The "Putin Doctrine of muscular nationalism" makes Russia's relations with the West fraught. Photo: Getty
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Is a return to constructive relations between Russia and the West possible?

Russia may be destined to remain a source of instability and confrontation for as long as Putin remains in the Kremlin.

Just when it looked as if tensions between Russia and the West couldn't get any worse, an international arbitration tribunal in The Hague is set to make a ruling on Monday that could have far-reaching consequences for relations with Moscow. It's the culmination of a decade long legal battle by the former majority shareholders of Yukos Oil to secure compensation for the expropriation of their assets by the Russian state in 2004. It is also the largest arbitration claim in history. If it loses, Russia could be out of pocket by as much as $100bn; a huge financial hit for any country, especially one flirting with recession and facing an escalating campaign of international sanctions.

Couldn't President Putin ignore a ruling against him and simply thumb his nose at the outside world like he has done on many occasions before? Not this time, because it turns out that the long arm of international law can be very long indeed. Russia may have renounced the Energy Charter Treaty on which the case is built, but it was legally bound by it at the time of the Yukos affair. Furthermore, the terms of the treaty allow any financial award against it to be enforced under the provisions of the New York Convention. If Russia refuses to pay up, its assets in any country that has ratified the convention could be seized to the full value of the award. This encompasses 148 countries, including the US, every member state of the EU and even China.

It is certainly possible that the ruling could go Russia's way. But legal observers point out that international tribunals have already considered the same evidence in two smaller cases and found against Russia on both occasions. Judges dislike contradicting their peers without compelling new evidence. If Monday's decision goes the same way, Putin faces a tricky dilemma that could profoundly alter the course of Russian policy for the remainder of his presidency.

The response that would fit most naturally with the new Putin Doctrine of muscular nationalism would be to reject the ruling and threaten economic retaliation against any country that allowed its enforcement under the New York Convention. Putin doesn't recognise a separation of judicial and political power, so he would be probably regard decisions by foreign courts to seize Russia property as essentially political acts. Russian politicians have already threatened to seize foreign assets in response to Western sanctions over Ukraine, so the idea is already out there.

The problem with this is that it would require a sharp re-direction of Russian economic strategy. Despite the rhetoric of 'sovereign democracy' - an ideology based on the rejection of foreign influence - Russia is deeply embedded in the global economy. It needs not only access to foreign trade, but also inflows of foreign capital and technology to modernise and thrive. The investment requirement for its dilapidated energy sector alone stands at $2.7 trillion over the next twenty years. Without this Russia faces the threat of a return to the kind of long-term stagnation that brought an end to the Soviet era.

A strategy based on economic autarky and a closed 'Russian world' isn't really viable. Russia doesn't have either the capital or the technology needed to build new infrastructure and open new energy production in the Arctic North. Besides, the Russian elite love their Swiss bank accounts and Park Lane apartments. An 'Asian pivot' and the friendly embrace of the BRICS might provide a degree of short-term diplomatic comfort, but Chinese money will always come with plenty of strings attached, especially since Beijing will sense Russia's desperation. In any case, China can't offer the technology Russia needs or the lifestyle options its oligarchs crave.

Putin understands this perfectly well. It is probably the only thing that has persuaded him to pull back from a full-scale invasion of Ukraine. At some point he will need to convince foreign companies that Russia is a safe place to invest once again. With net capital outflows already running at $75bn in the last six months, he is clearly a long way from achieving that goal. The last thing he needs to do is demonstrate that Russia is a country where property rights have no standing by seizing foreign assets and completely abandoning the rule of law. The damage would take a generation to repair.

If Russia loses on Monday, the pragmatic move would be for the Kremlin to swallow its pride and find a way of settling the claim quietly. The Yukos affair was in many ways Putin's 'original sin'. It was the moment when it became clear that he was determined to centralise political power and dismantle any democratic or legal safeguards that stood in his way. Drawing a line under the affair might become a symbol of Russia's willingness to put relations on a more businesslike footing.

Admittedly, that seems unlikely given the acrimony over Ukraine. But it wouldn't be entirely out of character either. The early phase of Putin's leadership was based on pragmatic modernisation, constructive relations with the West and a desire to nurture Russia's economic recovery. The question is whether too much bad blood has now passed between Russia and the West to make a return to that approach possible. The answer will tell us whether Russia is destined to remain a source of instability and confrontation for as long as Putin remains in the Kremlin.
 

David Clark is the founder and editor of Shifting Grounds, and served as special adviser to Robin Cook at the Foreign Office from 1997 to 2001. He is chair of the Russia Foundation.

David Clark was Robin Cook’s special adviser at the Foreign Office 1997-2001.

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Martin McGuinness's long game: why a united Ireland is now increasingly likely

McGuinness died with his ultimate goal of a united Ireland arguably closer to realisation than at any other time since the island’s partition in 1921.

In late 2011 Martin McGuinness stood as Sinn Fein’s candidate in Ireland’s presidential election, raising all sorts of intriguing possibilities.

Raised in a tiny terraced house in the Bogside, Derry, he would have ended up living in a 92-room presidential mansion in Dublin had he won. A former IRA commander, he would have become supreme commander of Ireland’s defence forces. Once banned from Britain under the Prevention of Terrorism Acts, he would have received the credentials of the next British ambassador to Dublin. Were he invited to pay a state visit to London, a man who had spent much of his youth shooting or bombing British soldiers would have found himself inspecting a guard of honour at Buckingham Palace.

McGuinness would certainly have shaken the hands of the English team before the Ireland-England rugby match at the Aviva Stadium in Dublin every other year. “I’d have no problem with that,” he told me, grinning, as he campaigned in the border county of Cavan one day that autumn. Though a staunch republican, he enjoyed the “Protestant” sports of rugby and cricket, just as he supported Manchester United and enjoyed BBC nature programmes and Last of the Summer Wine. He wrote poetry and loved fly-fishing, too. Unlike Gerry Adams, the coldest of cold fish, McGuinness was hard to dislike – provided you overlooked his brutal past.

In the event, McGuinness, weighed down by IRA baggage, came a distant third in that election but his story was astonishing enough in any case. He was the 15-year-old butcher’s assistant who rose to become the IRA chief of staff, responsible for numerous atrocities including Lord Mountbatten’s assassination and the Warrenpoint slaughter of 18 British soldiers in 1979.

Then, in 1981, an IRA prisoner named Bobby Sands won a parliamentary by-election while starving himself to death in the Maze Prison. McGuinness and Adams saw the mileage in pursuing a united Ireland via the ballot box as well as the bullet. Their long and tortuous conversion to democratic politics led to the Good Friday accord of 1998, with McGuinness using his stature and “street cred” to keep the provisional’s hard men on board. He became Northern Ireland’s improbable new education minister, and later served as its deputy first minister for a decade.

His journey from paramilitary pariah to peacemaker was punctuated by any number of astounding tableaux – visits to Downing Street and Chequers; the forging of a relationship with Ian Paisley, his erstwhile arch-enemy, so strong that they were dubbed the “Chuckle Brothers”; his denunciation of dissident republican militants as “traitors to the island of Ireland”; talks at the White House with Presidents Clinton, George W Bush and Obama; and, most remarkable of all, two meetings with the Queen as well as a state banquet at Windsor Castle at which he joined in the toast to the British head of state.

Following his death on 21 March, McGuinness received tributes from London that would have been unthinkable 20 years ago. Tony Blair said peace would not have happened “without Martin’s leadership, courage and quiet insistence that the past should not define the future”. Theresa May praised his “essential and historic contribution to the extraordinary journey of Northern Ireland from conflict to peace”.

What few noted was that McGuinness died with his ultimate goal of a united Ireland arguably closer to realisation – albeit by peaceful methods – than at any other time since the island’s partition in 1921.

The Brexit vote last June has changed political dynamics in Northern Ireland. The province voted by 56 per cent to 44 in favour of remaining in the European Union, and may suffer badly when Britain leaves. It fears the return of a “hard border” with the Republic of Ireland, and could lose £330m in EU subsidies.

Dismay at the Brexit vote helped to boost Sinn Fein’s performance in this month’s Stormont Assembly elections. The party came within 1,200 votes of overtaking the Democratic Unionist Party, which not only campaigned for Leave but used a legal loophole to funnel £425,000 in undeclared funds to the broader UK campaign. For the first time in Northern Ireland’s history, the combined unionist parties no longer have an overall majority. “The notion of a perpetual unionist majority has been demolished,” Gerry Adams declared.

Other factors are also working in Sinn Fein’s favour. The party is refusing to enter a new power-sharing agreement at Stormont unless the DUP agrees to terms more favourable to the Irish nationalists. Sinn Fein will win if the DUP agrees to this, but it will also win if there is no deal – and London further inflames nationalist sentiment by imposing direct rule.

McGuinness’s recent replacement as Sinn Fein’s leader in Northern Ireland by Michelle O’Neill, a personable, socially progressive 40-year-old unsullied by the Troubles, marks another significant step in the party’s move towards respectability. As Patrick Maguire recently wrote in the New Statesman, “the age of the IRA old boys at the top is over”.

More broadly, Scottish independence would make the notion of Northern Ireland leaving the UK seem less radical. The Irish republic’s economic recovery and the decline of the Roman Catholic Church have rendered the idea of Irish unity a little less anathema to moderate unionists. And all the time, the province’s Protestant majority is shrinking: just 48 per cent of the population identified itself as Protestant in the 2011 census and 45 per cent Catholic.

The Good Friday Agreement provides for a referendum if a majority appears to favour Irish unity. Sinn Fein is beginning to agitate for exactly that. When Adams and McGuinness turned from violence to constitutional politics back in the 1980s they opted for the long game. Unfortunately for McGuinness, it proved too long for him to see Irish nationalism victorious, but it is no longer inconceivable that his four grown-up children might. 

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution