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.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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