The outgoing American president Donald Trump has significantly shaken international political relations, often causing more destruction than construction. It will be interesting to see how the new democratic administration will reshape them.
Of course, Viktor Vekselberg is not just anyone. He is one of the most recognized faces of Russian oligarchy, ranked 127th on Forbes’ list of the richest people on Earth (with an estimated wealth of $10 billion). However, he does not belong to the category of those Russian oligarchs who befriended President Putin back in their student days (like the Rotenberg brothers) or those who lead the largest state-owned companies (such as the longtime director of Gazprom, Alexey Miller) or who were even his political allies in the past (the most prominent representative of the latter being Rosneft’s chief, Igor Sechin). On the contrary, Viktor Vekselberg is by far the most recognized Russian billionaire in the West, with excellent business connections in the United States and Europe. Among other things, the boards of his Western companies have been occupied by Luca di Montezemolo, longtime head of Fiat and Ferrari, former Deutsche Bank president Josef Ackermann, and even former CIA director and Deputy Secretary of Defense John Deutch. In the last decade, Vekselberg has had three meetings with current and former US presidents, and companies under his influence have financially supported both Democrats and Republicans. And last but not least, in early 2017, he even attended Trump’s inauguration, and two years before that, he hosted Ivanka Trump and Jared Kushner in Moscow. And yet, none of this helped him – on April 6, 2018, he found himself on the updated US sanctions list against Russian legal and natural persons, against whom extremely severe sanctions have been imposed, from blocking bank accounts held by US banks to banning transactions with companies owned by individuals on the list.
In just one day, Vekselberg’s estimated wealth shrank by two billion dollars (he later provided this estimate himself), and in the last two years, it has plummeted by a staggering four billion dollars. For comparison: this is less than a tenth of Slovenia’s entire GDP.
New rules – old players?
From this case, several interesting conclusions can be drawn. Firstly, if we follow the theory and historically prevailing practice of international relations, in which capital power, network connections, and economic interests play a central role, what happened to Viktor Vekselberg simply could not have happened. He would not have joined the sanctions list alongside other Russian oligarchs who have much more direct ties to the Kremlin or who are directly dependent on the political regime. His contacts, extensive network, and even direct access to the White House would have been sufficient for him to continue to operate smoothly and travel to the United States, where his family owns several properties. But he did not end up on the list by accident, nor is it a “mistake” by some senior official in the US administration. It is a completely rational decision at the top of the US administration.
Secondly, the Vekselberg case once again confirms that Trump, who was long believed to have had his presidential path paved by the Kremlin (some still believe this today, although there is no substantiated evidence for it), did not hesitate to escalate relations with Russia, a trend that gained momentum after the events in Ukraine in 2014. The Trump administration was very quick to sacrifice one of its biggest allies, who had previously heavily relied on economic cooperation and rapprochement between Russia and the United States. Thus, relations between the nuclear superpowers have never been lower since the Cold War. Let us not forget the old wisdom – when you think you’re already at the bottom, someone suddenly knocks from below.
And thirdly, the attentive observer should not overlook the detail between the cases of Vekselberg and Meng Wanzhou, the chief financial officer of Chinese Huawei and daughter of the company’s founder, Ren Zhengfei. Namely, based on a US warrant, Meng was arrested by Canadian authorities in December 2018, and since then, she has been legally defending herself against extradition to the US, where she faces criminal prosecution for alleged violations of US sanctions against Iran. If Trump, before this event, had built relations with China primarily on the line of trade and tariff wars in the spirit of “America First”, in 2019 this gradually escalated into a broader political, economic, and even military confrontation and turned into a real Cold War between the two countries on the brink of a military (or at least hybrid) conflict. In this case as well, it is clear that this is a completely rational move by the US administration, about which all parties involved are aware, and which will have direct consequences, at least in the form of retaliatory measures. In other times, just the announcement of the latter would have a deterrent effect, ultimately helping to maintain balance and the status quo.
However, since we obviously live in a different era, we see that new balances are being established in an environment of prevailing nationalisms, isolationist policies, and ad hoc coalitions, which strongly characterize regional and global international relations. Therefore, it is entirely appropriate to consider what the new, democratic president of the United States will bring to US relations with Russia and Eastern Europe.
Democrats on the Rise
International observers and analysts are mostly in agreement that Biden’s term, broadly speaking, will bring a return to multilateralism in US foreign policy (including a return to some key international agreements from which the US withdrew in the past four years), increased predictability with an enhanced role for diplomacy and diplomatic channels (as a complete contrast to the extreme chaotic “twitter diplomacy” of Trump), and a return to advocating democratic values in foreign policy, including active advocacy for fundamental human rights, the rule of law, etc. And it is precisely at this last point that things could get complicated with Russia.
Russia will certainly not be a stranger to Biden, although we will have to wait for the formation of his administration and the appointment of key figures who will significantly shape and even lead the foreign and defense policy of the new administration. If we limit ourselves to the facts known so far, Biden will be inclined to advocate better economic cooperation between the two countries (after all, he explicitly supported Russia’s entry into the World Trade Organization), but not at any cost.
Above all, not at the cost of accusations of human rights violations and fundamental freedoms, which Democrats have been accusing not only the Kremlin of more systematically and for a longer time than Republicans, but also other superpowers. Recent cases of unexplained deaths and poisonings of opponents of the Kremlin regime and double agents in recent years, and ultimately the case of Navalny, will further complicate any attempts to soften US policy towards Russia without certain assurances or concessions from Putin. And since these are not expected, there will be no more tangible deviations from the policy of the Trump administration; otherwise, Biden would come under strong pressure and criticism from his own party and electorate, which would undoubtedly demand substantial explanations as to why the Democratic administration would approach the Kremlin, which supposedly helped elect the outgoing president, who is of the same party and electorate.
Therefore, a repetition of the period 2009-2013, when the Obama administration set a policy of resetting and normalizing relations with Russia, which was immortalized by the symbolic handover of the red button between Secretary of State Hillary Clinton and Sergei Lavrov in 2009, is not expected. But let us not forget: at that time, Dmitry Medvedev was sitting in the Kremlin (presidential term 2008-2012), who, for his own political agenda, had set himself the task of economic modernization of the Russian economy and liberalization of the political system, thus almost automatically gaining the sympathy of the West. Leaving aside the assessment of how much real basis and decision-making power Medvedev had for the implementation of his own plans, the fact remains undeniable that his personality significantly contributed to the (temporary) thaw in relations between Russia and the United States at that time. With Putin’s return to the presidency of Russia in 2012 and the Crimean conflict in 2014, things quickly returned to their (old) places.
Somewhere between economic pragmatism and pursuit of democratic principles, we can expect better cooperation between the two superpowers in areas where there is already a significant intersection of strategic interests, but additional tensions in bilateral relations in recent years have prevented any positive progress. A case in point is the issue of limiting strategic nuclear weapons capabilities, as well as addressing individual international hotspots (such as the Iranian nuclear program). Biden, who actively participated in negotiations with Russia over the old Start treaty, has already announced during the campaign that he will strive for a new agreement, which Moscow should also be interested in. This is where the aforementioned predictability and role of diplomatic channels of the new American administration will come into play, which will have the opportunity to achieve normalization of relations at least in certain areas, which are also very important for the wider international community. The same applies to Iran, as Biden is expected to bring the US back to the negotiating table, even though he risks conflict with the Saudis, who received special favor from the outgoing Trump administration. The intersection of common interests with Moscow can increase in these cases.
Transatlantic “Ostpolitik”?
In addition to advocating democratic values, another area that could significantly determine the direction of Russian-American relations in the coming years is how high on the priority list Biden’s administration will place Eastern Europe. And not just in the context of strengthening the role of the North American alliance, but primarily in a bilateral and regional context; namely, what the US calls the promotion of democratic values and assistance in democratizing the former Warsaw Pact countries (including funding for NGOs, civil society development programs), Moscow sees as direct interference in its sphere of interest (which it calls its near abroad). And if in the past the “red line” ran along the Baltic states and western Ukraine, it has now moved even closer – to the east directly on the Russian-Belarusian border.
There are not many unknowns about what policy the democratic administration will pursue in the case of the Baltic states, Ukraine, or Poland. Namely, even if the political elites in some of these countries openly cheered for Trump and advocated extreme right-wing policies “a la Bannon” (the most obvious example being Poland), there is no expectation of significant withdrawal of White House support. For such a thing to happen, further tectonic shifts towards undemocratic policies in these societies would have to occur (which are already experiencing internal resistance from increasingly large masses). Otherwise, the Biden administration will continue to support projects through which the US increases or at least maintains influence in the (wider) region (such as the Three Seas Initiative, of which Slovenia is also a member), has a multiplicative economic interest (promotion of US natural gas imports), and at the same time influences the retention of influence (or penetration) of other superpowers in the region – besides Russia, primarily China.
But what about Belarus? There is no such straightforward answer to this question. On the one hand, there is no strong Belarusian diaspora in the US that could significantly influence decision-making processes at the highest political level (unlike, say, the Armenian diaspora) and play a more active role for the US. But the new administration will also not be able to stand aside completely, as pressure on Lukashenko is gradually increasing, with the EU, after several weeks of painful coordination, finally managing to adopt a unified stance and rejecting recognition of the election results. The Biden administration will probably have to become more engaged in such cases – also due to distancing from Trump’s isolationist policy – and resort to measures that go beyond expected political calls for respect for democratic processes. It is by no means expected that the US will get involved in a direct conflict with Russia over Belarus, this is not a realistic scenario. But even any more active role of the US in the processes of democratization of Belarusian society – for example, with more extensive development aid programs for civil society, independently or as part of a broader Western coalition – will meet with a sharp response from the Kremlin. And thus, we could quickly start moving again, and very quickly, along the spiral of bilateral relations. Downward, of course.
Meanwhile, Viktor Vekselberg will try to get removed from the sanctions list with the help of a large legal team, on which he unexpectedly found himself. So far, he has not been successful in this. And if you were to bet today on whether his chances will increase or decrease under the new US administration, you would bet against him. Welcome to the new reality of international relations.
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After the US elections: Viktor’s paradox in Russian-American relations (written November 2020)
The outgoing American president Donald Trump has significantly shaken international political relations, often causing more destruction than construction. It will be interesting to see how the new democratic administration will reshape them.
Of course, Viktor Vekselberg is not just anyone. He is one of the most recognized faces of Russian oligarchy, ranked 127th on Forbes’ list of the richest people on Earth (with an estimated wealth of $10 billion). However, he does not belong to the category of those Russian oligarchs who befriended President Putin back in their student days (like the Rotenberg brothers) or those who lead the largest state-owned companies (such as the longtime director of Gazprom, Alexey Miller) or who were even his political allies in the past (the most prominent representative of the latter being Rosneft’s chief, Igor Sechin). On the contrary, Viktor Vekselberg is by far the most recognized Russian billionaire in the West, with excellent business connections in the United States and Europe. Among other things, the boards of his Western companies have been occupied by Luca di Montezemolo, longtime head of Fiat and Ferrari, former Deutsche Bank president Josef Ackermann, and even former CIA director and Deputy Secretary of Defense John Deutch. In the last decade, Vekselberg has had three meetings with current and former US presidents, and companies under his influence have financially supported both Democrats and Republicans. And last but not least, in early 2017, he even attended Trump’s inauguration, and two years before that, he hosted Ivanka Trump and Jared Kushner in Moscow. And yet, none of this helped him – on April 6, 2018, he found himself on the updated US sanctions list against Russian legal and natural persons, against whom extremely severe sanctions have been imposed, from blocking bank accounts held by US banks to banning transactions with companies owned by individuals on the list.
In just one day, Vekselberg’s estimated wealth shrank by two billion dollars (he later provided this estimate himself), and in the last two years, it has plummeted by a staggering four billion dollars. For comparison: this is less than a tenth of Slovenia’s entire GDP.
New rules – old players?
From this case, several interesting conclusions can be drawn. Firstly, if we follow the theory and historically prevailing practice of international relations, in which capital power, network connections, and economic interests play a central role, what happened to Viktor Vekselberg simply could not have happened. He would not have joined the sanctions list alongside other Russian oligarchs who have much more direct ties to the Kremlin or who are directly dependent on the political regime. His contacts, extensive network, and even direct access to the White House would have been sufficient for him to continue to operate smoothly and travel to the United States, where his family owns several properties. But he did not end up on the list by accident, nor is it a “mistake” by some senior official in the US administration. It is a completely rational decision at the top of the US administration.
Secondly, the Vekselberg case once again confirms that Trump, who was long believed to have had his presidential path paved by the Kremlin (some still believe this today, although there is no substantiated evidence for it), did not hesitate to escalate relations with Russia, a trend that gained momentum after the events in Ukraine in 2014. The Trump administration was very quick to sacrifice one of its biggest allies, who had previously heavily relied on economic cooperation and rapprochement between Russia and the United States. Thus, relations between the nuclear superpowers have never been lower since the Cold War. Let us not forget the old wisdom – when you think you’re already at the bottom, someone suddenly knocks from below.
And thirdly, the attentive observer should not overlook the detail between the cases of Vekselberg and Meng Wanzhou, the chief financial officer of Chinese Huawei and daughter of the company’s founder, Ren Zhengfei. Namely, based on a US warrant, Meng was arrested by Canadian authorities in December 2018, and since then, she has been legally defending herself against extradition to the US, where she faces criminal prosecution for alleged violations of US sanctions against Iran. If Trump, before this event, had built relations with China primarily on the line of trade and tariff wars in the spirit of “America First”, in 2019 this gradually escalated into a broader political, economic, and even military confrontation and turned into a real Cold War between the two countries on the brink of a military (or at least hybrid) conflict. In this case as well, it is clear that this is a completely rational move by the US administration, about which all parties involved are aware, and which will have direct consequences, at least in the form of retaliatory measures. In other times, just the announcement of the latter would have a deterrent effect, ultimately helping to maintain balance and the status quo.
However, since we obviously live in a different era, we see that new balances are being established in an environment of prevailing nationalisms, isolationist policies, and ad hoc coalitions, which strongly characterize regional and global international relations. Therefore, it is entirely appropriate to consider what the new, democratic president of the United States will bring to US relations with Russia and Eastern Europe.
Democrats on the Rise
International observers and analysts are mostly in agreement that Biden’s term, broadly speaking, will bring a return to multilateralism in US foreign policy (including a return to some key international agreements from which the US withdrew in the past four years), increased predictability with an enhanced role for diplomacy and diplomatic channels (as a complete contrast to the extreme chaotic “twitter diplomacy” of Trump), and a return to advocating democratic values in foreign policy, including active advocacy for fundamental human rights, the rule of law, etc. And it is precisely at this last point that things could get complicated with Russia.
Russia will certainly not be a stranger to Biden, although we will have to wait for the formation of his administration and the appointment of key figures who will significantly shape and even lead the foreign and defense policy of the new administration. If we limit ourselves to the facts known so far, Biden will be inclined to advocate better economic cooperation between the two countries (after all, he explicitly supported Russia’s entry into the World Trade Organization), but not at any cost.
Above all, not at the cost of accusations of human rights violations and fundamental freedoms, which Democrats have been accusing not only the Kremlin of more systematically and for a longer time than Republicans, but also other superpowers. Recent cases of unexplained deaths and poisonings of opponents of the Kremlin regime and double agents in recent years, and ultimately the case of Navalny, will further complicate any attempts to soften US policy towards Russia without certain assurances or concessions from Putin. And since these are not expected, there will be no more tangible deviations from the policy of the Trump administration; otherwise, Biden would come under strong pressure and criticism from his own party and electorate, which would undoubtedly demand substantial explanations as to why the Democratic administration would approach the Kremlin, which supposedly helped elect the outgoing president, who is of the same party and electorate.
Therefore, a repetition of the period 2009-2013, when the Obama administration set a policy of resetting and normalizing relations with Russia, which was immortalized by the symbolic handover of the red button between Secretary of State Hillary Clinton and Sergei Lavrov in 2009, is not expected. But let us not forget: at that time, Dmitry Medvedev was sitting in the Kremlin (presidential term 2008-2012), who, for his own political agenda, had set himself the task of economic modernization of the Russian economy and liberalization of the political system, thus almost automatically gaining the sympathy of the West. Leaving aside the assessment of how much real basis and decision-making power Medvedev had for the implementation of his own plans, the fact remains undeniable that his personality significantly contributed to the (temporary) thaw in relations between Russia and the United States at that time. With Putin’s return to the presidency of Russia in 2012 and the Crimean conflict in 2014, things quickly returned to their (old) places.
Somewhere between economic pragmatism and pursuit of democratic principles, we can expect better cooperation between the two superpowers in areas where there is already a significant intersection of strategic interests, but additional tensions in bilateral relations in recent years have prevented any positive progress. A case in point is the issue of limiting strategic nuclear weapons capabilities, as well as addressing individual international hotspots (such as the Iranian nuclear program). Biden, who actively participated in negotiations with Russia over the old Start treaty, has already announced during the campaign that he will strive for a new agreement, which Moscow should also be interested in. This is where the aforementioned predictability and role of diplomatic channels of the new American administration will come into play, which will have the opportunity to achieve normalization of relations at least in certain areas, which are also very important for the wider international community. The same applies to Iran, as Biden is expected to bring the US back to the negotiating table, even though he risks conflict with the Saudis, who received special favor from the outgoing Trump administration. The intersection of common interests with Moscow can increase in these cases.
Transatlantic “Ostpolitik”?
In addition to advocating democratic values, another area that could significantly determine the direction of Russian-American relations in the coming years is how high on the priority list Biden’s administration will place Eastern Europe. And not just in the context of strengthening the role of the North American alliance, but primarily in a bilateral and regional context; namely, what the US calls the promotion of democratic values and assistance in democratizing the former Warsaw Pact countries (including funding for NGOs, civil society development programs), Moscow sees as direct interference in its sphere of interest (which it calls its near abroad). And if in the past the “red line” ran along the Baltic states and western Ukraine, it has now moved even closer – to the east directly on the Russian-Belarusian border.
There are not many unknowns about what policy the democratic administration will pursue in the case of the Baltic states, Ukraine, or Poland. Namely, even if the political elites in some of these countries openly cheered for Trump and advocated extreme right-wing policies “a la Bannon” (the most obvious example being Poland), there is no expectation of significant withdrawal of White House support. For such a thing to happen, further tectonic shifts towards undemocratic policies in these societies would have to occur (which are already experiencing internal resistance from increasingly large masses). Otherwise, the Biden administration will continue to support projects through which the US increases or at least maintains influence in the (wider) region (such as the Three Seas Initiative, of which Slovenia is also a member), has a multiplicative economic interest (promotion of US natural gas imports), and at the same time influences the retention of influence (or penetration) of other superpowers in the region – besides Russia, primarily China.
But what about Belarus? There is no such straightforward answer to this question. On the one hand, there is no strong Belarusian diaspora in the US that could significantly influence decision-making processes at the highest political level (unlike, say, the Armenian diaspora) and play a more active role for the US. But the new administration will also not be able to stand aside completely, as pressure on Lukashenko is gradually increasing, with the EU, after several weeks of painful coordination, finally managing to adopt a unified stance and rejecting recognition of the election results. The Biden administration will probably have to become more engaged in such cases – also due to distancing from Trump’s isolationist policy – and resort to measures that go beyond expected political calls for respect for democratic processes. It is by no means expected that the US will get involved in a direct conflict with Russia over Belarus, this is not a realistic scenario. But even any more active role of the US in the processes of democratization of Belarusian society – for example, with more extensive development aid programs for civil society, independently or as part of a broader Western coalition – will meet with a sharp response from the Kremlin. And thus, we could quickly start moving again, and very quickly, along the spiral of bilateral relations. Downward, of course.
Meanwhile, Viktor Vekselberg will try to get removed from the sanctions list with the help of a large legal team, on which he unexpectedly found himself. So far, he has not been successful in this. And if you were to bet today on whether his chances will increase or decrease under the new US administration, you would bet against him. Welcome to the new reality of international relations.
Sharing is caring!