Mr. Chairman, members of the standing committee, thank you for inviting me to talk to you today about this very important topic. I will focus on your questions as they have been posed. I will focus on Russia's intentions, and also on what we can see so far from the Trump administration.
The key thing about Russia's foreign policy today is that Russia has a strong sense of domestic insecurity. Russia has become an authoritarian state. Its authoritarianism is not very severe, as counted in the number of political prisoners, but it's quite efficient in terms of a very strong surveillance of citizens that is just about unprecedented.
President Vladimir Putin maintains a personal authoritarian rule. In his first two terms, he based his legitimacy on political stability and fast economic growth. Since 2008, however, Russia's economy has stagnated. With the fall in the price of oil, Russia's GDP has fallen, in U.S. dollar terms, from $2.1 trillion to currently $1.2 trillion. That is, Russia's economy today, in current U.S. dollars, is the 14th biggest economy in the world. At the same time, exports and imports from 2013 to 2016 approximately halved.
The Russian economy is not very big. The striking thing is what President Putin talks about when it comes to the economy—stability, not growth. He counts stability as having large reserves, a small budget deficit, minimal public debt, a large current account surplus, low inflation, and low unemployment. These are the measures he's concerned about. That the standard of living, counted as retail trade or real income, in the last two years has fallen by 15% does not concern him at all. It's stability that is important, not economic growth. Therefore, in its foreign policy, Russia does not have any strong economic objectives, which is rather difficult to understand for people coming from democracies and market economies.
Instead, President Putin has turned to an old Russian strategy to gain legitimacy, through “small, victorious wars”. The term comes from 1904, before the Russo-Japanese War. We've seen in the last decade Russia's war with Georgia in 2008, five days, small and victorious; the annexation of Crimea in 2014, a small and victorious war that was approved by 88% of Russians; and the war in Syria, which has also been small and so far victorious. The problem was the war in eastern Ukraine, which was neither small nor victorious.
What we should expect from this perspective is that President Putin will “poke” more instability in the region. The question is not if he will do it but where and when he will find an opportunity for what he considers to be a small and victorious war. This means it's mainly the countries in his region that are in trouble. He favours destabilization, as we can see in the unresolved military conflicts in Moldova, Georgia, between Armenia and Azerbaijan, and now in Ukraine. We are to expect more such minor wars. The two countries in case right now are actually his closest allies, Belarus and Kazakhstan.
As my late old friend Boris Nemtsov, who was murdered two years ago, used to say, Putin respects article 5 in the NATO statutes. The NATO countries have so far not been touched and it's vital that situation continue.
How would I describe Russia's main priorities and interest in eastern Europe and central Asia? They can be described in three terms: political dominoes, domestic political control through authoritarian rulers, and corruption. Again here there are no particular national economic goals involved. Russia's main export is oil. The oil is quite unpolitical. Gas is a much less important export, and that is highly political and involves a lot of corruption.
In what way do broader relations between Russia and the west impact development in these regions? Russia wants to separate and isolate countries in the region from the west. Russia's interests are not primarily economic but are focused on geopolitical dominance, promoting corrupt and authoritarian regimes.
Turning back to Trump's administration, what are we to expect about its policy towards countries in the region? So far, the Trump administration has said extremely little about it. The main statements have come in the last few days. On February 14, President Trump's press spokesman, Sean Spicer, stated, “President Trump has made it very clear that he expects the Russian government to de-escalate violence in the Ukraine and return Crimea. At the same time, he fully expects to and wants to get along with Russia”, unlike previous administrations.
This was followed by a tweet by the president, “Crimea was taken by Russia during the Obama administration. Was Obama too soft on Russia?” This is of course in reaction to all the criticism. President Trump has criticized virtually all significant countries in the world, but there's not been a negative word about Russia or President Putin before. He has just about mentioned Ukraine on a couple of occasions.
What are the implications of this for Canada? I think that for Canada it's an interest in standing up for the common western values in the region, and for standing up for multilateral organizations. That amounts to standing up for NATO, to maintain NATO as such, and given that the threat from the Arctic is increasing, Canada has all the greater interest in strengthening NATO whereas the U.S. attitude towards NATO is uncertain. The second point is that the European Union stands for the same human values and democratic values that Canada stands for. It's important for Canada to get closer to the European Union. CETA is an excellent step in this direction.
Finally, when it comes to western values such as human rights and democracy, Canada has all the great reasons to engage with or support other countries that share these values, and of course the European Union stands out as the main region that shares those values. From what Samuel Charap said here before, of course Ukraine is the tipping point. There's no country in the world that is at the same time so corrupt and so open and transparent as Ukraine. This is not a stable situation.
Either Ukraine becomes a western democracy and maintains its openness and defeats corruption, or it goes the way of most of those Soviet countries, into a mixture of authoritarianism and corruption. Corruption is no accident. It is a choice of authoritarian leaders who prefer to enrich themselves at the cost of their population. I think that leads to a massive focus on Ukraine.
Thank you.