kaliningrad in eu-russia relations: scenario exercise
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Kaliningrad in EU-Russia relations:Scenario exercise
Sergei Medvedev
RECEP, Moscow
Research objectives Define key global trends relevant for Russia-EU
relations and on Kaliningrad Define key parameters to forecast the future of
Russia-EU relations and of Kaliningrad Define four sets of scenarios for :
Russia The European Union Russia-EU relations Kaliningrad
Define the most desirable scenario for Kaliningrad (“Pilot Region”) and outline practical policy steps for its implementation (“Road Map”)
KEY PARAMETER: Role of the nation-state
GLOBAL TRENDS: Globalization and accommodation
Europeanscenarios
Russian scenarios
RE1
RE2
RE3
K1
K2
K3
Pilot region
Road map
E1
E2
E3
R1
R2
R3
Globalization and accommodation
De-Nationalization Integration
EU federalism Homogeneity
Markets, liberalism Americanization
New Economy networks
Crisis of the welfare state Liberal imperialism New World Order
Re-Nationalization Fragmentation
Regionalization, localization
Resistance/Identity State as an anchor of identity Anti-Americanism
Old Economy, oil, resources, hierarchy
State intervention Global terrorism Regional instability
Key parameters Role of the Nation-State
In the economy: Liberal/ globalized / private / de-regulated/, or… Statist / Public / Regulated / protectionist
In politics: Decentralized / networked / confederal, or… Centralized / integrated / unitary
Scales of evaluation Economic axis:
Statist / regulated <---> Liberal / Global
Political axis: Centralized/integrated <---> Decentralized/networked
Generic chart
StatistRegulated
LiberalGlobal
Centralized/Integrated
Decentralized/Networked
Economic axis
Poli
tica
l axi
s
Russia’s options
StatistRegulated
LiberalGlobal
Centralized/Integrated
Decentralized/Networked
R1: Administrative Modernization
R2: Liberal Modernization
R3: Bureaucratic Capitalism
Russian scenarios
R1: Administrative modernization Model: South Korea
R2: Liberal modernization Model: Czech Republic
R3: Bureaucratic capitalism Model: Mexico, Indonesia
R1: Administrative modernization Political centralization
“Administrative vertical”, “managed democracy” Limits on federalism and local autonomy East Asian models: South Korea1960s-70s?
Liberal economic and social agenda Corporatism / re-distribution of resource rent Capital-intensive modernization projects Dismantling the paternalist social system Eventual WTO membership, OECD application?
Generally pro-Western foreign policy Extended cooperation with the US (terrorism, Iraq?) Friction with EU, CoE, OSCE “Liberal imperialism” in the CIS
R2: Liberal modernization Political pluralism
Resurgence of liberal parties/projects (support by the Kremlin?)
Modernization from below, civil society development Extended federalism and regionalism
Cross-border cooperation Full economic liberalization, de-monopolization
Fighting the “Dutch disease” and resource dependence Development of the small and medium business Central European model (Poland, Czech Republic)
Enhanced dialogue with the EU Not just economic interests, but normative affinity and
legal harmonization
R3: Bureaucratic Capitalism Informal state capitalism
Corporations are private but de facto controlled by the state High ownership concentration / monopolies (Gazprom) Postponement of structural reform / stagnation Dependence on natural resources/ oil exports: Russia as
petro-state (“Petrocracy”)
Authoritarian drift Privileged role for the bureaucratic corporation/security elite One-party rule (like in Japan, Mexico) A unitary territorial structure (merger of regions)
Neo-imperialism in the CIS “Cold peace” with the West
EU options
StatistRegulated
LiberalGlobal
Centralized/Integrated
Decentralized/Networked
E1: Global Actor
E2: NetworkEurope
E3: FortressEurope
EU scenarios
E1: Global actor E2: Network Europe E3: Fortress Europe
E1: Global actor
Success of constitutional referenda and institutional reform
Deepening and widening of the EU (accession of Turkey, Ukraine, etc.)
Liberal economic policy: opening up EU markets to globalization
Consolidated foreign and security policy Enhanced Neighborhood Policy Global role – out of the area
E2: Network Europe
Failure of the Constitution and of institutional reform Weakening of central institutions, re-nationalization
and regionalization Emergence of a “core Europe” of rich nations Proliferation of bilateralism
Globalization and liberalization of national and subregional markets
Low-profile global role of the EU Failure of CFSP and of consolidated neighborhood projects
E3: Fortress Europe Powerful external variables /“globalization gone bad”:
Global terrorism, WMD Role of the US and/or Russia climate change, catastrophic migration
Enlargement stops at 25 + BG, ROM, CRO Limited institutional reform, with impact on JHA
Securitization of polity, stricter immigration/border control
Economy: protectionism and state intervention Foreign policy: Isolationism, no global commitment
Failure of subregionalism and of neighborhood projects
Russia-EU scenario matrix
Russia
Europe
Liberal Modernization
Administrative Modernization
BureaucraticCapitalism
Global ActorFull
PartnershipMuddlingThrough
Cold Peace
Network Europe
MuddlingThrough
MuddlingThrough
Cold Peace
Fortress Europe
Cold Peace Cold Peace Cold Peace
Russia-EU scenarios
RE1: Cold Peace RE2: Muddling through RE3: Full partnership
RE1: Cold Peace A combination of worst-case scenarios:
deteriorating global conditions: terrorism, WMD, migration global security alert, geopolitics, competition for resources “Fortress Europe” in the EU and/or bureaucratic capitalism
in Russia
EU and Russia increasingly alienated US-Russia cooperation possible, over the head of the EU Russia’s unsuccessful attempts to divide the EU
Raising visa and border barriers failure of cross-border regionalism
Trade disputes, delayed Russian entry into the WTO
RE2: Muddling through Continuation of present trends, stagnation of EU-
Russia relations Loose institutions, hollow summits, bureaucratic
squabbling between EU and Russia Lack of cohesion, rival visions of Russia in the EU
Failure of CSR Bilateralism with Russia (France, Germany, UK)
Of four common spaces, only some cooperation in the First (economy) and Fourth (humanitarian) no large EU investment frictions in internal security (visas, re-admission) competition in foreign policy (rivalry in the CIS: Ukraine,
Moldova, Belarus, South Caucasus) stagnation of cross-border regionalism
RE3: Full partnership Development of EU-Russia institutions beyond the
traditional neighborhood policy a Special Partner status for Russia? acceptance by Russia of part of the acquis, institutional
adaptation Full cooperation in four common spaces
Economy: EU investment, participation in the modernization of Russia
CFSP: Cooperative security with Russia, replacing NATO as preferred partner
JHA: full cooperation (counterterrorism), visa-free for RF? Cultural exchange, Bologna process
Kaliningrad scenarios:passive mode (policy-taking)
Russia
Europe
Liberal Modernization
Administrative Modernization
BureaucraticCapitalism
Global Actor Pilot regionStagnation/Preferences
Outpost
Network Europe
Stagnation/Preferences
Stagnation/Preferences
Outpost
Fortress Europe
Outpost Outpost Outpost
Kaliningrad scenarios:active mode (policy-making)
Russia
Europe
Liberal Modernization
Administrative Modernization
BureaucraticCapitalism
Global Actor Pilot regionStagnation/Preferences
Outpost
Network Europe
Stagnation/Preferences
Stagnation/Preferences
Outpost
Fortress Europe
Outpost Outpost Outpost
Pilot region
K1: Outpost Deterioration of global conditions and EU-Russia
relations geopolitical thinking, isolationism, enemy construction higher transit costs, “security tax”, lifting of preferences militarization of the Baltic Sea area, hard security risks
Kaliningrad as a “double periphery” Alienation from Europe Vicious circle of dependence on mainland Russia
Kaliningrad as an “island economy” Curtailing imports from Europe Collapse of the local informal economy Drastic deterioration of social conditions
K2: Stagnation/ preferences Continuation of present trends: high vested interests
Local rentier behavior, shadow economy (up to 90 %?) Poland, Lithuania, transit economies of the Baltic and CEE Russian business: “Dutch disease” Russian bureaucracy: selling preferences, administrative rent
“Drug addiction” to preferences in the SEZ No export, huge imports No structural investment; short-term high-risk investment Vicious circle of parasitism and underdevelopment Kaliningrad as a waste of national resources, value subtracted Susceptible to world oil prices and Russian balance of account
“Soft security” risks: complicating EU-Russia relations Environment, drugs, AIDS, smuggling, migration…
K3: Pilot Region Transnational economic and policy project
EU and Russia as key stakeholders Special institutions needed (special reps, High Level Group)
Export-oriented industrial policy, sustainable growth Orientation to (a) EU markets and (b) Russian market Gradual removal of current preferences, re-orienting incentives to
export of goods and services Making local industries competitive without subsidies “Double integration” of Kaliningrad as a competitive advantage
Transition period needed to prepare local business to: a revised regime of preferences liberalized energy tariffs new certification requirements
Road Map with a timeline needed
Logic of the Pilot Region From passive mode (Kaliningrad as a policy-taker) to
pro-active approach (Pilot Region as a policy-maker) Pilot Region as a harbinger of change
Overcoming unfavorable trends in EU-Russia relations Pilot Region feasible under various scenarios except
overtly isolationist and/or confrontational Forward implementation of European Economic Space:
Improving EU-Russia compatibility through a common interface
Adaptation by Russia of part of the acquis The logic of gradualism: creating a “Road Map” with
a timeline for specific benchmarks
Institutional base of the Pilot Region
Russian Law on the “Guidelines of the Federal Policy towards Kaliningrad Oblast” Stipulating the status of a “foreign territory” of the RF
A Special Agreement between Russia and the EU on Kaliningrad
Introducing the Kaliningrad factor into Four Common Spaces
Guidelines of the Federal Policy towards Kaliningrad
1. Integration into the European economic space2. Creating the institutional base of cooperation3. Modifying the SEZ regime4. Improving federal and regional governance5. Improving business climate and lowering
administrative barriers6. Development of infrastructure7. Export incentives8. Supporting small and medium business
Impact of the Pilot Region
Active shaping of the EU-Russia agenda (a policy-maker approach)
Addressing key bottlenecks of the EU-Russia relations Improving the geopolitical situation in Europe after the
double enlargement of the EU and NATO Promoting the “Global Actor” scenario in the EU, fostering
ESDI Promoting modernizing attitudes in Russia, signaling
Russia's adherence to long-term liberalization Checking the rentier behavior of the Russian bureaucracy Kaliningrad as a test case for the successful globalization
of Russia
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