Paranoid, mischievous and heading in the wrong direction, Russia is an awkward prospect for Barack Obama

Over the past ten years, under Vladimir Putin's leadership, Russia has become more nationalistic, corrupt and corporatist. Its economy, although much bigger than a decade ago, is even more dependent on oil and gas, an industry now controlled by a small group of kleptocratic courtiers and former spies. The decision by Ikea, a well-known Swedish furniture supplier once bullish about Russia, to suspend investment because of graft is an indictment of the dire commercial climate (see article). Its non-energy exports are smaller than Sweden's.

Russia's population is shrinking alarmingly, its death rate double that in most developed countries. Conflicts in its north Caucasus republics have flared again. Its armed forces are woefully ill-equipped and poorly trained. Mr Putin has kept control by unleashing a virulent brand of anti-Western "patriotism"-the latest textbooks are as tough on America as they are soft on Stalin-and thuggishly silencing the opposition. Last year in a pretence of democracy Mr Putin installed Dmitry Medvedev (Mr Obama's supposed host) as president while he himself became prime minister.

In the long term Mr Putin's refusal to modernise his country will weaken Russia. Yet the place Mr Obama has to deal with now is still a potent force. The largest country on earth, Russia stretches from Europe to China. It is the world's biggest producer of oil and gas. It has a seat on the UN Security Council and of course that nuclear arsenal. Above all it has the capacity to do both great harm and some good (see article).
Vlad the invader

Recently, the harm has been more noticeable. Last year's invasion of Georgia, followed by Russia's decision to recognise South Ossetia and Abkhazia, was the clearest sign that Mr Putin has given up any hope of joining the West. Since then he has slammed the door on the World Trade Organisation, opting instead for a no-doubt-mighty customs union with Belarus and Kazakhstan. Russia has long criticised the Organisation for Security and Co-operation in Europe for daring to highlight election malpractice. Now Mr Medvedev is promoting a European security structure that would in effect give Russia a veto over any expansion of NATO. Countries such as Ukraine, in what Russia regards as its sphere of influence, are nervous. At the UN Russia has dragged its feet on sanctions against Iran and autocrats pretty much everywhere.

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On not being a pushover

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America's president needs to resist the temptation to play on supposed differences between Mr Putin and the more "liberal" Mr Medvedev. These are more notional than real, as the farcical second show trial of Mikhail Khodorkovsky, a former oil boss and a Putin rival, which is taking place on Mr Medvedev's watch, demonstrates.

Meanwhile, humility about some of America's past mistakes should not leave Russia's leaders with the impression that Mr Obama will be a pushover. Robustness is necessary because of the widening gap between the interests of the Russian people and those of its ruling elite (the people who stoke anti-Americanism even as they send their offspring to Western universities and buy up holiday homes in France). With the economy declining and social discontent rising, a stand-off with the West might be tempting for Mr Putin's cabal-but ruinous for most Russians. It was not America's fault that Russia failed to develop an independent judiciary, opting for corruption as the organising principle of its political system. Nor is it America's fault that Russia wasted the years of high oil prices.

Most of all, Mr Obama needs to be firm over Russia's ambitions to dominate the countries along its western and southern borders. Mr Bush's attempt to hurry Georgia and Ukraine into NATO, ready or not (they weren't, and won't be for a long time) was a mistake. But both countries, like all others in Europe, have the right to choose their own friends. Mr Obama must make clear that he will not cut them adrift and will not tolerate attempts to destabilise their governments. Europeans could help too by diversifying their oil and gas supplies so that Russia is not tempted to turn off their taps either (see article).

Ironically, given Mr Obama's difficulties in the Urals, the easiest place to start may be arms control. There is room to reduce further both sides' warheads; it is also a subject that flatters Russia. But this is going to be an awkward relationship, one where the West's expectations of success should be low.

Complete article: http://www.economist.com/opinion/displaystory.cfm?story_id=13944748