Courtesy Reuters

Moscow's Modernization Dilemma

Is Russia Charting a New Foreign Policy?

The last year has seen considerable change in the U.S.-Russian relationship -- or at least the desire and promise for change. In Washington, the Obama administration has talked of a "reset," and in Moscow, the unofficial publication of a Foreign Ministry document has prompted mentions of a "seismic shift." But the prospects for U.S.-Russian relations cannot be discussed in isolation from wider questions: In what direction is Russia moving? What will Russia be like ten or 20 years from now?

Speculation on the future of nations rests both on near certainties and on imponderabilia, which cannot possibly be measured, let alone predicted. Russia's demographics provide some near certainties: over the last two decades, more than 20,000 villages and small towns have ceased to exist, the immigration of Central Asian workers and Chinese traders has continued, and the Russian birthrate of 1.5 children per woman has stayed well below the replacement rate of 2.1 children per woman. A radical reversal of these demographic trends seems quite unlikely. There will be fewer ethnic Russians in the Russia of the future, to be sure. What is less clear is whether Moscow will even be able to hold on to the Russian Far East and all the territories of Russia beyond the Urals.

As for the imponderabilia: if it had not been for Mikhail Gorbachev and Boris Yeltsin, the Soviet system -- although doomed -- might have been able to hang on to power for another decade or two. From 1972 to 2008, the price of oil went up from $2 a barrel to almost $150 a barrel (as of the summer of 2010, it was less than half that). In other words, if Russia was still the Soviet Union, the enormous windfall that Moscow has experienced over the last decade would have been ascribed not to Vladimir Putin's wise and energetic leadership but to Leninism and the farsighted successors of the Soviet leader Yuri Andropov.

To a large extent, Russia's prospects still depend on the price of oil. The

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