Since no one could imagine $100 a barrel oil, no one thought of what kind of Russia we would have with $100 a barrel oil. That was like asking, what kind of Russia would we have if Martians took over the Kremlin? It was outside the realm of possibility.
But this also means that what had looked like a nearly riskless strategy for re-ordering a post-Cold War world and for assigning Russia a place in it turns out to have been a very risky one indeed. We built institutions on a fictitious foundation. We sold insurance policies like out of the money put options with no belief that the bubble would ever end. There was no push back for many years. We did get the benefit of that premium income — the Eastern Europeans embraced reform despite the difficulties, they remained at peace among themselves, and the U.S. could act freely in the global arena. Russia, and Yeltsin, had to comply. Russia was too weak to resist from the very beginning, and the weakness only grew over time. Between 1991 and 1999, Russia’s dollar GDP as a share of world GDP dropped by over 70 percent. In the two years from 1997 to 1999 alone, it collapsed by 50 percent. Meanwhile, the Russian government incurred close to $30 billion in new debt from 1996 to 1999.
The Russian and Belarus officials presented detailed power-point graphs and maps showing that, over the past decade, the United States, aided by some NATO allies, have attempted to overthrow governments in Ukraine, Georgia, Kyrgyzstan, Afghanistan, Iraq, Syria, Egypt, Libya and Yemen. Even in cases where the “color revolutions” succeeded—like Libya—the consequences were widespread chaos, massive refugee crises, and the spread of terrorism.
Waking up is hard to do.
That is where we are.