Russia Projects Confidence as It Pursues Alliances to Undermine West

REUTERS/Maxim Shemetov
Noctilucent clouds are seen over the Kremlin in Moscow, Russia July 4, 2023.

Russia is increasingly confident that deepening economic and diplomatic ties with China and the Global South will allow it to challenge the international financial system dominated by the United States and undermine the West, according to Kremlin documents and interviews with Russian officials and business executives.

Russia has been buoyed by its success in holding off a Western-backed Ukrainian counteroffensive followed by political stalemates in Washington and Brussels over continued funding for Kyiv. In Moscow’s view, the U.S. backing of Israel’s invasion of Gaza has damaged Washington’s standing in many parts of the world. The confluence of events has led to a surge of optimism about Russia’s global position.

Officials in Moscow point to growing trade with China, military cooperation with Iran, diplomatic outreach in the Arab world and the expansion of the BRICS grouping of major emerging economies – Brazil, Russia, India, China and South Africa – to include Iran, Saudi Arabia, the United Arab Emirates, Egypt and Ethiopia.

The BRICS expansion demonstrated the group’s “growing authority and role in world affairs,” and its work will focus on “sovereign equality” Russian President Vladimir Putin said in a Jan. 1 statement as Russia assumed the chairmanship of the group. The Kremlin has begun to refer to itself as part of the “Global Majority.”

Internal Russian Security Council documents obtained by a European intelligence service and reviewed by The Washington Post, show that the Kremlin convened meetings in 2022 and 2023 on ways to undermine the dollar’s role as the world’s reserve currency. The ultimate goal, one of the documents stated, was to dismantle the post-World War II global financial system and the power it gives Washington.

“One of the most important tasks is to create a new world order,” one of the documents dated April 3, 2023, states. “Western countries led by the United States have tried to impose their own structure, based on their dominance.”

Another document, written by a close ally of Security Council chief Nikolai Patrushev and circulated in the Kremlin this summer, advocated greater cooperation between China and Russia on artificial intelligence, cyber systems and the “internet of things.” As part of that, the document envisioned Beijing and Moscow creating a new financial system and a Eurasian digital currency based on alternative payment systems, such as blockchain, to bypass the Western dominance of global financial transactions.

Kremlin spokesman Dmitry Peskov denied that Russia was working to undermine U.S. dominance of the global financial system, but he conceded it aimed to create alternatives, saying actions taken by “the collective West” were undermining trust without any assistance from Moscow. The Kremlin “is following [the situation] carefully and building a new system of economic neurons because the previous system turned out to be unreliable, false and dangerous,” he said in comments to The Post.

The belief that Russia has proved more militarily and economically resilient than the West anticipated has consolidated Putin’s domestic standing ahead of a presidential election in March, particularly with certain members of the Russian elite who have shown long-standing skepticism about the war in Ukraine and initial concern about the impact of Western sanctions.

“There has been a certain consolidation in the Russian elite,” said a Russian academic with close ties to the country’s senior diplomats. “There is a certain expectation that the situation will further change in Russia’s favor.”

Russian billionaires like Oleg Deripaska, who initially publicly spoke in opposition to the war in Ukraine, saying it would lead to economic crisis in Russia, now describe Russia’s break with the West as a catalyst for reshaping global economic patterns.

“Alternative payment systems and debt markets will be created: In China on the basis of the yuan, and in India and the Middle East on the basis of cryptocurrencies,” Deripaska wrote on Jan. 20 on Telegram, the messaging app. “In a few years, sanctions will no longer be a brake on global trade and investment.”

European security officials said that Moscow is very much Beijing’s junior partner and that it is unclear China has any real interest in aligning with the Kremlin’s grandiose visions. But Russia’s focus on using its global position to disrupt the West is intensifying, the officials said, including in the Middle East.

Russia is “not omnipotent, but they try to use all possibilities. They are very consistent and systematic,” said one senior European official who, like others, spoke on the condition of anonymity to discuss sensitive matters.

While most of the West still hopes for a return to the previous order, the senior European security official said, Russia’s billionaires “have understood that the old life is finished and now is the time to create a new future.”

The Russians, the official continued, “have passed through the Rubicon, and the West has not. The West wants to return to business as usual. But the Russians understood that this is impossible, and they are trying to build a new world.”

Since Hamas’s Oct. 7 attack on Israel, the Kremlin has appeared to jettison its carefully crafted post-Soviet relationship with Israel in favor of deepening ties with the Arab world. In October, Russia hosted a joint delegation of high-ranking Hamas members and Iran’s deputy foreign minister, Ali Bagheri Kani. Putin made a rare visit to the United Arab Emirates and Saudi Arabia in December, his first trip outside China, Iran and former Soviet states since the invasion of Ukraine.

“Through Iran, it is possible [for Moscow] to make this [Middle East] situation so acute that attention can be further distracted from Ukraine,” one Russian official said.

“Russia still has a big negative potential,” he said. “There are a lot of hot spots that Russia can interfere in.”

With a host of elections taking place in Europe this year, the State Department has warned that Russia will conduct “information operations” aimed at further undermining Western support for Ukraine.

“Russia is hoping that the number of elections in Europe this year could change what has been a remarkable coalition and disciplined opposition to its war,” James P. Rubin, U.S. special envoy and coordinator of the department’s Global Engagement Center.

And deep divisions in Washington, including over continued funding for Ukraine, have fostered the belief in Moscow and elsewhere that the United States is paralyzed, said Matthew Redhead, former head of Global Strategic Intelligence at HSBC and currently a senior associate fellow at the Royal United Services Institute, a British think tank.

“It means that hostile states like Russia and Iran and potentially China are going to start pushing the boundaries further to see what reaction they will get,” Redhead said. “It is an invitation to escalate.”

For Mikhail Khodorkovsky, the exiled business executive who spent 10 years in Russian jail after falling afoul of Putin, the West appears to be at an inflection point. How it responds to increasing global disorder – and Russian aggression – could determine the number of conflicts it faces in the decades to come.

“Putin of course is trying to undermine the world order because this for him is the only strategy to survive,” said Khodorkovsky, who is now based in London. After allowing Russia to cross red lines in Syria and then withdrawing from Afghanistan, followed by piecemeal support for Ukraine, Khodorkovsky said, “it looks from the outside like the U.S. is losing the Third World War.”

Gen. Richard Barrons, former commander of the British military’s Joint Forces Command, said the risks are growing of strategic failure for the West because of the lack of political will to supply Ukraine with adequate amounts of weapons and to turn around military industrial production.

“In terms of latent military power and economic strength, it is absolutely ridiculous that the West is being held hostage by something as relatively puny as Russia,” he said. “Putin believes that if he is stubborn enough for long enough, we, the feeble West, will walk away – and he could be right. … That won’t just be shameful. That will be an act of strategic self-harm.”