In the mood for love?

I recently found a very peculiar article on FP's website. It is called Bad Exes and it points out five former heads of state who, in the author's opinion, have devoted their post-spotlight time to mess around in an unhelpful manner. Although the inclusion of figures such as former Spanish Prime Minister José María Aznar is more than justified, I was shocked to see that the list is headed by Germany's former Chancellor, Gerhard Schröder.

Always an advocate of the European Union and relatively pro-Russia as a Chancellor, Schröder did not hesitate to publicly display his respect for his Russian friends and, of course, to accept their money: his dealings with Russian businessmen (read oligarchs) and authorities are well documented and have led him to the chair of the Gazprom's Nord Stream pipeline project

So, the criticism seems to be fair enough. Or isn't it? Of course, one can argue that Schröder might be into it just for the money. However, let's take a longer view: maybe the European Union should show more receptiveness towards Russia if it wants to regain its clout in global affairs.

The issue is clear: neither Russia nor the EU can keep ignoring each other in a globalized world, where power is rapidly shifting East. Russia needs to modernize and diversify its economy with Western technology and know-how, and the EU needs access to the energy sources and raw materials Russia possesses in abudance. However, the EU is obviously reluctant to having closer ties to Russia because of its undemocratic regime and constant violations of human rights: this would go against the very principles of the Union, at least in the short term... but what if we think mid- or long-term?

In the face of the global financial crisis and the return of gas and oil prices to normal, pre-bubble prices, Russia has made clear it badly needs the transfer of advanced technology to create a more modern society. Russian officials hope that this would drive the country away from its current dependence on energy exports.

If the country does indeed move forward towards the modernization path, it would obviously lead to more white collar jobs, not directly linked to the extraction and exportation of raw materials and energy resources. This would, in turn, create a bigger, more educated middle-class that would push for political opening and freedom of speech. In other words, we could see what we have seen in the past in Western societies: what Russia lacks today is an effective civil society, able to push for its civil rights and freedoms. Russian society is a highly polarized one, where almost all middle- and upper-class citizens owe their well-being to the state or a big state-sponsored or company. 

Thus, a technologically-boosted Russia could lead, in the mid term, to a growing respect of democratic values and human rights in this country -- which is precisely what Europe would like to see. And who is readier than the West to provide Russia with the technology it wants? The answer is clear: the U.S., Japan and, obviously, the EU countries. What we see here is, in short, a win-win situation: Russia modernizes and maybe ends up opening up freedom-wise, while advanced European companies get a boost to their exports with a new, big market.

Of course, as foreign investors claim, Russia suffers from rampant corruption, untrustworthy courts, stifling bureaucracy and poor protection for property rights. This should effectively and immediately be dealt with by the Russian government. However, the EU could substantially help via a very juicy incentive: the prompt establisment of a privileged partnership with Russia -- and, of course, also with the rest of the countries in Eastern Europe not yet part of the EU, including Ukraine and Belarus.

Now is also the right moment to act. Although Russia continues to develop its commercial and strategic relationship with China, it does so reluctantly. Russia is also aware of growing Chinese influence in the greater Asia, including its own underpopulated -- but extremely resource-rich -- region of Siberia and, of course, the Central Asian countries, long seen by Russia as its backyard. This explains, for instance, the recent sale of Russian armament to the Vietnamese army (underlining the continuation and intensification of a trend), which is looking to protect its interests in the face of Chinese expansionism in the East Sea. 

After a confidential report calling for a rapprochement to the West was leaked last May, it is undeniable that, under President Medvedev, Russia's foreign policy has clearly moved from ideology and invective towards pragmatism and profit. 

Therefore, the race is on: both China and the EU are worried about Russia's moves towards the other, and wish to have it by its side -- with Chinese top foreign policy experts such as Yang Jiemian openly vying for a closer relationship with Russia. China has its SOEs, which can pay hefty, above-market rates for energy resources and raw materials, but the EU has the technological edge, and what Russia really needs is to modernize its economy, not perpetuating its dependence on energy exports.

It's about time that both Russia and the EU do something to regain their lost relevance. They should just seriously consider acting together.