Problem of departing presidents

Vladimir Putin’s dream has come true. He began to discuss the fate of Europe and the Middle East directly with Barack Obama. Without mediators. Further meetings between Surkov and Nuland, Kerry and Lavrov were just the development of some of the agreements reached between the two leaders both set to leave office soon.

Let's try to understand what the United States and Russia may agree on in the present circumstances, as Washington begins confident export of hydrocarbons, while Moscow is in a "pre-stroke" state because of oil prices.

By the end of Barack Obama’s second presidential term, the United States is in quite an ambiguous position. On the one hand, the United States firmly hold the palm of technological leadership, setting the tone in the projects on human space exploration and the creating new industries of the future based on 3D-Printing. American technology and the U.S.-based companies have turned upside down the world’s energy industry, accelerating the end of the era of oil and gas with shale revolution. Now the United States are actively developing solar energy, nuclear fusion, and a host of other energy technologies, eliminating the need for traditional coal, oil and gas. The American military machine knows no equals, being able to conduct several wars in different war theaters, if necessary, and to deploy the U.S. troops anywhere around the world in less than 24 hours.

On the other hand, many internal issues, including migration, health system, and social support remain in an ambiguous state.

But it’s the foreign policy that turned out to be the weakest point of Obama administration. The U.S. has failed to fulfill its guarantees to Ukraine under the Budapest memorandum. Instead of a hard confrontation with Putin's Russia after the Kremlin began an open aggression in the Donbas and hybrid war against Europe, rejecting international law, the White House opted for a strategy of smothering Moscow slowly with economic sanctions. At the same time, it creates additional preconditions for the new oil lows. Moreover, the Obama administration has failed to prevent revolutions in the North Africa and the Middle East that brought Islamists to power. After years of campaigns in Afghanistan and Iraq, the U.S. has not been able to qualitatively improve the situation with the development of state institutions and security systems in these countries.

As a result, in political terms, the United States’ influence has decreased in Eastern Europe and North Africa, in the Middle East, and Asia. U.S. President-peacekeeper was unable to offer the world an exit plan from the most severe security crisis in the last few decades. Now the Obama administration is trying to at least not exacerbate the current level of escalation with Putin's Russia and not to plunge the world into a chain of regional conflicts and, in the long term, a global conflict with unpredictable consequences. The paradox is that at present, the main contenders for the post-Obama White House – Hillary Clinton and Donald Trump –have no clear plan on how to completely neutralize the Putin regime and, most importantly, what to do with Russia after the change of the Kremlin’s master.

There is a high possibility of a change of power in Russia this year, either by a new consensus of internal elites (a “rock to the head" scenario), or by Putin’s quiet early departure from power, with transmission of power to some group, agreed with the West.

Of course, Putin may try to play to the end, but this game will not last too long (up to two or three years) and it is likely to end similar to those of Hussein, Gaddafi and Milosevic.

According to the latest estimates of Russian economists and government officials, there is less than $100 billion left in Russia’s foreign exchange and financial reserves. At best, this will be enough until the end of this year. At worst - to the middle of 2016. The Russian economy has now halted. Import substitution is just not working. The main export field - oil and gas extraction and processing – has been knocked out by the plunging price of the "black gold" below $30 per barrel. The price is most likely not to go up in the coming year, due to the U.S. and Iran both entering the export market, as well as to Saudis dumping hard. Protest sentiments across Russia are escalating. Last year, there were 40% more labor protests in Russia than in previous years. 2016 will see even more of those. The collapse of the ruble is underway, and no one risks to predict, where the bottom is. It is possible that we will see RUB 100 to the dollar pretty soon.

Against this background, the Russian authorities sign an agreement on abolishing double taxation with Hong Kong. This means that the Kremlin has in fact launched the evacuation of the financial assets from the sinking ship of the Russian statehood.

In such circumstances, Russia and Putin simply have no resources for any confrontation, even for trench warfare in Donbas with the escalation of the internal political situation in Ukraine. Kremlin only has a couple of moves left until it suffers a checkmate.

Amid this crisis, there goes the first long conversation between Obama and Putin, then there is a meeting between  Nuland and Surkov, and then – the talks between top diplomats John Kerry and Sergei Lavrov. What may be the real agenda of all these negotiations given the current position of the U.S. and Russia?

It is likely that the departing presidents have agreed on de-escalation before and during the period of their transition from power. For Obama, it means the preservation and transfer of control over the situation to the next leader of the White House. For Putin, it means the ability to ensure personal security, wealth (albeit in a cut form), and to avoid responsibility for all the crimes committed. For Russia, it will mean withdrawal from the annexed territories (first Donbas, then - Crimea); wrapping up its Middle Eastern military campaigns; and a radical change of the government team. At the same time the United States will try to help keep Russia in its current form, fearing the collapse of the state with the second-largest nuclear arsenal, as well as the unpredictable people and elite. Washington should have time to build up the ranks of its chess pieces before the big geopolitical game with China, where the grand prize is Europe. At this, the U.S. is also tasked with preventing a sharp strengthening of China due to the rapid collapse of the Russian Federation.

This is likely what the departing presidents have tried to agree on. The first quarter of 2016 will show whether such assumption has the right to life.