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Putin vs. Western analysts

Russia’s new approach to extending its influence necessitates new approaches to assessment.

Douglas A. SamuelsonBy Douglas A. Samuelson

Russia has a plan to take over Central and Eastern Europe, only this time by buying it rather than overrunning it.

Russia’s recent move to a more assertive foreign policy has more and more analysts trying to guess its intentions and how the Western world can respond. Russia’s military push into Georgia, the advance of rebels presumably backed by Russia in the Crimea, Russia’s possible involvement in the hacking of Democratic National Committee emails and generally bolder statements in foreign policy indicate that there are reasons for concern. But there is broad disagreement about what Russia’s objectives and plans really are.

A good outline, backed by substantial data, appears in a report recently completed by study teams at the Center for Strategic and International Studies (CSIS), one of Washington, D.C.’s most respected think tanks, and the Center for the Study of Democracy (CSD) in Sofia, Bulgaria [1]. As the study’s authors quoted Marti Dempsey, then chairman of the Joint Chiefs of Staff, from July 2014, “[Vladimir Putin] got a playbook that has worked for him now two or three times, and he will continue to [use it.]” The analysts focused on Russian economic influence in Central and Eastern Europe, with detailed attention to events from 2004 through 2014 in five countries: Hungary, Bulgaria, Latvia, Slovakia and Serbia.

The study’s authors’ conclusion is that since 2008 or thereabouts, Russia has deliberately and systematically pursued increasing economic influence in the countries of Central and Eastern Europe, trying to draw them away from close cooperation with the United States and the European Union (EU). These pursuits include substantial efforts to involve those countries’ leaders in financial arrangements to enrich the leaders in return for more pro-Russian and anti-democratic policies and politics. Detailed depiction of the five countries suggests some factors that affect resilience against Russia’s creeping influence.

Russian President Vladimir Putin’s playbook focuses on economic influence in Central and Eastern Europe.

Russian President Vladimir Putin’s playbook focuses on economic influence in Central and Eastern Europe.
Photo Courtesy of 123rf.com | Igor Dolgov

Deterioration in Democratic Governance

The study’s authors call Hungary “an early adopter of illiberalism.” They wrote, “At the beginning of the study period, Hungary was among the best performers in Central Europe in terms of its good governance practices and was steadfast in its Euro-Atlantic orientation, having acceded to NATO in 1999 and the European Union in 2004. Yet, as the decade progressed, Hungary experienced a marked deterioration in democratic governance standards following its 2010 parliamentary elections.”

The government has revised the constitution five times, increasingly restricted media and minorities, and imposed more control over the judiciary and the central bank. These developments have coincided with reduced cooperation with NATO, rising dependence on Russian energy supply and increasing new projects with Russia. Also during this time, the authors assert, the think tank Transparency International stated that Hungary has adopted “a centralized form of corruption that has been built up and made systematic.”

In Bulgaria, the study’s authors find that economic linkages, particularly in energy, “provide the Kremlin with considerable leverage over current and future decision-making.” This happens “through an interplay of reinforcing networks of influence that range from corrupt politicians and like-minded political parties to energy majors and Bulgarian oligarchs.” Among the five study countries, Bulgaria has the largest proportion of Russian investment and the most pervasive influence on policy, including legal changes that make financial dealings more opaque. This set of effects led the study’s authors to call Bulgaria an example of “state capture” by the Russians.

Latvia, in contrast, offers a model of how to “break the unvirtuous cycle.” Despite – or perhaps because of – its close proximity to Russia and its former status as a Soviet republic, Latvia has resisted “the malign influence of the Russian-linked oligarchies” most effectively of the five study nations. The authors suggest that this may be because Latvia “has more successfully deepened its nascent democratic institutions and reinforced the rule of law” and the deep skepticism by most Latvians of Russian intentions. Their historical narrative is one of Soviet occupation rather than liberation from the Nazis, and this seems to have made them less persuadable by current Russian initiatives. Thus Latvia, despite the second highest proportion of Russian investment, seems most resilient against Russian influence.

Slovakia, the study’s authors said, has seen a steady decline in democratic governance rankings over the past decade – less pronounced than in Hungary but persistent. While Slovakia did attempt to “dismantle communist-era networks and shrug off authoritarian and nationalistic-style leadership” between 1998 and 2006, “many Slovaks did not enjoy the economic benefits, which exposed the less firmly planted roots of Slovakia’s liberal, democratic tradition.” The ensuing government made financial transactions more opaque and introduced more policies and practices widely seen as unfair.

The study’s authors conclude that Slovakia is an example of a “state capture in action.”

Serbia, in contrast to Latvia, has deep historic ties to Russia that extend to the recent past, including Russian opposition to NATO intervention in the Balkan conflicts of the 1990s. Hence “the Kremlin has continued to deepen its bilateral ties to Serbia even as Serbia has sought to become a member of the European Union.”

These activities include heavy Russian investments in key sectors of Serbia’s economy, such as railway equipment and infrastructure. Serbian companies and Serbian politicians, often thoroughly obscured by complex contractual relationships, seem to have greatly expanded Russia’s political influence in Serbia. The study’s authors rather gloomily describe Serbia as “a preview of coming attractions.”

Policy Recommendations

To counter the tendencies they identified, the study’s authors made several policy recommendations:

  • Elevate and design a specific, high-level task force within the U.S. Financial Crimes Enforcement Network that focuses solely on tracing and prosecuting illicit Russian-linked financial flows if they interact with the U.S. financial system.
  • Encourage NATO and EU members to task their own financial intelligence units with developing dedicated units that track illicit Russian transactions.
  • Prioritize EU-U.S. financial intelligence cooperation.
  • Elevate anti-corruption by strengthening institutions as an element of NATO’s Readiness Action Plan.
  • Completely revamp U.S. assistance to Central and Eastern Europe and the western Balkans to prioritize combating Russian influence and strengthening governance.
  • Substantially enhance EU member states’ and institutions’ anti-corruption and development assistance mechanisms to help the most vulnerable countries build greater resilience to Russian influence.
  • Introduce more rigorous benchmarking of rule of law and anti-corruption efforts as-conditions for pre-accession aid to the western Balkans and other countries seeking EU accession.
  • Earmark specific EU-wide and national funds for support of the rule of law.
  • Enhance EU oversight of EU development funds and require full disclosure of company ownership when meeting EU diversification requirements.

Analytics Opportunities

The study did leave open some interesting issues analytics professionals might wish to pursue. The definition of “corruption” is broad, not tied to an international legal standard, and could therefore be hard to distinguish from what the Western democracies might call “targeted incentives.” More precise terminology and metrics would sharpen the analysis, perhaps yielding better recommendations about how to counter the more pernicious forms of influence.

The study relied heavily on rankings from Freedom House, a well-respected organization specializing in assessments of governmental institutions around the world, for measures of democratic government, judicial independence, and other aspects of economic and political “health.” Even the best such organizations can have biases and blind spots, however, especially when relying on subject matter experts’ judgments. Comparison against one or more other sets of assessments would most likely be illuminating.

Although the study’s authors described the pattern they observed as a “network flow model,” they did not cite a reference in either the operations research/optimization literature or the social networks literature. Neither did they discuss what cuts in the network would disable it. Input-output economics would also be illuminating. Here, too, some analytics attention could be helpful.

The study focused entirely on actions within Eastern and Central Europe in the countries Russia attempts to influence. Analysis of the inside-Russia component of these activities was left for others to pursue. Hopefully, someone will. In particular, it would be interesting to assess whether Russian actions are as cohesive as they may appear from the vantage point of the countries studied, and whether their intent is entirely malevolent.

The study does not mention wargaming, although some wargames have elucidated financial and other non-economic actions as part of hypothesized conflicts between Russia and NATO (see, for instance, [2].) With development of better model-based assessments of consequences, such wargames could be quite valuable in suggesting Russian courses of action and Western countermeasures.

The study does provide a serious, in-depth, careful look at the means of Russian influence, apparently directed at weakening Euro-Atlantic ties and hence undermining U.S. interests. These issues deserve much additional scrutiny both by analysts and policy-makers, as politico-economic influence appears to be a much more consequential and imminent threat to the United States, both the nation and its businesses, than the still-daunting Russian nuclear arsenal.


Douglas A. Samuelson, D.Sc. in operations research, is president and chief scientist of InfoLogix, Inc., a small R&D and consulting company in Annandale, Va. He is a longtime member of INFORMS.

REFERENCES

  1. Heather A. Conley, James Mina, Ruslan Stefanov and Martin Vladimirov, October 2016, “The Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe,” Rowman and Littlefield, Lanham, Md. Also available as a pdf download online from
    www.csis.org.
  2. Douglas A. Samuelson and Russell R. Vane III, June 2015, “Wargamers Explore ‘Forbidden Options,’ ” OR/MS Today.

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