Tough-Love Diplomacy

Nostalgic cold-warriors sat up up and took notice last week when U.S. officials announced that a Russian diplomat by the name of Sergei Tretyakov had decided to abandon his job at the United Nations and remain on American soil. Though his new U.S. handlers were reluctant to divulge details, Russian journalists speculate that Tretyakov was probably working as a spy under diplomatic cover. But whatever his motives, the case had one remarkable effect: for the first time in nearly a decade, the word "defector" has re-entered the vocabulary of Russia's relations with the West.

Even though Tretyakov resigned his midlevel post and asked for asylum last October, the timing of the revelation was all too appropriate. Russians' irritation over their country's demotion from superpower status is colliding with a new policy of tough love from the West. George W. Bush set the tone in pre-Inauguration newspaper interviews, reasserting his plans to develop a national missile defense (a project resolutely opposed by Russian President Vladimir Putin) and saying he was reluctant to lend Russia more money until the country cleaned up its act. That hard line was underscored by Bush's first foray into foreign policy last week, when he relegated Putin to the lower ranks of a list of introductory phone calls to foreign leaders. But U.S. leaders aren't the only ones opting for a policy of zero tolerance when it comes to Putin's Russia.

Russia's leading businessmen got a jolt, for example, during the recent World Economic Forum in Davos. Back in the 1990s conference organizers courted the small group of tycoons, known as oligarchs, who emerged as the main beneficiaries of the country's haphazard economic liberalization. This time WEF organizers made headlines by canceling their invitation to Oleg Deripaska, a leading aluminum magnate being sued by three of his disgruntled business partners in a U.S. court. The plaintiffs allege that Deripaska was involved in organized crime. Meanwhile, financial guru George Soros added insult to injury by reportedly saying that foreign investors no longer have the stomach to risk money in Russia's failing economy.

Many of the other Russians who usually attend Davos didn't even bother to go this year. At least one Moscow newspaper claimed to know why. "Let's not beat around the bush: It's a trend," noted the daily, Izvestia. "Many representatives of the Russian political and economic elite are turning out to be ineligible for travel abroad." The paper pointed to several leading businessmen who have found themselves mired in legal problems in Western countries (including media mogul Vladimir Gusinsky, now under house arrest in Spain as officials there consider an extradition request from Moscow).

And the list of unwelcome Russians goes on. The country's movers and shakers were stunned last month when former Kremlin property manager Pavel Borodin was arrested in New York. U.S. law-enforcement authorities were honoring a request by their Swiss counterparts, who want to put Borodin on trial for money laundering. (Russian prosecutors dropped their own charges against Borodin in the same case last December.) The Borodin imbroglio has prompted an outcry in the Russian media. The fact that he was detained on his way to the Bush Inauguration led one state-owned TV network to speak darkly of a "well-organized special operation" aimed at blackening Russia's reputation.

These days Russia doesn't seem to need much help in that department. The country has been getting some of its worst press in the one international arena where it can least afford it: the continuing negotiations over its $40 billion debt to the Paris Club of rich governments who give loans to poor nations. Russia says that it's been suffering under an unbearable external-debt burden since the 1998 ruble crisis. Creditors respond that Moscow is flush with cash thanks to high prices for oil, one of the country's main sources of revenue, and can easily meet its payments. The Paris Club could forgive part of the debt--if Moscow comes to terms with the Inter- national Monetary Fund on a new set of loans. But the IMF has refused to fork over any new money since Russia's big default in 1998, and an agreement looks a long way off--especially, say experts, consider-ing the negative vibes coming out of the White House.

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