Russia wants to be recognised as a great power, and has sufficient economic power and potential to encourage it to behave accordingly. However, under its current leadership it recognises that there are economic limits to its behaviour. There is a consistent commitment to budget discipline and a measured allocation of resources among key claimants — the social and development sectors, as well as defence and security. That limits the allocation of resources to power projection, particularly of the hard variety, even if such allocation is at a level high enough to cause considerable discomfort in the West.
The Russian economy is subject to particular pressures: stagnant growth even before the 2014 fall in oil prices, and the budgetary and investment challenges of lower oil prices and sanctions. The commitment to budget discipline and a measured allocation of resources has been maintained. However, there has also been a major rhetorical and policy shift towards a more ‘securitised’ economy, including import substitution-led industry policy. There are major features of the Russian environment which threaten the success of such a policy shift, but which are highly resistant to policy action. They include much discussed institutional weaknesses, as well as issues of remoteness, climate, market size, and industrial location that make it difficult for Russian industry to be globally competitive. The West has no determining influence over the Russian economy. But it is able to raise the costs of great power behaviour, through reducing access to investment and technology, and should do so.