Barack Obama's "reset" with Russia is looking flimsy in the wake of Russian Prime Minister Vladimir Putin's vitriolic reaction to events in Libya last week.
Frustration over American interventionism and lost revenues in arms trade and gas projects are behind Mr. Putin's ire. During the Cold War, the Soviet Union was one of the major arms suppliers to Libya and the Middle East writ large. Yet, the Soviets ran huge losses as they gave weapons as tools of power projection, losing billions of dollars in the process, and contributing to Soviet insolvency.
In 1991, after the Libyan involvement in the bombing of Pan Am Flight 103 over Lockerbie, Scotland, the U.S. declared Libya a terrorism-sponsoring state and imposed an arms embargo. The U.N. Security Council followed in April 1992 and Russia complied. In addition, serious disagreements between the two countries regarding the size of the Soviet debt prevented trade between Moscow and Tripoli until 2008, when then-President Putin decided to write off the Libyan debt in exchange for lucrative arms and gas contracts in the country. Since then, Col. Moammar Gadhafi has become one of the most significant arms customers of the Russian military-industrial complex.
Sergei Chemezov, Mr. Putin's confidant and the head of Russian Technologies, reported that the situation in Libya had cost state-owned arms exporter Rosoboronexport lost income totaling $4 billion.
In addition, during Mr. Putin's 2008 visit to Libya, both countries expressed an interest in the creation of an OPEC for natural gas. Following the visit, Gazprom signed a memorandum of understanding to study joint projects in oil and gas, new gas liquefaction and oil-refining capacity construction, and natural-gas-fired power plant construction.
If the Gadhafi clan is replaced by a pro-Western government, Moscow might lose these arms sales and energy projects indefinitely. It might also have difficulty collecting what Libya owes for weapons already supplied. Bad business breeds hurt feelings.
This is not the first time Russians feel cheated out of their Middle Eastern business: After the U.S. invasion of Saddam Hussein's Iraq, Russia lost billions of Soviet debt and lucrative contracts, such as the giant West Qurna oil fields. No wonder Mr. Putin joined then-French and German Presidents Jacques Chirac and Gerhardt Schroeder, respectively, in their denunciation of "Bush's war."
Mr. Putin's anti-American rhetoric also exposes escalating tensions between the ruling tandem: Mr. Putin and his one-time protege, Russian President Dmitry Medvedev. The latter supports the West in its Libyan engagement.
Moscow abstained from vetoing the U.N. Security Council resolution authorizing Operation Odyssey Dawn. Now, however, it's changing its tune. Russia has joined Brazil's call for an immediate cease-fire, ostensibly because of "high civilian casualties." China also vociferously opposes intensive engagement.
The Putin-Medvedev row reflects deepening splits inside Russian leadership and society. Moscow's abstention over the U.N. resolution on Libya has already had an unexpected effect on the Russian political scene. Mr. Putin condemned the resolution, which calls for "an immediate cease-fire in Libya, including an end to the current attacks against civilians," saying that this resolution is "deficient." He likened it to a "medieval call to crusade" - an almost verbatim quote from Col. Gadhafi himself.
Mr. Putin's remarks elicited a rare and sharp rebuke from Mr. Medvedev, who slammed the comments as "unacceptable." Mr. Medvedev then reiterated his position on the U.N. resolution: "We have to be absolutely accurate in our assessments. Under no circumstances is it acceptable to use expressions that essentially lead to a clash of civilizations, such as 'crusades' and so on."
Disagreements over the future direction of Russia seem to be getting more acute the closer it gets to 2012, the presidential election year in Russia as well as in the United States. The pro-status-quo siloviki (men of force) faction around Mr. Putin is becoming more vocal in its attacks against the more liberal and pro-Western technocrats, who support Mr. Medvedev.
U.S. Defense Secretary Robert M. Gates stepped right into this brouhaha on a recent visit to Russia. Mr. Gates pointedly said Russian officials parrot Col. Gafhafi's inflated casualty figures and take them at face value. Such assertions, he said, are "outright lies." For a moment, it looked like "reset" with Russia never happened.
Meanwhile, the Russian public remains deeply split over the Libyan situation. Russian youth and nationalist groups Nashi (Ours) and Stal (Steel) are holding public demonstrations in front of the U.S., French, and British embassies in Moscow. These expressions of solidarity with and support for the Gadhafi regime implicitly criticize Mr. Medvedev's stated position in support of Western intervention against Col. Gadhafi. In Russian politics, the bizarre is often followed by absurd.
And there is more. Mr. Putin is deeply uncomfortable with Western intervention in what he and his allies perceive as the internal affairs of other countries. Apparently he did not read Harvard professor Samantha Power's book on "the responsibility to protect." Ms. Power's controversial ideology, reportedly, is driving the humanitarian intervention over Libya. Nor did Mr. Putin sip cocktails with Susan Rice, the U.S. ambassador to the U.N., another advocate of Libyan engagement.
Mr. Putin was - and is - deeply mistrustful of the United States. Moreover, he does not welcome any precedent that might lead to sanctions against him - perhaps over atrocities committed against Islamist guerrillas in the North Caucasus or violations of human rights. Also, Mr. Putin views China as Russia's ally of the future. Denouncing the West may help attract the East.
Mr. Medvedev, on the other hand, represents those Russians who yearn for Western acceptance and are betting their future on high-tech modernization, foreign investment and some liberalization. Thus, the Libya spat reflects not only a political competition between the two contenders for 2012 Russian presidency, but also a century-and-a-half-long conflict between "Westernizers" and "Slavophiles," who view Russia's future in diametrically opposing ways.
Ariel Cohen is a fellow in Russian and Eurasian studies at the Heritage Foundation (heritage.org).
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