From Russia With Love: The "Reset" Continues

It certainly looked like Dmitry Medvedev had a good time on his first trip to America last week as Russia's president. First with his host in California, Governor Arnold Schwarzenegger, on whom he tried out his impression of Russia's longtime favorite movie star. Then in Washington, where, in the midst of high-level summitry, President Barack Obama took his new ally out for a cheeseburger luncheon.

It was all a far cry from the bleak old days of the Cold War. No one pounded a table with a shoe; no one threatened to bury anyone. The focus was on economic modernization, but it didn't feel especially dramatic. Maybe that's a good thing.

Russian President Dmitry Medvedev tells Governor Arnold Schwarzenegger that he'll be back. But in the meantime, "Hasta la vista, baby."

After coming into office, Obama and other top administration officials, from Secretary of State Hillary Clinton on down, have spoken repeatedly of "hitting the re-set button" on American/Russian relations. Clinton even presented a large button to her Moscow counterpart, albeit one with a faulty translation. And progress has been made, as much out of necessity as anything else.

Russia has re-emerged as a great power on the global stage, fueled in large measure by its vast supplies of oil and natural gas. It's making aggressive and largely successful moves to reassert its influence in the post-Soviet space, and elsewhere. America is still pinned down in Iraq and Afghanistan, largely unable to counter those moves even if it were so inclined. Even the hawkish Bush/Cheney Administration stood by as Russia smashed Georgia's military in 2008 after that country's foolish president provided Moscow the pretext it needed by attacking a breakaway province.

The Obama Administration seems enthusiastic about Medvedev's initiative to develop new technologies -- replete with a would-be Russian Silicon Valley outside Moscow -- viewing it as a good development after 18 months of continuous diplomacy. The White House points to a number of successes with Russia, including agreement by the world's two leading nuclear powers to sharply reduce the number of weapons, agreement on nuclear nonproliferation efforts, cooperation on intelligence and counter-terrorist matters, Russian help for the U.S. effort in Afghanistan, Russian support for stronger U.N. Security Council sanctions against North Korea and Iran, and Russian agreement to pull out of a contractual agreement to provide Iran with some of the world's most advanced anti-aircraft systems.

President Barack Obama treated his guest from Moscow to an elegant Washington luncheon, at Ray's Hell Burger in Arlington, Virginia.

Now, promising as all this is, let's not kid ourselves. As democracies go, Russia is a decidedly authoritarian one. The electoral system is anything but robust. Serious political opposition is either cowed, co-opted, or gone. The very rich and powerful are even more so. The news media, largely compliant. But it is in our interest to find ways to work with Russia.

In Medvedev, Obama has someone he can work with, someone he gets along with better than the more forbidding Vladimir Putin, who seemingly plays bad cop to Medvedev's good cop. Medvedev, like Putin, emerged in St. Petersburg out of the ruins of the St. Petersburg. A lawyer, one of the few in Putin's inner circle without an intelligence or military background, Medvedev served as Putin's presidential chief of staff and chairman of Gazprom, the world's largest natural gas company, before getting the nod from the Putin-dominated United Russia party as its presidential candidate.

Obama and Medvedev worked out more details in their Washington meetings regarding Russia's accession to the World Trade Organization, which the Obama Administration supports. It's a key step in modernizing the Russian economy.

The vast revenues flowing from minerals and metals made Moscow, a sad place in the 1990s, a glittering city in the most recent decade, with the most billionaires before the great global meltdown. But even though Russia is moving aggressively to stake claims to the vast depositories of petroleum beneath the still frozen Arctic Sea -- in anticipation of climate change making access to that storehouse far easier -- the Kremlin knows that Russia cannot simply rely on resource extraction forever.

Hence the drive to modernize.

Presidents Obama and Medvedev led Thursday's U.S.-Russia Business Summit in Washington.
The focal point of Medvedev's visit to California, where he toured high tech hot spots with Schwarzenegger, and Washington, was economic modernization.

While Russian is strong in weapons technology -- Prime Minister Vladimir Putin, who elevated Medvedev, his former chief of staff, to the presidency when he decided not to change the constitution limiting him to two successive terms as president, is overseeing what he says is the creation of the world's most advanced fighter aircraft -- it lags in civilian technology. Many of its most talented citizens left Russia after the collapse of the Soviet Union and the even greater collapse of Russia during the chaotic 1990s.

So Medvedev, with Putin's support, is trying to create an innograd, or innovation city, a Russian version of Silicon Valley outside Moscow. Skolkovo already hosts a new school of business and management. But that's just the beginning.

It's an interesting idea to create a Silicon Valley. But it's not a new idea. It's certainly been tried before, and usually doesn't work.

It's not as though Silicon Valley doesn't exist in large part because of the government. The microchip was created by the demands of the U.S. military and space programs. The initial version of the Internet was created by the Pentagon's advanced research agency.

Schwarzenegger welcomed Medvedev to the U.S. on his first trip to America as president.

But direct governmental intervention is only part of the picture. Silicon Valley benefited from a confluence of factors, ranging from the cosmopolitan and experimental atmosphere of the San Francisco Bay Area, proximity to two great universities in Stanford and Berkeley, and a culture of venture capital. These aren't things that emerge from the top-down.

Nevertheless, Medvedev, a technophile and Apple aficionado who runs his operations in the Kremlin from a MacBook and issued twitter messages at this past weekend's G20 summit in Toronto from an iPad, is definitely giving it a go.

After Schwarzenegger welcomed him to San Francisco, the two went on down the road to Silicon Valley where Medvedev met with leading high tech figures and spoke at Stanford.

Google CEO Eric Schmidt agreed to be on the board of directors of the Skolkovo project. John Chambers, CEO of Cisco Systems, a world leader in computer networking equipment, agreed to invest $1 billion in Skolkovo for research and development, build a second global headquarters for emerging technology, and partner with Russian companies.

And Steve Jobs gave Medvedev the brand-new iPhone, and some advice.

By the time he got to Stanford, after also sending his tweet at Twitter headquarters, touring the U.S. headquarters of Russian search index leader Yandex, meeting with Russian expats at a Palo Alto cafe, and even visiting the legendary garage where Hewlett-Packard began, Medvedev was in a contemplative mood.

"Unfortunately for us, venture capitalism is not going so well so far," he said at Stanford, where former Republican Secretaries of State George Shultz and Condi Rice were in attendance. "No one wants to run the risk," he said. "It's a problem of culture, as Steve Jobs told me today. We need to change the mentality."

Medvedev toured some of the high tech hot spots of Northern California.

As impressive as the big Washington meetings with Obama were, including the U.S./Russia Business Summit at the U.S. Chamber of Commerce, where Boeing agreed to participate in Skolkovo and to sell 50 airliners to Russia, the California leg of the trip may have been most important for Medvedev.

After California First Lady Maria Shriver greeted Medvedev and Russian First Lady Svetlana Medvedeva at the airport in San Francisco, Schwarzenegger, whose Red Heat was the first American film to shoot in Red Square, welcomed the Medvedevs more formally at the Fairmont Hotel.

He also signed a deal with Renova Group chief (and BP partner) Viktor Vekselberg, the single largest owner of Faberge eggs in the world, who is spearheading the Skolkovo project. Renova will contribute $1 million towards preserving California's Fort Ross State Historic Park. Fort Ross was the hub of Russian settlements in California during the 19th century. It's not well understood that Russia also colonized California, along with Spain. Hence the popular Russian River resort area north of the San Francisco Bay Area.

Schwarzenegger accompanied Medvedev on his visit to San Francisco and Silicon Valley.

Schwarzenegger, who took Medvedev out for steaks in San Francisco after he arrived, pledged to put together a technology trade mission to Moscow to help with the Skolkovo project.

But he didn't tour the guided missile cruiser Varyag ("Viking"), flagship of Russia's Pacific Fleet, which made the long cruise across the Pacific from Vladivostok to coincide with Medvedev's visit. With the exception of the brief visit of a Soviet submarine during World War II, this was the first visit to San Francisco by Russian warship since the Civil War.

Varyag sailors participated in a plaque dedication ceremony commemorating the six Russian sailors who died fighting a city fire during that visit in 1863. The Varyag (originally named Red Ukraine when it was built during the late Soviet days) was open for public tour on Thursday.

The Russian sailors had an apparently uneventful shore leave in the City by the Bay. Well, by the rather loose standards of the City by the Bay, that is. The Cold War seems like it was a lot longer than 19 years ago.