Government Watch / National Security / Politics

The Biggest Nation-Building Failure of the Last 30 Years Isn’t Afghanistan—It’s Russia

AMAC Exclusive – by Daniel Roman


Under the shadow of the collapse of America’s 20-year nation building project in Afghanistan, and suggestions from American allies around the world that the US is no longer even a superpower, there has been extensive discussion of where American foreign policy went wrong. There have been plenty of answers too, some quite easy. The 2003 invasion of Iraq, the mishandling of the war in Afghanistan, appeasement of China on trade and IP theft, all seem in hindsight to be horrible mistakes. But perhaps it is worth going back another decade. For although all these conflicts were mismanaged, America’s position today is a consequence of a failure to consolidate its victory in the Cold War in the only way that would have been sustainable: by building a capitalist and democratic Russia. That failure, which both the George H.W. Bush and Clinton administrations contributed to, is one we are still paying for today—in the Middle East, in Europe, and in the Far East.

Just over ten years before the 9/11 attacks and 9,000 miles away, tanks suddenly appeared in another city of ten million. It was August 18th, 1991, and in Moscow troops took up positions around public buildings as a drunken gang of Soviet politicians appeared on television to declare that Mikhail Gorbachev had resigned as Soviet president due to “ill health.” Their effort to seize power was resisted by the people of Moscow, who flocked to join Russian President Boris Yeltsin at the “Russian White House,” resisting Soviet tanks until the coup collapsed several days later.

When contrasted with how brutally, not to mention easily, Vladimir Putin’s regime breaks up protests and silences dissent, it is almost shocking how bravely the Russian people acted in resisting the Coup. They were not crushed, but on the contrary crushed the plotters. Bringing about the effective end of the Soviet Union is even more incredible when it is recalled how little international support they had. Rather than rallying to the support of Yeltsin or the Soviet people, foreign leaders hesitated, showing a shocking willingness to work with the new hardline leaders. Even the United States only mustered an observation from the President that “coups can fail” — far short of doing anything to promote that outcome.

In fact, this inaction was representative of the Western attitude toward the democratic and capitalist movement within Russia throughout the 1990s. While favorable to the concept of a democratic and capitalist Russia, Western leaders were so enmeshed in a world view in which a hostile, Communist, totalitarian Russia was an inevitable fixture that they could not bring themselves to believe that those calling for a different Russia could succeed. While they paid lip service to resistance figures, there was always an element of contempt, viewing them as “flakes.” The White House, for example, blocked any official reception of Yeltsin in the United States for years, apparently believing his very liberalism made him “unserious.” His victory in August of 1991 did not change this attitude.

Throughout the 1990s, Western politicians repeatedly wrote off Russian liberals, predicting their demise repeatedly, whether in a military coup in 1993 or the 1996 Presidential election. At the same time, they constantly sought out “serious” figures from the old security forces they could deal with, in the hope the “adults” would retake power. Before Putin, that included figures such as former Soviet Foreign Minister Yevgeny Primakov. When a “strongman” rose to power in 2000 in the form of Vladimir Putin, he was only providing what Western leaders believed Russia had needed all along, and it was only then that investors began taking renewed interest in Russia. Tragically, they were to be proven far too late.

The investment which poured into Putin’s Russia in the early 2000s could have been of invaluable assistance in 1992. Unlike in 2000, Russia was then for a brief period ruled by committed capitalists who wished to bury Communism more than many American politicians. In the wake of the August Coup, Russia had banned the Communist Party outright, and there was a desire to become like the West as quickly as possible.

We know now that this failed amidst corruption, but just because something failed did not mean that it had to. Many of the problems with privatization were related to the effective bankruptcy of the Russian state, which needed money quick, and was unable to sell investments at their real value, or afford to modernize them before selling. This was not a uniquely Russian problem. Similar issues bedeviled Germany’s recovery from the First World War and contributed to the rise of the Nazis.

Learning from that lesson, American policymakers realized after the Second World War that the best way of safeguarding democracy and American alliances in Europe was to help those countries rebuild quickly. The result was the Marshall Plan, which pumped billions of American dollars into Europe. While it could have been portrayed as welfare, American farmers and manufacturers needed customers, and European states needed to be able to defend themselves. In the end, the U.S. economy made a substantial profit. The total cost of the plan, in 2021 dollars, was $140 billion, one fifteenth that of the Afghan war.

There were those, such as Secretary of State James Baker, who saw a similar opportunity in Russia. There were tens of thousands of factories and oil refineries which were effectively worthless because there was no money to purchase spare parts to operate them. They could neither generate revenue directly, nor be sold for much. But with an influx of dollars, Russia’s energy sector could have been turned into a profitable powerhouse, reducing American dependence on Middle Eastern oil and making Russia’s recovery self-funding. Baker argued that not only would providing funds for such a project on a loan likely pay for itself, with American taxpayers earning a profit, but it would serve a wider geopolitical end.

For Baker, there was no more vital U.S. foreign policy objective than making the Russian transition to capitalism and democracy a success. A democratic Russia would be key to solving domestic disputes in the Ukraine, the Caucuses, and Central Asia, where linguistic and ethnic conflicts could be contained if they did not become proxies for ideological competition. A democratic Russia would be a key ally within international bodies, able to pressure Iran, Syria, and Iraq. By contrast, other U.S. interests, such as the effort to expand the EU and NATO into the former Soviet bloc, isolate or overthrow the Iranian regime, and press for peace in the Middle East, would be under constant threat if there was a resentful, authoritarian Russia out for revenge.

With China rising as a potential American rival, a successful transition in Russia would have vindicated those who called for democracy in Tiananmen Square in 1989 by fulfilling the dream of those who took to the streets of Moscow in August 1991. By contrast, the disastrous failure of the Russian transition would, as it has, serve to vindicate Deng Xiaoping and those who acted to crush the nascent democracy movement in China. 

Baker asked for at most $100 billion in the form of loans. With hindsight and knowledge of the trillions of dollars that would be spent in the Balkans, Iraq, Afghanistan and Eastern Europe, $100 billion now appears to have been a shockingly cheap bargain.

Unfortunately, at the time, American politicians were in no mood to build, or more accurately to help others build. They wanted a peace dividend, and if there would be money spent abroad, it would be on wars. If there was to be construction, it would be reconstruction in nations the U.S. was seeking to build, not helping people who wanted to build their own nations.

Russia, in the end, received no money. At most it received assistance in taking out more IMF loans at ruinous interest rates, not any actual investment. The U.S. would spend trillions in Iraq, Syria, and Afghanistan, only to have the Taliban ultimately regain power and a hostile Russia wielding as much influence in those places as the United States.

Would engagement and funding have produced a democratic Russia? Maybe. Maybe not. But the tragedy is that the United States did not try. The Afghanistan debacle was a catastrophe, and an embarrassment of historic proportions. But the failed nation building mission was not America’s worst blunder since the end of the Cold War. It was only a very expensive runner up.

Daniel Roman is the pen name of a frequent commentator and lecturer on foreign policy and political affairs, both nationally and internationally. He holds a Ph.D. in International Relations from the London School of Economics.

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John / fix this mess
27 days ago

I respectfully “disagree”. The biggest failures of the last 30 years in rebuilding of livable,thriving societies are all of our large democrat-controlled cities; Chicago Baltimore, detroit , Los Angeles, St. Louis, San Fran.. You get the idea.

27 days ago

Too many politicians are focused on being elected and then re-elected without thought of why they are seeking a job in government. They want the job, but not the work that goes with the job…their goal is the election, not taking care of the country and doing what is best for the USA.

Henry Carney
27 days ago

Would have loved to see James Baker as our President…

Tim Toroian
27 days ago

I always thought Afghanistan needed to be a cooperative occupation as Korea is for terrorist control rather than a “war” that could be “won”.

27 days ago

Neither Bush 1 nor Clinton were focused on true, long-term world geopolitics as it pertains to then Russia. Their administrations had very specific objectives, which did NOT include a large scale engagement to facilitate pro-capitalism in post Soviet Union Russia. Bush was chiefly focused on facilitating expanded economic and diplomatic relations with China and Clinton was focused on trying to make the United States more European via social engineering efforts, along with easing the path to getting China into the World Trade Organization despite the many warnings of the dangers of doing so. A more interesting article would have been how would the world look today, if the both these U.S. Presidents had made more rational, clear-eyed decisions with respect to Communist China. However, that is a topic for another day.

Would a hypothetical engagement by either U.S. President have changed the ultimate outcome and rise of Putin? That is a coin toss at best. Just because the Soviet Union collapsed, it didn’t mean the societal damage of 70 years of repressive communism on the country would be magically wiped away. Yeltsin and his supporters ultimately giving way to old-style “strongmen” from the old Soviet Union high-lighted the push and pull between those in Russia wanting a better, more freedom oriented lifestyle (the generally younger people) and those that longed for the state imposed predictability of a dictatorship (the older people who spent their entire lives living where the state told them, doing the job the state told them, etc. etc.).

Ultimately, the Russian people made the fatal mistake of putting people like Putin back into power and like in all socialist governments, once elected socialists are very hard to remove. They change the voting rules. They use their power to change laws and whatever constitution or rules govern the country. They control who counts the votes in every election to ensure they win over and over again. They imprison or kill their political rivals to ensure they remain in power. So while this article presents a nice “what if” to ponder what a different set of priorities and actions from two past U.S. Presidents might have changed in Russia, none of it will change the fact that as of the last election Putin has cemented his life-long hold on power in Russia.

27 days ago
Reply to  PaulE

AND Our Communist-Loving So-Called Democratic Party Leadership IS READY TO NOW DESTROY AMERICA ONCE AND FOR ALL! . . . And I Don’t See Our Current Republican Party Leadership Up To The Task TO STOP THEM! . . . I FEAR FOR OUR WONDERFUL COUNTRY and How We the People CAN STOP THEM!

27 days ago
Reply to  PaulE


27 days ago
Reply to  PaulE

Off subject, as we have stated before, there seems to be no rhyme or reason for the way AMAC censors work. Earlier, on several of the articles, there were a couple of people who advertising some silly work scheme that should not even had been allowed but made it. On an earlier article , a couple of days ago, I answered someone’s comment that was relevant to the discussion and my comment was rejected, ended up just revising the comment to get approval. One of these days I will get the hang of it. LOL.

27 days ago
Reply to  Max

Yes it is amazing Max that the AMAC censor seems to arbitrarily flag comments for no good reason, but on the other hand sees nothing wrong with someone using the website to push an Internet scam.

Bill on the Hill
26 days ago
Reply to  PaulE

Paul, it is good that you mention Bush 1 & Clinton specifically with respect to ’91 Russia…
Neither of these gentlemen showed much interest in seeing or promoting capitalism in Russia, in fact just the opposite would be true it seemed at the time… Whether or not they could have made a difference had they showed some interest in Russia’s fate, we’ll never know on that score because they remained silent…As for Boris Yelstin’s stunt with the tanks, many thought it was Vodka induced!
Bill on the Hill… :~)

Stephen Russell
27 days ago

We tried that in 1918-19 Op Archangel in Russia then post Russian Rev 1917

27 days ago

Not exactly the same thing Stephen. Operation Archangel was a military action by allied forces designed to assist the remaining old guard Russian forces trying to oppose the communists, that already had seized control throughout much of Russia. However, a great teachable moment of bad timing and poor planning by the allied forces, which is why it failed.

What the author is talking about is more a hypothetical economic and diplomatic assistance program to try and foster pro-capitalist ideals after the fall collapse of the Soviet Union when a few liberal leaders like Yeltsin briefly had power. Something along the lines of the nation building exercises that so many in Washington love to push rather than bother to understand the fundamentals of what is going on inside the country they are trying to re-shape.

27 days ago

The Russians have a great memory and remember the backstabbing by the USA and Allies during this operation. They have never forgiven any country for this incident.

27 days ago

Interesting but V Putin is what he is— a DICTATOR with the similar goals of conquest as any man with power desires. He has been patient with his dealings with the West getting what he wants at the West’s expense. He brutally suppresses all who oppose him and doesn’t blink an eye. It would not have mattered if the West helped Russia earlier, the result would have been accelerated.

27 days ago
Reply to  Max

I generally agree Max. Yeltsin was not a strong, decisive leader, which is why he didn’t last very long. The societal damage from 70 years of communism on Russia had left deep scars and created a large percentage of people in Russia that were actually completely incapable of fending for themselves without the state telling them what to do constantly. Which is why they eventually gravitated back to electing essentially a dictator (Putin), who promised order and what could jokingly be called “security” (do as the state tells you to do or else).

Neither U.S. President at the time was up to the challenge and they both had other objectives as I point out in my other post. President Reagan might have had a viable chance, but he would have been fought tooth and nail by both sides of the aisle in Congress all the way. Doing something on the scale being discussed in the article is hard enough as it is without having to deal with constant opposition that would have come from both sides of the aisle in Congress. Politically Washington, D.C. prefers the “status quo” (meaning do as little as possible because change equals potential political risk). So the desire inside the beltway would be to do exactly what was done…absolutely nothing. A complete hands-off policy. The logic in D.C. is you can’t be blamed for failing at something, if you don’t do anything at all.

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