History: The Godfather

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Russian President Vladimir Putin.

Sergei Guneyev for TIME

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You can say what you like about Russian President Vladimir Putin--although you'd be well advised to keep it polite--but he has certainly re-established his country's credibility as a great power. Ten years ago, Russia was in a state of disarray reminiscent of the early 17th century "Time of Troubles." Putin's predecessor, Boris Yeltsin, was like a caricature of the disastrous Czar Boris Godunov, on whose watch Russia suffered hunger and humiliation. Plagued by heart trouble and alcohol abuse, Yeltsin had secured re-election in 1996 only by turning the privatization of the Russian energy sector into a sleazy scam, trading oil and gas fields for campaign contributions. Meanwhile, ordinary Russians had to endure rampant inflation and unemployment. Small wonder Russia's geopolitical standing seemed to crumble during the 1990s. As former Soviet republics and Warsaw Pact allies queued up to join NATO, the superpower seemed really to have become--as the cold war joke had it--Upper Volta with missiles.

Then, at the end of 1999, Putin took over. Since then he has ruthlessly reasserted Kremlin control over the energy sector and the media. The economy has bounced back, with growth averaging 6.8% and inflation coming down into single digits. Putin's most impressive achievement, however, has been to restore Russia's global clout. While his predecessor acted the clown on the international stage, Putin has relished playing the tough guy. Indeed, when I saw him speak at the recent international Conference on Security Policy in Munich, the Russian President gave a striking impersonation of Michael Corleone in The Godfather--the embodiment of implicit menace. An American delegation that included Defense Secretary Robert Gates and presidential contender John McCain heard Putin warn that a "unipolar world"--meaning one dominated by the U.S.--would prove "pernicious not only for all those within this system but also for the sovereign itself." America's "hyper use of force," Putin said, was "plunging the world into an abyss of permanent conflicts."

To some listeners, Putin's complaints were eerily reminiscent of the cold war. But as I looked around the conference hall, it struck me that his target audience was not necessarily American but rather more European and Middle Eastern. Like Michael Corleone, Putin aspires to be a businessman. His Russia is an energy empire, sitting on more than a quarter of the world's proven reserves of natural gas, 17% of its coal and 6% of its oil. For geographical reasons, the U.S. is not one of Russia's main customers. But two-fifths of Germany's natural-gas imports come from Russia--as do all of Iran's new nuclear reactors. When Putin mentioned energy prices, it was the Germans in the audience who took notes. And when he got onto nuclear proliferation, it was the Iranians who sat up.

The key point is that Russia's geopolitical power has become a function of the value of its energy exports. As Princeton historian Stephen Kotkin has pointed out, the energy crisis of the 1970s helped the Soviet economy--even as it hurt the West--by bathing the ailing Soviet system in petrodollars. But as oil prices slid below an average price of $20 per bbl. from 1986 to 1996, Russian power slid too. It's no coincidence that the price of oil touched $11 in Yeltsin's miserable last year.