The Russian Baltic exclave of Kaliningrad has fallen into a state of economic lethargy, while military activity in the sector has increased dramatically. Once seen as a commercial gateway on the warming frontier between Russia and the EU, the territory has now transformed into a hub of regional military focus. In this piece, Eamon Driscoll examines how Kaliningrad serves as a bellwether of Russian-Western relations, and how Moscow-watchers can benefit from observing the exclave.

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The southeastern corner of the Baltic Sea has had a turbulent ride through history. Originally settled by ethnic Balts, the land was conquered by the Teutonic Order in the thirteenth century prior to the Northern Crusades, notably including the Battle of the Ice, in which Aleksandr Nevsky defended the Novgorod and Pskov republics from Teutonic aggression. Since then, the land has been on the frontier of both Germanic and Slavic ethnic groups. The Teutonic Order founded Königsberg, which later became the capital of the Duchy of Prussia, later the Kingdom of Prussia, and remained the city where Prussian monarchs were crowned even as the capital moved to Berlin. Stalin may well have had this history in mind when Königsberg and East Prussia were claimed by the Soviet Union in 1945, and renamed in honor of Mikhail Kalinin, a Bolshevik revolutionary and the first head of state of the Soviet Union.

Despite this rich history, the legal status of Kaliningrad remains unclear today. In what may have been the last example of legal claim to territory by conquest, the Soviet Union occupied the land as part of the Potsdam Agreement, but never formally annexed it. The land was not added to the German Democratic Republic, perhaps to appease the Poles, but remained as part of the Russian SFSR until the 1990s, when a newly unified Germany renounced its claim to the land as part of the Final Settlement prior to the collapse of the Soviet Union, which resulted in Kaliningrad Oblast simply remaining a part of the newly formed Russian Federation. Neither Lithuania nor Poland have made a claim, and after seventy-plus years of Russian occupation and activity in the territory, there is no question as to the ownership of the land, in a case of de facto reality carrying more weight than the de jure paperwork.

Prior to the collapse of the Soviet Union in 1991, Kaliningrad Oblast’s significance came from the main naval base of the Soviet Baltic Fleet at Baltiysk (formerly Pillau). That significance was amplified after 1991 when the region became an exclave of Russia, and further so when Poland and the Baltic states joined NATO and the European Union. As discussed previously, Kaliningrad Oblast is now a critical feature of both Russian and NATO military strategy due to its commanding location on the Baltic Sea, which simultaneously makes the Baltic states vulnerable to Russian aggression and makes itself vulnerable to geographic separation from the rest of Russia. This geopolitical environment, coupled with heightened tensions following the 2014 annexation of Crimea (conducted in defiance of international law, unlike Kaliningrad), has put greater focus on the region. Much attention has been drawn to the periodic deployment of Iskander missiles to the region, potentially a violation of the NATO-Russia Founding Act of 2009, though Russia also claims that Western forces have escalated their activity in the region recently, likely due to the Zapad exercises. Both sides claim that the other is building up its military capabilities, contributing to building tensions in an already-tense geopolitical arrangement.

Fig 1.0 – Iskander (red) and Kalbir (green) Missile ranges from Russia’s key forward bases: Kaliningrad oblast, annexed Crimea and the Khmeimim airbase at Basel al-Assad international airport

Much of Kaliningrad’s strategic importance comes from its proximity to the European core. As the crow flies, the Russian-aligned Belorussian capital of Minsk is only slightly closer to Kaliningrad than Berlin, and Moscow itself is only slightly closer to the exclave than Brussels. Given its position in Europe, Kaliningrad serves Russia’s interests in Europe in a comparable manner to that of the U.S. Hawaiian Naval Stations in the Pacific: allowing the projection of power further than would be possible from the “mainland” alone. In the hypothetical event that the current tensions were ever to escalate, control of Kaliningrad would likely be the primary objective of NATO forces, not only to defend the Baltic states, but also to put pressure on Russian commanders who would then need to respond from a weaker position.

Despite this, the recent history of Kaliningrad has demonstrated an altogether different purpose and value. Though the 1990s were difficult years across Russia, there was a flicker of possibility that Kaliningrad might be able to enjoy long-term economic prosperity. Based on its geographic position, enterprising Russians in both the public and private sectors imagined Kaliningrad as a modern entrepôt; a word used historically for a port in which goods could be imported from abroad for the purposes of later export within the same country. Furthermore, Kaliningrad’s development as a “pilot region” of Russian-EU cooperation was aggressively pursued, and the region continues to participate in multinational organizations with its neighbors Poland, Lithuania, and Sweden in Euroregion Baltic, which seeks to improve cooperation on matters of economic development, environmental protection, political lobbying, and other forms of cross-border cooperation which are not available to the remainder of the Russian Federation. These efforts, together with privileges that came with its status as a Special Economic Zone (SEZ) from 2006–2016, helped to insulate Kaliningrad from the domestic turmoil affecting the rest of Russia during this period. A hub of production, two-thirds of Russian-made televisions have been manufactured in Kaliningrad, while the devaluation of the ruble in 1998 made the region an attractive locale for citizens of neighboring countries to make cheap purchases.

The benefits associated with European cooperation helped make Kaliningrad one of the few regions in Russia which actually experienced an increase in population, but this was revealed to be too good to last. As it became clear to the Kremlin that NATO and the EU would not listen to Putin’s demands of being seen as an equal partner, the climate worsened and the central government intervened in the SEZ to limit its success. This was done in part to prevent an imbalance between Kaliningrad and other Russian regions, and in part to ensure that Kaliningrad would remain dependent on Moscow for support, rather than entertain the idea of pursuing increased autonomy. By 2014 much of the prosperity had vanished; its GDP per capita was less than €7000, less than the national average of €9000 and well below the €12,700 enjoyed in nearby Klaipėda, Lithuania. This trend has not abated. As a border region, it is doing better than most comparable Russian cities like Smolensk or Yaroslavl, but the increasing disparity between Kaliningrad and its immediate neighbors, coupled with severe corruption scandals, is a plague on the region’s overall economic health and will continue to be an issue well into the future.

The Kaliningrad region thus stands as a microcosm of Russia’s foreign policy since 1991. Originally developed as a way to bring Europe and Russia closer together through economics, it has recently been subject to increasing militarism as tensions between the two forces have similarly increased. Shifts in continental geopolitics affect Kaliningrad far more than they do to most mainland Russian regions. As the political climate remains uneasy, and the Ukrainian conflict continues to simmer, Kaliningrad serves as a bellwether for how the Kremlin views the course of current events.

Judging by the bustle of increasing military activity in the region since 2014, it appears that for the moment the Kremlin continues to view its border with NATO and the EU as a potential threat. Despite being generally overlooked by Russia-watchers, the smallest shift in policy within the exclave could be a useful signal to observers of Kaliningrad, and Russia as a whole; currently Kaliningrad points to tension.

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Eamon Driscoll is a graduate of the University of Ilinois and postgraduate of Geopolitics, Territory and Security at King’s College, London. Eamon focuses on issues in Russia and the wider Commonwealth of Independent States, which has furnished him with extensive experience on the topic of breakaway states. His current academic focus is on the Russian enclave of Kaliningrad and how its unique position has forced the region to develop differently from other Russian territories, especially in the shadow of the ongoing crisis in Ukraine.

For an in-depth, bespoke briefing on this or any other geopolitical topic, consider Encylopedia Geopolitica’s intelligence consulting services.

Image credit: Victor Anyakin