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When the G8 has met in the past, Russia has been a minor player. It has not made major contributions to the preparations or the final communiqués. It has been happy just to enjoy the status of being included in the group. This year will be different. Not only is Russia the host, strongly involved in setting the agenda and inviting observers, but it has set energy security as a major item for attention.

Russia began 2006 by cutting off natural gas exports after Ukraine refused to pay a fourfold increase in the subsidized price. The decision created a crisis in Ukraine, many of whose Soviet era industries depend on cheap Russian gas. When Ukraine began to divert gas from the pipeline that crossed its territory, the reverberations created a crisis in Europe which consumes 80 per cent of Russian gas exports. It was an ironic and costly way to introduce the theme of energy security!

Even though it is no longer a global superpower, Russia's vast oil and gas reserves make it an energy superpower, and President Vladimir Putin seems intent on playing that card. Oil provides somewhat less economic power than gas because it is a fungible commodity, and interruptions of supply can be made up by purchases on world markets. But gas is expensive to transport, depending on costly pipelines or gas liquefaction facilities which cannot be quickly replaced when flows are interrupted. Gas provides a tempting form of leverage which Russia had already used against such small neighbors as Georgia, Latvia, Lithuania and Moldova. But when Gazprom, the Russian state gas company, followed Putin's instructions to turn off the spigot to Ukraine, Russia crossed a new threshold, and Europe shuddered.

This behavior, combined with backsliding on democracy, has raised a number of questions about where Russia is heading and how the West should react. When the World Economic Forum met in Davos last January, one of the items on the agenda was the question: " Is Russia Turning East". In the economic sense, of course, Russia is like the rest of the world and will turn more eastward as markets surge in China and India. But the more important sense of the question was political: is Russia turning its back on Western concepts of liberal democracy? Is it leaving its European orientation and returning to the Slavophil tradition?

In the eyes of some Western observers, democracy is already gone in a Russia run by a network of KGB old boys who limit freedom, feather their own nests, and increasingly use high energy prices to bully their neighbors. Governors are no longer elected, and the Duma has little power. Republican Senator John McCain has even suggested that Western leaders should respond to this behavior by boycotting the G8 summit scheduled for Moscow this summer. Journalists report a policy debate in Washington between Vice President Dick Cheney who urges a tougher line toward what is seen as Vladimir Putin's backsliding and Secretary of State Condoleezza Rice who is reported to take a more pragmatic position.

I recently revisited Moscow after a decade of absence. I had come to Moscow several times in the 1980s as a guest of Yuri Arbatov's Institute for the Study of the United States and Canada. My first impressions now were of a bright well lighted Moscow that had clearly become much more like a European capital than the dreary city of twenty years ago. In the early 1980s, Russian colleagues risked critical comments only when walking outdoors or in noisy restaurants, but never in their offices. This time I found students, journalists, and politicians willing to criticize President Putin openly. Russia may not be democratic, but there is certainly more private property and personal freedom than there was two decades ago.

But free speech is not the same as democracy, particularly when it cannot be amplified and organized for political purposes. While newspapers and some radio stations are openly critical of the regime, television is strictly controlled by the state. As one of Putin's supporters explained, "we have a manipulated democracy. It is really no different than Berlusconi's Italy." But despite Prime Minister Silvio Berlusconi's influence over his television stations, the outcomes of Italian elections are an open question. No-one suggested to me any doubt that Putin's United Russia group could fail to win the next Russian election. And many expressed concern that the new oligarchs who were creating both private and state owned corporations were even more corrupt than the oligarchs who profited from the privatization of the 1990s under Boris Yeltsin.

What will the future look like? One former political leader suggested that Russian politics is like a pendulum. It had swung too far in the direction of chaos under Boris Yeltsin, and was now swinging too far in the direction of order and state control under Putin, but would eventually reach equilibrium. Others were not so sure. A Duma member told me he foresaw a continual decline of freedom rather than a return to equilibrium. Perhaps the most interesting assessment is by Dmitri Trenin, the deputy director of the Carnegie Endowment's Moscow Center. In his view, "although not democratic, Russia is largely free. Property rights are more deeply anchored than they were five years ago. Russia's future now depends heavily on how fast a middle class - a self-identified group with personal stakes in having a law-based government accountable to tax-payers can be created."

How should western countries respond? Despite disappointment about the backsliding on democracy, the West needs Russian cooperation in dealing with issues like nuclear proliferation in Iran and North Korea, with the control of nuclear materials and weapons, with combating terrorism, and with energy production and security. While the G8 summit will bolster Putin's prestige, realism suggests that a Western boycott of the summit would be a mistake. Moreover, most Russian liberals I spoke with believed such isolation would accelerate the xenophobic tendencies present in Russian culture and make the liberal cause more difficult. In their view, the West should look to the long run, use our soft power of attraction, expand exchanges and contacts with Russia's new generation, support Russia's entry into the World Trade Organization and other market oriented institutions, and address Russian deficiencies with specific criticisms rather than general harangues or counter-productive isolation. Some cited the success of Secretary Rice's quiet efforts to make changes in a new Russian law that regulates non-governmental organizations. Turning our back on Russia will not help. We should remember that in the long term, honey catches more flies than vinegar.

Joseph S. Nye, Jr. is Distinguished Service Professor at Harvard University. His most recent book is Soft Power: The Means to Success in World Politics

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