Obama consultants land in Ukraine

By: Kenneth P. Vogel and Ben Smith

American political consultants are hard at work in Ukraine. This fascinating article can be read in its entirety on www.politico.com/news/stories/1109/29410.html.

"In Kiev and Kharkiv and other cities in Ukraine, American political consultants who worked against one another in Iowa and New Hampshire and then in the general election are facing off again in a somewhat surreal Eastern European replay of the 2008 campaign.

The firm headed by Hillary Clinton’s former chief strategist, Mark Penn, is helping run incumbent President Victor Yushchenko’s campaign. Meanwhile Paul Manafort, whose firm worked on Republican John McCain’s losing effort, and Tad Devine, a top strategist on the Democratic presidential campaigns of Al Gore in 2000 and John Kerry in 2004, are consulting for Victor Yanukovych, the pro-Russian frontrunner in the polls.

For Penn, Manafort and Devine, foreign elections have been a lucrative source of business for years. But for the Chicago-based media consulting firm AKPD, the contract to help guide Prime Minister Yulia Tymoshenko’s campaign is part of a new, growth area of business that presented itself after the firm helped Barack Obama win the White House last fall.

Also assisting Tymoshenko is John Anzalone, a pollster who worked on the Obama campaign. And Obama's lead pollster in the campaign, Joel Benenson, also worked briefly in Ukraine this year, helping supporters of a rival presidential candidate, former Parliament speaker Arseniy Yatsenyuk, who courted comparisons with Obama (and whose billboards bear a faint resemblance to the iconic posters of Obama by Shepard Fairey)."

Eurasian Energy Briefs

by Roman Kupchinsky

Ukrainian Prime Minister Yulia Tymoshenko announced that the transit fee for Russian gas going to Europe via the Ukrainian pipeline system will be doubled from $1.70 per 1,000 cubic meters/100 kilometers to $3.40. Tymoshenko did not specify when the new transit fee will take effect – presumably it will begin in January 2010.

The announcement came on the eve of Tymoshenko’s visit to Russian Prime Minister Vladimir Putin to discuss the gas trade between the two countries. Tymoshenko has been upbeat in her public statements about the reliability of the Russian Federation to meet its commitments in the gas trade and praised Putin for “never letting her down.”

Ukrainian President Viktor Yushchenko however, takes a less benign view of the gas trade between the two countries. In an open letter to Russian President Dmitri Medvedev on November 19 posted on his website, Yushchenko urges the Russian president to consider changing the January 2009 gas supply and transit contract which he considers as harmful to Ukrainian interests.

Gazprom, meanwhile, has threatened to demand some $8.5 billion in penalties from Ukraine for not fulfilling its 2009 gas purchase contract. Ukraine has purchased some 14 billion cubic meters less than what it contracted for in 2009.

The Ukrainian side is disputing this figure and many analysts fear that a combination of the increase in the transit price and the unwillingness of Ukraine to pay the alleged penalties might result in another gas war” which could lead to a shut-off of gas supplies to Europe in the coming winter months.

Moreover, East Week, published by the Polish Center for Eastern Studies reported that Tymoshenko has admitted that extending co-operation with the IMF is Ukraine’s only anti-crisis program. After the suspension of the program, Ukraine is unlikely to receive short-term support from other international institutions and Western states, which have made their loans conditional on Ukraine’s continued co-operation with the IMF.

No support would be forthcoming from the European Commission (€610 million), the World Bank (US$500 million) or the EBRD (the first payment of US$300 million under the loan to Naftohaz) should be expected until Ukraine resumes co-operation with the IMF. Both Tymoshenko and Yushchenko had hoped on IMF funds to help them pay off gas debts to Russia and not force them to spend their hard currency reserves reputed to be some $30 billion.

Azerbaijan Considers Georgia-Black Sea-Bulgaria Route for Compressed Natural Gas to Europe

by Vlad Socor

The following article by Jamestown senior fellow Vlad Socor appeared in the Eurasian Daily Monitor and the full text can be read on the EDM website.

On November 13 in Sofia, Azerbaijan’s President Ilham Aliyev and his Bulgarian counterpart Giorgi Purvanov witnessed the signing of agreements of intent on the transportation of Azerbaijani gas to Bulgaria and onward to Europe. The agreements’ centerpiece concerns transportation of compressed natural gas (CNG) from Azerbaijan, via Georgia and the Black Sea, to Bulgaria and farther into European Union territory. This solution, if implemented, would avoid the existing impediments to transit via Turkey.

Azerbaijan’s and Bulgaria’s Energy Ministers, Natig Aliyev and Traicho Traikov, signed a memorandum of inter-ministerial cooperation on gas export and transportation; while Elshad Nassirov, vice-president of Azerbaijan’s State Oil Company (SOCAR), signed with the Bulgartransgaz (state-owned transmission pipelines’ operator) general manager Ivan Drenovchiki a memorandum of understanding toward those goals.

At the signing event, Purvanov placed the CNG project within the broader context of the E.U.-planned Southern Corridor for gas transport to Europe. This envisages an integrated Caspian-Central Asian solution, with Azerbaijan as a transit country (as well as producer) for Turkmen gas to E.U. territory. For his part, President Aliyev noted that this project would “make us [Azerbaijan] a direct supplier to the European Union ... advancing the E.U.-Azerbaijan strategic partnership on energy” (BTA, November 13).

CNG is an unprecedented and untested solution for transportation by tanker ships or any large-scale transportation in Eurasia. Compressed gas has only been used in small volumes for road transport thus far. According to officials from both sides at the signing, CNG transportation across the Black Sea necessitates specialized tankers that are more expensive to build, compared to liquefied-natural-gas (LNG) tankers. However, the CNG delivery mode does not require liquefaction of the natural gas and its re-gasification, obviating the need for those expensive installations and processes. The decompressed gas can be delivered directly into the recipient country’s pipeline network, for national use or transmission to third countries. This cost advantage may well offset the investment costs of CNG tankers, according to the same officials.

Azerbaijan intends to conduct detailed research on CNG transportation on the proposed Georgia-Black Sea-Bulgaria route (Trend Capital, November 14). Azerbaijan and Bulgaria will jointly commission a feasibility study, to be drawn up in short order.

Subject to the feasibility study’s conclusions, Azerbaijan envisages the possibility of delivering 7 to 8 billion cubic meters (bcm) of gas annually, some of it to Bulgaria, but most of it farther into E.U. territory. According to Azerbaijan’s State Oil company president Rovnag Abdullayev, the company considers building a gas-pressurizing installation in the Georgian Black Sea port of Kulevi as a starting point for CNG transportation by tankers to Bulgaria and potentially also to Romania (Trend Capital, November 14).

Apart from CNG, Azerbaijan and Bulgaria confirmed on November 13 their intention to sign a contract for 1 bcm of Azerbaijani natural gas to be exported to Bulgaria from 2011 onward. This depends on continuing advance of the Turkey-Greece-Italy Interconnector (ITGI) and the completion of a 90 kilometer pipeline link from Greece to Bulgaria.

The Interconnector has advanced as far as the Turkey-Greece link and should continue through Greek territory westward, for an undersea link to southern Italy and a projected capacity of some 12 bcm annually. The 1 bcm of Azerbaijani gas to Bulgaria is being envisaged separately from Bulgaria’s quota of Nabucco gas; one would not prejudice the other.

Bulgaria’s government under Boyko Borisov, in office since July, has suspended three major joint energy projects with Russia –including the South Stream gas pipeline project– pending a review of their terms. The new government is looking into possible corruption deals behind those projects and also questions their wisdom in terms of energy security for Bulgaria (EDM, August 10).

Azerbaijan’s agreements of intent with Bulgaria form one aspect of Baku’s recently initiated search for multiple gas export options (EDM, July 2, 17, October 15, 22). Baku’s search is being prompted by slow movement on the Nabucco project and Ankara’s refusal thus far to sign a transit agreement for Azerbaijani gas. Russia and Iran are two active options. The route via Georgia and the Black Sea to Bulgaria adds a further possible option.

Putin Says Decision on ‘Reunification’ of Georgia ‘Already Decided’

by Paul Goble

Vienna, November 17 – Prime Minister Vladimir Putin, who has often described the collapse of the Soviet Union as “the greatest tragedy” of the 20th century, has now said that the “reunification” of Georgia has “already been decided,” a suggestion some of his listeners believe was a call for restoring Moscow’s control over Georgia and even the former USSR as a whole.

In an intriguing commentary published in yesterday’s “Gazeta,” Bozhena Rynska describes both the celebration of the 80th birthday of longtime Soviet and Russian official Yevgeny Primakov and Prime Minister Vladimir Putin’s two very different toasts on that occasion.

The celebration took place at the Center of International Trade. Among those in attendance were Vice Prime Minister Sergey Ivanov, KPRF leader Gennady Zyuganov, Governor Valentina Matviyenko, Federation Council First Vice Speaker Aleksandr Torshin “and other government people of the first rank,” Rynska said.

Primakov, she continued, has close ties to Georgia – he spent part of his childhood there, his first wife was a Georgian, and his mother was a Georgian Armenian – and consequently it was not surprising that many of the guests at his birthday celebration were people “with Georgian roots.”

Among them were former foreign minister Igor Ivanov (whose mother was Georgian, current foreign minister Sergey Lavrov (whose father was a Georgian Armenian), the oligarch Shalva Breus, Academician Viktor Gelovani, the singer Nani Bregvade, sculptor Zurab Tsereteli, and the master of ceremonies (“tamada”) was Moscow chief cardiologist David Ioseliani.

Rynska noted that “throughout the entire evening, Ioseliani the tamada called Putin who was sitting next to Primakov the first person of the state,” a description that others in attendance followed, including apparently some who are serving officials and thus know that in protocol terms at least that title belongs to someone else.

In his first toast, Putin said “the history of Russia is complicated and at times bloody,” the prime minister said. “But in it,” he continued, there are its Primakovs, and therefore these blood lettings end and sometimes do not even begin.” Primakov responded in kind. He said, Rynska continued, “that he will always be devoted to Mr. Putin because the latter saved Russia.”

There followed entertainment including singing. And then Putin made his second toast. He “immediately warned that he very well understood that everything said will go beyond the walls of this hall. More than that,” Rynska continued, the Russian leader indicated that he was “counting on exactly that.

Following that introduction, Putin declared that “the question of the reunification of Georgia had been decided. And that there are no questions which we cannot resolve.” Primakov, Putin continued, “is involved with this question,” a statement that sounded to many in attendance as a direct appointment in the tsarist style.

After some more singing, Putin left the hall, and the remaining participants began to talk among themselves as to what the prime minister’s intentions had been. Some of those with the closest Georgian ties concluded that Putin “’had said that he will return everything to us!’ That is, Rynska said, they heard exactly what they wanted to hear.”

“Those not affiliated to Georgia interpreted [Putin’s] programmatic toast entirely differently.” They heard as a promise that “all that we consider ours will remain ours.” And a few of them concluded that what Putin had committed himself to was “the restoration in a new form” of the entity that was once called “the Soviet Union.”

Putin’s remark certainly was enigmatic enough to permit these various interpretations. Indeed, that may have been exactly his intention. But his participation in a session with so many Russians who have Georgian roots and ties will certainly be read in Tbilisi as yet another indication that the Russian prime minister has no plans to reduce pressure on Georgia.

At the very least, it suggests that Putin’s understanding of Russia’s sphere of influence includes not just Abkhazia and South Ossetia, which Moscow has already recognized as independent, but also the remainder of Georgia and the remainder of the former Soviet space, an understanding that will exacerbate rather than calm tensions in many other capitals as well. From Window on Eurasia.

Georgia Sends Combat Troops to Afghanistan: Rationale behind Tbilisi’s Move

by Giorgi Kvelashvili



On November 17 Georgia sent 170 servicemen to Afghanistan to participate in NATO’s International Security Assistance Force (ISAF) operation. The combat troops will serve under French command near the Afghan capital Kabul. According to Georgian media, Mikheil Saakashvili’s pro-Western government plans to dispatch an additional 700 troops by February 2010 to strengthen the American units in various parts of the war-torn country.

A day earlier, during the official ceremony at the Vaziani military base near Tbilisi, Georgia’s Defense Minister Bacho Akhalaia highly praised the preparedness and morale of the Georgian military who had been trained by American instructors for months. “We fully realize that ISAF is NATO’s top priority…Peace and stability in Afghanistan is our common objective,” Akhalaia said.

In September, Georgian media reported that 40 instructors from the U.S. Marine Corps were engaged in the training of Georgian troops for the Afghan campaign and “the two-year training program was designed to prepare four Georgian battalions in total.” Needless to say, Russia views any American involvement in training Georgian troops with utmost suspicion and even the very presence of the American military instructors on Georgian soil is an irritant to the Kremlin.

As the Obama Administration is in the process of developing a new U.S. strategy for Afghanistan and a decision on the number of troops required for winning battles as well as the hearts and minds of the Afghan people is still under deliberation, Georgia’s contribution to the West’s cause cannot be undervalued.

Meanwhile, not all Georgians agree that sending troops to a remote country is the right - and timely - decision for a nation whose very survival is under a big question mark. Overwhelmed in the battlefield in August 2008 by Russia’s tens of thousands of troops, countless tanks and airplanes as well as warships on the Black Sea, Georgia, a good number of Georgians allege, does not have the luxury to sacrifice itself to others’ cause.

President Saakashvili has a hard time explaining to his fellow citizens that for Georgia, with 20 percent of territory under Russian occupation and Russian troops stationed as near as a few dozen miles from Tbilisi, helping the United States and its NATO allies in Afghanistan is an absolutely necessary step.

Before the Russian military aggression Georgia had as many as 2,000 troops in America’s other battlefield, Iraq – the third largest contingent after the U.S. and U.K. – and boasted that it was not a mere consumer but a sizable provider of security in today’s troubled international system.

The Georgians were shocked when they learned that Germany’s and France’s decisive ‘no’ at NATO’s Bucharest summit in April 2008 denied their country a much needed Membership Action Plan (MAP) that could pave the way to coveted membership in the Western alliance. Emboldened, Moscow did not wait long before attacking Georgia a few months later, in August 2008.

Yet again, President Saakashvili’s government is trying to rationalize its decision to help the United States and the West by explaining to its people that participation in NATO’s operation in Afghanistan as in the past about Georgia being a responsible international player, a de facto NATO ally and a nation that does not simply request security from the West but is capable of providing one.

Meanwhile, as long as Georgia remains split into three parts and is excluded from the Western collective security architecture, many Georgians fear, that their country’s sustainability as a stable, democratic and free nation is an objective, not an accomplished fact.

Gazprom-Rising Costs-Dwindling Sales

by Roman Kupchinsky

Gazprom, the Russian gas giant, has been caught in a financial vise throughout 2009. It’s main market in Europe for gas shrank by 32 percent in the first half of 2009. Part of this can be explained by reduced demand due to the world economic crisis, yet Gazprom’s competitors have increased sales of pipeline gas and LNG to European customers during this same period. Norway increased its sales by 12 percent from January to August, and in August volume rose by 51 percent. Qatar increased LNG sales by 58 percent in January-August and in August by 173 percent. Algeria increased its sales to Europe by 7 percent as did Trinidad and Tobago.

The main reasons for these increases have been the overabundance of gas in the United States due to large shale gas production and the fact that LNG spot prices were lower than Gazprom’s price. Gazprom management however remains optimistic about the future demand for its gas and predicts that soon it will once again export 240 billion cubic meters (bcm) of gas and that this figure will remain stable until 2030.

Oil and gas analysts are not convinced. The Russian daily Kommersant quoted Valery Nesterov from Troika Dialogue as saying that if Gazprom manages to sell 180-200 bcm yearly up to 2030 the company would be highly successful. Gazprom is also facing unexpected increases in gas production and transmission costs.

According to the East European Gas Analyst, “Compared to the average costs of 2008, the reported gas production cost of Q2-2009 was up 33% and transmission cost per 1000 cubic meters of marketed gas soared 36%. Note that the growth from Q1 to Q2-2009 cannot be explained by the drop in production and sales.”

How these projections will impact Gazprom’s Nord Stream and South Stream pipeline projects is difficult to say. Some analysts claim that by 2012 pipelines and LNG terminals might have to ship some 200 bcm of gas less than they presently do.

Under Extreme Conditions - Russian Journalism

by Yuri Zarakhovich

“First, the golden heads left, then, the golden hands. Now, we have only gold teeth left.”

I first heard this sad quote in Tajikistan in 1993, as the Tajik civil war pushed many a golden head out the country. One of those golden heads was my good friend Oleg Panfilov, a prominent oriental scholar, journalist, writer and human rights activist.

Tajikistan lost a great deal, when people like Oleg left. Since then Oleg has worked in Sweden, Iran, and in Russia. In Russia, he launched a
NGO of which he has the right to be particularly proud: the Center for
Journalism Under Extreme Conditions (CJUEC).

Not only does this body protect journalists it often helps them escape the
tight clutches of Russian “justice.” The Center also has created and maintains a comprehensive system of legal education and support for Russian journalists.

Over the last decade I have witnessed the unique role Oleg’s organization has played. Recently I've learned that Oleg Panfilov, Secretary of the Union of Russian Journalists, has moved to Georgia.

Why? Let me put it in Oleg’s own words: “In Russia, people can no longer speak up their minds; the media serve to disseminate lies and falsehoods, while the situation with freedom of speech is particularly hard.”

“Georgia is a much freer country than Russia and there are good
prospects for the development of journalism and society in the country. In Russia, such prospects are becoming fewer and fewer. I’m quite disappointed about my chances of working in Russia.

While Oleg and I are friends, but we don’t always see eye-to-eye. One thing we agree to disagree on is President Mikeil Saakashvili. Oleg endorses him, I see him as another version of Putin---two of a kind, really.

But we both agree that Georgia is a much freer country than Russia under
Putin.We both agree that Russia’s prospects under the incumbent regime are
disappointing. In fact, they are rapidly approaching zero.

So, now it’s Russia that is losing golden heads, including Oleg’s.Woe to a
country that keeps only proverbial gold teeth. Honor to a country that welcomes them. What lies in store for Russia, once the brain drain depletes the country?