Friday, October 23, 2009

Hydrocarbons and Kalashnikov’s

by Yuri Zarakhovich

The decade of Putin’s rule was based on projecting hydrocarbon power and demonstrating military power. If the former is quite realistic, the latter is mostly illusory in regard to the West where Russia's Armed Forces are often regarded as a mob.

Still, it remains quite menacing to former Soviet republics. Among other things, Putin’s invasion of Georgia’s was meant as a signal to other neighbors in Russia’s “near abroad” to behave.

The Putinists in their hubris have been missing the fact that good relations with ones neighbors is what make borders really secure, not intimidation and arm twisting, tactics that make neighbors forever suspicious. Just look how Russia has handled Ukraine or Belarus:

In the cold winter of 20005-2006, the Russian-Ukrainian gas war seriously threatened natural gas supplies to Europe. Russia demanded a steep price raise. Ukraine responded by diverting transit gas. It was very much a case of the current commercialization of Russia’s polices—the mix of financial and political interests, with the former often taking the upper hand.

Moscow still sees Ukraine’s 2004 Orange Revolution as an act of disobedience. Moscow is unhappy with Ukraine’s demand that Russia withdraws her Black Sea Fleet from the Crimea by 2017. Now, Russia is fomenting trouble in Russian-speaking Ukrainian regions, primarily in the Crimea.

Since 1994, the tin-pot dictatorial regime of Belarus President Alexander Lukashenko has been shored up by cheap supplies of Russian natural gas and cheap crude. Lukashenko then refined and sold petroleum products to Western Europe at high rates.

Formally, Russia and Belarus proclaimed a joint state. However, Moscow expected Belarus to enter the Russian Federation as a province, while Lukashenko insisted on his independence within the joint state. Moscow has been long vexed with Lukashenko’s reluctance to accept the terms of the anschluss, including the Russian ruble as the single currency.

Putin never forgave Lukashenko for his aspirations to rule the Kremlin. And again, the commercialization of Russia’s foreign policies stepped in: on the eve of 2007 , Russia steeply raised prices for gas and oil. Lukashenko unsuccessfully tried to fight back by leveling new transit duties and diverting oil transits earmarked to Europe.

Ever since economic hostilities have been on and off, but the Belarus economy will not last long without supplies from Russia. Moscow expects Lukashenko to give in – and if he refuses - try to have him replaced with someone more compliant.

Heretofore, Putin’s supporters have been quite gung-ho on his policies of intimidating “the far abroad” with what Moscow wits nickname Russia’s “pipe-line troops,” and the near abroad with obsolete but heavy armor. It made them feel like a superpower once again.

However, on October 22, Konstantin Kosachev, Chair of the Duma’s Foreign Relations Committee, wrote in the government Rossiyskaya Gazeta: “We have been preferring…demonstrations of raw power….We now have more or less normal relations only with Kazakhstan and China…It’s unbecoming to a new democratic Russia to build her relationships with the world on the ‘military-hydrocarbon’ foundation’ only.”

The question is why the ever loyal Kosachev permits himself to make such statements. Maybe, because the best-informed part of the Russian establishment is worried over the prospects of Putin’s continuous rule. Growing oil prices only add to their concerns: a new windfall means that Putin will have enough money to bury urgently needed reforms again which spells an eventual collapse not unlike the case with the Soviet Union.

And the 64.000 dollars question is: what does a “new democratic Russia” have to offer after Putin’s decade, besides “the military-hydrocarbon” approach?

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