Russia to Cease Using Gabala Radar Station

By Anar Valiyev

On December 10, media outlets reported that Russia will end its use of the Gabala Radar Station, located on Azerbaijan’s territory. The Azerbaijani Ministry of Foreign Affairs stated that following intensive negotiations over Gabala, the two sides were unable to reach an agreement on leasing fees. The Russian Interfax agency cited an anonymous diplomatic source who contended that the Russian withdrawal from Gabala would not negatively affect relations between Russia and Azerbaijan (Interfax, December 10).

The Head of the External Relations Department in Azerbaijan’s presidential administration, Novruz Mammadov, stressed that the Russian withdrawal from Gabala will have no negative impact on bilateral relations. He made it clear that the reason for the closure was financial and not political in nature. Concerning the future of the radar station, Mammadov said that the surrounding Gabala region is a center of tourism. It is, therefore, possible that the military installation will generally be eliminated and ruled out the possibility of leasing the Gabala radar to some other country (Trend, December 11). Arastun Orujlu, the head of the Baku-based East-West think tank, believes that Azerbaijan was not the initiator of the Russian withdrawal. Most probably, Russia received guarantees that the site will not be leased to anyone else (Contact.az, December 11).

Uzeir Jafarov, a Baku-based military expert argues that the Gabala station has no practical use for Azerbaijan from a military perspective, while the environmental damage caused by its continued use was high. Therefore, the termination of this site should be considered a positive political decision (Contact.az, December 11). However, he expects that the closure of Gabala will, in fact, lead to a deterioration of bilateral relations. Jafarov maintains that Gabala has little military value for Azerbaijan and Baku lacks human resources for its operations. Today, Armenia represents the major threat for Azerbaijan, but the country’s air defense system currently in place is able to successfully repulse possible Armenian air strikes without further assistance from the Gabala station. Political analyst Eldar Namazov agrees on this point, adding that the low rent being charged for Russia’s continued use of the site made it uneconomical for Azerbaijan to maintain it. However, Namazov also believes that Moscow’s loss of its military presence in Azerbaijan will negatively impact bilateral diplomatic and political relations. Time will tell how negative these consequences will be, he believes (Contact.az, December 11).

Other political experts have more openly argued that Russia will take revenge for its forced withdrawal from Azerbaijan. Political observer and journalist Rauf Mirkadirov, writing the Zerkalo newspaper on December 11, asserted that Azerbaijan should expect provocations from Russia. He even compared the current situation in Azerbaijan with the situation in Georgia prior to the Russian-Georgian war in 2008, when seven months before the war, the last echelon of Russian military equipment left Georgia. Moreover, he added, with the Russian withdrawal from Azerbaijan, the significance of Armenia as the only Russian satellite in the Caucasus would increase (Zerkalo, December 11).

Notably, the Russian-Azerbaijani failure to come to an agreement on Gabala came at a point when relations between the two countries are experiencing hard times—as illustrated by the Azerbaijani president’s boycott of the Commonwealth of Independent States (CIS) summit in Ashgabat this month (see EDM, December, 14). The next couple of months will clarify how the Russian withdrawal will affect relations between Moscow and Baku.

Russian Far Eastern Development Agency Comes Under Fire

By Sergei Blagov

It took the Kremlin little more than six months to realize that its earlier move to form a new regional development agency required some second thoughts.

On November 29, Russia’s President Vladimir Putin strongly criticized the Far Eastern development ministry, stating that its management system was not efficient. The ministry is yet to fulfill its goals; there were failures and a lack of responsibility in its operations, he said. Putin criticized the ministry’s officials for their inability to finalize the regional development blueprint that was supposed to be approved by July 1, 2012, and ordered that the draft be finalized in the first quarter of next year. In response to Putin's criticism, the Far Eastern Development Minister Viktor Ishayev argued that the ministry took over the regional development blueprint only on November 13, implying that officials were short of time to finalize the draft in the first quarter of 2013. Putin suggested reviving an earlier idea to create a state corporation tasked with developing Russia’s Far East and Siberia. Putin also told a meeting of the State Council at his Novo-Ogarevo residence outside Moscow that he was prepared to discuss other types of management solution aimed to expedite the development of the Far Eastern (The Presidential Press-Service, RG daily, November 29).

The creation of the Far Eastern development ministry came as an immediate by-product of Putin’s return to the Kremlin. On May 21, Russia’s freshly re-minted President Putin signed a decree to reform the cabinet. The reformed government included the Far Eastern development ministry that was due to coordinate the implementation of regional development programs and manage state-owned assets. The new federal ministry was specifically designed to oversee the country’s efforts to develop Far Eastern regions (Interfax, RIA-Novosti, May 21).

Ishayev, the presidential envoy to the Far East since 2009, was appointed to head the new ministry. In recent years, Ishayev has repeatedly advocated new measures to encourage economic development in the region. Putin’s suggestion to consider the creation of a special-purpose state corporation also hardly comes as a novelty. Last year and earlier this year, Russia’s government officials repeatedly advocated plans to create a state corporation tasked with developing the country’s Far East and Siberia.

In April 2012, first Deputy Prime Minister Igor Shuvalov argued the corporation could have been created as a subsidiary of the state-run Vnesheconombank (VEB). However, other state corporations have been subject to criticism for inefficient performance.

Therefore, the Kremlin appears to be running out of managerial options in the Far East: the federal agency already failed to fulfill its goals, while the efficiency of the proposed state corporation remains a matter of debate.

Ukrainian Political Technologists and Seven Election Myths

By Taras Kuzio

Ukraine’s “political technologists” have little in common with European and US political scientists and political consultants. The catastrophic state of political science in the Ukrainian education system has, for a decade now, made it nearly impossible to buy books on Ukrainian politics, and more books and scholarly articles on Ukrainian politics are published in the United States and Europe than in Ukraine. Many of a small group of Ukrainian political scientists have left underpaid academia for the far more lucrative world of political technology.

One can observer seven myths about the political and electoral situation in Ukraine that are currently being widely propagated by Ukrainian political technologists.

Myth 1: The Communist Party (KPU) increased its support in 2012.

Reality 1: The Party of Regions and KPU are symbiotic twins, and the KPU received higher support because ex-Communist voters returned to them from the Party of Regions. Ukrainians vote for the Party of Regions and KPU because a third of Ukrainian voters hold undemocratic views and prioritize economics and stability over democracy (http://dif.org.ua/ua/polls/2012-year/madjani-ivi.htm). These voters are based in Russian-speaking Ukraine and vote for the Party of Regions and KPU. A higher proportion of Party of Regions and KPU voters than Svoboda voters hold authoritarian and undemocratic views (see EDM, October 17).

Myth 2: Former Prime Minister Yulia Tymoshenko will be released from prison before the 2015 elections.

Reality 2: Tymoshenko’s sentence of seven years imprisonment and three years ban from public office aimed to remove her from Ukrainian politics until after 2020. In addition, personal revenge and fear play roles in her continued detention. In February 2010, Viktor Yanukovych told the US Ambassador to Ukraine he expected to win the 2010 presidential elections by over ten percent, but he won them by only three percent (http://wikileaks.org/cable/2010/02/10KYIV199.html#).

Myth 3: In 2015 Yanukovych’s political technologists will engineer his re-election.

Reality 3: In 2015, Yanukovych will not have the high support he possessed in 2004 when he was popular in eastern Ukraine and while the economy was growing by 12 percent per year. In the re-run second round of the 2004 elections, he was defeated by Viktor Yushchenko by only eight percent of the vote.

Election fraud in Ukraine may reach up to five percent of the vote, unlike in most Eurasian countries where it is greater. In the fraudulent second round of the 2004 elections, the Central Election Commission claimed Yanukovych defeated Yushchenko by three percent. Increasing Yanukovych’s support from 20–25 percent to 48 percent (which he won in 2010) will be practically impossible without resorting to mass fraud.

Myth 4: Political technologists will manipulate the 2015 elections so that Communist Party leader Petro Symonenko or Svoboda nationalist leader Oleh Tyahnybok will enter the second round. Political technologists believe Yanukovych can only win a second term if he repeats the 1996 Russian and 1999 Ukrainian presidential elections where Boris Yeltsin and Leonid Kuchma encouraged Ukrainians to vote against them and support the incumbent. In 2015 Tyahnybok could play the role of Symonenko in 1999.

Reality 4: Opposing Viktor Yanukovych in the second round will be opposition leaders Arseniy Yatseniuk or Vitaliy Klychko who would defeat Yanukovych if Ukraine holds a free election in 2015—but which is unlikely because Yanukovych has presided over five fraudulent elections since 1999. Former US Ambassador to Ukraine Steven Pifer said nobody in the West any longer believes Ukraine is democratic (http://tyzhden.ua/Politics/65125).

Myth 5: Voting “proty vsikh” (against all) only works against “orange” leaders. In the second round of the 2010 elections, Yushchenko called on voters to vote against both candidates reducing support for Yulia Tymoshenko more than Yanukovych.

Reality 5: Proty vsikh works against any incumbent. In 2010, many “orange” voters stayed at home rather than vote for Tymoshenko who received three million fewer votes than Yushchenko in December 2004. Two million fewer eastern Ukrainian voters supported the Party of Regions in 2012 compared to 2007. In 2015, Yanukovych will face the same incumbent problem as Tymoshenko, but this time it will be eastern Ukrainian voters who will vote proty vsikh by staying at home.

Myth 6: Yanukovych will engineer his re-election by changing the constitution to a parliamentary system to avoid an election. The newly adopted law on referendums could be used to circumvent the need for an election in 2015 (http://www.kyivpost.com/content/ukraine/new-wording-of-constitution-could-be-approved-at-nationwide-referendum-according-to-law-315646.html).

Reality 6: The Party of Regions will be unable to command the loyalty of a constitutional majority to change the constitution to a full parliamentary system. In addition, Yanukovych would never agree to be a symbolic head of state under parliamentary control and with few powers.

Myth 7: Oligarchs will be forced to support Yanukovych in 2015.

Reality 7: Fearing Tymoshenko’s anti-elite rhetoric, Ukraine’s oligarchs supported Yanukovych in 2010. Former President Leonid Kuchma told the US Ambassador to Ukraine that the second round of the 2010 elections was a choice between “bad” and “very bad” (Yanukovych and Tymoshenko). (http://wikileaks.org/cable/2010/02/10KYIV190.html).

The 2015 election will be unlike 2010 and instead will resemble 2004 where oligarchs will put their eggs in the authorities and opposition baskets. Oligarchs will not fear Yatseniuk or Klychko because they are not viewed as threats to their business interests (http://www.kyivpost.com/content/politics/media-monitoring-shows-possible-rift-between-oligarchs-administration-315438.html). Ukraine’s “gas lobby” has supported Yatseniuk in the 2010 elections and Klychko in 2012.

Rather, Ukrainian oligarchs will be more afraid of Yanukovych. They will fear that “The Family” (the emerging clan from the president’s home town in Donetsk oblast, see EDM, December 2, 2011) will raid their assets by the end of his second term in 2020 (http://www.project-syndicate.org/commentary/will-yanukovych-win-the-ukrainian-elections-by-anders--slund).

As Ukraine will face serious economic and financial crises in 2013-2014 (see EDM, November 29), the run up to the 2015 elections along with politics in the parliament will be raucous and unstable. However, the widely disseminated predictions from Ukrainian political technologists for how the country’s next political developments will be shaped are based on fundamental misdiagnoses and misunderstandings of past and future trends.

Russia Mulls Flexible Gas Export Policies

By Sergei Blagov

Russian authorities hinted at a possible end to the natural gas export monopoly, which currently belongs to state-controlled gas giant Gazprom. Meanwhile, the country’s energy executives urged the development of shale gas production in Russia.

On November 20, the Russian energy ministry indicated tentative plans to end Gazprom’s export monopoly and allow other domestic producers to sell natural gas outside Russia. The ministry is considering suggestions of the country’s second largest gas producer, Novatek, to allow independent producers to export LNG, Energy Minister Alexander Novak announced on November 20. He pledged to draft a proposal on this issue by the end of 2012. This year, Russia’s total natural gas production is expected to remain unchanged year-on-year, Novak said. In 2011, the country’s total gas output amounted to 671 billion cubic meters (bcm), according to the ministry. Noval also suggested exempting new projects in Siberia and the Far East from an extraction tax for 25 years. These tax incentives would be aimed at encouraging investments in new energy projects (ITAR-TASS, Prime, November 20).

In the meantime, the ministry has remained slow to disclose a draft of the country’s “energy strategy,” a long-term development blueprint for the domestic energy sector. But while Moscow’s earlier energy plans ignored the issue of shale gas, the latest version of the blueprint is expected to feature that issue prominently.

The country’s energy executives apparently intensified discussions on the development of shale gas production in Russia. Notably, on November 15, the Russian Trade and Commerce Chamber held a discussion on the energy strategy. The meeting focused on the issue of shale gas production in Russia and globally. Guennady Shmal, chairman of the Russian Union of Oil and Gas Producers, told the meeting the country needed long-term plans to develop shale gas production. Russia’s shale gas reserves were estimated at 25 trillion cubic meters, and the country was expected to produce three trillion cubic meters by 2030, he said. Meanwhile, Russia’s total gas reserves were estimated at 287 trillion cubic meters, according to Shmal (http://www.tpprf.ru/ru/news/about/index.php?id_12=40133).

In recent years, Gazprom had ignored the issue of shale gas, apparently placing its hopes on huge reserves of the company’s conventional gas deposits. The gas giant and Russia’s top officials insisted that international gas prices simply would not decrease. When these hopes proved to be detached from reality, the country’s energy officials and executives started to advocate the development of shale gas production in Russia. Russian officials are now following the energy executives’ lead and have also indicated plans to consider more flexibility in gas exports.

Ukraine’s Elections Produce Few Surprises Except Knock Out and Freedom

By Taras Kuzio

The run up to Ukraine’s October 28 parliamentary elections received relatively little coverage and interest in the US, Canadian and European media except over the question of their conduct and expected election fraud.

Leaders of international organizations raised many doubts before the election about whether they could be declared democratic when opposition leaders Yulia Tymoshenko and Yuriy Lutsenko remain imprisoned on trumped up charges. The July 2012 Organization for Security and Cooperation in Europe (OSCE) Parliamentary Assembly’s Monaco Declaration called on: “Reaffirming the importance for Ukraine of respecting the OSCE commitments, including the principles of transparency, equal opportunities, freedom of expression and fulfillment of the requirements of fair and free elections” (http://www.oscepa.org/news-a-media/press-releases/1028-parliamentary-assembly-adopts-monaco-declaration).

During the election campaign, Ukrainian non-governmental organizations (NGO) Opora (Resistance), Chesno (Honesty), Spilna Sprava (Mutual Affair) and Committee of Voters routinely provided reports of election fraud (www.oporaua.org, www.chesno.org, www.spilnasprava.com, www.cvu.org). In addition, the European Network of Election Monitoring Organizations (ENEMO), the National Democratic Institute and International Republican Institute found that the elections were the worst since 2004 and therefore a regression (http://www.enemo.eu/ukraine2012.htm). Whereas, opposition and NGO web sites suffered from DOS attacks on election day that crippled them.

The OSCE, European Parliament and Canadian election mission found numerous problems with the elections (http://www.osce.org/odihr/elections/96675, Ukrayinska Pravda, October 28-29). Buying up of voters was a major problem (http://blogs.pravda.com.ua/authors/leschenko/5076cd3f4ac7c/), as was massive abuse of state-administrative resources, “oligarchization” of the elections, lack of transparency and absence of a level playing field. Parliamentary Chairman Volodymyr Lytvyn, for example, massively abused state resources in the region of Zhitomir he ran in, pouring in funding (see map: http://www.pravda.com.ua/articles/2012/10/25/6975412/).

The new mixed proportional–first past the post election law attracted support from the pro-presidential Stability and Reforms coalition and half of opposition deputies, which proved to be a major mistake for the opposition parties. United Opposition leader Arseniy Yatseniuk showed his weak political acumen when he claimed the adoption of the new election law “is the victory of the opposition. The opposition’s demands were clearly formulated and we managed to have these demands met. The majority wanted to adopt the law, which would steal the votes of electors, as it was during the local elections. We did not allow this law to be passed and [thus prevented] election fraud. According to this law, the opposition will win the parliamentary elections in 2012” (November 18, 2011, Interfax-Ukraine).

His second in command, deputy leader of Tymoshenko’s Batkivshchina (Fatherland) party Oleksandr Turchynov, reached a different conclusion, accusing the authorities of “massive election fraud” (http://www.kyivpost.com/content/ukraine/front-for-change-leader-new-law-to-allowoppositio-117213.html). Tymoshenko went on a hunger strike against mass election fraud (http://www.pravda.com.ua/news/2012/10/29/6976112/). The worst election fraud took place in President Viktor Yanukovych’s home region of Donetsk and Luhansk and in Kyiv oblast.

If the 2004 full proportional election law had remained in place, the combined opposition, with over 50 percent of the vote, would have been in a position to establish a parliamentary majority—as they did in 2006 and 2007. However, in 2010 a constitutional coup d’état reverted Ukraine to its 1996 presidential system where the government is under the president’s control. Ukraine’s parliament today is a rubber stamp institution.

It was not a surprise that the Party of Regions received first place plurality of 28–32 percent of the vote—as they received in 2006 and 2007 (see EDM, October 17), according to exit polls. Defying opinion polls, the United Opposition came in second with 23–25 percent; Tymoshenko’s popularity has always been under-estimated by pre-election polls, and the 2012 election was no different. The Ukrainian Democratic Alliance for Reforms(UDAR), led by boxing champion Vitaliy Klychko, received 13–15 percent and third place, filling the niche previously held by Viktor Yushchenko’s Our Ukraine. UDAR (meaning strike) remains an untested political force (see EDM, October 29).

These election results resembled 2006, when the Party of Regions, Bloc of Yulia Tymoshenko (BYuT) and Our Ukraine received a similar 31-, 24- and 14-percent vote breakdown, respectively.

With 12 percent of the vote, the Communist Party (KPU) was able to more than double its poor performance on 2006 (four percent) and 2007 (five percent) by attracting voters to return from the Party of Regions, although this was still far lower than the 20 percent of the vote the KPU won in 2002. The KPU’s electorate this year was disenchanted by unpopular IMF reforms, such as raising household utility prices, adopted by the Nikolai Azarov government.

The populist-nationalist Svoboda party was the surprise on election day, with 11–13 percent of support, entering parliament for the first time. Svoboda leader Oleh Tyahnybok declared that one of his party’s first legislative acts will be to ban the Communist Party. Initiatives such as these will inevitably lead to repeats of boxing matches that parliament has already witnessed (http://www.kyivpost.com/content/politics/opposition-blocks-ukrainian-parliament-1-128270.html).

The authorities are projected to capture two thirds or more of deputies elected in first-past-the-post districts, giving them a parliamentary majority; but a constitutional majority will be beyond their means. This would rule out the much talked about scenario for 2015 where the authorities change the constitution to a parliamentary system with parliament electing Yanukovych president, thereby avoiding a popular presidential election he could potentially lose.

How will the OSCE define the elections that just took place, and how will the West react? Clearly, with opposition leaders unable to participate and extensive examples of fraud, the OSCE will not declare the elections to be democratic. At the same time, they are unlikely to be denounced in the same manner as elections in Russia—even though much of the same type of electoral fraud took place in Russia’s December 2011 elections (http://www.osce.org/odihr/elections/82441).

Continued international isolation for Yanukovych predates the election, and never publicized visa black lists against the ruling regime could possibly be adopted by Western countries. Sanctions are unlikely unless Republican Party candidate Mitt Romney, no friend of President Barack Obama’s Russia reset, wins the US presidential elections and adopts a hard line toward Russia and Ukraine.

Russian Gas Export Plans Face Reality Check

By Sergei Blagov

Russia’s natural gas monopoly Gazprom has repeatedly pledged to start natural gas exports to China. However, these plans have remained on paper, despite numerous promises to the contrary.

On October 25, Russia’s Deputy Energy Minister Anatoly Yanovsky announced that yet another round of bilateral talks on gas prices was expected before the end of this month. However, he refrained from disclosing more details or commenting on whether the much-awaited bilateral deal could become a reality. The matter was last discussed during President Vladimir Putin’s visit to China on June 5–6, 2012. The RBC news agency commented that the two sides’ disagreement over gas prices differed by some $100 per one thousand cubic meters (RBC, October 25).

Gazprom’s project to build the Altai gas pipeline from Siberia to China has been stalled for years as both sides struggled to agree on gas prices. More than six years ago, Moscow first pledged to export Russian gas to China via a 6,700-kilometer Altai pipeline. In March 2006, Gazprom and CNPC signed a memorandum on the delivery of Russian natural gas to China.

Gazprom offered to supply gas at European prices, while CNPC insisted on lower rates. Initially, Russian officials expected a final agreement on the cost of gas to be concluded in 2009, and gas supplies to start in 2014–2015. In September 2010, Russia and China signed a binding agreement on gas supplies that envisaged Russian exports of up to 38 billion cubic meters (bcm) per year from Eastern Siberia and 30 bcm per year from Western Siberia.

Indeed, in October 2011, then Prime Minister Vladimir Putin said that bilateral talks on the terms of Russian gas supplies to China “were nearing completion.” Then Deputy Prime Minister Igor Sechin also stated that both sides achieved progress in negotiations on gas prices. When asked whether the gas contract could be signed by the end of 2011, Sechin said there was no rush, adding that both sides agreed to finalize a “roadmap” in two weeks (Interfax, ITAR-TASS, October 10, 2011). While, in September 2012, Gazprom noted some progress in pricing negotiations with Chinese partners, but did not elaborate (Prime-Tass, October 25).

However, the latest developments indicate that both sides have yet to conclude any binding agreement on gas prices, and the bilateral negotiations have remained inconclusive. Therefore, the Russian plans to export gas to China apparently remain stalled, as do Moscow’s intentions to diversify the country’s natural gas exports.