Sunday, April 23, 2006

Russia Uses Energy to Bully its Neighbours

An editorial in Sunday's Washington Post - "Imperialist Gas" - claims that 'Russia doesn't want to "politicize" energy sales. It just wants to use them to bully its neighbors.' Expectations that Russia would restrain itself in its imperial ambitions during the country's 2006 G8 presidency thus seem to have been falsified. Instead, Moscow continues its increasingly aggressive energy policy towards not only its "near abroad" but also European and global markets.

According to the editorial, Alexei Miller, Gazprom chairman, last week threatened EU governments that 'his company will sell its products in other markets unless they give way to its "international ambitions".' The background was reactions against Gazprom plans to buy Britain's largest gas company. Thus, Miller denounced 'supposed Western attempts to "politicize questions of gas supply"' despite the fact that it is now becoming increasingly apparent that Russia is using the "energy weapon" to 'restore Moscow's dominion over neighbours' such as, on the one hand, Russia-defiant Ukraine and Georgia, and on the other hand, Russia-friendly Armenia and Belarus, and in the process affecting energy supplies to EU-countries.

That Putin is serious in projecting Russia's new role as an "energy superpower" also on the European and global markets should now be considered a political fact, not least in view of the consequences of cuts in gas supplies to EU-members in connection to the New Year's Russian-Ukrainian gas crisis. This makes it necessary also to focus on the importance of Russian acquisitions of western energy companies, in addition to focussing on the supply-issue. Would Moscow's influence on the EU energy market involve both supplies and ownership, Europe may become reliant on Russian energy policies across the board, including control of both energy supplies and infrastructure.

This would pose no great problem to Europe, were it not for Moscow's declared amitions to use energy as a political instrument rather than in its more normal role as a profit generator. Nobody would begrudge Russia's gaining profits from a normal energy market, but when it comes to politics, the matter must be considered from a different perspective. Economics is economics - politics is politics. If the Kremlin wants to meddle the two, the West should show greater caution - as indeed with any country displaying similar ambitions.

Since the 1980's, Western governments have put great emphasis on the important principles of free market economy and its separation from interests of state. Today, this has become a key element in international trade and a basis for organisations and arrangements such as the World Trade Organization (WTO) and the Group of Eight (G8) industrialised nations. President Putin's action is therefore testimony to the extent of disregard that Moscow is prepared to show these principles in the safe assertion that Western governments will remain acquiescent to such measures in view of their increasing dependence on Russian energy. That Putin's policy, under normal circumstances, would complicate the Russian G8 presidency and mar Kremlin ambitions to gain membership of the WTO, seems like something Russian leaders turn a blind eye to.

Putin's blatant disregard of the principles of market economy and free trade is also a danger to Russia itself to the same extent as it thretens the stability of the international energy market. There may come a day when gas prices fall or resources falter, and then Putin's policies will be remembered by the West, and Russia possibly be served with the same treatment as the country is treating its neighbours with now. In today's world, a strategy of tit-for-tat is rendered obsolete, and only applied to those that provoke such reactions by their own behaviour. This could potentially be the fate of a Russia that once more may become consumed by crisis due to its own or international economic imbalances. The question is if anyone will care about the Russians then, possibly making them once more the victims of their own state's policies.

What is worst with Russia's current policy is that it testifies to a lingering misperception of the nature of power in our era. Putin is brought up in a tradition where power is an absolute projection of force - in whatever form. The truth of the matter is, however, that modern societies grow and thrive on the basis of relative power - by cooperating and sharing in order to gain the spoils of the greater overall profit this produces. As long as Russia's leaders do neither understand nor implement this logic, there will be room for both misperception and conflicts between Moscow and the West as each party will act according to different paradigms. If Russian behaviour does not change, the country in the end is likely to come out at the wrong end of the stick in its international relations.


W. Shedd said...

It is very encouraging to see VVP doing his very best to promote alternative and renewable energy in Europe. Greenpeace and the Sierra Club just might make him man of the Year in 2006 for such aggressive policies to force Europe off of Russian natural gas and Russian petroleum.

As petroleum and natural gas prices climb ever higher, it simply makes alternative energy sources, be it nuclear, wind, or solar that much more economically feasible. Combine that economic reality with political blackmail and you have a winning formula for encouraging the spending of billions in those areas. Mafia tactics only work when there are no alternatives. While Europe might be unprepared in the short-term, it is unlikely that would remain unchanged in the long-term.

Vilhelm Konnander said...

Dear Mr. Shedd,

Yes, this is really an effort on Mr. Putin's part, to do what European politicians have not been able to over the last odd 30 years. One really must admire the fellow for being so zealous in his fight for the global climate.

As for my own country, viz. Sweden, we had a referendum back in 1980 deciding to phase out nuclear energy by the year 2010. So far, only one reactor has been closed down, and in reality the output of nuclear energy has increased over the last years. This is a general trend in many European countries, and it remains to be seen whether there will be a renaissance for nuclear energy.

Not so long ago, I was asked to write an article on the Swedish position concerning the consequences of the Baltic pipeline for a Russian journal. The thing is that Sweden has no real position on the issue, since Swedish import of natural gas is next to non-existent. As for oil, Sweden may still diversify, even though imports from Russia has risen by 53% over the last two years. Consequently, little was to be said on the issue, since Russia's Baltic pipeline do not concern us that much. As for Poland and Germany, the matter is of a completely different character, as both countries are heavily dependent on Russian gas.

As for Putin's maffia tactics as a winning formula for a paradigm-shift in European energy policy, it remains to be seen whether this will suffice for the lame European politico-bureaucrats. The fact that Putin applies such tactics may be explained by a simple " mal môt": Raz CheKist - vsegda CheKist.



La Russophobe said...
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