I spotted a couple of days ago in Der Spiegel an interesting analysis about why Internet is considered dangerous in Russia and how its effects are countred through various official policies.
Showing posts with label Vladimir Putin. Show all posts
Showing posts with label Vladimir Putin. Show all posts
Tuesday, August 14, 2012
Tuesday, August 7, 2012
Quo Vadis Pussy Riots?
Sometimes, I feel that people that are not too much in love with democracy are trying to do their best for convincing other people about their disregard for democracy. The more you criticize them, the more they would enjoy doing something bad against those who do not agree with their opinion.
Arts of any kinds are one of the domains that always gave serious headaches to people without too much interest or sympathy for human rights and plurality of opinions in general. Some might remember how much hate the communists had against rock bands and creative arts, and how happy they were to impose their 'standards' on visual representations - by qualifying as 'decadent' everything that failed to meet the simple and anti-artistic standards of the nomenklatura.
This interest towards 'purity' in arts concerns both the ideological and religious based regimes. The Middle East countries is a case apart that will address on another occasion. My inspiration for the above thoughts was represented by the case of the punk rock Russian Band Pussy Riot. Three girls of the band - Maria Alyokhina, Nadezhda Tolonnikova and Ekaterina Samutsevitch - are about to be condemned to 3 years of prison for protesting against President Vladimir Putin in a church. They are accused of hooliganism and religious hatred, despite the fact that nothing was vandalized in the church. However, the process in itself could be an inspiration for an absurd novel, in the old style of the good Russian literature.
For many Western democracies, Vladimir Putin is considered a long-term reliable partner and many EU capital cities prefer stability and avoid spontaneous changes. True is that Russia is a huge country, with so many contradicting realities and interest groups ready to die for a slice of power that someone as Putin is seen as the only one that could control them. He did it in the last 12 years, but the question will be, what could happen after he will assume that his power should end? However, the witch hunt against a punk group and the possible new restrictions imposed to the freedom of speech and human rights in general, might worry the big powers.
As China demonstrated successfully, you do not need to have democracy for outperforming economically and being considered an important player on the international stage. Russia is a difficult and complicated player, with a long history of problematic democratic developments - if any. The key to change is to have more people committed to democracy and understanding why you should accept that even Pussy Riots have their right to say something against you.
Tuesday, June 26, 2012
Putin in Israel
Stratfor's on the recent visit of Russian President Vladimir Putin in Israel, with interesting insights about Syria and the recent tensions in the region.
To be continued
Friday, December 31, 2010
Deciphering Kyrgyzstan
Kyrgyzstan, a country that we, in the West, hardly identify on the map, is not only a mystery, but a place – as many in the world – where you could read the Cold War, the latest impact of globalization and the geopolitical reassessments. More than Belarus, it is a benchmark in the regional configuration, given its potential and the crossings of various interests.
Since December 2001, it was opened here a base – Manas Air Base, currently the Transit Center at Manas - to support U.S. military operations in the ongoing war in Afghanistan. As in the case of other countries from the former Soviet empire, as Uzbekistan and Kazakhstan, the US and international presence in general, was considered an important assets in getting more money and recognition – despite the poor record in the area of corruption, democracy and human rights. But, for small countries, it is almost impossible to play alone. Russia and China have been pushing often for the closure of the base and the local Parliament voted in December 2009 in favor of such a move. The base will continue to be hosted until 2014.
When it is not in the cards of the big power-brokers, Kyrgyzstan is trying, not always successful to build its own path. And we will hear again in the news about the country when there are violent coups – as it was this April, when the former president Kumanbek Bakiyev was removed from power and fled to Belarus. The country is facing economic problems, but also an ethnic conflict in the South, with the Uzbeks, where during the last summer there were registered several clashes, leading to the death of hundreds and displacement of thousands. But in a country where you don’t have free media and full democracy, it is difficult to estimate the situation.
In the last years, people went out in the street fighting for reform – as it was the case in 2006, where the current prime-minister Almazbek Atambayev participated to the protests of the movement За Реформы (For Reform). But it is hard to understand from the first sight why the reform couldn’t be accomplished. The latest parliamentary elections leaded to the creation of a coalition of opposition parties, who could play a big role in promoting democracy, given the increased powers of the Parliament since this summer.
As in the case of other ex Soviet members – as Moldova – the first trip overseas of the new prime minister was in Moscow, for meeting Vladimir Putin and got back the promise of more investments and loans. On the other hand, the West is trying to do its best, with fewer financial resources in comparison with the beginning of 1990s, for helping the country, but after more than 20 years of experience in the transitional processes in the former communist countries, not too many wonders to be expected.
The tensed relations with the neighbors – Belarus is hosting the former president, Uzbekistan just raised the natural-gas price, despite the Kyrgyz promise for a nomination of the president of Uzbekistan, Islam Karimov, for the Nobel Peace Prize - are increasing the level of dependency of the country of Russia. But what it is the advantage for Russia to keep all those “satellites”, apart the illusion of the glorious “old good times” of the Soviet Union?
Thursday, December 30, 2010
Belarus, the rogue state
Image via Wikipedia//Lukashenko is looking EastBelarus – or White Russia – where it is on the map? What can you, my reader, tell me about this state? A couple of months ago, maybe the last year, I’ve read an interesting article in the Monocle review about the business environment and the expat life there. I doubt it was a promotional one, but anyway, it was interesting to discover that it is something going on in this corner of the world – is this part of Europe?, you might ask.
What I know for sure, without reading daily reports about Belarus is that there is a president called Aleksandr Lukashenko, a former director of a state-owned agricultural farm, who is in power since 1994. And who is organizing puppet elections for enjoying the wonderful pleasure of being reelected – with a vast majority, if possible, this time with a successful rate of almost 97%.
As in many puppet states, there are opposition parties whose candidates are allowed to compete, but if unhappy with the results, they are in danger to be put in prison and convicted for years in prison. And this is available for anybody daring to protest, as it happened on the streets of Minsk, December 19th: journalists, civic activists, or even foreign citizens of the former Empire.
The US and EU condemned the post-election crackdown and said the ballot itself had been flawed and international media extensively reported about the daily violences and the international reactions.
Is Russia – with whom Belarus had a long dispute in 2006 over the gas supplies in 2006 – a supporter of Lukashenko? This is hard to think that without Russia’s support, few of the countries with open communications channels with Minsk – Lukashenko will resist. Apparently, as in other situations, the discussions over gas is a completely separate business of the political dialogue. In comparison with other years, Moscow, and mainly prime-minister Vladimir Putin, is decided to avoid any new gas rows and by thus, giving a green light to Minsk to continue unhampered its repressive policies. A free Belarus will think about joining EU and NATO and will be a lost card from the poker full of the old Empire. A dangerous game for the future.
Monday, December 27, 2010
“Khodorkovsky is the name of the next Russian president”
Image via Wikipedia//Mikhail KhodorkovskyWill the Russian oil tycoon Mikhail Khodorkovsky and his partner, Platon Lebedev spend another 14 years in prison? They have been accused, according to a verdict announced today, of stealing some $25bn (£16bn) worth of oil - or practically all the oil that their company, Yukos, produced between 1998-2000, and all the oil it exported between 2000-03, and then laundering the proceeds. Both of them already spent seven years behind bars.
The independent observers are considering the sentence as a protection took by the current duo from Kremlin Medvedev and Putin, for keeping their power for another mandate. The next presidential elections are expected in 2012.
Khodorkovsky’s lawyers announced that he will appeal the verdict.
The decision was not a surprise, and Vladimir Putin spoke in a recent interview in support of a lengthy prison sentence. He reaffirmed that Khodorkovsky is a proven criminal and "should sit in jail", a statement denounced by critics as interference in the trial. In a country as Russia, where justice and judges are so fragile, such statements were translated as a hint for the decision expected in the court. And, of course, Putin is not alone in his “good wishes” for the oil tycoon.
"I am ready to die in jail," Khodorkovsjy said in his last word to the court in November, while strongly reiterating his innocence. “No one believes an innocent verdict in the Yukos case is possible in a Moscow court,” he said on another occasion.
Today, during the lecture of his verdict, he was reading a book.
How will affect this decision the public opinion ? Only 13% of those polled in September by Levada Center said they believed the charges, down from 29% in February. (Roughly twice as many, 24%, said they did not believe the charges.) There were protests today, held against the decision, but the probability to turn this case into an Achilles’ heel for the current power is not likely to occur.
But, once free, Khodorkovsky might represent a powerful brand for a fragile and incoherent sometimes opposition and Russian voices on Twitter indicated him as the possible next president. With the condition to let him free! In May 2010, former primer minister and current opposition leader Kasyanov said the new charges against Khodorkovsky were ludicrous and politically motivated. He said that Putin, while president, had been angered by Khodorkovsky's financial support for the Communist Party, liberal Yabloko and the Union of Right Forces.
From prison, he is having a very active intellectual life and continue to be present for the Russian public opinion. The political transformation of Khodorkovsky is cited in many of his writings from prison. On Oct. 26, 2009, published a response to Dmitri Medvedev's "Forward, Russia!" article in Vedomosti, arguing that "authoritarianism in its current Russian form does not meet many key humanitarian requirements customary for any country that wishes to consider itself modern and European."
On 28 January 2010, Khodorkovsky authored an opinion article in the New York Times and International Herald Tribune, which argued that "Russia must make a historic choice. Either we turn back from the dead end toward which we have been heading in recent years — and we do it soon — or else we continue in this direction and Russia in its current form simply ceases to exist."
On 3 March 2010, he wrote an article in Nezavisimaya Gazeta about the "conveyor belt" of Russian justice. In this article, he warns that "siloviki conveyor belt, which has undermined justice is truly the gravedigger of modern Russian statehood. Because it turns many thousands of the country's most active, sensible and independent citizens against this statehood - with enviable regularity."
Who is the most wanted man?
Khodorkovsky, born in 1963 with a Jewish father and a non-Jewish mother, grew up in an ordinary Soviet family in a two-room apartment in Moscow. He became deputy head of Komsomol (the Communist Youth League) at his university, the Mendeleev Moscow Institute of Chemistry and Technology, where he graduated in chemical engineering in 1986, getting into the ranks of communist apparatchiks.
After perestroika started, Khodorkovsky used his connections within the communist structures to gain a foothold in the developing free market. He used the help of some powerful people to start his business activities under the cover of Komsomol. Friendship with another Komsomol leader Alexey Golubovich helped him greatly in his further success, since Golubovich's parents held top positions in the State Bank of the USSR.
With partners from Komsomol, and technically operating under its authority, Khodorkovsky opened his first business in 1986, a private café. In 1987 they opened a "Center for Scientific and Technical Creativity of the Youth" (which eventually allowed him to found the bank Menatep). In addition to importing and reselling computers, the "scientific" center was involved in trading a wide range of other products; French brandy, Swiss vodka. It is alleged that these goods were mostly counterfeit: "Swiss" vodka was produced in Poland, and the brandy was not French.
By 1988, he had built an import-export business with a turnover of 80 million rubles a year (about $10 million USD). Armed with cash from his business operations, Khodorkovsky and his partners used their international connections to obtain a banking licence to create Bank Menatep in 1989. As one of Russia's first privately owned banks, Menatep expanded quickly, by using most of the deposits raised to finance Khodorkovsky's successful import-export operations.
Bank Menatep
Khodorkovsky also became a philanthropist, whose efforts include the provision of internet-training centres for teachers, a forum for the discussion by journalists of reform and democracy, and the establishment of foundations which finance archaeological digs, cultural exchanges, summer camps for children and a boarding school for orphans. .
In April 2003, he announced that Yukos would merge with Sibneft, creating an oil company with reserves equal to those of Western petroleum multinationals. Khodorkovsky has been reported to be negotiating with ExxonMobil and ChevronTexaco about them taking a large stake in Yukos. Sibneft was created in 1995, at the suggestion of Boris Berezovsky, comprising some of the most valuable assets of a state-owned oil company. In a controversial auction process, Berezovsky acquired 50% of the company at what most agree was a very low price.
When Berezovsky had a confrontation with Putin, and felt compelled to leave Russia for London (where he was granted asylum) he assigned his shares in Sibneft to Roman Abramovich. Abramovich subsequently agreed to the merger.
With 19.5 billion barrels (3 km³) of oil and gas, the merged entity would have owned the second-largest oil and gas reserves in the world after ExxonMobil and would have been the fourth largest in the world in terms of production, pumping 2.3 million barrels (370,000 m³) of crude a day. However, the merger had been recalled by the shareholders of Sibneft after the arrest of Khodorkovsky.
The hunt
In early July 2003, Platon Lebedev, a Khodorkovsky partner and second largest shareholder in Yukos, was arrested on suspicion of illegally acquiring a stake in a state-owned fertiliser firm, Apatit, in 1994. The arrest was followed by investigations into taxation returns filed by Yukos, and a delay to the antitrust commission's approval for its merger with Sibneft.
Khodorkovsky was himself arrested in October 2003, charged with fraud and tax evasion. The Russian Prosecutor General's Office claims Khodorkovsky and his associates cost the state more than $1 billion in lost revenues.
Subsequent to Khodorkovsky's arrest, Leonid Nevzlin gained a controlling stake in Yukos when Khodorkovsky handed him a 60% share in the holding company that controlled the firm. Nevzlin is himself now wanted in Russia and has since fled to Israel.
On 31 March 2009, a new trial of Khodorkovsky and Lebedev began in Moscow for fresh charges on embezzlement and money laundering. The two men face up to 22 more years in prison. Both of them pleaded non guilty and denounce vague accusations.
Initially news of Khodorkovsky's arrest had a significant effect on the share price of Yukos. The Moscow stock market was closed for the first time ever for an hour in order to assure stable trading as prices collapsed. Russia's currency, the ruble, was also hit as some foreign investors questioned the stability of the Russian market. Media reaction in Moscow was almost universally negative in blanket coverage, some of the more enthusiastic pro-business press discussed the end of capitalism, while even the government-owned press criticised the "absurd" method of Khodorkovsky's arrest.
Yukos moved quickly to replace Khodorkovsky with Russian born U.S. citizen Simon Kukes. Simon Kukes, who became the CEO of Yukos, was already an experienced oil executive.
A week after the arrest, the Prosecutor-General froze Khodorkovsky's shares in Yukos to prevent Khodorkovsky from selling his shares although he retains all his rights to vote the shares and to receive dividends. In 2003, his shares in Yukos passed to Jacob Rothschild under a deal they concluded prior to Khodorkovsky's arrest.
Foreign support
The U.S. State Department said the arrest "raised a number of concerns over the arbitrary use of the judicial system" and was likely to be very damaging to foreign investment in Russia, as it appeared there were "selective" prosecutions occurring against Yukos officials but not against others.
Khodorkovsky has received a high level of independent third party support from groups and individuals who believe the process, charges, and two trials against him are politically motivated. On Nov. 29, 2004, The Council of Europe Parliamentary Assembly (PACE) Committee on Legal Affairs and Human Rights published a report which concluded: "The Assembly considers that the circumstances of the arrest and prosecution of leading Yukos executives suggest that the interest of the State’s action in these cases goes beyond the mere pursuit of criminal justice, to include such elements as to weaken an outspoken political opponent, to intimidate other wealthy individuals and to regain control of strategic economic assets."
In June 2009, the Council of Europe published a report which criticized the Russian government's handling of the Yukos case, entitled "Allegations of Politically Motivated Abuses of the Criminal Justice System in Council of Europe Member States".
Statements of support for Khodorkovsky and criticism of the state's persecution have been passed by the Italian Parliament, the German Bundestag, and the U.S. House of Representatives, among many other official bodies. Recently, a group of intellectuals pledged for his release.
Is this any chance for a change?
Tuesday, August 11, 2009
Hypothesizing on the Iran-Russia-U.S. Triangle
George Friedman
Stratfor
August 10
For the past several weeks, STRATFOR has focused on the relationship between Russia and Iran. As our readers will recall, a pro-Rafsanjani demonstration that saw chants of “Death to Russia,” uncommon in Iran since the 1979 revolution, triggered our discussion. It caused us to rethink Iranian President Mahmoud Ahmadinejad’s visit to Russia just four days after Iran’s disputed June 12 presidential election, with large-scale demonstrations occurring in Tehran. At the time, we ascribed Ahmadinejad’s trip as an attempt to signal his lack of concern at the postelection unrest. But why did a pro-Rafsanjani crowd chant “Death to Russia?” What had the Russians done to trigger the bitter reaction from the anti-Ahmadinejad faction? Was the Iranian president’s trip as innocent as it first looked?
A Net Assessment Re-examined
At STRATFOR, we proceed with what we call a “net assessment,” a broad model intended to explain the behavior of all players in a game. Our net assessment of Iran had the following three components:
Despite the rhetoric, the Iranian nuclear program was far from producing a deliverable weapon, although a test explosion within a few years was a distinct possibility.
Iran essentially was isolated in the international community, with major powers’ feelings toward Tehran ranging from hostile to indifferent. Again, rhetoric aside, this led Iran to a cautious foreign policy designed to avoid triggering hostility.
Russia was the most likely supporter of Iran, but Moscow would avoid becoming overly involved out of fears of the U.S. reaction, of uniting a fractious Europe with the United States and of being drawn into a literally explosive situation. The Russians, we felt, would fish in troubled waters, but would not change the regional calculus.
Despite the rhetoric, the Iranian nuclear program was far from producing a deliverable weapon, although a test explosion within a few years was a distinct possibility.
Iran essentially was isolated in the international community, with major powers’ feelings toward Tehran ranging from hostile to indifferent. Again, rhetoric aside, this led Iran to a cautious foreign policy designed to avoid triggering hostility.
Russia was the most likely supporter of Iran, but Moscow would avoid becoming overly involved out of fears of the U.S. reaction, of uniting a fractious Europe with the United States and of being drawn into a literally explosive situation. The Russians, we felt, would fish in troubled waters, but would not change the regional calculus.
This view — in short, that Iran was contained — remained our view for about three years. It served us well in predicting, for example, that neither the United States nor Israel would strike Iran, and that the Russians would not transfer strategically significant weapons to Iran.
A net assessment is a hypothesis that must be continually tested against intelligence, however. The “Death to Russia” chant could not be ignored, nor could Ahmadinejad’s trip to Moscow.
A net assessment is a hypothesis that must be continually tested against intelligence, however. The “Death to Russia” chant could not be ignored, nor could Ahmadinejad’s trip to Moscow.
As we probed deeper, we found that Iran was swirling with rumors concerning Moscow’s relationship with both Ahmadinejad and Ayatollah Ali Khamenei. Little could be drawn from the rumors. Iran today is a hothouse for growing rumors, and all our searches ended in dead ends. But then, if Ahmadinejad and Khamenei were engaging the Russians in this atmosphere, we would expect rumors and dead ends.
Interestingly, the rumors were consistent that Ahmadinejad and Khamenei wanted a closer relationship to Russia, but diverged on the Russian response. Some said the Russians already had assisted the Iranians by providing intelligence ranging from Israeli networks in Lebanon to details of U.S. and British plans to destabilize Iran through a “Green Revolution” like the color revolutions that had ripped through the former Soviet Union (FSU).
Equally interesting were our Russian sources’ responses. Normally, they are happy to talk, if only to try to mislead us. (Our Russian sources are nothing if not voluble.) But when approached about Moscow’s thinking on Iran, they went silent; this silence stood out. Normally, our sources would happily speculate — but on this subject, there was no speculation. And the disciplined silence was universal. This indicated that those who didn’t know didn’t want to touch the subject, and that those who did know were keeping secrets. None of this proved anything, but taken together, it caused us to put our net assessment for Iran on hold. We could no longer take any theory for granted.
All of the foregoing must be considered in the context of the current geopolitical system. And that is a matter of understanding what is in plain sight.
Potential Russian Responses to Washington
The U.S.-Russian summit that took place after the Iranian elections did not go well. U.S. President Barack Obama’s attempt to divide Russian President Dmitri Medvedev and Russian Prime Minister Putin did not bear fruit. The Russians were far more interested in whether Obama would change the FSU policy of former U.S. President George W. Bush. At the very least, the Russians wanted the Americans to stop supporting Ukraine’s and Georgia’s pro-Western tendencies.
But not only did Obama stick with the Bush policy, he dispatched U.S. Vice President Joe Biden to visit Ukraine and Georgia to drive home the continuity. This was followed by Biden’s interview with The Wall Street Journal, in which he essentially said the United States does not have to worry about Russia in the long run because Russia’s economic and demographic problems will undermine its power. Biden’s statements were completely consistent with the decision to send him to Georgia and Ukraine, so the Obama administration’s attempts to back away from the statement were not convincing. Certainly, the Russians were not convinced. The only conclusion the Russians could draw was that the United States regards them as a geopolitical cripple of little consequence.
If the Russians allow the Americans to poach in what Moscow regards as its sphere of influence without responding, the Russian position throughout the FSU would begin to unravel — the precise outcome the Americans hope for. So Moscow took two steps. First, Moscow heated up the military situation near Georgia on the anniversary of the first war, shifting its posture and rhetoric and causing the Georgians to warn of impending conflict. Second, Moscow increased its strategic assertiveness, escalating the tempo of Russian air operations near the United Kingdom and Alaska, and more important, deploying two Akula-class hunter-killer submarines along the East Coast of the United States. The latter is interesting, but ultimately unimportant. Increased tensions in Georgia are indeed significant, however, since the Russians have decisive power in that arena — and can act if they wish against the country, one Biden just visited to express American support.
But even a Russian move against Georgia would not be decisive. The Americans have stated that Russia is not a country to be taken seriously, and that Washington will therefore continue to disregard Russian interests in the FSU. In other words, the Americans were threatening fundamental Russian interests. The Russians must respond, or by default, they would be accepting the American analysis of the situation — and by extension, so would the rest of the world. Obama had backed the Russians into a corner.
When we look at the geopolitical chessboard, there are two places where the Russians could really hurt the Americans.
One is Germany. If Moscow could leverage Germany out of the Western alliance, this would be a geopolitical shift of the first order. Moscow has leverage with Berlin, as the Germans depend on Russian natural gas, and the two have recently been working on linking their economies even further. Moreover, the Germans are as uneasy with Obama as they were with Bush. German and American interests no longer mesh neatly. The Russians have been courting the Germans, but a strategic shift in Germany’s position is simply not likely in any time frame that matters to the Russians at this juncture — though the leaders of the two countries are meeting once again this week in Sochi, Russia, their second meeting in as many months.
The second point where the Russians could hurt the Americans is in Iran. An isolated Iran is not a concern. An Iran with a strong relationship to Russia is a very different matter. Not only would sanctions be rendered completely meaningless, but Iran could pose profound strategic problems for the United States, potentially closing off airstrike options on Iranian nuclear facilities.
The Strait of Hormuz: Iran’s Real Nuclear Option
The real nuclear option for Iran does not involve nuclear weapons. It would involve mining the Strait of Hormuz and the narrow navigational channels that make up the Persian Gulf. During the 1980s, when Iran and Iraq were at war, both sides attacked oil tankers in the Persian Gulf. This raised havoc on oil prices and insurance rates.
If the Iranians were to successfully mine these waters, the disruption to 40 percent of the world’s oil flow would be immediate and dramatic. The nastiest part of the equation would be that in mine warfare, it is very hard to know when all the mines have been cleared. It is the risk, not the explosions, which causes insurance companies to withdraw insurance on vastly expensive tankers and their loads. It is insurance that allows the oil to flow.
Just how many mines Iran might lay before being detected and bringing an American military response could vary by a great deal, but there is certainly the chance that Iran could lay a significant number of mines, including more modern influence mines that can take longer to clear. The estimates and calculations of minesweepers — much less of the insurers — would depend on a number of factors not available to us here. But there is the possibility that the strait could be effectively closed to supertankers for a considerable period. The effect on oil prices would be severe; it is not difficult to imagine this aborting the global recovery.
Iran would not want this outcome. Tehran, too, would be greatly affected by the economic fallout (while Iran is a net exporter of crude, it is a net importer of gasoline), and the mining would drive the Europeans and Americans together. The economic and military consequences of this would be severe. But it is this threat that has given pause to American and Israeli military planners gaming out scenarios to bomb Iranian nuclear facilities. There are thousands of small watercraft along Iran’s coast, and Iran’s response to such raids might well be to use these vessels to strew mines in the Persian Gulf — or for swarming and perhaps even suicide attacks.
Notably, any decision to attack Iran’s nuclear facilities would have to be preceded by (among other things) an attempt to neutralize Iran’s mine-laying capability — along with its many anti-ship missile batteries — in the Persian Gulf. The sequence is fixed, since the moment the nuclear sites are bombed, it would have to be assumed that the minelayers would go to work, and they would work as quickly as they could. Were anything else attacked first, taking out the Iranian mine capability would be difficult, as Iran’s naval assets would scatter and lay mines wherever and however they could — including by swarms of speedboats capable of carrying a mine or two apiece and almost impossible to engage with airpower. This, incidentally, is a leading reason why Israel cannot unilaterally attack Iran’s nuclear facilities. They would be held responsible for a potentially disastrous oil shortage. Only the Americans have the resources to even consider dealing with the potential Iranian response, because only the Americans have the possibility of keeping Persian Gulf shipping open once the shooting starts. It also indicates that an attack on Iran’s nuclear facilities would be much more complex than a sudden strike completed in one day.
The United States cannot permit the Iranians to lay the mines. The Iranians in turn cannot permit the United States to destroy their mine-laying capability. This is the balance of power that limits both sides. If Iran were to act, the U.S. response would be severe. If the United States moves to neutralize Iran, the Iranians would have to push the mines out fast. For both sides, the risks of threatening the fundamental interests of the other side are too high. Both Iran and the United States have worked to avoid this real “nuclear” option.
If the Iranians were to successfully mine these waters, the disruption to 40 percent of the world’s oil flow would be immediate and dramatic. The nastiest part of the equation would be that in mine warfare, it is very hard to know when all the mines have been cleared. It is the risk, not the explosions, which causes insurance companies to withdraw insurance on vastly expensive tankers and their loads. It is insurance that allows the oil to flow.
Just how many mines Iran might lay before being detected and bringing an American military response could vary by a great deal, but there is certainly the chance that Iran could lay a significant number of mines, including more modern influence mines that can take longer to clear. The estimates and calculations of minesweepers — much less of the insurers — would depend on a number of factors not available to us here. But there is the possibility that the strait could be effectively closed to supertankers for a considerable period. The effect on oil prices would be severe; it is not difficult to imagine this aborting the global recovery.
Iran would not want this outcome. Tehran, too, would be greatly affected by the economic fallout (while Iran is a net exporter of crude, it is a net importer of gasoline), and the mining would drive the Europeans and Americans together. The economic and military consequences of this would be severe. But it is this threat that has given pause to American and Israeli military planners gaming out scenarios to bomb Iranian nuclear facilities. There are thousands of small watercraft along Iran’s coast, and Iran’s response to such raids might well be to use these vessels to strew mines in the Persian Gulf — or for swarming and perhaps even suicide attacks.
Notably, any decision to attack Iran’s nuclear facilities would have to be preceded by (among other things) an attempt to neutralize Iran’s mine-laying capability — along with its many anti-ship missile batteries — in the Persian Gulf. The sequence is fixed, since the moment the nuclear sites are bombed, it would have to be assumed that the minelayers would go to work, and they would work as quickly as they could. Were anything else attacked first, taking out the Iranian mine capability would be difficult, as Iran’s naval assets would scatter and lay mines wherever and however they could — including by swarms of speedboats capable of carrying a mine or two apiece and almost impossible to engage with airpower. This, incidentally, is a leading reason why Israel cannot unilaterally attack Iran’s nuclear facilities. They would be held responsible for a potentially disastrous oil shortage. Only the Americans have the resources to even consider dealing with the potential Iranian response, because only the Americans have the possibility of keeping Persian Gulf shipping open once the shooting starts. It also indicates that an attack on Iran’s nuclear facilities would be much more complex than a sudden strike completed in one day.
The United States cannot permit the Iranians to lay the mines. The Iranians in turn cannot permit the United States to destroy their mine-laying capability. This is the balance of power that limits both sides. If Iran were to act, the U.S. response would be severe. If the United States moves to neutralize Iran, the Iranians would have to push the mines out fast. For both sides, the risks of threatening the fundamental interests of the other side are too high. Both Iran and the United States have worked to avoid this real “nuclear” option.
The Russian Existential Counter
The Russians see themselves facing an existential threat from the Americans. Whether Washington agrees with Biden or not, this is the stated American view of Russia, and by itself it poses an existential threat to Russia. The Russians need an existential counterthreat — and for the United States, that threat relates to oil. If the Russians could seriously threaten the supply of oil through the Strait of Hormuz, the United States would lose its relatively risk-free position in the FSU.
It follows from this that strengthening Iran’s ability to threaten the flow of oil, while retaining a degree of Russian control over Iran’s ability to pull the trigger, would give Russia the counter it needs to American actions in the FSU. The transfer of more advanced mines and mining systems to Iran — such as mines that can be planted now and activated remotely (though most such mines can only lay, planted and unarmed, for a limited period) to more discriminating and difficult-to-sweep types of mines — would create a situation the Americans could neither suppress nor live with. As long as the Russians could maintain covert control of the trigger, Moscow could place the United States, and the West’s economies, in check.
Significantly, while this would wreak havoc on Persian Gulf producers and global oil consumers at a time when they are highly vulnerable to economic fluctuations, a spike in the price of oil would not hurt Russia. On the contrary, Russia is an energy exporter, making it one of the few winners under this scenario. That means the Russians can afford much greater risks in this game.
We do not know that the Russians have all this in mind. This is speculation, not a net assessment. We note that if Russo-Iranian contacts are real, they would have begun well before the Iranian elections and the summit. But the American view on Russia is not new and was no secret. Therefore, the Russians could have been preparing their counter for a while.
We also do not know that the Iranians support this Russian move. Iranian distrust of Russia runs deep, and so far only the faction supporting Ahmadinejad appears to be playing this game. But the more the United States endorses what it calls Iranian reformists, and supports Rafsanjani’s position, the more Ahmadinejad needs the Russian counter. And whatever hesitations the Russians might have had in moving closer to the Iranians, recent events have clearly created a sense in Moscow of being under attack. The Russians think politically. The Russians play chess, and the U.S. move to create pressure in the FSU must be countered somewhere.
In intelligence, you must take bits and pieces and analyze them in the context of the pressures and constraints the various actors face. You know what you don’t know, but you still must build a picture of the world based on incomplete data. At a certain point, you become confident in your intelligence and analysis and you lock it into what STRATFOR calls its net assessment. We have not arrived at a new net assessment by any means. Endless facts could overthrow our hypothesis. But at a certain point, on important matters we feel compelled to reveal our hypothesis not because we are convinced, but simply because it is sufficiently plausible to us — and the situation sufficiently important — that we feel we should share it with the appropriate caveats. In this case, the stakes are very high, and the hypothesis sufficiently plausible that it is worth sharing.
The geopolitical chessboard is shifting, though many of the pieces are invisible. The end may look very different than this, but if it winds up looking this way, it is certainly worth noting.
It follows from this that strengthening Iran’s ability to threaten the flow of oil, while retaining a degree of Russian control over Iran’s ability to pull the trigger, would give Russia the counter it needs to American actions in the FSU. The transfer of more advanced mines and mining systems to Iran — such as mines that can be planted now and activated remotely (though most such mines can only lay, planted and unarmed, for a limited period) to more discriminating and difficult-to-sweep types of mines — would create a situation the Americans could neither suppress nor live with. As long as the Russians could maintain covert control of the trigger, Moscow could place the United States, and the West’s economies, in check.
Significantly, while this would wreak havoc on Persian Gulf producers and global oil consumers at a time when they are highly vulnerable to economic fluctuations, a spike in the price of oil would not hurt Russia. On the contrary, Russia is an energy exporter, making it one of the few winners under this scenario. That means the Russians can afford much greater risks in this game.
We do not know that the Russians have all this in mind. This is speculation, not a net assessment. We note that if Russo-Iranian contacts are real, they would have begun well before the Iranian elections and the summit. But the American view on Russia is not new and was no secret. Therefore, the Russians could have been preparing their counter for a while.
We also do not know that the Iranians support this Russian move. Iranian distrust of Russia runs deep, and so far only the faction supporting Ahmadinejad appears to be playing this game. But the more the United States endorses what it calls Iranian reformists, and supports Rafsanjani’s position, the more Ahmadinejad needs the Russian counter. And whatever hesitations the Russians might have had in moving closer to the Iranians, recent events have clearly created a sense in Moscow of being under attack. The Russians think politically. The Russians play chess, and the U.S. move to create pressure in the FSU must be countered somewhere.
In intelligence, you must take bits and pieces and analyze them in the context of the pressures and constraints the various actors face. You know what you don’t know, but you still must build a picture of the world based on incomplete data. At a certain point, you become confident in your intelligence and analysis and you lock it into what STRATFOR calls its net assessment. We have not arrived at a new net assessment by any means. Endless facts could overthrow our hypothesis. But at a certain point, on important matters we feel compelled to reveal our hypothesis not because we are convinced, but simply because it is sufficiently plausible to us — and the situation sufficiently important — that we feel we should share it with the appropriate caveats. In this case, the stakes are very high, and the hypothesis sufficiently plausible that it is worth sharing.
The geopolitical chessboard is shifting, though many of the pieces are invisible. The end may look very different than this, but if it winds up looking this way, it is certainly worth noting.
Friday, August 7, 2009
First step for South Stream
FT - No friends, only partners in Realpolitik
Bloomberg - Turkey's offer to Gazprom
Factbox about Nabucco
Hungarian support for Nabucco
Bloomberg - Turkey's offer to Gazprom
Turkey's decision could be a tough answer to the EU following the difficult European negotiations.
Factbox about Nabucco
Hungarian support for Nabucco
In the same time, I will doubt at least 10% the ways in which public opinion understand the technical and economic feasability arguments for a pipeline or another, otherwise than by political and national sympathies.
Tuesday, August 4, 2009
Ten Years of Putin
August 4
This coming weekend marks the 10th anniversary of Vladimir Putin’s assumption of a leadership position at the Kremlin. Much has happened since Putin’s appointment as first vice prime minister in August 1999, but Russia’s most definitive evolution was from the unstable but semidemocratic days of the 1990s to the statist, authoritarian structure of today.
While it has hardly been clear to STRATFOR that Putin would survive Russia’s transition from tentative democracy to near-police state, the transformation of Russia itself has always fit with our predictions. Authoritarian government is a geographically hardwired feature of Russia.
Russia’s authoritarian structure has its roots in two interlinking features: its size and its lack of geographically defined borders.
The Matter of Size
Russia is huge. Mind-numbingly huge. Even Americans, whose country is large in its own right, have difficulty absorbing just how large Russia is. Russia spans 11 time zones. Traveling from one end to the other via rail is a seven-day, seven-night journey. Commercial jets needed to refuel when flying the country’s length until relatively recently. The country’s first transcontinental road became operational only a few years ago. In sum, Russia — to say nothing of the substantially larger Soviet Union — is roughly double the size of all 50 U.S. states combined.
In being so huge, Russia is condemned to being hugely poor. With the notable exception of the Volga, Russia has no useful rivers that can be used to transport goods — and the Volga, which is frozen most of the year, empties into the commercial dead end of the Caspian Sea. Whereas the Americans and Europeans always could shuttle goods and people cheaply up and down their rivers and use the money this allowed them to save to build armies, purchase goods and/or train workers — and thus become richer still — the Russians had to apply their scarce capital to build the transportation systems necessary to feed their population.
Most Western cities grew on natural transportation nodes, but many Russian cities are purely the result of state planning. St. Petersburg, for example, was built exclusively to serve as a forward position from which to battle Sweden and control the Baltic Sea. Basic industrialization, which swept across Europe and the United States in the 19th century, required rapid, inexpensive transit to make the process economical and dense population centers to serve as cheap pools of labor and concentrated markets.
Russia had neither transit nor population going for it. Large cities require abundant, cheap food. Without efficient transport options, farmers’ output will rot before reaching market, preventing them from earning much. State efforts to confiscate farmers’ production led to rebellions. Early Russian governments consistently found themselves stuck having to choose between drawing upon already-meager finances to purchase food and subsidize city growth, or spending that money on a security force to terrorize farmers so the food could be confiscated outright. It wasn’t until the development of railroads — and the rise of the Soviet Union’s iron grip — that the countryside could be both harnessed economically and crushed spiritually with enough regularity to grow and industrialize Russia’s cities. But even then, cities were built based on a strategic — not economic — rationale. Magnitogorsk, one of Russia’s vast industrial centers, was built east of the Ural Mountains to shield it from German attack.
Russia’s obstacles to economic development could be overcome only through state planning and institutional terror. Unsurprisingly, Russia’s first real wave of development and industrialization did not occur until Stalin rose to power. The discovery of ample energy reserves in the years since has helped somewhat. But since most of them are literally thousands of miles from any market, the need to construct mammoth infrastructure simply to reach the deposits puts pressure on the country’s bottom line.
In being so huge, Russia is condemned to being hugely poor. With the notable exception of the Volga, Russia has no useful rivers that can be used to transport goods — and the Volga, which is frozen most of the year, empties into the commercial dead end of the Caspian Sea. Whereas the Americans and Europeans always could shuttle goods and people cheaply up and down their rivers and use the money this allowed them to save to build armies, purchase goods and/or train workers — and thus become richer still — the Russians had to apply their scarce capital to build the transportation systems necessary to feed their population.
Most Western cities grew on natural transportation nodes, but many Russian cities are purely the result of state planning. St. Petersburg, for example, was built exclusively to serve as a forward position from which to battle Sweden and control the Baltic Sea. Basic industrialization, which swept across Europe and the United States in the 19th century, required rapid, inexpensive transit to make the process economical and dense population centers to serve as cheap pools of labor and concentrated markets.
Russia had neither transit nor population going for it. Large cities require abundant, cheap food. Without efficient transport options, farmers’ output will rot before reaching market, preventing them from earning much. State efforts to confiscate farmers’ production led to rebellions. Early Russian governments consistently found themselves stuck having to choose between drawing upon already-meager finances to purchase food and subsidize city growth, or spending that money on a security force to terrorize farmers so the food could be confiscated outright. It wasn’t until the development of railroads — and the rise of the Soviet Union’s iron grip — that the countryside could be both harnessed economically and crushed spiritually with enough regularity to grow and industrialize Russia’s cities. But even then, cities were built based on a strategic — not economic — rationale. Magnitogorsk, one of Russia’s vast industrial centers, was built east of the Ural Mountains to shield it from German attack.
Russia’s obstacles to economic development could be overcome only through state planning and institutional terror. Unsurprisingly, Russia’s first real wave of development and industrialization did not occur until Stalin rose to power. The discovery of ample energy reserves in the years since has helped somewhat. But since most of them are literally thousands of miles from any market, the need to construct mammoth infrastructure simply to reach the deposits puts pressure on the country’s bottom line.
The Best Defense
Russia’s size lends itself to an authoritarian system, but the deeper cause for this system is rooted in Russia’s lack of geographically defined borders. The best illustration of this requires a brief review of the lessons of the Mongol occupation.
The strength of the Mongols — who once ruled the steppes of Asia, and in time most of what is now Russia (among other vast territories) — lay in their military acumen on horseback. Where the land was open and flat, the Mongol horsemen knew no peer. Russia’s populated chunks are as flat as they are large. It possesses no physical barriers that could stop, or even particularly slow, the Mongol’s approach and inevitable victory. The forests north of Moscow served as Russia’s best defense.
When the Mongol horde arrived at the forests’ edge, the cavalrymen were forced to dismount if they were to offer combat. Once deprived of their mounts, the Mongol warrior’s advantage over the Russian peasant soldier shrank precipitously. And so it was only in Russia’s northern forests where some semblance of Russian independence managed to survive during the three centuries of Mongol rule.
The Mongols taught Russians just how horrible invasions — especially successful invasions persisting for generations — could be. The Mongol occupation became indelibly seared into the Russian collective memory, leaving Russians obsessed with national security. Echoes of that terrible memory have surfaced again and again in Russian history, with Napoleon’s and Hitler’s invasions only serving as two of the most recent. Many Russians view today’s steady NATO and EU expansions into the former Soviet territories through this prism, as simply the most recent incarnation of the Mongol terror.
After the Mongol period ended, Russian strategy could be summed up in a single word: expansion. The only recourse to the challenge of size and the lack of internal transportation options — and the lack whatsoever of any meaningful barriers to invasion — was establishing as large a buffer as possible. To this end, massive and poor Russia dedicated its scarce resources to building an army that could push its borders out from its core territory in the search for security.
The complications flowing from such an expansion — like the one achieved during Soviet times — are threefold:
First, the security is incomplete. While many countries have some sort of geographic barrier that grants a degree of safety — Chile has the Andes and the Atacama Desert, the United Kingdom has the English Channel, Italy has the Alps — potential barriers to invasion for Russia are far-flung and incomplete. Russia can advance westward to the Carpathian Mountains, but it remains exposed on the North European Plain and the Bessarabian gap. It can reach the Tien Shan Mountains of Central Asia and the marshes of Siberia, but between mountain and marsh lies an extension of the steppe into China and Mongolia. Short of conquering nearly all Eurasia, there is no way to secure Russia’s borders.
Second, the cost of trying to secure its borders is enormously expensive — more massive than any state can sustain in perpetuity. Trying to do so means Russia’s already-stressed economic system must support an even longer border, which requires an even larger military. The bigger Russia gets, the poorer it gets, and the more critical it becomes for its scarce resources to be funneled toward state needs — meaning central control becomes more essential.
Third, any buffers Russia conquers are not empty, they are home to non-Russians. And these non-Russians rarely take a shine to the idea of serving as Russia’s buffer regions. Keeping these conquered populations quiescent is not a task for the faint of heart. It requires a security force that isn’t just large but also able to excel at penetrating resistance groups, gathering information and policing. It thus requires an internal intelligence service with the primary purpose of keeping multiple conquered peoples in line — whether those people are Latvian or Ukrainian or Chechen or Uzbek — and this intelligence service’s size and omnipresence tends to be matched only by its brutality.
The strength of the Mongols — who once ruled the steppes of Asia, and in time most of what is now Russia (among other vast territories) — lay in their military acumen on horseback. Where the land was open and flat, the Mongol horsemen knew no peer. Russia’s populated chunks are as flat as they are large. It possesses no physical barriers that could stop, or even particularly slow, the Mongol’s approach and inevitable victory. The forests north of Moscow served as Russia’s best defense.
When the Mongol horde arrived at the forests’ edge, the cavalrymen were forced to dismount if they were to offer combat. Once deprived of their mounts, the Mongol warrior’s advantage over the Russian peasant soldier shrank precipitously. And so it was only in Russia’s northern forests where some semblance of Russian independence managed to survive during the three centuries of Mongol rule.
The Mongols taught Russians just how horrible invasions — especially successful invasions persisting for generations — could be. The Mongol occupation became indelibly seared into the Russian collective memory, leaving Russians obsessed with national security. Echoes of that terrible memory have surfaced again and again in Russian history, with Napoleon’s and Hitler’s invasions only serving as two of the most recent. Many Russians view today’s steady NATO and EU expansions into the former Soviet territories through this prism, as simply the most recent incarnation of the Mongol terror.
After the Mongol period ended, Russian strategy could be summed up in a single word: expansion. The only recourse to the challenge of size and the lack of internal transportation options — and the lack whatsoever of any meaningful barriers to invasion — was establishing as large a buffer as possible. To this end, massive and poor Russia dedicated its scarce resources to building an army that could push its borders out from its core territory in the search for security.
The complications flowing from such an expansion — like the one achieved during Soviet times — are threefold:
First, the security is incomplete. While many countries have some sort of geographic barrier that grants a degree of safety — Chile has the Andes and the Atacama Desert, the United Kingdom has the English Channel, Italy has the Alps — potential barriers to invasion for Russia are far-flung and incomplete. Russia can advance westward to the Carpathian Mountains, but it remains exposed on the North European Plain and the Bessarabian gap. It can reach the Tien Shan Mountains of Central Asia and the marshes of Siberia, but between mountain and marsh lies an extension of the steppe into China and Mongolia. Short of conquering nearly all Eurasia, there is no way to secure Russia’s borders.
Second, the cost of trying to secure its borders is enormously expensive — more massive than any state can sustain in perpetuity. Trying to do so means Russia’s already-stressed economic system must support an even longer border, which requires an even larger military. The bigger Russia gets, the poorer it gets, and the more critical it becomes for its scarce resources to be funneled toward state needs — meaning central control becomes more essential.
Third, any buffers Russia conquers are not empty, they are home to non-Russians. And these non-Russians rarely take a shine to the idea of serving as Russia’s buffer regions. Keeping these conquered populations quiescent is not a task for the faint of heart. It requires a security force that isn’t just large but also able to excel at penetrating resistance groups, gathering information and policing. It thus requires an internal intelligence service with the primary purpose of keeping multiple conquered peoples in line — whether those people are Latvian or Ukrainian or Chechen or Uzbek — and this intelligence service’s size and omnipresence tends to be matched only by its brutality.
The Kremlin Crucible
Russia is a tough place to rule, and as we’ve implied, STRATFOR is mildly surprised Putin has lasted. We don’t think him incompetent, it’s just that life in Russia is dreadfully hard and the Kremlin is a crucible, and leaders often are crushed swiftly. Before Putin took Russia’s No. 2 job, former President Boris Yeltsin had gone through no fewer than 10 men — one of them twice — in the position.
But Putin boasted one characteristic that STRATFOR identified 10 long years ago that set him apart. Putin was no bureaucrat or technocrat or politico; he was a KGB agent. And as Putin himself has famously proclaimed, there is no such thing as a former intelligence officer. This allowed him to harness the modern incarnation of the institutions that made Russia not just possible but also stable — the intelligence divisions — and to fuse them into the core of the new regime. Most of the Kremlin’s current senior staff, and nearly all Putin’s inner circle, were deeply enmeshed in the Soviet security apparatus.
This is hardly a unique coalition of forces in Russian history. Andropov ran the KGB before taking the reins of the Soviet empire. Stalin was (in)famous for his use of the intelligence apparatus. Lenin almost ran Russia into the ground before his deployment of the Cheka in force arrested the free fall. And the tsars before the Soviet leaders were hardly strangers to the role such services played.
Between economic inefficiency — which has only gotten worse since Soviet times — and wretched demographics, Russia faces a future that if anything is bleaker than its past. It sees itself as a country besieged by enemies without: the West, the Muslim world and China. It also sees itself as a country besieged by enemies within: only about three in four citizens are ethnic Russians, who are much older than the average citizen — and non-Russian birthrates are approximately double that of Russians. Only one institution in Russian history ever has proved capable of resisting such forces, and it is the institution that once again rules the country.
Russia may well stand on the brink of its twilight years. If there is a force that can preserve some version of Russia, it might not be identical to Putin, but it will need to look a great deal like what Putin represents.
But Putin boasted one characteristic that STRATFOR identified 10 long years ago that set him apart. Putin was no bureaucrat or technocrat or politico; he was a KGB agent. And as Putin himself has famously proclaimed, there is no such thing as a former intelligence officer. This allowed him to harness the modern incarnation of the institutions that made Russia not just possible but also stable — the intelligence divisions — and to fuse them into the core of the new regime. Most of the Kremlin’s current senior staff, and nearly all Putin’s inner circle, were deeply enmeshed in the Soviet security apparatus.
This is hardly a unique coalition of forces in Russian history. Andropov ran the KGB before taking the reins of the Soviet empire. Stalin was (in)famous for his use of the intelligence apparatus. Lenin almost ran Russia into the ground before his deployment of the Cheka in force arrested the free fall. And the tsars before the Soviet leaders were hardly strangers to the role such services played.
Between economic inefficiency — which has only gotten worse since Soviet times — and wretched demographics, Russia faces a future that if anything is bleaker than its past. It sees itself as a country besieged by enemies without: the West, the Muslim world and China. It also sees itself as a country besieged by enemies within: only about three in four citizens are ethnic Russians, who are much older than the average citizen — and non-Russian birthrates are approximately double that of Russians. Only one institution in Russian history ever has proved capable of resisting such forces, and it is the institution that once again rules the country.
Russia may well stand on the brink of its twilight years. If there is a force that can preserve some version of Russia, it might not be identical to Putin, but it will need to look a great deal like what Putin represents.
Friday, July 31, 2009
The Russian Economy and Russian Power
George Friedman
July 27
U.S. Vice President Joe Biden’s visit to Georgia and Ukraine partly answered questions over how U.S.-Russian talks went during U.S. President Barack Obama’s visit to Russia in early July. That Biden’s visit took place at all reaffirms the U.S. commitment to the principle that Russia does not have the right to a sphere of influence in these countries or anywhere in the former Soviet Union. The Americans’ willingness to confront the Russians on an issue of fundamental national interest to Russia therefore requires some explanation, as on the surface it seems a high-risk maneuver. Biden provided insights into the analytic framework of the Obama administration on Russia in a July 26 interview with The Wall Street Journal. In it, Biden said the United States “vastly” underestimates its hand. He added that “Russia has to make some very difficult, calculated decisions. They have a shrinking population base, they have a withering economy, they have a banking sector and structure that is not likely to be able to withstand the next 15 years, they’re in a situation where the world is changing before them and they’re clinging to something in the past that is not sustainable.”
U.S. Policy Continuity
The Russians have accused the United States of supporting pro-American forces in Ukraine, Georgia and other countries of the former Soviet Union under the cover of supporting democracy. They see the U.S. goal as surrounding the Soviet Union with pro-American states to put the future of the Russian Federation at risk. The summer 2008 Russian military action in Georgia was intended to deliver a message to the United States and the countries of the former Soviet Union that Russia was not prepared to tolerate such developments but was prepared to reverse them by force of arms if need be. Following his July summit, Obama sent Biden to the two most sensitive countries in the former Soviet Union — Ukraine and Georgia — to let the Russians know that the United States was not backing off its strategy in spite of Russian military superiority in the immediate region. In the long run, the United States is much more powerful than the Russians, and Biden was correct when he explicitly noted Russia’s failing demographics as a principle factor in Moscow’s long-term decline. But to paraphrase a noted economist, we don’t live in the long run. Right now, the Russian correlation of forces along Russia’s frontiers clearly favors the Russians, and the major U.S. deployments in Iraq and Afghanistan would prevent the Americans from intervening should the Russians choose to challenge pro-American governments in the former Soviet Union directly. Even so, Biden’s visit and interview show the Obama administration is maintaining the U.S. stance on Russia that has been in place since the Reagan years. Reagan saw the economy as Russia’s basic weakness. He felt that the greater the pressure on the Russian economy, the more forthcoming the Russians would be on geopolitical matters. The more concessions they made on geopolitical matters, the weaker their hold on Eastern Europe. And if Reagan’s demand that Russia “Tear down this wall, Mr. Gorbachev” was met, the Soviets would collapse. Ever since the Reagan administration, the idee fixe of not only the United States, but also NATO, China and Japan has been that the weakness of the Russian economy made it impossible for the Russians to play a significant regional role, let alone a global one. Therefore, regardless of Russian wishes, the West was free to forge whatever relations it wanted among Russian allies like Serbia and within the former Soviet Union. And certainly during the 1990s, Russia was paralyzed. Biden, however, is saying that whatever the current temporary regional advantage the Russians might have, in the end, their economy is crippled and Russia is not a country to be taken seriously. He went on publicly to point out that this should not be pointed out publicly, as there is no value in embarrassing Russia. The Russians certainly now understand what it means to hit the reset button Obama had referred to: The reset is back to the 1980s and 1990s.
Reset to the 1980s and 90s
To calculate the Russian response, it is important to consider how someone like Russian Prime Minister Vladimir Putin views the events of the 1980s and 1990s. After all, Putin was a KGB officer under Yuri Andropov, the former head of the KGB and later Chairman of the Communist Party for a short time — and the architect of glasnost and perestroika. It was the KGB that realized first that the Soviet Union was failing, which made sense because only the KGB had a comprehensive sense of the state of the Soviet Union. Andropov’s strategy was to shift from technology transfer through espionage — apparently Putin’s mission as a junior intelligence officer in Dresden in the former East Germany — to a more formal process of technology transfer. To induce the West to transfer technology and to invest in the Soviet Union, Moscow had to make substantial concessions in the area in which the West cared the most: geopolitics. To get what it needed, the Soviets had to dial back on the Cold War. Glasnost, or openness, had as its price reducing the threat to the West. But the greater part of the puzzle was perestroika, or the restructuring of the Soviet economy. This was where the greatest risk came, since the entire social and political structure of the Soviet Union was built around a command economy. But that economy was no longer functioning, and without perestroika, all of the investment and technology transfer would be meaningless. The Soviet Union could not metabolize it. Former Soviet leader Mikhail Gorbachev was a communist, as we seem to forget, and a follower of Andropov. He was not a liberalizer because he saw liberalization as a virtue; rather, he saw it as a means to an end. And that end was saving the Communist Party, and with it the Soviet state. Gorbachev also understood that the twin challenge of concessions to the West geopolitically and a top-down revolution in Russia economically — simultaneously—risked massive destabilization. This is what Reagan was counting on, and what Gorbachev was trying to prevent. Gorbachev lost Andropov’s gamble. The Soviet Union collapsed, and with it the Communist Party. What followed was a decade of economic horror, at least as most Russians viewed it. From the West’s point of view, collapse looked like liberalization. From the Russian point of view, Russia went from a superpower that was poor to an even poorer geopolitical cripple. For the Russians, the experiment was a double failure. Not only did the Russian Empire retreat to the borders of the 18th century, but the economy became even more dysfunctional, except for a handful of oligarchs and some of their Western associates who stole whatever wasn’t nailed down. The Russians, and particularly Putin, took away a different lesson than the West did. The West assumed that economic dysfunction caused the Soviet Union to fail. Putin and his colleagues took away the idea that it was the attempt to repair economic dysfunction through wholesale reforms that caused Russia to fail. From Putin’s point of view, economic well-being and national power do not necessarily work in tandem where Russia is concerned.
Russian Power, With or Without Prosperity
Russia has been an economic wreck for most of its history, both under the czars and under the Soviets. The geography of Russia has a range of weaknesses, as we have explored. Russia’s geography, daunting infrastructural challenges and demographic structure all conspire against it. But the strategic power of Russia was never synchronized to its economic well-being. Certainly, following World War II the Russian economy was shattered and never quite came back together. Yet Russian global power was still enormous. A look at the crushing poverty — but undeniable power — of Russia during broad swaths of time from 1600 until Andropov arrived on the scene certainly gives credence to Putin’s view. The problems of the 1980s had as much to do with the weakening and corruption of the Communist Party under former Soviet leader Leonid Brezhnev as it had to do with intrinsic economic weakness. To put it differently, the Soviet Union was an economic wreck under Joseph Stalin as well. The Germans made a massive mistake in confusing Soviet economic weakness with military weakness. During the Cold War, the United States did not make that mistake. It understood that Soviet economic weakness did not track with Russian strategic power. Moscow might not be able to house its people, but its military power was not to be dismissed. What made an economic cripple into a military giant was political power. Both the czar and the Communist Party maintained a ruthless degree of control over society. That meant Moscow could divert resources from consumption to the military and suppress resistance. In a state run by terror, dissatisfaction with the state of the economy does not translate into either policy shifts or military weakness — and certainly not in the short term. Huge percentages of gross domestic product can be devoted to military purposes, even if used inefficiently there. Repression and terror smooth over public opinion. The czar used repression widely, and it was not until the army itself rebelled in World War I that the regime collapsed. Under Stalin, even at the worst moments of World War II, the army did not rebel. In both regimes, economic dysfunction was accepted as the inevitable price of strategic power. And dissent — even the hint of dissent — was dealt with by the only truly efficient state enterprise: the security apparatus, whether called the Okhraina, Cheka, NKVD, MGB or KGB. From the point of view of Putin, who has called the Soviet collapse the greatest tragedy of our time, the problem was not economic dysfunction. Rather, it was the attempt to completely overhaul the Soviet Union’s foreign and domestic policies simultaneously that led to the collapse of the Soviet Union. And that collapse did not lead to an economic renaissance. Biden might not have meant to gloat, but he drove home the point that Putin believes. For Putin, the West, and particularly the United States, engineered the fall of the Soviet Union by policies crafted by the Reagan administration — and that same policy remains in place under the Obama administration. It is not clear that Putin and Russian President Dmitri Medvedev disagree with Biden’s analysis — the Russian economy truly is “withering” — except in one sense. Given the policies Putin has pursued, the Russian prime minister must believe he has a way to cope with that. In the short run, Putin might well have such a coping mechanism, and this is the temporary window of opportunity Biden alluded to. But in the long run, the solution is not improving the economy — that would be difficult, if not outright impossible, for a country as large and lightly populated as Russia. Rather, the solution is accepting that Russia’s economic weakness is endemic and creating a regime that allows Russia to be a great power in spite of that. Such a regime is the one that can create military power in the face of broad poverty, something we will call the “Chekist state.” This state uses its security apparatus, now known as the FSB, to control the public through repression, freeing the state to allocate resources to the military as needed. In other words, this is Putin coming full circle to his KGB roots, but without the teachings of an Andropov or Gorbachev to confuse the issue. This is not an ideological stance; it applies to the Romanovs and to the Bolsheviks. It is an operational principle embedded in Russian geopolitics and history. Counting on Russian strategic power to track Russian economic power is risky. Certainly, it did in the 1980s and 1990s, but Putin has worked to decouple the two. On the surface, it might seem a futile gesture, but in Russian history, this decoupling is the norm. Obama seems to understand this to the extent that he has tried to play off Medvedev (who appears less traditional) from Putin (who appears to be the more traditional), but we do not think this is a viable strategy — this is not a matter of Russian political personalities but of Russian geopolitical necessity. Biden seems to be saying that the Reagan strategy can play itself out permanently. Our view is that it plays itself out only so long as the Russian regime doesn’t reassert itself with the full power of the security apparatus and doesn’t decouple economic and military growth. Biden’s strategy works so long as this doesn’t happen. But in Russian history, this decoupling is the norm and the past 20 years is the exception. A strategy that assumes the Russians will once again decouple economic and military power requires a different response than ongoing, subcritical pressure. It requires that the window of opportunity the United States has handed Russia by its wars in the Islamic world be closed, and that the pressure on Russia be dramatically increased before the Russians move toward full repression and rapid rearmament. Ironically, in the very long run of the next couple of generations, it probably doesn’t matter whether the West heads off Russia at the pass because of another factor Biden mentioned: Russia’s shrinking demographics. Russian demography has been steadily worsening since World War I, particularly because birth rates have fallen. This slow-motion degradation turned into collapse during the 1990s. Russia’s birth rates are now well below starkly higher death rates; Russia already has more citizens in their 50s than in their teens. Russia can be a major power without a solid economy, but no one can be a major power without people. But even with demographics as poor as Russia’s, demographics do not change a country overnight. This is Russia’s moment, and the generation or so it will take demography to grind Russia down can be made very painful for the Americans. Biden has stated the American strategy: squeeze the Russians and let nature take its course. We suspect the Russians will squeeze back hard before they move off the stage of history.
Tuesday, July 7, 2009
Thursday, March 19, 2009
Hungary forges closer energy ties with Russia
March 17
BERLIN: Hungary, already considered one of Russia's closest allies in Central Europe, has signed two major energy deals that will make it even more dependent on Moscow for its natural gas, analysts said Tuesday.
The deals run counter to claims by the Hungarian prime minister, Ferenc Gyurcsany, that he is a firm supporter of a European Union-sponsored gas pipeline project. The project, called Nabucco, is considered a competitor to a Russian-backed project, called South Stream, in which Moscow has both economic and political interests.
One of the deals, signed in Moscow last week in the presence of Mr. Gyurcsany and Prime Minister Vladimir Putin of Russia, calls for the Hungarian government and the state-owned Hungarian Development Bank to finance the South Stream pipeline project on Hungarian territory.
South Stream is a joint venture between Gazprom, the Russian state-controlled energy giant, and the Italian energy company Eni. It will run under the Black Sea and link Russia directly to Bulgaria, bypassing Ukraine, through which more 80 percent of Russian gas is sent to customers in Europe.
Little progress has been made on the pipeline, which is not thought likely to be ready until at least 2015.
Estimates of the cost of South Stream vary. Mr. Putin said last week the sum would be around €10 billion, or $13 billion. The Russian president, Dmitri Medvedev, who has questioned whether the project should go ahead, told investors last month that it might cost as much as €20 billion.
South Stream's northern branch would run from Bulgaria to Serbia, Hungary and Austria.
The 3,000 kilometer, or 1,865 mile, Nabucco pipeline is to be completed in 2013 an estimated cost of €8 billion. It is supposed to bring natural gas to Europe from Azerbaijan and eventually Iran.
Doubts have grown about the feasibility of Nabucco because of uncertainty over both the source of the natural gas and the level of public financing available amid the recession sweeping Europe. Hungary received a €25 billion rescue package from the International Monetary Fund and the E.U. in October.
Mr. Gyurcsany agreed nearly two years ago to support Gazprom's plans to build South Stream, saying that he saw no conflict of interest in supporting both the E.U. and Russian pipeline projects.
For Russia, South Stream would reduce dependence on Ukraine, with which Moscow has continuing political conflicts. It would also lock countries in Central and Southern Europe into long-term Russian energy contracts that would prevent them from diversifying their sources.
"This is all about weakening its dependence on Ukraine," said Peter Kaderjak, director of the Regional Center for Energy Policy Research in Budapest. "But it is also about Russia extending its economic, if not political, influence here in Hungary."
The other deal involves Gazprom and MOL, Hungary's oil and natural gas company, establishing a new gas storage site in Hungary. The new company will be owned equally by Gazprom Export and MOL and will have a capacity of 1.3 billion cubic meters, or 46 billion cubic feet, of natural gas.
MOL said Tuesday that the deal would increase Hungary's energy security as Ukraine became increasingly unreliable as a transit country for sending Russian gas to its customers in Eastern and Western Europe.
MOL recently sold its gas storage facility to the German company E.ON Ruhrgas and, according to analysts, now seeks to re-enter this sector to meet all its domestic needs in times of shortages and also supply natural gas to its neighbors.
Russia has its own interest in teaming up with MOL. In a bid to weaken its dependence on Ukraine, Russia wants to build storage facilities in Europe, besides new pipelines that will bypass Ukraine.
Gazprom is building big storage units in Germany, Austria, and Hungary, and it plans to acquire a site in Slovakia.
See also:
The Moscow Times - Deferring Nabucco is Win-Lose for Gazprom
Azerbaijan and Austria discussed about the prospects of Nabucco
Saturday, February 7, 2009
Mini-incident marks EU-Russia meeting
An EU-Russia meeting designed to improve post-gas crisis ties went wrong on Friday (6 January), when European Commission chief Jose Manuel Barroso clashed with Russian Prime Minister Vladimir Putin over human rights. A visibly angry Mr Putin during a press conference in Moscow censured the commission chief for having discussed "legal matters" with Russian President Dmitry Medvedev in a bilateral meeting in his absence earlier the same day.
"We need to discuss the full range of problems - both in Russia and in Europe - in order to be able to solve them," Mr Putin said, accusing EU states of themselves mistreating Russian ethnic minorities, prisoners and migrants."In [EU] public opinion there is some concern regarding some recent events that happened in Russia. Namely, the murder of some journalists and some rights activists," Mr Barroso replied in bullish tones. "Human rights and rule of law are much more important than diplomacy between two states."The unusual exchange comes after the recent slaying, in broad daylight in the Russian capital, of lawyer Stanislav Markelov and reporter Anastasiya Baburova, who investigated state killings and torture in North Caucasus. Mr Barroso had flown over with nine commissioners to meet with the Russian government in the first such high-profile event since 200The diplomatic mission came in the wake of the January gas crisis, which also saw the commission chief use strong language, at one point saying Russian and Ukrainian leaders were less trustworthy than some African statesRussia's invasion and partition of EU ally Georgia last August had already complicated relations. But the then French EU presidency tried to restore business as usual amid fears that a rupture could hurt EU trade and geopolitical interests.Mr Putin on Friday also said that EU monitors overlooking Russian gas flows via Ukraine should stay in place "until the end of the first quarter 2009."The team, made up mostly of delegates from EU energy firms, arrived in Russia on 10 January and was originally asked to leave by both Moscow and Kiev after gas flows restarted on 19 January.A lower-level EU delegation including external relations commissioner Benita Ferrero-Waldner also visited Kiev earlier this week, urging political stability and faster reforms.The timing of the visit proved unfortunate. The same day, a punch-up broke out in the country's parliament during a vote of no confidence against Prime Minister Yulia Tymoshenko, forcing the iron lady to scurry for shelter among her party's deputies.
New contexts, old mentalities. During the Cold War, the communist countries leader praised their wonderful life standards with pictures from the "Wild West". One of their favorite topics was the homeless Americans. The former Russian president is accusing the EU states now of neglecting the minorities and immigrants. What about the constant attacks against foreigners in big Russian cities?
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