Paris, January 3, 2006 – Russia’s halt in natural gas supplies to Ukraine on Sunday, even if rapidly and predictably lifted, throws serious doubt upon Vladimir Putin’s competence, at exactly the moment he claimed the international status he has sought for the new Russia.
He has just become chairman of the G-8 group of leading industrial nations, and will soon preside over the annual gathering of the politically and economically grand of this world.
Russia’s membership in the group is, in strict terms, undeserved, as Russia’s is not one of the leading eight industrial economies. It was admitted as an encouragement to further market and political reforms, and in acknowledgement of Russia’s position as a traditional great power and a major strategic military power.
Putin’s attempt to punish Ukraine for its Orange Revolution and ambitions to join NATO and the EU was logical enough. Why should Moscow continue to let Kiev pay a privileged price for Russian energy exports if the Ukrainians are hostile to Russia and want new alliances in the West?
The Orange Revolution was largely promoted, financed and politically supported by American NGOs, many with direct or indirect links to the U.S. government. The same thing was true for Georgia’s election two years ago of a new pro-western and anti-Russian government.
Russia until now has grumbled about this but not made an issue of it, itself remarkable.
Can one imagine the Bush administration, or the American Congress, tolerating Russian organizations, some supported directly by the Russian state, setting up office in Washington to train and finance American groups anxious to defeat the Republicans in forthcoming congressional and presidential elections (or to reform what they could reasonably call the new and authoritarian American plutocracy)?
Don’t make me laugh. What is astounding is that it took until late last year for Putin to attack western non-governmental organizations in Moscow, which were working to reverse the increasingly authoritarian government Putin has installed in his country.
Until now, the clamp-down on independent television news and analysis in Russia, and the pressures placed on radio and the printed press, have caused concern in the West but have been tolerated in the expectation (or hope) that they are passing phenomena.
The Putin government’s attack on the Russian oligarchs has excited indignation at The Wall Street Journal but not among too many others in the West. It is reasonable to see Putin and the people he has appointed – many from the intelligence services of Putin’s own time – as attempting to maintain politically accountable and “patriotic” authority in the country after the rapacity of the oligarchs who looted it during Boris Yeltsin’s presidency, and against the threat of international criminal infiltration of the Russian state as well as economy. Putin has been taking his country back from the oligarchs.
However what follows? Increasing authoritarianism and suppression of debate, leading towards rigged elections? Many have thought Putin too intelligent for that.
Now there is doubt about his tactical sense and grasp of the non-Russian world. He seems to have believed he could interrupt the supply of gas from Central Asia and cut exports to Ukraine without a reaction in Western Europe or the U.S. In fact, pipeline pressure and the quantity of gas reaching Gazprom’s major West European customers fell by about a quarter.
He seems not to have considered that Ukraine as well as Russia influence the quantity of gas being delivered to Europe, thereby mobilizing the western governments against Moscow.
His actions threaten ruinous consequences for Gazprom’s reputation for reliability and commercial probity (at a moment when it is looking for western investors). They will also have serious political repercussions.
The political context was an issue from the beginning of the projects to build pipelines to supply Western Europe with Russian energy. That was while the cold war still lingered, and many in the West warned that Europe should be cautious about the degree of dependence on Russian energy it allowed itself.
The Soviet governments of the period insisted that energy would be supplied whatever the political climate, and whatever the disputes that arose between the West and Moscow.
Now that has been shown not to be true.
There is a market argument, which I have myself made in connection with Middle Eastern oil supplies, which says that energy producers have to sell to the markets that will buy.
Natural gas, in the quantities Russia produces, is useless to Russia unless it can be sold. You do not need to occupy or control Iraq or Saudi Arabia in order to have their oil. It is cheaper and more convenient to buy it. They have to sell it in order for it to have value for them. Hence politically-motivated producer boycotts tend to be self-defeating.
With China’s arrival on the market, with its enormous appetite for energy, this argument has temporarily lost some of its force, since most western countries have neglected developing and diversifying their sources of energy.
None of Gazprom’s customers are going to forget what happened last weekend. More important for Vladimir Putin is that all of those western clients now are on notice that Russia’s gas exports do not come with a guarantee. They come with a threat.
Copyright 2006 by Tribune Media Services. All Rights Reserved.