Three assaults on the Kremlin within the
month must be extraordinary even by Cold War
standards. They prompted Anatol Lieven, a
prominent American scholar on Russia, to pose a
rhetorical question: "Why are we trying to reheat
the Cold War?"
It all began with a 94-page
report released by the influential think-tank the
Council on Foreign Relations on March 5 titled
"Russia's Wrong Direction: What the United States
Can and Should Do". It
concluded that Russia's
foreign and domestic policies had taken directions
that hurt US global interests; that a US-Russian
partnership was no longer feasible; and that the
US should lead a coordinated Western policy of
"selective cooperation" with Russia, a variant of
the policy of detente during the Cold War years.
Then appeared, hardly a week later, the
annual human-rights report issued by the US State
Department, which roundly criticized the Russian
leadership of President Vladimir Putin for
authoritarianism by "virtually stripping
parliament of power ... continuing media
restrictions and self-censorship ... continuing
corruption and selectivity in enforcement of law,
political pressure on the judiciary, and
harassment of some non-governmental
organizations", all of which has resulted in an
"erosion of the accountability of government
leaders to the people".
This was followed
within a week on March 16 by the White House
blueprint called the National Security Strategy,
which in a distinct hardening of tone toward
Moscow not only called on Russia to respect
freedom at home, but specifically warned that the
Kremlin's "efforts to prevent democratic
development at home and abroad will hamper the
development of Russia's relations with the US,
Europe and its neighbors".
The same day,
while on a visit to Australia, US Secretary of
State Condoleezza Rice expressed concern over the
"centralization of power in the Kremlin" and spoke
about the danger that "by its very existence, a
presidency that is strong without countervailing
institutions can be subverted, can subvert
democracy".
Rice, speaking to a town-hall
audience in Sydney, saw "a very difficult and
shaky path" right now for Russian democracy, and
expressed the hope that the Russian people "will
find their voice to demand accountable,
transparent institutions and to demand the ability
to organize themselves to petition their
government and, if necessary, to change their
government".
A "regime change" in Russia!
Lieven wrote in his article featured in the Los
Angeles Times of March 18 that historians of the
future would look back with amazement that
"hardliners within the Bush administration, and
especially in the office of Vice President Dick
Cheney, are arguing for a new line against Moscow
along the lines of a scaled-down Cold War" and
that they advocate forming "anti-Moscow military
alliances" and giving "overt support" to Putin's
domestic political opponents.
Lieven took
apart the different facets of the "unrealistic,
aggressive and dangerous" US policies toward
Russia now being urged, especially the tirade on
democracy, given the United States' support of
former president Boris Yeltsin's "pseudo-democracy
ruled over by corrupt and brutal oligarchical
clans".
These assaults may appear
untimely. Post-Soviet Russia has eschewed any
confrontation with the US in the international
arena - even in the face of the eastward expansion
by the North Atlantic Treaty Organization (NATO)
and the specter of an unprecedented and
provocative military encirclement by the US in its
"near abroad".
Besides, if Putin himself
is at the peak of his presidential power, that is
also largely due to his immense popularity among
Russia's population based on a successful track
record of his presidency that brought the country
economic prosperity, much-needed political
stability and foreign-policy achievements.
To be sure, the Russian economy has
significantly recovered in recent years,
registering budgetary surpluses for five
consecutive years; Russia has built up
foreign-currency reserves of US$180 billion; it
has been able to make its debt repayments ahead of
schedule; the Russian economy has begun
integrating into the world economy.
But
Russia today is not a superpower, and is nobody's
enemy. Besides, it still has to address a host of
internal problems, some of which, such as the
decline in population or the misgovernance in its
North Caucasus regions, are very profound and do
not lend themselves to easy solutions.
So
what is the casus belli of the Cold
War-like rhetoric against post-Soviet Russia? One
problem in finding an answer will be that the
sources of the Cold War still lie obscure in many
ways.
Alleged "communist expansion" in the
post-World War II years apparently led to the
initiation of confrontation in British-American
policies toward the Soviet Union, but scholars
chronicling the war, including the late George
Keenan, have admitted that the slide toward the
Cold War was at the very least a two-way process.
Many today are willing to admit that the US and
Britain bore much of the blame. But the role
played by the incessant Anglo-American
determination to exercise control over the world's
oil resources remains largely overlooked.
Global fault lines The current
fault lines in the international system came to
the surface at the meeting of energy ministers
that Russia convened in Moscow on March 13-14 with
its partners among the Group of Eight as a prelude
to the G8 summit meeting in St Petersburg this
July, where Russia has tabled energy security as
the No 1 agenda item for discussion.
In a
nutshell, the G8 energy ministers' meet showed
that Russia saw its energy sector as a
national-security asset, while the US lamented
that energy security had become the "albatross" of
its national security.
The Kremlin is not
willing to loosen its grip on Russia's oil-and-gas
industry, while the European Union on the other
hand calls on Russia to liberalize Western access
to its gas-pipeline network (calling on Russia to
ratify the Energy Charter, which aims at setting
ground rules and treaty obligations regarding
third-party pipeline access and transit
obligations). And both the EU and the US argue
that market-based solutions are more reliable and
flexible, while demanding that the Kremlin should
preferably revert to the privatization of its oil
industry, as in the early years of post-Soviet
Russia under Yeltsin, or at least allow
participation by the Western oil companies on more
liberal terms.
The EU and the US view
energy security in terms of guaranteed supplies of
energy through vicissitudes of politics, while
Russia says the paradigm of energy security also
includes ensuring "security of demand", which
means allowing its oil and gas companies to invest
in the vast distribution networks in Europe and
the US at the wholesale and retail marketing
levels as well and in acquiring properties in the
energy sector. This would require the EU and the
US to liberalize their own energy markets.
In an overarching philosophical sense, the
EU and Russia visualize a dialectic involving the
interests of the energy-consuming and transit
countries and those of oil-exporting countries,
whereas Russia refuses to be drawn into
stereotyped modes of behavior in the era of
globalization.
Underlying these
differences lies the US perception that Russia is
increasingly using energy as the primary lever of
the country's foreign policy, and that Russia's
growing role in the world energy markets is
determining its geopolitical influence.
In
other words, the Western perception is that energy
is being refined by the Kremlin as a far cheaper
and far more effective way of expanding global
influence than the tanks and missiles that the
Soviet Union amassed at enormous cost, which
drained resources and ultimately led to the
weakening of the Soviet state structure.
Beyond these factors, the US, as the sole
superpower, also has a psychological problem of
having to deal with a resurgent Russia. As a
respected Russian political observer, Vitaliy
Tretyakov, editor-in-chief of Politichiskii Klass,
recently wrote, "Russia today is not a world
superpower like the Soviet Union was, but it has
preserved its many qualities of a superpower:
gigantic territory, huge natural resources,
nuclear weapons, space technology, scientific
potential, atomic technology and energy resources,
a defense industry that is actively working for
export ... and the permanent membership at the
United Nations Security Council."
But
Russia sees the situation differently. It has
threat perceptions of its own, as spelled out in
its National Security Concept of 2000 (dubbed by
the West the "Putin doctrine"): appearance of
foreign military bases and contingents in Russia's
neighborhood; overall decline in post-Soviet
Russia's political, economic and military
influence; NATO's eastward expansion; and
weakening of the integration processes within the
Commonwealth of Independent States (CIS). In
addressing these threat perceptions, Russia sees
energy as a trump card of great potential, if
astutely played.
The big energy question
thus began accumulating in recent years on the
plate of Russia-US relations.
A defining
moment came in September, when Russia concluded a
$5.7 billion deal with Germany in laying a
1,200-kilometer gas pipeline with an annual
capacity of 55 billion cubic meters connecting
Russia's Black Sea coast, through international
waters offshore Poland and the Baltic states, with
Greifswald on Germany's coast.
The
pipeline indeed has the potential to alter
Europe's political landscape. In the words of a
leading research fellow at the Economics Institute
of the Russian Academy of Sciences, Igor Tomberg,
"Stable supply of energy to Europe in the next few
decades will depend on relations with Russia."
In September, again, Russia's Gazprom
shortlisted five oil majors for the development of
the huge Shtokman natural-gas field in the Barents
Sea, with an estimated reserve of 3.2053 trillion
cubic meters of natural gas and 30.98 million
tonnes of gas condensate. The shortlisted firms
include Chevron and ConocoPhilips from the US,
Hydro and Statoil from Norway, and Total from
France.
The US would like progress on the
$15 billion Shtokman project. Twenty-five percent
of the liquefied natural gas (LNG) produced at
Shtokman may be exported to the US and the rest to
Europe. But Russia is taking its own time
deciding, and may accord priority to the European
market, unless the US reciprocally allows Russian
oil companies to enter its highly lucrative retail
marketing network as well as facilitate investment
and the technology upgradation of Russia's aging
oil industry.
Another bone of contention
appeared as Russia began further improving in the
recent period its monopoly on the transit routs to
consumer countries from the Caspian and Central
Asian region. This meant that Europe incrementally
would have a dual dependence on Russia for Russian
supplies as well as Russian-mediated supplies.
Some major decisions are now in the
offing. Kashgan oilfield in Kazakhstan, which is
the biggest offshore discovery anywhere in the
past 30 years, is due on-stream by the end of the
decade. The export routes for Kashgan are to be
determined soon. There are two choices. One will
be to reinforce Russia's monopoly further, while
the second is to use the US-favored Baku-Ceyhan
pipeline. The US is trying to persuade Kazakhstan
to opt for the Baku-Ceyhan, which runs from the
capital of Azerbaijan, Baku, to the Turkish
Mediterranean port of Ceyhan, passing through
Georgia. The US energy secretary visited
Kazakhstan in this connection this month.
President George W Bush is also expected to visit
Kazakhstan this year.
The US is also
impatiently awaiting legislation by Russia
clarifying new rules for investment for US oil
companies in natural resources in Russia. In his
speech at the conclave of G8 energy ministers in
Moscow last week, Putin assured that "comfortable,
transparent and predictable" conditions of foreign
investment would be created.
But as Russia
would see it, why should enabling laws be
specially legislated for the US? Russia does not
intend to remain the United States' energy
appendage. Russian energy certainly would like to
promote its technological potential and integrate
it with Western potential, but as Putin stressed
in a recent article in the Wall Street Journal,
"energy egotism is a road to nowhere".
At
any rate, Russia is conscious of the immense
attraction of its energy sector for the world
community. Holding 20% of the world's natural-gas
reserves, producing 85% of Russia's total gas at
the moment (which is 16% of the entire world
output of natural gas), supplying already a
quarter of the entire Western European market and,
most important, accounting for up to 25% of
Russia's federal tax receipts on its current
accounts, Gazprom's market capitalization alone is
currently estimated to be in the region of $300
billion. Russia knows that foreign investors know
these ground realities only too well.
Yet
another aspect of the paradigm is that the "world
energy order" itself is changing dramatically. The
two huge Asian energy guzzlers, China and India,
have ambitious plans to buy stakes in Russian oil
producers. They want access to resources in
Siberia, the Far East and Sakhalin. This is
happening at a time when the West, too, is seeking
to increase its presence in Russia's energy
sector. Putin in his article in the Journal
underlined that Russia would pursue an energy
policy that was first of all beneficial to itself.
"It is our strong belief that energy
distribution guided wholly by the priorities of a
small group of the most developed countries does
not serve the goals and purposes of global
development. We will strive to create an
energy-security system sensitive to the interests
of the whole international community," Putin
wrote.
An Asia threat? The West
takes the "Asian threat" altogether differently.
Dick Lugar, the powerful chairman of the US
Senate's Foreign Relations Committee, in a major
speech at the Brookings Institution in Washington
on March 13, unveiled an Energy and Diplomacy Act
to be introduced into the US Congress.
He
criticized the lack of "full appreciation of our
[US] vulnerability" to the growing competition in
the energy market, and underlined that "Chinese
and Indians, with one-third of the world's people
between them, know that their economic future is
directly tied to finding energy resources to
sustain their rapid economic growth. They are
willing to negotiate with anyone willing to sell
them an energy lifeline ... The demand for energy
from these industrializing giants is creating
unprecedented competition for oil and natural
gas."
Therefore, Lugar said, "a particular
priority" of the proposed legislation would be to
"offer a formal coordination agreement with China
and India as they develop strategic petroleum
reserves. This will help draw them into the
international system, providing supply
reassurance, and thereby reducing potential for
conflict."
Curiously, not by coincidence
by any means, Lugar's idea was echoed in an
article titled "Why Europe must act collectively
on energy" in the Financial Times on March 9,
authored by the EU's foreign-policy chief, Javier
Solana. With the added subtlety of European
thinking, Solana argued, "We have to find the
right balance between a market-driven and a more
strategic approach."
Solana said the EU
("as Europeans"), the US and China and India must
collectively conduct their energy dialogue with
energy producers. "What we need is an orderly
combination of markets, law and consensual
negotiations ... The role of politics is to
balance different considerations ... The time has
come to forge a European energy diplomacy, based
on common interests and shared principles."
What explains this sense of Western
urgency for assembling a collective of major
oil-importing countries? There was a time until
very recently when Western commentators freely
speculated about the inevitability of Sino-Indian
rivalries erupting over issues of energy security.
This thesis has now been summarily abandoned in
the haste to argue that a convergence of interests
exists among China, India, and the EU and the US.
Three new likely dimensions of Russia's
energy diplomacy in the coming period worry the
West. First, certain important decisions that
Russia is called on to take on a trunk energy
pipeline to China will become known in the near
future, although the indications are that Russia
will add a spur to the proposed pipeline to the
Pacific. Japan is hotly contesting any
preferential treatment of China by the Kremlin.
Meanwhile, speaking in Beijing this week,
Putin said a new gas-pipeline system, called the
Altai, could be built to deliver gas from western
Siberia to China. Another system would deliver gas
from eastern Siberia, for a total of up to 80
billion cubic meters per year.
As for the
US, any long-term Russian commitment with the
potential to augment China's rise on the global
stage is a matter of utmost concern. Much
grandstanding by the various protagonists is,
therefore, going on. Energy is at the top of the
Sino-Russian agenda, as seen by Putin's visit this
week to China, with another expected later in the
year.
India, too, is wooing Russia for a
qualitatively new level of energy cooperation
stretching to pipeline diplomacy. During the
recent visit of Russian Prime Minister Mikhail
Fradkov to Delhi, the Indian side proposed
Russia's involvement in the Iran gas-pipeline
project to Pakistan and then India (which faces
continued US opposition). Any intensification of
Russia's role in ensuring the energy security of
China and India in the medium and long terms is
bound to have profound implications for a truly
multipolar world order.
Second, following
up on the North Sea gas pipeline diplomacy with
Germany and Western Europe in September, Russian
energy diplomacy is tiptoeing into "New Europe",
the region that separates Russia from Western
Europe, which the US has painstakingly created as
a beachhead of geopolitical influence in the past
15 years.
Central and southeastern Europe
have become a highly strategic region for US
global policy. Turkey is already bound by
extensive energy cooperation with Russia - a key
factor, among others, that is serving to give a
new-found autonomy to Ankara's strategic
objectives in the Black Sea, the Caucasus and
Central Asia.
Turkey can no longer be
counted as a flag carrier of US regional policies.
Nuances are appearing in Turkey's strategic
thinking and it is showing reluctance to allow the
Black Sea to be made into a NATO theater flanking
Russia (though Turkey remains an important NATO
member country). Turkey prefers the Black Sea to
remain what it used to be through centuries of
history - a Russo-Turkish preserve, where the
interests of the two historic powers may have
rubbed at times on nitty-gritty issues, but
increasingly converge in strategic terms.
Thus the main purpose of Putin's visit to
Hungary and the Czech Republic this month was
energy politics. Against the backdrop of Hungary
sourcing more than 80% of its gas needs from
Russia, Putin suggested the construction of a
second section of the Blue Stream pipeline
(connecting Russia and Turkey) to proceed to
Hungary as well and to the entire southeastern
region of Europe. This comes at a time when the US
is encouraging the EU to hasten with the Nabucco
pipeline project linking Austria to potential
Iranian, Turkmen, Azeribaijani and Kazakh gas
supplies as an alternative to Russian gas
supplies.
On similar lines, Putin invited
Prague to use the North European gas pipeline
connecting Germany. Clearly, Russia not only wants
to consolidate its position on the central and
southeastern European market, but the Russian
proposals to Hungary and the Czech Republic
involve pipelines bypassing Ukraine, the thorn
that the US planted on Russia's sensitive western
flanks after the "regime change" in Kiev early
last year.
Putin also reiterated Russia's
keenness for the expansion of its private and
state capital into the properties and assets in
the energy sector in Eastern Europe. Russia has
had some success in purchasing assets, such as oil
refineries in Bulgaria and Romania, and in a
fairly large network of fuel retail outlets in the
Balkans, as well as in holding shares in
Slovakia's gas-pipeline company, apart from
currently negotiating more acquisitions in
Romania, Bulgaria, Serbia, Macedonia and
Bosnia-Herzogovina. But Poland, Hungary and the
Czech Republic have held out over geopolitical
considerations and in terms of the overlaps of
their shared history with the Soviet Union.
The implications for US regional policy of
such Russian diplomacy are obvious. Washington
senses creeping ambiguities in the reactions of
Eastern European countries to repeated Russian
overtures. As a Russian commentator wryly
observed, "Slovakia, Bulgaria and Romania and the
former Yugoslav republics are more or less
benevolent, while Poland, Czech Republic and
Hungary are more cautious."
Surveying
these worrisome tendencies, Lugar in his speech at
the Brookings Institution warned that they "might
require NATO to review what alliance obligations
would be in such cases".
Russian energy
diplomacy is undoubtedly exasperating the US by
undermining the visions of its global dominance.
If carried further, Russian diplomacy may hold
implications for the United States' leadership of
the Euro-Atlantic alliance itself. The secretary
of Germany's Ministry of Economics and Technology,
Georg Adamowitsch, who attended the Moscow
conference of energy ministers on March 13-14,
admitted, "The winter was very cold in Germany,
but no one froze, as we have good natural-gas
reserves owing to supplies from Russia."
However, another vector of Russia's recent
energy diplomacy that would arguably have the
greatest potential impact on great-power politics
appeared when Putin wound up his tour of central
Europe and headed for Algeria. This visit serves
as one of those rare moments in diplomacy when
various strands of international politics converge
as a microcosm. It took place against the backdrop
of Russia's new Middle East policy - Russia's
observer status within the Organization of Islamic
Conferences, revival of its Soviet-era ties with
Syria, its pursuit of an independent course toward
Iran (while coordinating with China and avoiding
any open discord with the US), its open dealings
with Hamas in Palestine, and so on.
Russian Foreign Minister Sergei Lavrov
outlined the parameters of this policy in an
important article in Moskoviye Novosti on March 3
titled "Russia in global politics". Taking
exception to the United States' "transformational
diplomacy" in the Middle East, Lavrov said any
settlement of the Iran nuclear issue was possible
only on the "conditions of engagement" of Iran,
rather than isolation.
"There is only one
choice: either a further buildup of tension
towards a 'clash of civilizations' or the
achievement of a compromise, which, out of all
international factors, is going to require a
renunciation of outdated prejudices and
oversimplified, unilateralist world views that in
no way square with the emerging reality of
multilaterality as the optimal means of conducting
world affairs," he wrote.
Lavrov said
Russia couldn't take the "position of a detached
onlooker" on the United States' approach toward
the Middle East. He spoke of Russia's willingness
to play the role of a "cultural and civilizational
bridge" between the West and the Middle East, and
its determination not to allow any power "to set
it at loggerheads with the Islamic world".
He concluded that the "increased
significance of the energy factor" challenged the
"equation formula of strategic stability" in the
international system, and made irrelevant the past
assumptions of geopolitics. "Professionals
concerned with Russia studies and policymaking
cannot but see that it is naive to expect of us a
readiness to be content in the world with the role
of one being led," Lavrov wrote.
In
another article three days later, titled "60 years
of Fulton: Lessons of the Cold War and our time",
in Rossiskaya Gazeta, Lavrov reverted to the same
theme of the "liberation of Russia's energies and
its resources".
These articles turned out
to be curtain-raisers of one of the most important
diplomatic missions of presidential diplomacy
undertaken by Putin - the visit to Algeria, during
which Russia concluded a $7.5 billion arms deal
with the North African country for the supply of a
fleet of multi-role fighter aircraft, missiles and
radar systems. A striking aspect of the massive
arms deal is that it will be financed under a
payment scheme woven into deep collaboration
between the two countries in the energy sector
that provides for Russian participation in
Algeria's upstream and downstream operations in
the oil-and-gas sector.
Thus Russian
companies have been given monopoly rights for oil
production in the Sahara Desert; Russia's Gazprom
will participate in the development and production
of Algeria's gas sector; and Algeria will share
with Russia its sophisticated Western technologies
in gas liquefaction.
Most important,
Russia and Algeria decided to work together in the
European market. Algeria is Europe's only viable
alternative source of gas at present, ranking
fourth in the world as a gas-exporting country.
Algeria's gas pipelines connect Italy, Spain,
Portugal and Slovenia. It exports LNG to France,
Spain, Italy, Greece, Turkey and the US.
The Russian-Algerian collaboration in the
gas market is in line with overall Russian energy
diplomacy in recent years in creating a matrix of
new dependencies and geopolitical groupings,
production and cooperation chains and price
cartels at regional or subregional levels that are
incrementally poised to impact on a global plane.
Moscow's strategy to enhance gas
cooperation with Central Asia has already met with
considerable success. In early 2002, Putin had
called for a cartel of gas producers in the CIS.
Since then, Moscow has successfully concluded
agreements with Turkmenistan, Kazakhstan and
Uzbekistan. Gazprom is increasing its purchases of
Central Asian gas in the coming three years.
Russia's monopoly control of all existing routes
for Central Asian gas implies that Moscow now
virtually holds all the ropes of all the gas flows
in the post-Soviet space.
The implications
of this are beginning to extend beyond CIS
boundaries. As Russian diplomacy crosses the
Mediterranean to engage Algeria, an entirely new
ball game begins in the world energy order.
(Indeed, an unspoken theme in the war of
pantomimes over the Iran nuclear issue is also
that any Russian-Iranian concord in the energy
sector at this juncture will mean the virtual
completion of an arc of the most important
gas-producing regions of the world in the nature
of a "gas cartel".)
The EU and the US are
indeed very concerned that "Russia has acquired a
freedom to behave ... at the critical stage of
formation of a new architecture of international
relations" - to quote from Lavrov's article in
Rossiskaya Gazeta. The irony and paradox consist
in the fact that Russia is turning out to be one
of the biggest beneficiaries of the phenomenon of
globalization in the post-Soviet era.
The
"victor" ending up as a dependant of the
"vanquished" - it is a rare occurrence in history.
It creates profound psychological problems. It can
be the stuff of cold wars.
M K
Bhadrakumar served as a career diplomat in the
Indian Foreign Service for more than 29 years,
with postings including ambassador to Uzbekistan
(1995-98) and to Turkey (1998-2001).
(Copyright 2006 Asia Times Online Ltd.
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