So Many Invasions, So Little Time

June 21, 2009

Russia’s next war won’t be with Georgia. It’ll be with Georgia’s unruly northern neighbors—Russia’s supposed vassals—the Chechens, Dagestanis, and Ingush.

That’s one plausible explanation for why, as Eurasia Daily Monitor reported, Russia’s defense ministry is simultaneously drawing down the number of troops in South Ossetia and Abkhazia while organizing a massive new army training exercise in the North Caucasus.

There were originally supposed to be 3,700 troops stationed in Abkhazia and South Ossetia. But on Wednesday, May 17, Russia’s top military commander, First Deputy Defense Minister Army-General Nikolai Makarov, announced that this number would be cut. He didn’t give any specifics, only that the stationed force  “will be reduced, since the initially announced number is perhaps too large.”

This is happening in conjunction with Kavkaz-2009, a training operation that is the successor of Kavkaz-2008, which took place last summer. The Kavkaz-2008 operation amassed and equipped 8,000 Russian troops on the Georgian border; they subsequently marched into Abkhazia and South Ossetia, to the dismay of the Georgian military forces who had been hoping to bring the two republics back under Georgian control.

This year’s Kavkaz exercise involves an even larger fighting force of 8,500. Eurasia Daily Monitors’ Pavel Felgenhauer speculates convincingly that Russia is planning on a new round of combat, this time bringing the fighting straight into Georgia proper. Most likely, it will take place in July or August.

Their objectives will be decisive,” he wrote. “Regime change and the forceful demilitarization of Georgia… establishing a secure land corridor linking Russia to its strategically important military base in Armenia… (and) transforming Georgia into a loose confederation of its many semi-independent regions with their regional king-pins, with a weak central government and without any national military-security forces.”

He notes that recently Makarov claimed to be worried that Georgia would be an instigator of new trouble. In the general’s own words, “Georgia is saber-rattling and preparing weapons to resolve its territorial problems by any means.”

Felgenhauer suspects that Makarov is just laying out a justification for an invasion of Georgia that the Russian military is already set on undertaking. Stationing this major military operation in the north Caucasus is the invasion’s planning phase:

If Moscow were indeed anticipating a possible new Georgian attack, it would have been logical to place forces in forward positions to prevent a sudden assault. But if Russia itself is preparing major military action, using the accusations of Georgian aggression as a pretext, it makes practical sense not to spend resources creating large permanent military bases in Abkhazia and South Ossetia. It is much more expedient when the time for action arrives to move combat troops from permanent bases within Russia.

Felgenhauer may be right. But the only problem is that this summer might be an inopportune time. There are too many other invasions that Russia will likely have to initiate. Specifically, into Chechnya, and neighboring Dagestan and Ingushetia.

Never mind that Russian president Medvedev and Chechen governor Ramzan Kadyrov officially celebrated the end of the Chechen war over a month ago. Things are, as the head of a local NGO told Caucasian Knot, “not so mild and beautiful.”

Militia groups keep up the fight. Among their latest sorties, as told by Eurasia Daily Monitor: a shootout that killed a police officer in Shali on May 28; and an explosive device that wounded two police officers on May 30 in Grozny.

Caucasian Knot concurs with the NGO head: “Kadyrov has serious reason to be dissatisfied with the actions of law enforcement agencies.

That’s why Kadyrov gathered his security chiefs together on Wednesday, May 17, and told them “I am giving you two weeks to change the situation. The rebels must be destroyed.

Will the Chechen forces be able to do in two weeks what the far more powerful Russian military was not able to do in 10 years? Probably not. Russian leaders have every reason to be worried. They may reason that Kadyrov will need some extra help. Enter another 8,500 Russian troops.

They might see it as a sound investment, given that havoc in Chechnya seems to have a tendency to spill over into neighboring republics:

  • On June 1, a man was severely wounded by an improvised explosive device in Dagestan’s capital city of Makhachkala. Three law officers were wounded in a shootout in Makachkala the day before.
  • The same day as the shootout, another bomb blew up a car parked at a gas station in Karabulak, Ingushetia, killing the three passengers inside.

It’s natural that what starts in Chechnya might continue in Ingushetia. The Chechens and Ingush share many historical ties: Both are mostly Sunni Muslim, 20.4% of Ingushetians are ethnically Chechen, the two languages are almost mutually intelligible, and both peoples share an antipathy toward their overlord Moscow.

Dagestan is Sufi Muslim, not Sunni. But that hasn’t stopped Chechen rebels from trying to inspire the Dagestanis to rise up against Russia many times since the fall of the Soviet Union. And even before–Shamil, a warlord of Dagestan in the nineteenth century, drew most of his followers from Chechnya.

Russian officials might be open to taking on Georgia some time in the future. But for the time being, any plans to gain new territory might have to be put on hold while they must fight for the territory they already have. Apparently they feel Chechnya is worth expending a decade and hundreds of thousands of lives over. Or maybe they fear that the loss of it would be enough to turn the Russian people against Medvedev-Putin’s United Russia party, which is already losing popular support due to the tanking economy. It doesn’t need an unsuccessful war to sour the public mood even more.

In any case, they’re not going to simply leave the situation to Kadyrov, who is already showing that he can’t quell uprisings alone. They’re going to try to do what they haven’t done in over a decade, i.e., restore order themselves.

Being Powerful Isn’t Enough

June 7, 2009

A penny for your thoughts—actually, make that $500 million.

Frustrated with the scarcity of international support for its war in the Caucasus, the Russian government apparently has sought to buy some. It approached Belarusian president Alexander Lukashenko last month and offered him a $500 million (15.47 billion rubles) loan, to be paid on the condition that he recognize Abkhazia’s and South Ossetia’s independence, according to Belarusian daily Beloruskaya Delovaya Gazeta last week.

But Lukashenko turned out to be less desperate for cash than his Russian counterparts had expected. He stated in no uncertain terms that his stance on the two republics is not for sale.

We do not wish to be sold. We will solve the issue ourselves,” he said.

In the same breath, he reminded the Russian leadership that they’re not the only game in town: He’s a proud member of the European Union’s “Eastern Partnership” program and has no intention of leaving it (a partnership of Ukraine, Azerbaijan, Georgia, Moldova, Armenia, and Belarus with the EU; the six nations get consideration for free-trade pacts, financial aid, help with energy security and visa-free travel to the EU).

And he told Beloruskaya Delovaya Gazeta that if it’s money Belarus is after, he is actually more likely to get it from Europe than from Russia. Russia’s trade laws are too much geared toward enriching Russia and against equitable trade: “There are organized and identified barriers in Russia. And we have to overcome them, to sell a textile, chemical fiber, potassium and other fertilizers. They build, and they protect what build with duties. Yet, we overcome these duties, lowering, of course, the price, but we sell it.

RIA Novosti sees an additional factor at work: natural gas prices.

Relations between Moscow and Minsk have repeatedly been strained in recent years, in part due to Russia charging Belarus more for its gas,” it states.

Whatever the factors, and they are probably many, Lukashenko is now committed to forming new partnerships to supplement his staid one with Moscow. He said this clearly to his Cabinet ministers in a separate meeting:

If things go wrong with Russia, do not bow down to it, do not whine and weep. Seek fortune in a different part of the globe” Lukashenko told them.

Let’s spare the moral outrage over Russia using economic incentives to get backing for its military policies. Such things are far from unheard of in the give-and-take of international relations. The United States knows this well. In the weeks leading up to its war in Iraq, it offered Turkey $6 billion to “cover the costs of damage” if it would participate.

And in December 2002, it arranged a sweetheart deal between Lockheed Martin and the Polish government in which the latter bought 48 F-16 aircraft for $3.5 billion and got a range of offsets totaling $9.7 billion—for a $6 billion profit, i.e., 2.6 times the value of the aircraft themselves. Of course, this deal doesn’t necessarily translate to a bribe for support in the Iraq War. But the deal’s timing, less than three months before Poland’s March 2003 pledge of 200 troops to Iraq, does raise the question. So does this statement by Gregory Filipowicz, a defense industry consultant who helped arrange at least two of Lockheed’s “offset” investment deals: “Lockheed didn’t win the contract, the U.S. government did, with pressure and support coming from the very highest levels.”

France, for its part, tried to use its economic clout to be a counterweight on Iraq. It warned several Eastern European nations that their support for the war placed their candidacies for EU membership in jeopardy.

Note that in all four of these cases, only one ended in the greater economic power getting the support that it wanted. In the other three, said economic power was forced to reckon with other, greater powers in the neighborhood. France was forced to realize that nothing it could offer Eastern Europeans could beat what they might get through close ties with the United States. And the United States had to realize that its money alone could not compensate for the visceral pushback the Turkish leaders could expect from the minority of their constituents who were militant Muslim and anti-American.

Russia, in turn, must take the hint that—in Belarus’ eyes, at least—it’s not as important as it would like to think. Since the 1990s, Russia’s comparatively larger economy and vital energy resources have made it a key player to its lesser neighboring republics, who have accepted its (often very restrictive) economic demands for their survival’s sake. But those who want to more than survive may find that they have demands of their own that don’t jive with Russia’s. And in this case, they’re choosing to exercise them. It’s easier when, to their West, there are alternative wealthy countries with comparatively friendlier, global-trade oriented policies.

Then, Russia has to accept—like France and the United States—that being a powerhouse doesn’t guarantee you’ll get what you want. Other nations have interests of their own, and can be expected to pursue them.

Hungering for Economic Freedom

May 24, 2009

Russia’s oil and gas industries may be booming, but that doesn’t mean much to the 22,000 residents of the Saint Petersburg suburb Pikalevo. Endemic joblessness, hunger, and a recent lapse of hot water supplies drove 200 of them to storm their own town hall last Wednesday.

We have a catastrophe! People have no money even for food,” said Svetlana Antropov, head of the cement-manufacturer’s union, to Moscow daily newspaper Moskovsky Komsomolets.

Pikalevo has been in survival mode since last winter, when the three mainstays of employment—the Metakhim chemical factory, Basel Cement cement plant, and alumina-maker Pikalevsky Glinozem—all shut down for good. The three sites had employed half the working population of the city.

How bad did things subsequently get? Ask Moskovsky Komsomolets correspondent Igor Karmazin, who saw hunger turn so severe that people were eating  field grass.

Courses prepared with cabbage soup nettle, salad of dandelions, and grass multiplied,” he wrote. And that was before last week, when the region’s electric companies shut off heating and hot water to Pikalevo over Basel Cement’s unpaid debts.

Pikalevo’s economic troubles actually date back to 2000, when Apatit, the three factories’ supplier of nephelin concentrate, raised the price of its concentrate to 873 rubles a ton – more than 2.8 times its previous rate. Pikalevsky Glinozem sued, citing Russia’s “anti-monopoly” statutes (for what they are worth). The court sided with Apatit. The two companies compromised on 686.4 rubles a ton, per a contract that was to remain in force until June 30, 2005. When June 30, 2005, rolled around and the contract expired, Apatit announced it would hike the price to a new height of 1372.79 rubles a ton. Pikalevsky Glinozem refused to pay, and Apatit simply stopped shipping concentrate.

Production in Pikalevo immediately started declining. The three plants just proceeded to burn through their reserves of concentrate, which would only last them so long. At that date, Valery Serdyukov, governor of the Leningrad Region, called on the Federal Antimonopoly Service to step in to save the situation. It denied him.

Every wise business leader wants to get his or her money’s worth. That is natural and good. But when an enterprise is able to raise its prices so high that a slew of vital industries cannot afford it and are driven into bankruptcy, taking down thousands of jobs with them, then clearly one is seeing a system work against itself. That system, which we are seeing now in Russia, is hurting from a lack of competition—why else could Apatit get away with such obsene price hikes? And where, pray tell, is antitrust law when Russia’s people so clearly need it?

Flashing forward four years to the present, there is an additional problem: Russian leadership’s fixation on oil and natural gas. Pikalevo is not the only town in Russia that has lost exorbitant numbers of manufacturing jobs. The Russian manufacturing sector’s output fell 14.9% in the first quarter of 2009. And its output was 8.1% lower in March 2009 from where it had stood in March 2008. All of this, even while Russia’s oil output has edged up since last March, much to OPEC’s displeasure.

Oil lines and gas lines are great sources of revenue, by all means. But no country in the world can live on them exclusively. Pipeline networks don’t claim hubs into every city. They may create jobs in some places, i.e., where the oil field and gas sites are. But other locales are going to have to have other means. So far, too many of Russia’s locales don’t.

Serdyukov, still governor, seems to have become painfully aware by now of the futility of the whole situation. This time around, he opted to wash his hands of Pikalevo’s plight, telling reporters Thursday that “the situation should be dealt with by the local authorities.”

He also delivered a public downplay of the troubles, one that would be shocking in its audacity—except that this, after all, is Russia: “There is no hot water there in Pikalevo… Well, it happens. And not just there. It happens even in Moscow and Saint Petersburg, that the water is turned off for a couple months. There is no tragedy here. As for heat, well, I don’t think it’s needed so much during the summer.

He did changed his mind the next day, and forwarded the Pikalevo government 20 million rubles in emergency “compensation for falling revenues.” Not that a quick cash infusion is any substitute for permanent industry. But it is better than nothing.

Unfortunately, Serdyukov’s comments about hot-water shutoffs expressed an indisputable truth. In Russia, these things do happen. That the residents of a town near Saint Petersburg—a major commercial hub by Russian standards—would be reduced to foraging for grass for food speaks volumes. What of the townspeople in communities around lesser cities like Samarov, Vladivostok, or in any of the vast expanses of underdeveloped tundra and taiga stretching across Siberia? How much worse off are they? How many more of their own people are going hungry?

More importantly, how long will they have to stay hungry before Russia’s officials warm up to genuine economic reform and a functional free market?

No Hurrying Nabucco

May 12, 2009

 

Conduct some trade with Europe or conduct much more trade with Russia and China—seems like an easy choice, does it not?

 

Then it’s a no-brainer why natural-gas-rich Kazakhstan, Turkmenistan, and Uzbekistan would feel no compulsion to sign up for the Nabucco pipeline deal. Much to the chagrin of European Union leaders, who want them to step in as substitutes to Gazprom.

 

Whether they care to admit it or not, some EU officials recognize that whatever they can offer the three Caspian nations, it might be bested by what Beijing and Moscow can offer.

 

If we in Europe do not get these supplies of gas, then they will end up in Russia or China,” said a European Union diplomat anonymously to the Moscow Times today. 

 

EU leaders had hoped they could get the three to make concrete commitments to Nabucco at last Friday’s “New Silk Road” summit in Prague. A summit declaration, which leaders of Turkey and a number of interested European nations signed, pledged its signers to identify “non-committed natural gas and oil volumes … that can be dedicated specifically to the EU.” 

 

The hope is that said gas volumes might get shipped via Nabucco, which is supposed to pump 20-30 billion cubic meters a year from the Caspian Sea region to Europe starting 2013 or 2014.

  

Kazakhstan, Turkmenistan, and Uzbekistan all refrained from signing. In so doing, they towed Russia’s line, which is staunch opposition to the project, as it is to any project that might undercut Gazprom’s monopoly.

 Turn down the prospect of exporting 20-30 billion cubic meters of gas? That’s a lot of gas, isn’t it? Not really. The three nations have conduits of gas, some in operation now and some to be in operation soon, which match or even dwarf this amount. For starters, there is the Turkmenistan-China gas pipeline, which started pumping gas last January. Bagtyarlyk, a territory on the line, has enough natural gas to pump 30 billion cubic meters a year to China for the next 30 years. There is also the Central Asia Center gas pipeline, which will have a capacity of 80 billion cubic meters a year upon completion in 2012.

 

In addition, each nation has some very active natural-gas business of its own with Russia and China.

Kazakhstan: Russia has a virtual monopoly on Kazakh natural gas, more than 90% of which goes to or through Russian territory. If the percentages alone sound intimidating, consider the bulk amounts: Kazakhstan’s North Kumjol field, on which Kazakh company Petrokazakhstan and Russian company Lukoil are partnering, produces  18.3 million million cubic feet a day (189.14 million cubic meters a year). That’s on top of the the 4.5 million cubic feet a day (46.51 million cubic meters a year) coming from the North Buzachi field, courtesy of the Lukoil and China National Petroleum Corporation. Even more gas shipping is in store once Russia develops the Khvalinskoye field, which it is expected to do by 2014. There are a total 369 billion cubic meters of natural gas buried within.

Uzbekistan: Lukoil already beat the West to the punch here, too. Last January, the company confirmed plans to invest $5 billion this year in exploring and developing Uzbek gas deposits, with the aim of selling the extractions to Gazprom.  These plans follow two previous gas deals, worth $1.5 billion total, that Moscow and Tashkent reached in 2006.

Uzbek president Islam Karimov had such deals in mind when, last November, he rebuffed the very idea of Nabucco with the bold assertion that “Uzbekistan exports gas only to Russia, and then it exports gas wherever it wants.

And to China, apparently. The Uzbekistan-China pipeline, under construction as of last July, will ship 30 billion cubic meters a year–half of Uzbekistan’s gas supply–to Chinese buyers once most of its stations reach completion in 2012.

 

Turkmenistan: Turkmenistan and Russia exchange 50 billion cubic meters of natural gas annually. Turkmenistan could get by just fine without adding Western oil contracts to the mix. Though it may pretend to seek them just to win better terms from Russia. Policy-analysis firm STRATFOR concluded that Turkmen president Gurbanguly Berdimukhammedov took this very tack last month, when Russia sharply reduced its gas conumption without telling Turkmen officials, and the pipeline consequently overloaded and burst. The Turkmen government began publicly pursuing gas deals with Europe, including one with Germany’s RWE. It would be a stretch to say that this course of action endeared Moscow to the Turkmen government. As STRATFOR records further, Moscow responded to the RWE deal by threatening to pull back its weapons sales and the troops stationed within Turkmen borders. This was frightening to the Turkmen leadership, which fears military incursions from Uzbekistan and other rivals on its western flank.

“At the end of the day,” reads the STRATFOR report, “Turkmenistan is still stuck in balancing its desire to reach out to non-Russian foreign players and its fear that only Russia can protect the state from the West and other regional rivals.”  

Russia, and to a lesser extent China, clearly are the dominating presence in the Kazakh, Turkmen, and Uzbek economies: Russia because of its vast material and infrastructure support (which it can give and take away), and China because of its gargantuan hunger for natural resources to fuel its rapidly growing economy (which is an astronomically profitable market for fossil fuels). The economic power that Russia and China wield is tremendous, and will not be broken by a mere 30-billion-cubic-meter pipeline to Europe. Western nations, leaders, and private corporations will have to undertake far more investing in the Caspian region if challenging Russian and Chinese dominion there is their goal. They might achieve it, but over decades, not in months or years.

Turkish president Abdullah Gul held out some hope last week that the nations who didn’t sign the Silk Road accord might yet come around sooner: “It’s in their interest to find new markets, they are looking for new markets in order to have a better bargaining, in order to have a better price.

They may well be looking for new markets. But those markets need not be Western markets.

Blood, Politics, and NATO Meet in Georgia

May 2, 2009

 

Go with Russia or go with NATO? The upcoming Cooperative Longbow 09–Cooperative Lancer 09 military-training exercises in Georgia, organized by NATO’s Partnership for Peace Programme, are a loyalty call for Russia’s 14 fellow republics within the CIS. All are Programme members and have the option of participating. One by one, they’ve had to decide whether to take that option, or to heed the demands by Russia—a Programme member itself—that they bow out.

 

By now, only three—Armenia, Azerbaijan, and Ukraine—are still signed on to defy Moscow and participate. Moldova pulled out last Wednesday. Kazakhstan called it quits the week before. Latvia and Estonia each individually said “thanks, but no thanks.” 

 

It’s interesting that Armenia and Azerbaijan, who continuously quarrel over ownership of the Nagorno-Karabakh region, can find an area of common cooperation in Georgia. They should, given that:

1) Georgia is the next-door neighbor of both (see the map below) and

2) Georgia’s population is 5.7% Armenian and 6.5% Azeri.

 

Those are two good reasons to believe that any serious trouble in Georgia will sooner or later spill over into Armenia and Azerbaijan.

To Armenians and Azerbaijanis, the turmoil in Georgia is too close for comfort.

To Armenians and Azerbaijanis, the turmoil in Georgia is too close for comfort.

 

Georgia has been the scene of much serious trouble in the last year, i.e., violence in Abkhazia and South Ossetia on top of growing civil dissent throughout Georgia proper against the Saakashvili regime. How messy is the whole country going to get? Armenia and Azerbaijan both have vested interests in not finding out. They would be better off not watching passively as Georgian civil order implodes. They also have an interest in not affording Russia a pretext to occupy Georgia proper, which Russia might see fit to do if the instability in Georgia continues. Either scenario would, if nothing else, mean streams of refugees pouring into Armenia’s and Georgia’s territories. Worse, it might mean war-related destruction of railways, pipelines, and other infrastructure that the two Caucasian republics’ fledgling economies cannot afford.

 

Things such as these came to pass in the bad old days of the early 1990s, when early armed uprisings by Abkhazian separatists against their then-occupier Georgia led to violent campaigns by Georgians to drive Abkhazia’s ethnic Armenians out. The fighting also led to collateral damage to Georgia’s Black Sea railroad (a lifeline from Russia to Armenia) and the repeated blowing-up of a natural-gas pipeline running through Georgia to Armenia.

 

Last year’s conflict in Georgia caused additional damage to rail transit into Armenia. Quote the CIA World Factbook: “The disruption of rail transit into Armenia during the Georgia-Russia conflict in August 2008 highlighted how Armenia’s supply chains for key goods – such as gasoline – were vulnerable to instances of regional instability.

 

Armenian leaders today have the foresight not to rely on Georgian or Russian troops to keep the peace and prevent things from getting blown up. They’re opting instead to take matters into their own hands by committing their own Armenian troops into Georgian territory and proactively keeping the (short-term, at least) peace.

 

Azerbaijan’s leadership is looking ahead, too, to the Kars-Akhalkalaki-Tbilisi-Baku rail project, a rail line that will transit people and goods from Azerbaijan to Turkey and back via a route through Georgia. The project has had a hard time getting off the ground due to not enough funding for the line’s Georgia segments. Baku has every good reason to expedite things, and that means helping to keep Georgia stable.

 

Belarus, Kazakhstan, Moldova, and the other republics that bailed from the NATO exercise all have the luxury of not having to worry about these things. All are far enough away from Georgia to not be fearful of hordes of refugees, exploding railways, or the like.

 

They also have the added element of closer ethnic ties to Russia. Belarus is 11.4% Russian; Kazakhstan is a whopping 30% Russian; 12.5% of the Kyrgyz Republic’s population is Russian; a smaller, but still considerable, 5.8% of the people of Moldova are ethnically Russian. So what concerns the Russian Federation will concern many of their own voting citizens. And so when Russian officials evince great worry that Saakashvilli might interpret NATO’s operation as validation and launch new attacks on Russia (and they have), or that nations who participate in the training exercises will, in so doing, weaken their own ties with Russia (and they likewise have) large numbers of voting citizens in these other CIS republics will listen and take heart. Their own leaders will inevitably listen and take heart, in turn.

 

Ethnic ties are a non-factor in Armenia and Azerbaijan. Their populations are, respectively, only 0.5% and 1.8% Russian. There are no ties that bind among their voters.

 

What about Ukraine? Where would Ukraine’s people stand? They, actually, are a bit more complicated. A substantial 17.3% of Ukrainians are Russian. But given annual Russia-Ukraine face-offs over gas exports—and last winter’s momentary freeze—there is probably little sense of fraternity with Russia in Ukrainian officialdom. Blood runs thicker than water, for sure, but so does the fuel needed to heat one’s home in northern Eurasia’s frigid winter season.

A Wild Card Called Kadyrov

April 26, 2009

 

Medvedev’s April 16 announcement that counterterrorism operations in Chechnya are over apparently came a bit too soon.

 

Counterterrorism operations went back into effect just six days later in the Chechen districts of Itum-Kalinsky, Vedeno, and Shatoi, plus a few parts of Shali, all “with the aim of neutralizing the actions of illegal armed formations,” according to Gazeta. Their reinstatement followed no less than four attacks in Grozny on Friday, April 16 – the very day of Medvedev’s glowing announcement:  

 

1)      two explosive devices detonated outside Grozny’s Belimhanova sports stadium, injuring a police officer as well as Grozny’s military commander, Igor Makeev.

2)      Another explosion on Dagestan Street, also near the Belimhanova sports stadium.

3)      A firefight, in the woods outside the town of Sogunty Nozhai-Yurt, between Russian police and armed militants.

4)      A gunshot on the outskirts of the town of Elistanzhi Vedeno; this one took the life of a contract soldier.  

 

Ramzan Kadyrov, Chechnya’s Kremlin-backed warlord-in-chief, is doing his best to pass these incidents off as nothing to be alarmed about.

“Normal seasonal activity,” he told Gazeta. “Militants stepped up a conflict between federal forces in Chechnya and the authorities of the republic.”

 

Normal seasonal activity? But I thought the war was over. There shouldn’t be any “normal seasonal activity” or “traditionally active militias.” There is no question in my mind that the situation on the ground is a lot uglier than Medvedev and Kadyrov are letting on.

 

Medvedev is, I’d guess, just in too much of a hurry to give his citizens some good news. Given the growing public displeasure over the economy and the rise in Russian unemployment past the 10% mark, that’s predictable politician behavior.

 

Kadyrov, however, is a bit more interesting a subject of speculation. As far as I see it, he’s got a great many of motives for glossing over Chechnya’s ongoing strife. Oil is a big one. Chechnya produces about 2 million tons of oil a year, with the fighting, but it averaged between 4 million and 5 million tons a year throughout the early 1990s, before the fighting. In peaceful 1971, it topped a total 21 million tons 

 

Right now, the little oil industry that Chechnya does have is heavily reliant on the assistance of Russian oil firm Russneft, who controls the extraction, export, and refining of Chechnya’s oil and has systematically opposed Kadyrov’s attempts to secure total control. Kadyrov would surely love to restore Chechnya’s oil capacity and see it become an oil power in its own right. But that can only happen if he can convince investors that the place is safe enough for them to risk their money on it.

 

Then of course, there are the massive inflows of cash from Moscow to fund reconstruction in Grozny and its environs. Neighborhoods are starting to come back to life  and major construction porjects are well underway—like this mosque: 

  

the new downtown Grozny

the new downtown Grozny

 

 

 

 

Positive reports from ground zero will ensure that the money keeps coming.

 

But perhaps Kadyrov aspires to be more than president of an autonomous Russian province. Perhaps he would like to be leader of an independent nation. Consider that Kadyrov was himself a rebel leader once, until he switched sides circa 2000.

 

What would it take to woo him back? Enter the third motivator for his bullish reporting.

 

As Russia’s right-hand man in the war-torn province, Kadyrov has been consolidating enormous power. Perhaps more power than Russia would like. BBC caught a whiff of where this was going as far back as 2004: By localising the conflict in Chechnya, the Kremlin has devolved enormous personal power to Ramzan Kadyrov. He is careful often to declare his absolute loyalty to his mentors in the Kremlin. But at the same time he runs Chechnya like a virtual independent fiefdom. Some in Moscow wonder how long that loyalty will last.

 

BBC may be onto something. The time may come when, with Chechnya’s infrastructure restored to health and its fighting forces in tiptop shape, this warlord-for-hire might decide he has gotten all he needs from his Russian masters and throw off Moscow altogether.

 

Putin is eagle-eying this situation, no doubt, and weighing his options. I wouldn’t be surprised if Kadyrov turns up dead of “mysterious circumstances” in another year or two.  

 

Otherwise, Putin—and we along with him—might see a whole new war break out, one far worse than those that came before. This scenario seems to me particularly realistic, given the mess in Georgia, where Saakashvili is nursing some heavy-duty grudges against Russia over the loss of Abkhazia and South Ossetia.

 

Assuming Saakashvili is still in power a year from now (and I assume that he will be), and assuming he has the good sense not to declare another war against Russia (and I hope that is so, but I have my doubts), might he decide against taking the Russians on in direct combat and settle for just making their lives very miserable by funding and arming the next wave of Chechen unrest, which will come not from bands of guerrillas in the mountains but from the professional fighting forces of Kadyrov himself? Could Saakashvili and Kadyrov form a mutual alliance? If the adage about the enemy of my enemy being my friend is true, then this is all within the realm of possibility. 

 

 

 

 

 

A Trigger-Happy Dictator With Nothing Left to Lose

April 19, 2009

 

 

It’s usually a good idea not to encourage a bully. But that is exactly what NATO is doing with its upcoming May 6-June 1 training exercises at the Georgian military base Vaziani. 

 

These training exercises, dubbed the “Partnership for Peace Programme” have as their stated goal “improving interoperability between NATO and partner countries.”

 

“Partnership for Peace?” Anything but. These training exercises sound to me like a great way to tempt Georgian President Mikhail Saakhashvili into making another go at Abkhazia and South Ossetia.

 

On August 7 of last year, he sent his army storming into the two breakaway republics with the intention of bringing them back under full Georgian dominion. That the Russian army was stationed in them at the time did not deter him. Why? In part, probably because, in his little dictator brain, he had reasoned that NATO would help him.

 

He implied no less in an interview just the day before with the Pulitzer Center’s Zygmunt Dzieciolowski, in which he said that he “cannot imagine the West not coming to Georgia’s aid. It would be like the betrayal of Hungary in 1956 or the then-Czechoslovakia in 1968, when the Soviet Union’s aggressive repression of restive satellites was met with silence from the West.

 

Saakhashvili hasn’t given up on the two provinces. In a September 2008 news conference, he vowed to “reclaim” them at some later point.

  

Now that NATO is going to be stationed in his country for at least a month, might this not strike him as a perfect time to try?

 

He might rightly reason that with NATO troops stationed on his turf, he can safely take a gamble on attacking Russia. The worst that can happen is the Russian military outfights him and forces him into a retreat. They won’t counterattack and invade Georgia again, that is for certain. Not while NATO is there and the risk of inciting a war with NATO is present. Saakhasvhili will just pull back, declare another cesefire, and life will go on.

 

Russian Foreign Minister Sergey Lavrov suspects as much, and he made no secret about it last Thursday when he warned NATO not to take steps that would create “a sense of all-permissiveness and impunity in the Georgian regime.”

 

The Russian military worries about it, too. They’ve been stepping up their troop numbers in Abkhazia’s Gali district and in the Akhalgori district of South Ossetia, as well as conducting naval maneuvers on the Black Sea, all to Saakhashvili’s dismay.

 

Having exact information about high probability of provocative actions against Abkhazia and South Ossetia in this period, the Russian side has taken preventive measures to ensure security of these republics and our servicemen stationed there,” said Andrei Nesterenko, Russian Foreign Ministry spokesman, on Thursday.

 

He also stressed that a real threat is coming from Georgia in terms of preparing “new provocations, including concentration of special troops and military hardware in the immediate proximity of Abkhazia and South Ossetia.”

 

There is an additional factor here, and that is Saakhasvhili’s domestic situation. He has been under a lot of heat lately, or more specifically, mass protests—ongoing since April 9—that demand nothing less than Saakhashvili’s resignation. For an autocratic government, which Georgia’s leadership is, the official response to the protest has been relatively mild. Civil Georgia reports thus: “The authorities continue the tactic of staying away from protests, with uniformed police having no presence on the protest venues and low presence around those venues,” albeit turning a blind eye to “separate cases of attacks on opposition activists and supporters.”

 

For a protest to go on this long and make this much noise without any state-orchestrated crackdown, it is painfully clear that the Saakashvili machine is weak and ailing. He is a dictator in a tight spot.

 

Not good, in this case: Dictators in tight spots are the ones most likely to do reckless things. Might he decide he has nothing to lose–and everything to gain–by going to war again with Russia? He might. If nothing else, he will dampen the momentum to overthrow him for the time being—wartime presidents, as a rule, are popular presidents.

 

On that subject, here is some food for thought from former Georgian president Edward Shevardnadze, spoken in the aftermath of last summer’s war: “This is a character of Georgian people, if someone meddles in their affairs, their national pride comes forward. It happened when Russia announced breaking of relations with Mikhail Saakashvili.”

 

An Offer They Can Refuse

April 19, 2009

 

 

There is a line between acting persistent and acting desperate. Latvian President Valdis Zatlers crossed it last Friday on radio station Echo Moskvy.

 

He told station listeners—in case they hadn’t heard it many times before—that he would much like

to see the Nordstream pipeline cut overland through Latvia.

 

He stated his preference for this over the current plan to run the line through the Baltic Sea. That latter plan is a “join Russian-German project,” i.e., one that is of no benefit to Latvia.

 

If given the chance to host a line on its turf, though, Latvia “could make available its gas storage facilities” and thereby benefit immensely, he said.

 

The problem with his stance is that it is nothing new. He, and likeminded Polish Prime Minister Donald Tusk, have been arguing it as far back as February 2008. At that time, they were pushing for an Amber pipeline that would ferry Russian natural gas overland through Latvia, Estonia, and Poland.

           

Back then, they framed their arguments on security concerns and worry over the environment. Zatlers’ Friday exortation to new business opportunities, not to to protecting the fish and wildlife, is at least some refreshing honesty. For that, I have to give him credit.

 

Valdis Zatlers decides to be blunt.

Valdis Zatlers decides to be blunt.

But will it convince Gazpom to ditch its plans and adopt his?

I doubt it. As Gazprom’s maps can illustrate for you, any overland route through Latvia would have to cross Latvia and Poland both to get to Germany; two nations that will expect transit fees for the gas. Latvia would have to convince Russia that the transit fees would be worth it – right now, Gazprom likes the fact that the planned line’s jut through the water dodges those fees. Says its own Web site: “There are no transit countries on Nord Stream’s route, which reduces Russian gas transmission costs and excludes any possible political risks.” 

 

And frankly, Gazprom has plenty of other, better ways to raise its stock shares via Latvia. Among them:

1)            a possible new nuclear power plant project in Latvia. Gazprom has already taken a 25% stake in this project.

2)            Latvia’s own gas utility, Latvijas Gaze. Gazprom has a 34% stake in this one.

Let’s not forget a third promising prospect in nearby Estonia, a new gas line that will stretch from Estonia to Finland. This, if built, could channel Russian gas to Finnish customers.

 

Russia already has plans to raise capital by these cheaper alternatives. Proof is in Gazprom’s opening of a first-ever Riga office at the beginning of this month. This new office was desired expressly because of “the important energy projects in the region.”

 

And frankly, Russia doesn’t need Estonia or Latvia to sell gas to Finland. Finland’s its next-door neighbor, and as Gazprom’s maps can also show you, conveniently located next to some already-existing pipelines.

 

There is one area of potential collaboration between Latvia and Russia, and that is Latvia’ gas reserves. These are substantial enough and have a customer base spanning the Baltic, as well as parts of Russia. It could expand even more. And given Gazprom’s shares in Latvian gas industries, Gazprom no doubt would like to see it expand even more. But that, too, can easily happen without an overland Nordstream. All it would take is the speculated new pipeline linking Latvia to Gazprom near the Latvian town of Dobele.

 

Zatler’s ardor to cash in on the Nordstream project is understandable, nevertheless, in light of the economic crises. The country’s economy shrank 10% in fourth-quarter 2008, is projected to shrink 12% more this year, and has currently the lowest Standard & Poor credit rating of all the Baltic states. This after boasting the highest growth figures in the European Union in 2004 and being designated one of the Baltic Tigers, along with Estonia and Lithuania. It’s bad enough to threaten Zatler’s government. He had a prime minister resign last February. And a 10,000-strong riot in Riga last January that left 40 people injured and several stores looted.

 

But if he wants Gazprom to toss him an overland lifeline, the burden of proof is on him to show that his way will be cheaper. Riga could heavily subsidize the construction so that the costs are less. And build up enough infrastructure so that its citizens will become loyal Gazprom customers. Both take money, though. And I don’t see Latvia having the money anytime soon.

 

Certainly, Gazprom’s owners would be all for Latvians pumping more gas and selling it to more customers. But they will see that this be accomplished on terms that maximize Gazprom profits and minimize Gazprom costs. You can’t blame them. Business is business, after all.

 

Trading Spaces

April 5, 2009

 

The NATO of 2009 strikes a sharp contrast with the NATO of 1999.  

 

 

Last Saturday, NATO’s North Atlantic Council issued a statement of “particular concern” over Russia’s continued involvement in Abkhazia and South Ossetia.

  

 

The statement complained that Russia has not yet withdrawn from the two breakaway states, as it had promised in EU-brokered talks last August and September—seven months later, “the withdrawal is still incomplete.”

 

 

It noted that Russia is still increasing its military presence within Abkhazia and South Ossetia, and doing so “without the consent of the Government of Georgia.”

 

 

And it restated NATO’s refusal to recognize the independence of Abkhazia and South Ossetia, as Russia has.

 

 

“The Alliance … continues to call on Russia to reverse its recognition, which contravenes the founding values and principles of the NATO-Russia Council, the OSCE (Organization for Security and Co-Operation in Europe) principles on which the security of Europe is based, and the United Nations Security Council resolutions regarding Georgia’s territorial integrity.”

 

 

Since when was a separatist movement contrary to OSCE principles? Kosovo’s wasn’t. In 1999, the OSCE development teams were on the ground, doing their part to ensure that Serbian forces were on their way out, and to help the fledgling Kosovar government gain a sound, democratic footing. Why do Kosovo’s militants get more sympathy than those of Abkhazia and South Ossetia?

 

 

Because this is a stew that has little to do with the Abkhazians or the South Ossetians, and everything to do with geopolitical power-play. Some more history:

 

 

Once upon a time, there was an independent kingdom called Ossetia. Russia conqered the northern half in 1767 and took the southern remainder in 1801. In 1922, Russia’s new Bolshevik government split the two up into North and South, and created a South Ossetian Autonomous Oblast Council to govern the latter. The Bolsheviks took the added step of transferring South Ossetia into a sub-region of Georgia in 1923. Russia held on to North Ossetia, as it has to this very day.  

 

 

South Ossetians have wanted for some time to reintegrate the two- the South Ossetian Autonomous Oblast Council made that request to the Georgian Supreme Soviet in 1989, only to be turned down (Georgian leadership has a small country to its own, and wouldn’t be quick to let it get any smaller). South Ossetian militants rose up in arms in 1991 and fought for their independence until a 1992 ceasefire that Russia and Georgia jointly negotiated. By the time of the ceasefire, the fighting had already resulted in 1,000 casualties, 100 missing persons, and innumerable damage to homes and infrastructure. South Ossetian fighters instigated a new round of violence in July 2004, this time with vocal support from the Russian Duma.

 

 

Last summer’s showdown was thus many years in the making, and for a reason: When South Ossetians say “independence,” they really mean annexation. It’s only logical that Russia might support this “independence,” and hence give the South Ossetians an easy justification for joining the Russian fold.

 

 

Abkhazia is a different story, for the Abkhazians never really identified with Russia: Russia occupied them from 1810 until 1918, when they declared independence and merged with the people of Daghestan, Chechen-Ingushia, Ossetia, Karachay-Balkaria, Abkhazia, Kabarda, and Adyghea into a North Caucasian Republic. Russia took over this new republic in a 1919-1920 invasion and annexation, and handed Abkhazia over to the Georgian Soviet Republic in a Treaty of Union, which all sides signed 1921. This treaty established an equitable union of Georgia and Abkhazia. The two were effectively one republic, but Abkhazians remained in charge of their territory and its internal affairs. Stalin, staying true to his Georgian roots, revoked the Treaty of Union in 1931 and made Abkhazia a fully subordinate province of Georgia. A “Georgianization” of Abkhazia followed. Nearly all Abkhazian intellectualls were imprisoned and/or killed, and Soviet-ordered mass migrations of Georgians swamped Abkhazia’s cities and towns.

 

 

A new Abkhazian Supreme Soviet ordered the Treaty of Union back into effect in July 1992. Georgia would have none of it. Frustrated Abkhazian leaders took up arms in August 1992, which prompted Georgian troops to invade and engage with them in a very bloody 13 months of fighting. This fighting included, regrettably, a gory ethnic cleansing by Abkhazians against Abkhazia’s ethnically-Georgian residents: By the time the separatists had decisively won in September 1993, around 15,000 ethnic Georgian civilians had died and another 250,000 had fled.

 

 

That time around, Russia did not come to Abkhazia’s aid. The military bases that Georgia was leasing to Russia at the time probably had something to do with that. Instead, Russia punished the upstart Abkhazians by imposing sanctions, closing the border, and denying Abkhazian residents any new passports.  

 

 

By now, there is now probably little love among the Abkhazians for Russia or for Georgia. Their first choice would seem to be a more equitable union with Georgia. The fireworks in South Ossetia last year certainly gave them an opportunity to make a go at it. But if that is not attainable – and given Russia’s buildup of military force in Abkhazia, it might not be – a merger with Russia might look like a tolerable alternative (hey, at least it’s not the rule of Saakashvili).

 

 

It’s understandable why European leaders don’t sympathize with the “freedom fighters.” Many Europeans are leery of Russia to begin with. They see its combination of authoritarian ways and raw geopolitical power as a bit of a menace–this recent survey of Poles is a case in point. Given that frame of mind, Russian actions to expand Russian territory by force–especially when that territory is a stone’s throw away from the continent–are a little discomfiting.  

 

 

Were I President Obama, I might place hope for defusing things in a 50-50 arrangement: a peaceful reconciliation between Abkhazia and Georgia, and South Ossetia can go where it will – if into Russia, then into Russia. The key lies in recognizing Abkhazia and South Ossetia as unique cases, who each have their own decisions to make. Of course, I’m not Obama, so I’ll have to leave that call up to him. And blog about it afterwards. 

 

 

What’s Peaving Putin

March 26, 2009

 

Why was Putin so peaved over the the European Commission’s and Ukraine’s joint agreement Monday to “modernize” Ukraine’s gas pipelines, and thereby increase the pipelines’ capacity to 180 billion cubic meters a year, up from their current annual carrying capacity of 120 billion? Because he likes the pipelines just the way they are.  

 

Putin called the Monday agreement “ill-considered and unprofessional,” ostensibly because the two parties didn’t include Russian leaders in the conversation.

 

“Discussing this kind of question without the main supplier is simply not serious,”  Putin said.

 

So the poor guy was feeling left out. His self-esteem was hurt. That’s all there is to it? Not quite. Putin said a very key thing right after: “The volume of gas to be pumped is a key factor. This gas can only come from the Russian territory, but no one has discussed the issue with us.” 

 

To make sense of this otherwise bizarre episode, the regurgitation of a few facts are in due order:

 1) Currently, much of the natural gas that Russia sells to Europe transits through Ukraine, who also buys it while charging Russia some modest transit fees for use of the route. 

2) For the past few years, Russia has been pushing to get European investors’ support for the construction of Nordstream, a new gas pipeline that would ferry 27 billion cubic meters of natural gas a year to Europe by cutting through the Baltic Sea. This seabound route would completely bypass any of Russia’s neighbors, thus sparing Russia any transit fees – and sparing its neighbors any revenue they could otherwise be reaping. Poland, Lithuania, and Estonia don’t like this at all, and have been making the approval process exasperatingly slow for Putin in hopes of scuttling the deal and getting it replaced with an overland route.

3)  Meanwhile, the Belarussian government and Russia’s Gazprom have been cooking up a sweetheart deal of their own, and it’s a new gas line called called Yamal-Europe-2. This line, if built, would pump an additional 24 billion cubic meters of Russian natural gas to Europe through Belarus. Gazprom spokesman Sergei Kupriyanov said that Yamal-Europe-2 will likely happen, but only – and these words are key – “after the building of Nord Stream” and if there will still be enough “demand…from consumers along the route.”

4) The fiasco with Ukraine back in January created a lot of momentum for Gazprom and Yamal-Europe-2 both. Want proof? Then know this: Russia boosted its shipments of gas through Belarus 30% during the feud. 

 

I see the makings of a Russian master plan here:

1)   Build Nordstream, which will bypass transit republics and thus spare Russia transit fees while increasing the available gas to Europe; then

2)      If Nordstream gets enough consumers, build a Yamal-Europe-2 line that will enrich Belarus (appeasing any lost opportunities that Yukashenko-land suffered over Nortstream) while also enriching Russia. Once that’s done…

3) Continue to pump the same stagnant amount of gas through Ukraine’s systems. Because it is stagnant, and demand isn’t, Russia will be able to raise or lower the price as it sees fit. At the end of all this… 

4)  Enjoy the higher revenues it is getting from Europe, the increased fees that Belarus is paying for gas it can’t get anywhere else, and an ever-steady revenue source from the limited gas trickle running through Ukraine, which it will be able to squeeze, constrict, and then relax as it pleases, a la OPEC, for maximum profit yield.  

Grrrr...Me want power! And rubles!

Grrrr...Me want power! And rubles!

 But Ukraine is in a position to foil this whole plan by offering Europe an additional 60 billion cubic meters of Russian gas through a renovated Ukrainian gas system. In the short term, this is not good for Russia, for it would mean that Ukraine could ship more Russian gas to the consumers in Europe. And per the rules of economics, whenever there is more of something, people pay less for it. If there are more liters of gas, then Russia will get fewer rubles per litre. Not to mention, Russia will have to pay the obligatory transit fees on those extra 60 billion cubic meters a year. And as for Yamal-Europe-2 and Nordstream? Forget about it. Both, put together, would total a comparatively punier 49 billion cubic meters a year. Would European investors even bother? Why would they?  

 

 

 

The level of enthusiasm among Europeans for a Baltic gas route is inversely proportional to the level of gas Europeans are already getting through the already-existing Ukraine route. A more abundant stream coming out of Ukraine would put a damper in investors’ interest in the Baltic route and all the risks that may go with it. Putin and his cohorts are hoping to keep the enthusiasm for the new, cheaper (for Russia) lines up; that means keeping European confidence in Ukraine down.