Not A Very New Russian Government

Last Friday, after an unusually long pause for thinking, the members of the new Russian cabinet were announced. The only thing is, to refer to it as “new” is rather exaggerated. In total three ministers were replaced: German Gref left the chair for economic development, Mikhail Zurabov had to quit as minister for health and social affairs and Vladimir Yakovlev is no longer handling the regional development portfolio. Now, will this in any way have an affect on policies? Let’s have a look at these cases one by one.

Everybody is pretty relieved that Mikhail Zurabov is gone. He was in general believed to be a total disaster at his post and most people are surprised he was even able to remain for so long. His successor is Tatiana Golikova (who is actually married to Viktor Khristenko, the minister for industry and energy), a former deputy finance minister and a skilled economist. Even though most analysts are unsure about how much influence she will be able to exercise, she could not possible be any worse than her predecessor.

The replacement of Vladimir Yakovlev with Dmitri Kozak is interesting. Kozak and Putin go back quite some time and he is the President’s must trusted doer. As the presidential envoy to the Southern Federal District (which includes, among other troublesome places, Chechnya) he is believed to have eased tensions somewhat and helped the federal leadership get rid of some of the worst local leaders (people that were bad even by Russian standards). His appointment is therefore an indication of the president putting more emphasis on regional development. Another sign of this is the fact that his ministry has recently received several billion dollars from the state Investment Fund to spend. 

German Gref, then, was widely acknowledged as being an economic reformist and fiscal conservative. He has been receiving a lot of credit for the ambition to reform Russia’s business life, but did not manage to get it into the World Trade Organization. Trying to do any reforming of Russian business should be tiring to anyone and rumour has it that Gref has been eager to leave for some time. His replacement, Elvira Naibullina, is believed to share his liberal views, but the amount of influence she will be able to exercise is yet to be seen.

With Gref gone, the only one of the three fiscal hawks that have served to preserve the Russian economic wonder through fiscal sanity (the third one being Putin’s former economic advisor Andrei Illarionov, who had to resign a few years ago due to being too outspoken on the Yukos affair) that remains is Aleksei Kudrin, who’s position was strengthened as he was named deputy prime minister in this last reshuffle. However, all alone perhaps, will he be able to withstand the pressure emanating from a new president that, eager to create for himself his own popularity base, might want to spend some of the money these gentlemen have been saving for a rainy day? Let’s keep a lookout. 

Russian Geopolitics of 2007

Stratfor’s George Friedmann in a recent report likened Russia’s view on geopolitics as a game of chess. It is mostly routine until your opponent makes the wrong move. Then you must seize the opportunity and take advantage of it, because it might never come again. To Russia, international politics is still a zero-sum game in which there must be losers if there are to be winners. With most of the soft power it inherited from the Soviet Union gone, mostly due to its often brutal handling of its relations with countries that surround it, what remains is a strategy that involves actions that generally tend to make neighbouring governments even more anxious. The strategy so far has not included the use of armed force (the Russians are neither stupid nor that desperate, they understand that would be taking it slightly too far), but makes extensive use of the energy dependency of many countries vis-à-vis Russia. It also includes the imposing of trade embargos on countries that have displeased the Russian government (Georgia is a good example of exactly all parts that make up this strategy, but Ukraine and Estonia also come to mind).

Russia is, however, not only seeking leverage in its own backyard, but increasingly also on global issues. It has e.g. turned into a fierce opponent of most of the stuff the United States is advocating on everything from Sudan to Iran, Kosovo and North Korea. This is not very surprising. President Putin has on a number of occasions voiced his opposition to the American hegemony in global affairs and during the past years these attacks have grown even fiercer. Putin says that he wants a multipolar world instead of the unipolar one he claims we are living in today. That is not really true. Putin would not really care about unipolareness was Russia the dominating power of the globe and to strengthen the influence of China, India and other potential power hubs is definitely not on his to-do list. This is about Russia and her geopolitical position and, if this is a zero-sum game and if it is to be strengthened, someone else’s has to be weakened. And now, Moscow thinks, this someone has made a wrong move in this global game of chess.

To Russia, in comparison to many other countries, military power is of greater importance than most people recognise and with the United States so bogged down in Iraq and its military power so stretched that, at the moment, it lacks the capability to launch a massive strike somewhere else, in Russia’s eyes this is a sign of weakness, albeit a temporary one. (One might here stop for a moment to think about the despair of the Russian armed forces just a few years ago. The fiasco in the first Chechen war, the devastatingly low morale and severe financial difficulties of the army served to strengthen the image of Russia as a nobody in international politics. After Russia embarked on the path to fiscal glory, thanks to the increasingly high price of oil, one of the priorities has been and continues to be the strengthening of the armed forces, which shows the importance with which Russia looks at this instrument of power in the face of global politics.) Since crucial decisions will have to be taken on several of the issues that are causing conflicts between America and Russia during this coming autumn, it should be of interest to take a closer look at them in this context.

But international politics is not only about chess; let’s not forget the old principles of game theory. By raising their voices on different issues, the players try to raise the stakes in the chicken race of international diplomacy and give the impression that they will not stand down even if it would mean having to make severe sacrifices. This way, they hope to convince their opponents that it is not worth taking the fight. Sometimes this is also true, when the issue is important as an end in itself. Often, however, the parties are not really ready to make sacrifices that huge, especially if it is to protect someone else’s interests, and instead use their positions as bargaining chips, or means to another, more important, end. To make an accurate analysis it is therefore important to separate the means from the ends.

Neither North Korea, nor Sudan or Iran (President Putin will be paying President Ahmadinejad a visit in October, much to the irritation of the United States) have an obvious strategic importance to Russia. It will surely object loudly to U.S. military intervention, but when it comes to other methods of forcing these countries to comply, Russia does not seem to care so much it would stop them. This is, of course, as long as they are given the incentive to comply and as long a Russian investments (in Iran in particular) are safe. Also, cutting off the supply of oil from either Sudan or Iran would surely make oil prices rise even higher, which obviously would not do any harm to the Russian economy. Thus, these positions could surely be sacrificed. 

Kosovo, too, is up for solving and here the debate has been somewhat more heated. Russia is not saying outright it would hinder Kosovo gaining its long-seeked independence, but rather that this will not happen against the will of Serbia. (Here it should be noted that those who claim Russia disapproves of independence for Kosovo with respect to its own situation in Chechnya are wrong. The official status of Chechnya seized to be an issue several years ago and there is no longer any question about whether it should be a subject of the Russian Federation.) The possibility that Serbia could keep up its total deferral of Kosovo independence without the support of Russia should be small. And while Russia does have cultural bonds with Serbia, those are mostly for domestic policy use and given the Kremlin’s total dominance in that sphere, this fact should not constitute a major obstacle should they decide to abandon Serbia. Kosovo, too, should therefore be up for bargaining. 

Now, if those are all means, what are the ends? Well, the long-term goal is about restoring Russia’s international influence. Even though Russia would very much like to retrieve the international grandeur of the Soviet Union, it is perfectly clear to the present leadership that it cannot do so in the short run. What they can do, and I believe this is their intention, is try to restore Russian hegemony in what they refer to as the near abroad, i.e. Central Asia, South Caucasus and the Ukraine. Russia would especially love to diminish American influence in Georgia and Ukraine. Since the Rose Revolution in 2003 Georgia has continued to defy Russia while seeking closer and closer ties to the West, particularly with America. The economic support Georgia receives from the U.S. is humongous and the American influence clearly visible (if you walk down the main street of Tbilisi, the capital, you will notice that police officers are dressed in exactly the same uniforms as their American counterparts). Thanks to this support, the Georgian Defence Ministry, among others, has been able to increase its annual budget several times. Georgia desperately wants to join NATO, but is unable to so long as there are internal conflicts about. For despite its smallness, Georgia is able to host two break-away republics, South Ossetia and Abkhazia, which, in turn, have extremely close ties to Russia (most of their inhabitants have been receiving Russian citizenships for years), a fact that has soured Russian-Georgian relations for quite some time. Thanks to its American backing, Georgia has been able to uphold rather a cocky attitude, so should America be forced to withdraw its presence, this would be considered an important accomplishment in Russia. The same goes for Ukraine and the American support of pro-western groups there (Russians see Kiev as the birthplace of their nation, so it is quite a sensitive issue).

American activity in Central Asia, too, is not very liked. It was thought of as a great victory for Russia when the Americans in 2005 were forced to shut down its airbase in Uzbekistan after having criticized the Uzbek authorities for the atrocities in Andizhan. At the same time, Uzbekistan also severed ties with most western countries bar Germany, which has taken a somewhat softer stand in all this. What remains in the region (except for the U.S. forces in Afghanistan, which are clearly out of reach) is an American airbase in Kyrgyzstan, not very popular with the Russians. If they could get rid of it, that too would serve to strengthen Russian influence. Apart from all this, there is also the idea of an American anti-missile system in Eastern Europe, which is not very popular, despite the fact that it could do absolutely nothing about a Russian missile strike, which in any event is an extremely unlikely scenario. On the other hand, Russia has been making quite a bit of fuss over this and fuss is always a message, which could mean it, too, is up for bargaining. I for one would not be surprised if we were to see Russia suddenly claiming the missile shield would not constitute a threat to its national security, thanks to the sheer number and advanced standards of its own nuclear armada.

Clearly there is room for some manouevring on these issues, but it should be noted that the fact that Russia would be willing to give up its position on some issues is not the same as saying it will.  For a game of chess you need two players and the outcome will be decided by which incentives Russia is offered in return for dropping its resistance. So the question remains whether America would value Russia complying with its wishes highly enough and whether the United States considers itself as week as does the Russian Federation.

Vote Lugovoi

Today we learnt that the former officer of the KGB Andrei Lugovoi, who has been accused of being an accomplice in the murder of also ex-KGB Aleksandr Litvinenko in London last autumn, will stand for election representing the rather bizarre Liberal Democratic Party (which is neither particularly liberal nor democratic). Some newspapers have been arguing that Lugovoi in this way might be seeking protection from being extradited to the United Kingdom, since members of the Russian parliament are immune from prosecution. That does not seem to be the case, since Lugovoi anyhow would be protected by the Russian constitution, which apparently (I must admit I have not read it myself) makes it illegal to extradite Russian nationals. Also, even the parliamentary immunity, according to the newspaper Izvestiya (http://www.izvestiya.ru/politic/article3108355/), is known to have been lifted when deemed necessary. Thus, a political career would offer no more protection for Lugovoi than he already enjoys. The move by the Liberal Democrats (LDPR) should rather be seen as an attempt to gain a mass media momentum before parliamentary elections this year. According to the same article in Isvestiya, the LDPR is balancing on the 7% threshold to win seats in the Duma. They hope Lugovoi will act as a pull-factor for the part of the constituency that might sympathize with the somewhat original (mostly obscurely nationalistic) views of their party, but does not really care too much about voting. At the party congress, leader Vladimir Zhirinovski portrayed his new recruit as a victim of British imperialism and said that the whole murder story was an MI6 plot.

Speculations about whether the Russian government ordered the Litvinenko murder have been abundant since the story broke, while it does not seem probable. Consider the method. By killing their victim with the help of radioactive poisoning (thus actually committing the first case of nuclear terrorism ever), the perpetrators committed probably the most indiscreet killing in the history of mankind. Not only was the poison especially torturous, they also left a radioactive trace covering large parts of a foreign capital and the aeroplane on which they flew in from Moscow. Now, if you were a government and you wanted to kill someone on foreign soil, why would you not choose some method less obvious? Would it be so difficult to organise an automobile accident or a mugging-went-wrong? Also, it is the question of timing. Ever since Litvinenko accused the Federal Security Service (FSB) of organising the terrorist bombings of two apartment buildings in Moscow in 1999, he was detested and hated by his former colleagues. It should not be ruled out that revenge was indeed the motive behind the killing, but why would the Russian government dispose of him now and draw even more attention to something long buried? This is not the same as saying that the men of the Kremlin are sorry about what happened. It does not necessarily mean that they do not know who were behind it. I just do not think they ordered it.

Obviously though, the murderers were well connected; getting your hands on polonium-210 most likely is not the easiest thing to pull off. The question is whether it is floating around the black market or if the perpetrators actually received it from a source within the government. If it is the latter, and the Kremlin disagreed with the need to dispose of Litvinenko, then we should have seen some re-organisation among the top echelon of the security and intelligence community. So far, we have not. This would imply that, even though the polonium probably once originated from within the government, it has been out of there for some time. Like Lugovoi, by the way.

There is, however, a message in all of this. Since the organisers behind the murder could not possibly have underestimated the reaction that would follow killing someone the radioactive way, they must have wanted everyone to notice what happened. There was a message, but to whom? Exile oligarch Boris Berezovski, who was Litvinenko’s guardian? Someone sitting on information that, according to some sources, Litvinenko was using to blackmail people in Russia? No clue. Honestly.   

EU, Russia and the Gas

There is intensive debating regarding the European Union’s relationship to Russia within the energy sphere at the moment. It has been specially visible with regards to the North European Gas Pipeline (NEGP) that Gazprom, the Russian state gas monopoly, wants to put on the bottom of the Baltic Sea. In Sweden the discussion has been somewhat heated, because the pipeline would pass within the boundaries of Sweden’s economic zone. Many people obviously do not feel at ease with this, since they fear increased military activity on behalf of Russia in the region. Environmental issues have also been raised, even though this is most likely an attempt to simply hide the fact that what lies behind all of this remains the angst with which these people look at Russia. Putting a pipeline on the bottom of the sea without setting off any disposed of chemical weapons from World War II should not constitute a severe difficulty; after all it is not the first thing put there. Also, an increased military presence in the Baltic Sea might look threatening, but is not the most serious of scenarios in this case.

What should be, and to some extent is, of concern in this matter is the subject of energy security. The question is not whether the European Union will grow dependent on Russian gas. It already is. In 2005 the Russian share of EU gas imports was 50%. (Larsson, Robert. Sweden and the NEGP – A Pilot Study of the North European Gas Pipeline and Sweden’s Dependence on Russian Energy. FOI 2006) That is obviously a dependency too large to be ignored. At the same time, and this too is of vital importance for understanding why there even is an NEGP, the EU share of Russian gas exports amounts to 60% (Larsson, 2006).

The term energy security has a dual meaning in Russia- EU relations. In the EU it refers to the access of a stable flow of energy from a reliable provider. For Russia it means to be able to control its own flow of exports. These interpretations, as we shall see, are highly correlated and at the moment neither is fulfilled to an extent that would satisfy both parties. First of all, Russia prefers to negotiate on a bilateral basis in these questions, i.e. not with the EU as a whole, but with the recipient buyers, e.g. Germany, directly. So far, Germany, which is a huge consumer of Russian gas, has been fine with this. Russian gas exports today go through the Ukraine, Belarus and Poland. Not only are these countries able to charge transfer fees for having the pipelines run through their territories, they also receive their own imports through the same system. When arguments have arisen about the heavily subsidized gas tariffs that CIS countries, such as Ukraine and Belarus, pay for the gas they use themselves, Russia has not long ago on two separate occasions responded by turning off the tap. It is not the same as shutting down Germany, because gas still flows there, but there is a very noticeable effect there as well, as could be witnessed during the Ukraine/Russia gas crisis in 2005/06. When such an important customer like Germany is affected, it serves to tarnish the reputation of Russia as a supplier. Energy security is nowhere.

Therefore, Russia is building the NEGP, thus bypassing the troublesome countries, which, supposedly, will give both Russia and Germany (other countries too would benefit, of course) energy security. At least one would think. However, there are other factors involved that are cause for alarm. Firstly, it is about the old transit countries, since Russia would then be able to put pressure on them without jeopardising the relationship with bigger and more important customers. Also, it could punish these larger countries without having to involve the others should they wish so. Of course Russia claims it would never do the latter and while they do they like to point to the fact that the Soviet Union proved to be a reliable energy supplier for Western Europe throughout the cold war. The situation now is, however, somewhat different for this to have any bearing on what we are discussing here. First of all, energy exports were a vital source of foreign currency, which the Soviet Union was constantly lacking but which Russia could not care less about at the moment. Also, modern Russia has on several occasions proven that, if deemed necessary, it does not hesitate to use the energy weapon against countries that have in some way displeased it.

But would Russia really use these methods against the EU? Probably, if it wanted to. Russia is fairly good at creating wedges and Poland, heavily dependent on Russian gas, has continuously not only resisted Russian pressure but also offered one or two provocations of its own. Now one might comment that still Russia has not punished Poland using the energy weapon (it has, however, used other types of pressure such as import restrictions on Polish goods), which might make it tempting to believe that these dangers are exaggerated. Not necessarily, since Russia might have resisted out of a concern that such actions would hurt what it believes to be more important EU customers. With the NEGP it would not have to worry. The interesting part is how these big clients would react to a Russian threat against Poland (or why not one of the Baltic countries which too have strained relations with Russia) that does not affect them directly. Objecting might cause Russia to turn part of its anger towards these countries as well. That is the problem of being dependent on someone. Energy security for Russia, but not for the EU.

There is absolutely nothing wrong with building the NEGP. The pipeline itself does not constitute a major security issue. The problem lies within the lack of diversification when it comes to securing the energy needs of the EU. More domestic energy production combined with a larger share of energy imports from other countries than Russia could solve this problem. Building the NEGP would also serve the purpose of strengthening the ties between Russia and the EU. As stated earlier, half of EU imports of gas come from Russia, while 60 % of Russian gas exports go to the EU. It is not only Europe that is dependent on Russia. Russia today lacks the infrastructure to let the gas flow in the other direction; China would then be the most likely recipient. But even though Russia has hinted that it might reconsider the EU as its primary export market for gas in the future, it also sees China as its main competitor in many ways. China becoming richer and more powerful might not be stoppable, but it is unlikely that Russia will go out of its way to offer a helping hand in this respect. Russia wants to be an energy supplier to the EU, it just should not be an almighty one that does not need to consider the consequences of how it treats its customers. The European Union could avoid being solely dependent on an energy supplier that on numerous occasion has proven unreliable. That would mean energy security for everyone. 

Why Viktor Zubkov Will Not Be President of Russia

As we all know, yesterday Prime Minister Michail Fradkov was replaced with Viktor Zubkov, officially due to health reasons. Immediately journalists and analysts started speculating on whether Zubkov might, in a way similar to Putins own ascent to power, be the present president’s designated heir. In this first posting I intend to show that it is not the case.

The most obvious reason is Zubkov’s age. At 65 he is already way past the usual retirement age in Russia and far older than Putin himself. He does not really constitute the young, energetic ideal of a leader that the present president has proved to be in the eyes of many Russians.

A second factor is that it seems highly unlikely that Putin would let go of power and leave it with someone with no obvious experience from Kremlin intrigues (even though his connections with Putin and his entourage go back many years). Remember that Putin himself had acquired vast experience from the Presidential Administration before being named head of the Federal Security Service (FSB) and then consequently prime minister. Therefore, the parallell that some people are now making, that Putin is doing what Yeltsin did in 1999, choosing a previously unheard of successor from the outside is wrong. While Putin was indeed a crown prince, Zubkov has more of an interimistic aura and will most likely remain in office through the presidential election.

But why was he made PM? There is no reason to believe Putin was dissatisfied with Michail Fradkov; if there is anything Fradkov has been, it is loyal to the President.  There is also no apparent social, economic or political crisis that would justify reshaping the government. Hence, we should not exclude the possibility that the reason for Fradkov’s resignation was indeed health-related. Something obviously made Putin name a new PM and while he could have made use of this opportunity to select an heir, he chose not to. And he is not likely to give any hints before the parliamentary elections this autumn, since he would want those to run without interference. Actually, he will wait until what he considers to be the last possible moment, in order to avoid being turned into a lame duck president, while the different groups try to either reposition themselves around the candidate, or try to make his campaign default. The last scenario is probably what worries the present leadership the most. Being the chosen one can be quite risky.

Now, what about the rumours that Putin might not leave and therefore has he chosen Zubkov as his successor? The plot here is that Zubkov would be elected president with the support of Putin (without it he would obviously not stand a chance), then resign after his first term, thus making way for Putin to return to power and serve a third term in accordance with the constitution. It does not seem likely that Putin, if he wanted to stay, would choose this path; four years is a long time and too much of the unexpected could happen during that time for him to risk it. There is of course the theoretical possiblity of Zubkov being elected president, naming Putin as his prime minister and then resigning, which would make Putin acting president (again, I might add, since this is what happend when Yeltsin left office). But then, what if he does not resign? And what would it do to Russia’s image abroad, such an obvious attempt to side-step the constitution? This approach, too, seems far too risky (and definitely less elegant).

So to sum up; Viktor Zubkov has been given a lot of unjustified media attention as Putin’s heir to the throne. There is nothing to suggest he is anything other than a new Fradkov, i.e. an administrator with the mission to carry out the politics of the Kremlin and see through the succession. The two most frequently named candidates, Sergei Ivanov and Dmitriy Medveded, remain the most likely people to succeed Putin. My money is on Ivanov, they always have been. Why I will leave for another post.