Power Politics

The Moscow Times reports that ecological experts are warning that Transneft’s proposed Far East pipeline presents a serious threat to the integrity of Lake Baikal.

Some 80 percent of the 50-member commission of ecological experts created to investigate the project voted earlier this week against the Transneft-proposed route because it ran too close to the world’s largest freshwater lake and hence endangered it, Gennady Chegasov, a member of the commission, said at a news conference Thursday.

Chegasov, along with environmentalists in Russia and abroad, argues that the construction of the pipeline in the highly seismic area of Baikal’s basin risks an ecological disaster of unprecedented magnitude. Under the proposed route, one stretch of the pipeline would run just 800 meters away from the shoreline of Baikal, a unique reservoir containing some 20 percent of the planet’s surface fresh water and accommodating some 3,000 endemic species.

I am in complete agreement with the scientists in this case. For me, however, this is not primarily an environmental issue but more importantly a social and geostrategic matter. Russia is, economically, a developing nation; she has a tremendous but decaying industrial base as a legacy of Soviet times, which she has not had enough liquidity or economic dynamicism to overhaul. Because of their relative decay and lack of expendable financial resources, Russian businesses (like those in any other developing state) cannot be expected to consider the environment an overriding factor in major decisions. That is a luxury afforded to the rich, and only once Russia becomes a wealthy nation should the standards of Western environmentalism apply.

In this case, however, there are pressing geostrategic and social reasons to make the preservation of Lake Baikal a state priority. The essential fact is that clean fresh-water is a dwindling and very precious resource. Water, in the future, will become as important as oil in many regions of the world; not only is it critical economically, but it is the sine qua non of human life. Lake Baikal, as the article reports, contains approximately one-fifth of the fresh water on the surface of the Earth. As water supplies elsewhere tighten due to overuse, pollution, and population expansion, Baikal and other massive fresh water lakes like it will increase substantially in value. Russia will find the lake quite valuable both for provisioning Russian citizens with potable water and use as a geopolitical lever akin to oil and natural gas. It is imperative for Moscow to maintain the lake’s integrity in order to effectively exploit Baikal as a resource in the future. In this case, the company argues that it will cost $2 billion to reroute the pipeline. The future benefits of Baikal are well worth that price.

Unfortunately, however, like the scientists who have brought this issue public, I’m not optimistic about the chances of their concerns being heeded. Moscow has a poor environmental track-recorded, highlighted by the Aral Sea fiasco whereby Soviet planners were responsible for one of the greatest environmental disasters in modern history. In this case, vested interests are heavily aligned in favor of the cheaper (but environmentally unsound) pipeline route. Russia, furthermore, is not a wealthy country; in the eyes of the government, the environmental risks are probably well-worth the cost savings.

Perhaps Moscow will get lucky and the lake will remain uncontaminated; it would not be wise for the Russian government to take that chance.

As I’ve noted before, continuing natural gas shortages from Russian suppliers have caused great fear among the European countries. As these shortages have dragged on, and the risk of geopolitical instability made all the more clear by terrorist attacks on vulnerable energy infrastructure, governments across Europe have given increasing priority to developing a degree of energy security. Before, this had meant strengthening ties with Russia and developing alternative sources of energy; now, it means rapid diversification and resiliency, to Russia’s great geostrategic detriment.

This trend is exemplified by several stories in press today.

The Moscow Times reports that not only are European leaders calling for increased energy security, but some have already begun to act.

World leaders increased calls for reducing Europe’s dependency on gas supplies from Russia on Thursday as freezing temperatures forced cutbacks from Gazprom for the eighth day running and Russia continued to snipe at Ukraine, a vital transit country.

As political and business leaders gathered in Davos for the World Economic Forum, Poland’s prime minister and U.S. billionaire George Soros said the recent disruptions in gas supply meant Europe should find alternate sources.

Soros called Russia’s recent standoffs with Ukraine and Georgia over prices “a wake-up call for Europe” as Russia used its might to gain leverage over its neighbors, while Polish Prime Minister Kazimierz Marcinkiewicz said his country wanted to diversify supplies.

“Trust is measured on practice and the practice we have seen in January of this year was not promising,” Marcinkiewicz told reporters in Davos, Reuters reported. He said his country was now considering building a liquefied natural gas, or LNG, plant.

Hungary and Croatia followed suit. At a joint session of both countries’ Cabinets in Budapest they vowed to reduce their dependency on Russia, and their prime ministers signed a deal Thursday for a new LNG terminal on the Adriatic coast.

“We want to do everything possible to become independent in terms of energy supplies,” said Croatian Prime Minister Ivo Sanader.

Meanwhile, the New York Times reports that Georgia has signed a natural gas deal with Iran (interestingly enough, this may work to Russia’s advantage as it will complicate relations between Tbilisi and Washington).

The government of Georgia said Friday that it had entered into a deal with Iran to purchase natural gas, potentially easing a heat and electricity shortage that has chilled Georgia’s people and slowed its economy for a week.

Details of the arrangement, which could send Iranian gas through Azerbaijan to Georgia as soon as Sunday, were limited. Georgian officials declined to discuss the price for the new supply or whether transit fees would be paid to Azerbaijan.

Instead, they said it was a temporary agreement that diversified Georgia’s sources of energy and would help end the crisis that began on Sunday when saboteurs destroyed gas pipelines and an electric power line that brought energy to the Caucasus nation. The anticipated Iranian supply of gas, two million cubic meters a day, would provide slightly less than half of Georgia’s needs.

Finally, the Financial Times reports that the gas shortages have given impetus to European efforts to forge a common strategic energy policy.

The French and British defence ministries are exploring a common approach to energy security which some officials say could form a blueprint for a common European policy.

Although the talks are still informal and at an early stage, the urgency of the efforts has been thrown into sharp relief by the recent dispute between Russia and Ukraine over gas prices, as well as record high oil prices.

The crisis has revived the debate over whether Europe needs a common energy policy to address its growing dependence on imports.

Christophe-Alexandre Paillard, of the strategic affairs directorate in France’s Defence Ministry, said the two countries were trying to develop “as common an approach to energy as possible, in the realms of defence and the economy”.

These strategic developments are a stark reminder that Russia’s geopolitical energy leverage is a limited and nonpermanent commodity. To be sure, these countries will continue to rely on Russia for energy, and Russia will continue to hold significant leverage over them. Nevertheless, this leverage is not overwhelming, and abusing it will cost Moscow dearly. The best policy for Russia to follow right now is to rebuild its credibility as a reliable energy supplier. That means constructing more and more secure energy infrastructure, improving the dismal state of its energy sector, and not making significant use of its energy leverage for the time being. Otherwise, Moscow could quickly see its stick over Europe melt away.

It is interesting to note that Russian foreign policy has once again fallen prey to internal factionizalization.

Russia’s conduct in the dispute resembles the chaotic foreign policy style of the era of former President Boris Yeltsin. In that period, we also never quite knew who was in charge in Moscow; senior officials often freelanced in public and ministries were at loggerheads. Russia seemed incapable of implementing consistent policies. And at times during Yeltsin’s presidency, foreign policy became hostage to domestic political disputes.

Putin’s first term marked a significant departure from this sort of behavior. During his first few years in office, Putin centralized, streamlined and coordinated foreign policy decision-making to an extent unprecedented in post-Soviet Russia. He asserted direct executive control over the policy-making process and oversight authority over policy implementation. The days of government ministries conducting their own foreign policy were over. Foreign policy was no longer used as a weapon in domestic political battles. The president was now clearly the final arbiter in matters of international significance.

The new trend reflected Putin’s general strengthening of the executive branch’s authority in Russian politics. By emasculating the once-mighty regional governors and asserting control over both houses of parliament, he eliminated the challenges to the executive’s authority faced by Yeltsin. He also cleaned house within executive structures over the course of his first term, installing loyalists in top posts and limiting the extent to which big business could buy policies and officials. For the most part, there was a team approach on major foreign policy issues.

It appears that the Yukos affair marked a turning point in this process. The political friction caused by the event — and, more importantly, the competition over the massive economic resources that were up for grabs — precipitated the factionalization of the Putin executive branch. As Putin’s second term got under way, it became more and more clear that infighting between individuals and “clans” within the government was intensifying. It appeared as if gang wars between groups dubbed “siloviki,” “St. Petersburg lawyers” and “liberals” were simmering inside the Kremlin walls.

Much of what passes for political conflict in Russia now occurs within the executive branch. While the parliament is now little more than a rubber-stamp, it is disputes between Kremlin factions — especially the siloviki, led by presidential deputy chief of staff Igor Sechin and Putin aide Viktor Ivanov, and the St. Petersburg lawyers, led by First Deputy Prime Minister Dmitry Medvedev and Miller — that determine major policy outcomes. A particularly glaring example was the failed merger of Gazprom with Rosneft. As a result of this factionalization, the strong Putin executive branch is no more. Although the external threats to its dominance, such as the parliament and the regions, are still largely powerless, the executive has been compromised from within by internecine conflict.

Charap has identified an important trend in Russian foreign policy that will severely frustrate President Putin’s ability to advance his future geopolitical agenda. This factionalization has become apparent in a dispute involving Finance Minister Alexey Kudrin. Kudrin had intended to go and attend the upcoming meeting of global elites at the World Economic Forum in Davos, Switzerland, in order to negotiate and finalize details relating to the important ministerial-level meetings Russia will be hosting this year as head of the G-8. As Kommersant noted, high level meetings like the ones that were planned will be essential to successfully organizing the ministerial conferences. The fact that Kudrin will be unable to go will greatly complicate this, to Russia’s disadvantage (especially since Moscow has made it a goal to finally accede to the G-8 as a full member). And why was he denied permission? Because, it seems, Prime Minister Fradkov wishes to flex his bureaucratic muscles and demonstrate his authority.

This is a prime example of how internal political struggle and factionalization can seriously affect the conduct of foreign relations. The future will surely bring more examples of this, perhaps in more consequential spheres. In order for Putin to realize his geopolitical ambitions under a unified strategic posture, he’ll have to regain control over the government bureaucracy. With a culture of adversity and corruption firmly rooted in the Russian government, that may no longer be possible.

The Public Chamber, an independent government body of 126 national elites from the private sector, is set to convene on Sunday for the first time. The purpose of the chamber is to discuss the state of civil society in Russia and devise ways of improving it. Civil society, the nongovernmental social institutions of a country, is an essential component of both stability and prosperity; civil society is heavily related to social trust, which is also essential to growth and governance. Civil society in Russia has traditionally been weak, often facing significant interference from the government, and its historic absence is one reason that Russia has had such trouble developing a modern economy and system of goverment like her European peers. Already, however, Putin’s critics are declaring the new body a tool of the Kremlin that will prove utterly ineffective.

Only four of the Public Chamber’s 126 members are independent of the Kremlin, analysts from two major think tanks said as the chamber heads for its first official session on Sunday. […]

Putin proposed setting up the Public Chamber as a bridge between the state and civil society after the Beslan school attack in 2004. Critics say the chamber will be toothless. It can issue nonbinding advice to the government on domestic policy and legislation and request that federal authorities investigate allegations of breaches of the law.

The four chamber members who are clearly not Kremlin loyalists are lawyer Genry Reznik, pediatrician Leonid Roshal, Moskva magazine editor Leonid Borodin, and the head of the World Wildlife Fund’s Moscow office, Igor Chestin, said Tatyana Stanovaya of the Center for Political Technologies and Vladimir Pribylovsky of Panorama.

The four could raise loud protests if they disagreed with the rest of the chamber, but they would not be able to influence any decisions, the analysts said.

Although it’s indeed a possibility that the Chamber will turn out to be a toothless organization created only to assist Moscow in pushing its agenda, that outcome is far from foreordained. The Kremlin recognizes the value of informal social institutions, and has not tried to destroy them; rather, what political elites in Moscow fear is political opposition, and that’s why they’ve been trying to get a grip on the country’s nongovernmental organizations. They fear that some NGOs are fostering political opposition to the current government, and by putting NGOs under government authority they hope to quash such dissent. This necessarily impacts civil society for the worse, true; however, much of what supports a healthy civil society is apolitical in nature, and the Kremlin would no doubt like to see these essential social service providers remain in operation (to provide services the government cannot or does not want to offer itself).

I think Peter Lavelle, in his essay on the Chamber, is entirely and exactly on the mark.

Just about every word written on the chamber in media claims it is “toothless.” Why should it have “teeth?” Russia has two houses of parliament for the passage of laws. There is no reason why the chamber should be a substitute for parliament. The chamber’s role is very different. The chamber’s purpose is not to pass laws – it is designed to speak out on the behalf of society. Speaking-out with moral authority can be more powerful than having the right to pass or veto laws.

I find the subliminal characterization of chamber members as being “stooges” in the service of the state an insult to some of Russia’s most respected and liked citizens. A careful review of the members informs me that if the chamber is expected to be a rubber stamp for the authorities’ own PR many members will simply walk away. All members have a “day job” – none of them should be considered as “rent seekers” to perform the role of “yes men.”

There has also been criticism that too many chamber members come from the world of business. I think that this is the way it should be. Civil society is, in my opinion, not so much an idea, but a process – and different everywhere. Nonetheless, business people – more times than not – represent the interests and identity of society. Those who claim that business interests will be promoted within the chamber are simply being naïve. Of course this will probably happen – what is wrong with this proposition? Promoting the interests of business is an important way to strengthen the interests of any modern civil society.

Under Gerhard Schroeder, Germany formed a strategic alliance with Moscow over the issues of energy and commerce. Schroeder, who was much more interested than his predecessors in formulating a conception of German interests separate from the United States, was unafraid to collaborate with Russia in opposition to the America when it suited his purposes. He endorsed a multipolar world order that would feature France and Germany (as the leaders of Europe) along with Russia as a counterbalancing bloc to the United States. More importantly to Schroeder, who was greatly interested in promoting German business interests (which hold substantial political influence under the German model of democratic-corporatist policy-making), Russia was one of Germany’s most critical energy suppliers. She provided the Germans with a tremendous amount of natural gas, and, because of her substantial untapped reserves and geographic proximity, promised to be even more crucial in the future. Schroeder wanted to ensure that Russia remained a reliable source of energy for his country, and saw strengthened political ties as a way to do that. He also saw Russia’s potential as a market for foreign investment and exports.

During his final days in office, Schroeder cemented a pipeline deal that promised to inexorably link Russia and Germany together in the future. The pipeline would run directly to Germany, and it would carry a substantial flow of natural gas. It would provide Germany with a dependable and secure supply of hydrocarbons; it would provide Russia with a reliable export route. Once committed to the project, neither side could afford to back out.

In late 2005, Schroeder’s government was replaced by a “Grand Coalition” of Germany’s two major parties led by Angela Merkel. Merkel, although not having much experience at all in foreign policy, is reflexively pro-American. During her brief time in office, she has realigned German grand strategy to emphasize that cooperation with the United States remains a central priority Although Schroeder never acted truly hostily toward Washington, Merkel’s shift is more than cosmetic. She is giving more consideration to the United States than Schroeder did, and she sees German interests as being more American-oriented than did her predecessor. This is particularly true in the spheres of diplomacy and security.

Nevertheless, Merkel is bound in by the external reality of Germany’s strategic environment. She cannot and will not disengage from Russia on energy; Berlin simply needs Moscow too much. The construction of the Baltic pipeline ensures that. She will also continue to pursue economic ties, a key issue for the powerful German business lobby.

Beyond energy and commerce, however, Merkel has flexibility. In terms of an issue like Iran, she doesn’t have to ally herself with the Russians. Whereas with Schroeder, Moscow could usually count on Germany as an ally, with Merkel the Russians will have to make deals on a case-by-case basis.

One of the interesting possibilities for a deal, raised here in the context of Iran, is cooperation over nuclear energy. The Germans have been planning for a while to phase out their domestic nuclear plants by 2020; geopolitical and energy instability, evidenced recently by the natural gas disruptions from Russia, have encouraged German policymakers to rethink this plan. Enter Russia.

Russia has had extensive experience in developing and operating nuclear power plants. Her nuclear industry is quite modern and sophisticated, and the Russians have devised some interesting and unique nuclear products (such as the floating nuclear power plant). Germany, and Europe as a whole, would benefit from cooperating with the Russians over a renewal of nuclear energy in Europe; this is particularly so because nuclear power is fast becoming the most favorable energy source of the early 21st century. It is cost-effective, environmentally sound, and very geopolitically advantageous to transition a national economy to nuclear power.

Germany, meanwhile, seems ready to return to nuclear energy. The Green Party is out, and society feels that nuclear energy may be safer than being dependent on foreign gas. This offers oppportunities for cooperation between Germany and Russia in Europe. Russia supports Iran’s nuclear program not because it wants to harm the West but because it wants to keep the market. Germany could open the EU nuclear energy market to cooperation with Russia.

Nuclear energy cooperation is fertile ground for striking a geopolitical deal (or, possibly, a series of deals). Europe should think wisely about what it asks for in return.