CIAO DATE:04/07

European Affairs

Spring/Summer 2006

 

Transatlantic Relations

Russia: More Awkward, But Still Indispensable

By William Drozdiak

 

When President George W. Bush gazed into the eyes of Vladimir Putin during their first encounter in June 2001 and claimed to discover a friend he could trust, the Russian leader probably never told him about his scorn for Western- style democracy. Now that Putin is clamping down on dissent, solidifying his control over his country’s oil and gas resources and destabilizing his neighbors, the United States and its European allies are waking up to the fact that Russia’s relations with the West still pose one of history’s unsolved problems.

Russia’s slide toward authoritarian rule has raised all sorts of questions about its membership in the select circle of industrial democracies and its plans to host the next Group of Eight (G8) summit in Saint Petersburg. Senator John McCain, the Republican Senator from Arizona who is a leading candidate to succeed Bush as president, has called on the United States and its allies to boycott the summit as a sign of their displeasure at Putin’s crude consolidation of power. Diplomatically, Russia’s relations with the European Union are at their lowest point since the end of the Cold War, especially now that the union includes Poland and the Baltic states. But as Bush and other Western leaders weigh their options, they are finding that their idealistic notions about promoting democracy do not measure up to the need to do business with tyrants in order to defend their security interests.

Washington recognizes that it will require Russia’s cooperation on a number of key fronts: preventing the spread of nuclear weapons and fissile materials, taking a tough stand by the United Nations in halting weapons programs in Iran and North Korea, and curbing the tide of Islamic radicalism. For Germany and other European countries, Russia’s role as key supplier of oil and gas makes Putin a vital strategic partner who cannot be ignored or antagonized.

Even German Chancellor Angela Merkel, who took office last autumn with a much more skeptical attitude toward Putin than her predecessor Gerhard Schroeder, has tempered her stance and recognized that she has no other choice than to embrace Putin. Germany is Europe’s biggest importer of Russian gas, and its dependency on it will rise if Germany carries out plans to phase out its nuclear power plants by 2020. Her need to do business with Russia in this sphere may help explain German reluctance to back any significant increase in the European Commission’s authority in developing and policing a common energy policy for the European Union.

In Merkel’s talks with Putin in Siberia in April, a deal was announced giving the German chemical company, BASF, access to a Russian gas field. In return, Gazprom, the giant Russian utility, will hold shares in a German gas distribution company (a subsidiary of BASF). In other words, Russia agreed to supply the gas on condition it got a share in the pipeline that will carry it to customers in Europe. Putin publicly reiterated his often-repeated demand that Gazprom, the world’s largest gas company, obtain shares in the downstream energy-distribution business in Europe as part of a larger accord tying Russian resources to European outlets. Otherwise, Putin warned, Russia will “start to look for other markets” for its oil and gas exports.

Europe’s main gas supplier, Gazprom is effectively controlled by the Russian government, so its political dimensions have made the authorities in other European countries, notably Britain, reluctant to accept the Russian company as a normal investor in their national gas-distributors. Even though Ms.Merkel’s personal relations with Putin are distinctly cooler than her predecessor’s, she has continued to play the game whenever required to keep Germany’s position as Russia’s favorite partner in the EU; for example, she supports the planned Baltic pipeline that will supply gas directly to Germany (and thence other west European countries), bypassing Poland and other east European countries.

Even German Chancellor Angela Merkel has tempered her stance and recognized that she has no other choice than to embrace Putin

Germany’s special consideration for Russia’s viewpoint on the gas issue has had a positive spill-over effect on the two countries’ wider ties: bilateral trade is soaring. This trend is not lost on Germany’s business elite. German businessmen have pressured Ms. Merkel to realize that the value of Germany’s trade and investments with Russia must take precedence over any desire she might have to show disdain for Putin’s undemocratic ways.

Understandably, that position does not sit well with Germany’s eastern neighbors. Given their history of Russian oppression, Poland and the Baltic states have been warning other EU states about the dangers of any strategic partnership that would enable Russia to exercise political leverage over its neighbors through its growing clout as an energy supplier. The heavy-handed move by Gazprom to cut gas supplies to Ukraine in the middle of winter only raised fresh doubts about Russia’s persistent claims to serve as a reliable supplier that would not wield the energy club for political purposes. Russia’s continuing refusal to sign the European Energy Charter, which was set up back in 1991 with the intention of helping integrate the former Soviet Union’s energy sector into European markets, underlines Putin’s determination to maintain untrammeled control over Russia’s hydrocarbon taps and pipelines.

Poland and the Baltic states have been warning about the dangers of Russia’s growing clout as an energy supplier

Leveraging Russia’s natural assets, the Kremlin is working to expand the reach and influence of Russia’s energy industry. Putin warned the EU in May that Russia will demand reciprocity in any investment arrangements designed to ensure greater confidence about Russian deliveries of oil and gas. If Europeans want access to Russian oil and gas-fields and pipelines, Putin said, EU countries will have to open their energy companies to Russian investment in their ‘downstream’ distribution networks. “if our European partners expect that we will let them into the inner sanctum of our economy – the energy sector – and let them in as they would like to be admitted, then we expect reciprocal steps for Russian companies’ development in the EU,” he said after an EU-Russian summit meeting dominated by energy concerns.

For the Kremlin, rising energy prices have brought Russia – the world’s leading gas exporter and second-ranked oil supplier – an economic bonanza. Politically, it has been a windfall in the form of new national self-confidence for Russians. Their energy clout can give them a feeling that their country is at least a naturalresource power and therefore a force that other powerful nations, including the United States, have to reckon with.

Putin himself has declared that he is eager to place energy security at the top of the agenda for the G8 summit. The United States and its European allies – four of whose leaders (from Britain, France, Italy, and Germany) will also attend the Saint Petersburg meeting – should welcome this discussion to ascertain the extent of Putin’s willingness to cooperate at a time when oil prices are reaching record highs and threatening to undermine the global economy. But they should also be prepared to raise their own qualms about Russia’s authoritarian drift, in particular the disturbing tendency by Moscow to stir up trouble for its neighbors.

Perhaps the greatest foreign policy success of modern Germany has been to establish an enduring peace and prospering friendships with all nine of its neighbors. Yet Russia still clings to its historical paranoia, visible in its actions fomenting turmoil among bordering states in order to keep them weak and provide a buffer to the outside world. Within Russia, Chechnya has receded in salience, partly because of better Russian handling of the situation. But around Russia’s periphery, there is a pattern in Moscow’s behavior. Its cold-shoulder treatment of Poland and the Baltic states, the continuing upheaval in the Caucasus, the military tensions with Georgia, the political meddling in Ukraine and support for what is often called Europe’s last dictatorship in Belarus illustrate how Russia’s 21st century attitudes toward its neighbors have not changed much since the days of the czars.

For the United States, relations with Russia are less focused on its power and proximity as a vast supplier of oil and gas than Moscow’s desire to recover its lost superpower status. This has produced tensions as the Bush administration’s democracy agenda clashes with actions by Putin designed to tighten the government’s political grip, including on the domestic scene.

As a revealing vignette, the status of voluntary organizations in Russia seems under threat.Many of the more political NGOs report that the Russian authorities are putting bureaucratic obstacles in the way of their funding, especially if it comes from official agencies in the European Union or the United States (such as USAID). This hardening approach in Moscow to NGOs seems to reflect Russian suspicions that these foreign-funded civil liberties groups are trying to undermine the government’s authority and perhaps even destabilize it. “We are against overseas funding for the political activities [of NGOs] in Russia,” Putin said last year in a meeting with human rights activists. Interestingly, Ms. Merkel made a point of meeting with foreign NGOs in Moscow during her first visit there as chancellor in January 2006.

Russia has actually gone on the counter-offensive in the sphere of NGO activity, fielding and helping NGOs of its own. Many of these employ people the Russians call “political technologists” (some of them trained in the United States in NGO-work and techniques) to work in NGOs that seem to be promoting Russian influence in places such as Ukraine, according to an article in the April issue of the Journal of Democracy, published by the US-based National Endowment for Democracy.

This overall pattern of recent Russian actions – on energy, regional cooperation and the domestic scene, including the media – prompted a public U.S. response in May in the form of Vice President Dick Cheney’s public chastisement of Moscow in his speech in Lithuania. Accusing Russia of cracking down on religious and political rights and using its energy reserves as “tools of intimidation or blackmail,” Cheney warned that such policy directions could damage Russia’s relations with the United States and Europe. Meanwhile the Bush administration has been actively working to curb Gazprom’s expansion, notably with U.S. efforts to get central Asia’s gas-producing countries to route their exports through planned new pipelines that would bypass both Russia and Iran.

We are against overseas funding for the political activities of NGOs in Russia, says Putin

The outcome of this new “cold war of pipelines” remains completely in the balance.Meanwhile, in U.S. efforts to call Russia into the dock ahead of the G8, Cheney’s tough rhetoric may be as far as the administration can go. Despite the concern in the Bush administration that Russian democracy may be backsliding toward some old Soviet ways, Moscow has to be cultivated by Washington for its diplomatic influence. As a permanent member of the United Nations Security Council, Russia can provide (or withhold) crucial cooperation as the Bush administration strives to turn Iran and North Korea away from nuclear weapons programs by demonstrating the united opposition of the world’s leading powers.

If the United States and its allies turn their back on Russia, it would not advance the cause of democracy there, but would probably exacerbate its isolationist, statist and paranoid tendencies

Even though George W. Bush proclaimed that spreading the gospel of democracy around the world would be the top foreign policy priority of his second term, the need to fight other pressing battles, such as the struggle against jihadist terrorism and halting the proliferation of nuclear weapons, has forced him to compromise on those prodemocracy principles. In the fight against terror, the United States has embraced as “strategic partners” a neo-Stalinist regime in Turkmenistan and a military dictatorship in Pakistan that developed clandestine nuclear weapons, turning a blind eye to their anti-democratic practices. It cannot have escaped other governments’ notice that the day after his public scolding of Moscow about its undemocratic ways he continued on to a friendly visit to oilrich Kazakhstan, whose recent elections were declared “not free” by the U.S. State Department.

The same acceptance of realpolitik should apply to dealing with an authoritarian Russia. The United States and its allies can ill afford to boycott the G8 summit and turn their backs on Russia; doing so would not advance the cause of democracy there and would probably exacerbate the isolationist, statist and paranoid tendencies of the regime that are so pervasive in Russian history.

Pragmatic engagement with Putin, tempered with constructive criticism of his authoritarian behavior at home and his destabilizing actions toward his neighbors, seems to be the wisest and most productive approach for the United States and its European allies. While grandstanding against tyrants might play well in American political campaigns, it rarely produces effective results – as shown by more than four decades of failed effort to undermine Cuba’s communist dictator Fidel Castro.

 

William Drozdiak, a former foreign editor and chief European correspondent for The Washington Post, is president of the American Council on Germany.