Russia, politics and power: internal & external(new title)

[Surferbeetle]

From the IMF

A $16.4 billion loan for Ukraine, approved by the IMF's Executive Board on November 5, will help the government strengthen confidence and restore economic stability after the country became the latest victim of the financial crisis sweeping the global economy.

Until the financial crisis hit the world economy in mid-2008, Ukraine was riding on the coattails of a global economy that had an insatiable demand for steel—a commodity that constitutes 40 percent of the country's exports, earning $17 billion a year in revenues. The government passed on the gains from high economic and steel exports growth to the population through generous incomes policies.

Together with rising capital inflows, this fueled an unprecedented consumption boom—and a rising current account deficit. By 2008, the economy had overheated, with inflation running at 25-30 percent, wages being hiked by 30-40 percent, and the import bill growing by 50-60 percent.

[Fuchs]

Strange. Why should one need to "counter" the Russians?
Cooperation should still be in the repertoire of foreign policy.

The Russians/Gazprom do now EXACTLY what a rational economist in charge would do:
1) Don't give your goods away to someone who didn't buy them.
2) Don't sell your goods at a tiny fraction of their worth.

The Eastern European non-NATO nations got natural gas for a half or less of the price charged on the Western Europeans. The Ukraine did not negotiate a new contract that satisfied the Russians in time, so they didn't get any deliveries any more. It needs no evil plan for this; rational economic behavior is enough explanation.

It's understandable that Russia subsidizes close friends like Belarus, but there's no reason for subsidizing Ukraine, a nation that has a Russian minority that's a regional majority in some places and doesn't want to talk about this.

The(first) article is about a small great power game; such things happen all the time in our world and our governments aren't exactly role models for fairness either.

By the way; the U.S.Americans and the British have in my opinion still no right to criticize Russia for its comparably civil great power games. Great powers who waged a war of aggression should better wait for a decade or two till they criticize others' great power games.
The Russians pursue their interests with great rationality and demonstrated the ability to limit their aims to what's easily achievable. That's a great situation for cooperation. Most of their national interests are justifiable - security against invasion in general and advance of a nearby foreign alliance, for example.
Putin knows about the limits of Russia's abilities (unlike the USA and UK) and this limits the problems that he creates.

We can fall back to containment strategies once Russia recovered as state, society and military from the downfall of the 90's and the sins of the 70's.

[Beelzebubalicious]

Good post, Fuchs. There is certainly rationality to the way the Russians behave, but we make great mistakes by assuming it means the same thing here (or that we can act on it in the same way we do in the US). There is always a bit of the Matrioshka (doll within a doll within a doll) going on and so what interests do you play to?

As you allude to, I also think the Russians understand the power games and how the West plays them better than the West understand how Russia plays. For example, the USG was playing the missile defense shield power game and Russia was countering that with some bluster, but meanwhile, there was all kinds of other backroom subterfuge going on.

What we don't see is the bribery/influence/corruption, especially within high levels of government in places like Ukraine. Europe is now throwing a lot of money into Ukraine with perhaps the same effect (buying allegiance, gaining leverage). What interests me is how far each side will go and what boundaries or lines they'll draw in these power games.

[Stan]

Hey Eric !

What we don't see is the bribery/influence/corruption, especially within high levels of government in places like Ukraine. Europe is now throwing a lot of money into Ukraine with perhaps the same effect (buying allegiance, gaining leverage). What interests me is how far each side will go and what boundaries or lines they'll draw in these power games.

Yep, a shame we are a decade later stuck trying to convince people what is mistakenly concluded as "fair trade" Some folks need and deserve a tour of reality I reckon. Just how many of those gas transactions were actually real transactions while Russia feeds her own elite?

The EU was already prepared to pay the aggregate price paid by most European countries (less than $300). That price would put the 3 Fat Pigs (well, one of them) in dire straights and have Gerhard wishing he never heard the name Nordstream.

BTW, I'm not altogether sure why "US Americans" (as apposed to those other Americans) has Delta to do with Russian gas and those pesky Ukrainians that give Putin nightmares

Time for a shower and beer !

[Surferbeetle]

Mutually beneficent cooperation is an important goal. What do you see the German census to be? From a pure engineering standpoint this is a cool project, but things are rarely that simple…

Nordstream backgrounder by wikipedia

Nord Stream (Russian: Северный поток Severnyy potok, German: Nordeuropäische Gasleitung, Polish: Gazociąg Północny; former names: North Transgas and North European Gas Pipeline; also known as the Russo–German gas pipeline or the Baltic Sea gas pipeline) is a planned natural gas pipeline from Russia to Germany by the company Nord Stream AG. The name of Nord Stream refers usually to the offshore pipeline between Vyborg, Russia, and Greifswald, Germany, but sometimes it may have wider meaning, which includes the onshore pipeline in Russia and further connections in Western Europe.

The project, which is promoted by Russia and Germany, is seen as controversial both for environmental concerns and national security risks in some countries such as Poland and the Baltic states, which favour overland pipelines across their countries' territories.

Nordstream Company Website

Nord Stream will transport up to 55 billion cubic metres of gas each year. This is enough to supply more than 25 million households.
Nord Stream is more than just a pipeline. It is a new channel for Russian natural gas exports, and a major infrastructure project which sets a new benchmark in EU-Russia cooperation.

Gerhard Schroder backgrounder by wikipedia

Gerhard Fritz Kurt Schröder (help·info) IPA: [ˌɡeɐ̯haɐ̯t fʁɪʦ kʊɐ̯t ˈʃʁøːdɐ] (7 April 1944) is a German politician, and was Chancellor of Germany from 1998 to 2005. A member of the Social Democratic Party of Germany (SPD), he led a coalition government of the SPD and the Greens. Before becoming a full-time politician, he was a lawyer, and before becoming Chancellor he was Minister-president of the German state of Lower Saxony. Following the 2005 federal election, which his party lost, after three weeks of negotiations he stood down as Chancellor in favour of Angela Merkel of the rival Christian Democratic Union.

Spiegel on cold war legacies of mistrust

Die schwedische Regierung rügt das deutsch-russische Unternehmen Nord Stream und könnte somit für Verzögerungen des geplanten Ostseepipeline-Projekts sorgen. Nord-Stream-Chairman Gerhard Schröder ist nicht amüsiert: Denn hinter den Umweltauflagen verbergen sich weit tiefere Ängste der Skandinavier.

My translation…

“The Swedish Government has criticized the planned Baltic sea pipeline Nord Stream, a German-Russian undertaking, and can provide reasons why. Nord Stream’s Chairman Gerhard Schroder is not amused: Behind the environmental concerns are deeply buried Scandinavian fears. “

Dilligner Hutte company website. Pipeline material

[Fuchs]

Quote:
Die schwedische Regierung rügt das deutsch-russische Unternehmen Nord Stream und könnte somit für Verzögerungen des geplanten Ostseepipeline-Projekts sorgen. Nord-Stream-Chairman Gerhard Schröder ist nicht amüsiert: Denn hinter den Umweltauflagen verbergen sich weit tiefere Ängste der Skandinavier.

My translation…

“The Swedish Government has criticized the planned Baltic sea pipeline Nord Stream, a German-Russian undertaking, and can provide reasons why. Nord Stream’s Chairman Gerhard Schroder is not amused: Behind the environmental concerns are deeply buried Scandinavian fears. “

"The Swedish government admonished the German-Russian enterprise Nord-Stream and could cause delays in the planned Baltic Sea pipeline project by doing so. Nord-Stream-Chairman Gerhard Schröder is not amused: The reason is that deeply buried fears of the Skandinavians are behind the environmental regulations."


---------------


First of all; the issue was solved with a ten-year treaty and shouldn't resurface unless one of the involved states break the treaty or enters a war.
That would be problems in their own right and wouldn't be pipeline-specific.

It's imho a waste of time to think about alternative routes for pipelines; new pipelines in Eastern Europe don't solve the other problem; the Europeans want to buy relatively cheap Russian gas (and the Russians want to sell it), but they want to diversify as well.

One approach is to increase the import of Algerian natural gas - with LNG technology. That means very short additional pipelines to specialized LNG terminals in some harbors. Projects for Wilhelmshafen and Rotterdam were or are in work.

Another approach is to decrease natural gas consumption - a typical European approach to energy supply problems since the 70's.

Natural gas has near-perfect substitutes in all its uses. Mankind does not need natural gas - it can do the same things with coal products.

* Natural gas replaced coal gas in the 70's for heating/cooking in residential areas (in Berlin and Eastern Europe only in the 90's).
* Natural gas powerplants are quick reaction peak supply tools, but not necessary for the base supply. Improved coal and even nuclear powerplant technologies can replace it in that role (and a special type of water power, but not on large scale).
* Natural gas is also in use in steel production. Alternative technologies use electricity and/or coke as far as I know.
* Natural gas-driven vehicles: No need for such a thing, it's a stupid idea anyway.

-----

The real challenge is to find issues where we can cooperate with Russia and turn them (and us) away from a "us vs. them" line of thinking. Let them worry about China, not us. Our politicians should not just have meetings with Putin & his clique, but also reach out to the Russian people.
There are opportunities - we would just need to use them.


It's so much cheaper and more pleasant to solve the situation the smart way with diplomacy and cooperation instead of a easy&primitive fall back to the wasteful Cold War.
At least some people should have understood by now that the Western World isn't in great shape, has huge society, state & fiscal challenges now and ahead - and that we could ill afford such a wasteful path as another Cold War.

[kaur]

Couple links about book "Gazprom: new Russian weapon"

http://www.robertamsterdam.com/2008/...russias_ne.htm

http://www.kommersant.com/p845604/Gazprom_Business_Gas/

[kaur]

I think that Brzezinski's article is ok for this topic

These words also underline the significant distinction between China’s and Russia’s conduct on the international scene. Russia, like China, is a revisionist power in that it wishes to revise the existing international patterns; but in pursuit of this end it tends towards impatience, frustration and sometimes even posturing in a threatening fashion. Nonetheless, it is in the interest of the United States and of Europe to engage Russia, with regard to the larger strategic issues as well as more specifically European geopolitical dilemmas.

Unfortunately, the current generation of Russian leaders, notably Putin, are still unable to come to terms with Russia’s diminished global status and its regional realities. It is unreconciled to the loss of its empire. It is unwilling to come to terms with its totalitarian and specifically its Stalinist experience. The Foreign Minister of Russia recently declared that to equate Nazism and Stalinism is ‘a blasphemy’. Yet there are millions of people in Europe who recall that the two were profoundly similar and equally inhuman to their victims. The difficult process of self-recognition will take time until a new Russian elite emerges.

http://www3.interscience.wiley.com/c...37300/PDFSTART

[Stan]

"Gas trade is one of the principal tools that Russia uses to increase its leverage on the Ukrainian leadership, seeking to change the country's geopolitical direction."

Under the current circumstances, Gazprom is interested in escalating the gas price, seeking to earn top dollar from Ukraine while it is still possible, while Naftohaz, Gazprom's Ukrainian counterpart, appears to be in no position to pay it. In the "dual monopoly" situation, the pricing dispute inevitably leads to a perfect deadlock: one side cuts off the gas while the other shuts down the transit pipe. This happened many times before; the only difference is that now Moscow and Kyiv are acting with particular abandon, being engaged in what appears to be a "struggle to the death."

[Ron Humphrey]

Strange. Why should one need to "counter" the Russians?
Cooperation should still be in the repertoire of foreign policy.

The Russians/Gazprom do now EXACTLY what a rational economist in charge would do:
1) Don't give your goods away to someone who didn't buy them.
2) Don't sell your goods at a tiny fraction of their worth.

Why indeed? Supply and demand right. And of course it's not unreasonable to expect them to work towards their own interests.

The Eastern European non-NATO nations got natural gas for a half or less of the price charged on the Western Europeans. The Ukraine did not negotiate a new contract that satisfied the Russians in time, so they didn't get any deliveries any more. It needs no evil plan for this; rational economic behavior is enough explanation..

True enough on the first part, not quite so sure about the latter

It's understandable that Russia subsidizes close friends like Belarus, but there's no reason for subsidizing Ukraine, a nation that has a Russian minority that's a regional majority in some places and doesn't want to talk about this.

The(first) article is about a small great power game; such things happen all the time in our world and our governments aren't exactly role models for fairness either..

While supporting your friends while sticking it to those who aren't may very well fall in the categories of both rational and well within the realm of "normal" governmental behaviours; still not certain that the particular means in this case match any rational expectations for ends in that it seems to presume that an awful lot of folks are gonna go along with it simply because they have no other choice.

If one considers Surferbeetle's posts above:

OK, Russia has product and the ability to demand an "acceptable" payment for it. They are concerned that should certain countries through which said product would have to flow have disagreement with errr their particular mode of barter or some actions then said supply might be interrupted thereby by costing them more than they might want to pay, both in loss of monetary income as well as any larger actions which might be required in order to get the product flowing again.

So thus the game begins, what to do what to do????
OH If we get an alternate line through a country with whom we believe we can ensure continuous flow regardless what we choose to do elsewhere than it frees us to use both but helps minimize any sort of possible burden should the on land routes go down for any reason.

Here's the gist of my question to you. This may make great sense to Russia, Germany but exactly why in the world would anyone else there in the region who looks to suffer so great a risk from such things(It's not exactly like Russia has tried hiding their intent) choose to rationally accept or help facilitate such a thing. And in such case exactly how rational is it to think that theres not going to be a ton of issues in doing it.

All part of the game right.

By the way; the U.S.Americans and the British have in my opinion still no right to criticize Russia for its comparably civil great power games. Great powers who waged a war of aggression should better wait for a decade or two till they criticize others' great power games.
The Russians pursue their interests with great rationality and demonstrated the ability to limit their aims to what's easily achievable. That's a great situation for cooperation. Most of their national interests are justifiable - security against invasion in general and advance of a nearby foreign alliance, for example.
Putin knows about the limits of Russia's abilities (unlike the USA and UK) and this limits the problems that he creates.

We can fall back to containment strategies once Russia recovered as state, society and military from the downfall of the 90's and the sins of the 70's.

While much of what you state carrys truth, it might be important to note that we at least try to learn from our mistakes rather than simply trying to find different ways to pull off the same ol tricks.

[Ken White]

...it might be important to note that we at least try to learn from our mistakes rather than simply trying to find different ways to pull off the same ol tricks.

wasn't I informed???

[Ron Humphrey]

wasn't I informed???

Try

Whether or when we succeed may be when someone lets you know

[Ken White]

Try

Whether or when we succeed may be when someone lets you know

listening watch.

[Ken White]

Strange. Why should one need to "counter" the Russians? Cooperation should still be in the repertoire of foreign policy.

By the way; the U.S.Americans and the British have in my opinion still no right to criticize Russia for its comparably civil great power games...The Russians pursue their interests with great rationality and demonstrated the ability to limit their aims to what's easily achievable.

We can fall back to containment strategies once Russia recovered as state, society and military from the downfall of the 90's and the sins of the 70's.

Good points all.