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RFE/RL Russian Political Weekly - 05/12/2006

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  • RFE/RL Russian Political Weekly - 05/12/2006

    RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
    _________________________________________ ____________________
    RFE/RL Russian Political Weekly
    Vol. 6, No. 10, 12 May 2006

    A Weekly Review of News and Analysis of Russian Domestic Politics

    **************************************** ********************
    HEADLINES

    * PLANE CRASH REVEALS CRACKS IN MOSCOW-YEREVAN TIES
    * EU MAINTAINS CODEPENDENT ENERGY RELATIONSHIP WITH RUSSIA
    * THE RECURRING FEAR OF RUSSIAN GAS DEPENDENCY
    * INTERVIEW: WILL RUSSIA'S OIL WINDFALL GO TO MILITARY?
    **************************************** ********************

    PLANE CRASH REVEALS CRACKS IN MOSCOW-YEREVAN TIES. The fatal crash of
    an Armenian airliner near the Russian resort town of Sochi on May 3
    has revealed tensions in the usually warm relations between Yerevan
    and Moscow.
    Many in Armenia believe the crash -- the worst in
    Armenia's history, with 113 deaths -- was the result of poor
    recommendations by Russian air-traffic controllers. But such claims
    may only be the cover for deeper concerns about the impending advance
    of the Russian gas giant Gazprom and growing racism in Russia
    directed in part at natives of the Caucasus.
    Hmayak Hovhanisian, the chairman of the Armenian Association
    of Political Scientists, says it is too early to tell if the
    controversy will have a lasting impact on relations between the two
    countries.
    "It depends on how the investigation proceeds," he notes. "If
    the black boxes aren't recovered and the real causes of the
    disaster aren't explained in a way that is clear for everyone, it
    will have a negative effect on Russian-Armenian relations."
    Recovery work is continuing following the May 3 crash of the
    Armenian Airbus A320. So far divers have located fewer than half of
    the 113 victims, the vast majority of whom were Armenians.
    The concurrent investigation into the crash is ongoing as
    well, under the joint supervision of Russian Transport Minister Igor
    Levitin and Armenian Defense Minister Serzh Sarkisian.
    But so far few clues have been revealed about the probable
    cause of the crash. Without the black-box flight recorders,
    investigators lack critical information about the flight crew's
    actions in the moments before the plane nose-dived into the Black Sea
    off the Sochi coast.
    The lack of information has angered Armenians, who believe
    the pilot may have crashed after being told by Russian air-traffic
    controllers to resume preparation for landing despite poor weather
    conditions. Georgian air officials had earlier recommended the plane
    turn back.
    While observers like Hovhanisian note that the responsibility
    for final decisions ultimately rests with the pilot, and not the
    air-traffic controllers, many Armenians -- including those in the
    political opposition -- are concerned by Russia's role in the
    crash. They have also expressed doubt that an investigation led in
    part by Russia will be fully honest.
    Russia and Armenia have long enjoyed strong strategic ties.
    Russia maintains a military base on Armenian soil, and the two
    countries are partner to a landmark treaty in which Moscow has
    committed itself to defend Armenia militarily in the event it is
    attacked from outside -- an apparent reference to its historic enemy,
    Turkey.
    It has also helped to prevent further outbreaks of violence
    between Armenia and Azerbaijan over the Nagorno-Karabakh enclave.
    Armenia has also remained a loyal member of both the
    Commonwealth of Independent States (CIS) and the CIS Collective
    Security Treaty. This is something that sets Armenia apart from its
    disgruntled South Caucasus neighbor Georgia, which has tense
    relations with Moscow and has threatened to withdraw from the CIS.
    But many Armenians remain resentful of Russia. This is due in
    part to what is viewed as mounting racism in Russia. Skinheads were
    believed to be behind the killing in April of a 17-year-old Armenian
    in Moscow.
    Many Armenians also accuse Russia of seeking to monopolize
    the country's energy industry. Eduard Aghajanov, an independent
    political analyst in Yerevan, says Russia is not treating Armenia
    like an equal partner.
    "Many already don't believe that [Russia] is a ally,
    because the way Russia deals with Armenia in its foreign policy is
    not the way a strategic partner would behave," Aghajanov says.
    "It's the way it would treat a vassal."
    Armenia recently agreed to hand over a portion of its state
    energy assets to Russia's state-run gas giant Gazprom, in order
    to prevent a threat to double gas prices. Gazprom has raised
    natural-gas prices for nearly all of its CIS clients this year, but
    Armenia, due to its compliance, saw a hike of just 10 percent.
    Gazprom is now set to assume control of a major Armenian
    power plant, and may also obtain a controlling share of a planned
    Armenian-Iranian gas pipeline. The deal is expected to give Moscow
    near-total control over the Armenian energy sector.
    Observers in Russia are more sanguine about the deal. Boris
    Makarenko, deputy director of the Moscow-based Center for Political
    Technologies, says Gazprom's policy in Armenia is no different
    than those in other countries.
    Makarenko says anti-Russian sentiment has recently become
    more "fashionable" in Yerevan. But on the whole, he adds, relations
    between Moscow and Yerevan can be held up as an ideal in the CIS
    neighborhood. "Speaking objectively, Russia has fewer problems in
    relations with Armenia than with any other post-Soviet state," he
    says. (Valentinas Mite)

    EU MAINTAINS CODEPENDENT ENERGY RELATIONSHIP WITH RUSSIA. The
    European Union's apparent dependence on Russian oil and gas
    imports has been the source of much debate in recent months, as
    Moscow has shown its willingness to wield its influence as an energy
    supplier for political gain. But at a high-level conference on energy
    security held in Brussels on May 10, senior European officials noted
    that Russia will need massive injections of foreign capital to retain
    its dominant position as a supplier to Europe's energy market.
    BRUSSELS, May 11, 2006 (RFE/RL) -- It is clear that when it
    comes to the energy trade, Russia and the EU are mutually dependent
    on each other.
    The EU looks to Russia for 30 percent of its oil imports and
    about half of its imported gas. Russia's economy, meanwhile, is
    fueled to a great extent by the revenue it generates by exporting
    energy to Europe's massive energy market.
    Likewise, while recent threats by Russia to look east for
    future gas and oil exports have made EU legislators nervous, some
    attending yesterday's conference on energy security noted that
    Russia will require foreign investment to keep up with rising EU
    energy needs.
    Among those in attendance was former Russian Prime Minister
    Mikhail Kasyanov, who said Russia must take "urgent action" to avoid
    a sharp decline in its output of natural gas. However, he said,
    Russia's recent efforts to establish greater central control over
    "strategic" assets have damaged the country's investment climate.
    "That creates a big problem for [the] overall investment
    process, [for] those investments which [are] badly needed in Russia
    right now, so [as to] raise the production of energy to satisfy our
    internal and general European demand," Kasyanov said. "[The] lack of
    different foreign investment is much more risky for Russia since it
    badly needs capital to be invested in the national energy sector."
    Senior European Commission official Christian Cleutinx
    estimated that by 2020, the EU's energy needs will rise by 200
    million metric tons of gas per year. But he says that according to
    Russia's most recent energy strategy, the country envisions
    expanding its total level of gas exports by just 50 million metric
    tons by that time.
    Cleutinx says that amount would meet only a quarter of
    Europe's future needs, not taking into account Russia's other
    export markets.
    "So, you see immediately the big difference there is between
    the exports that Russia on the basis of the current plan can deliver
    into the world markets -- because we're not talking about 50
    [million] tonnes of oil equivalent [going only] to Europe, it's
    to the CIS, to Turkey, it be might the United States, and we need an
    increase of 200 [million tonnes]," Cleutinx said.
    Cleutinx estimates that Russia would need $200 billion to
    meet its export targets. Overall, the European Commission says Russia
    would need $735 billion to modernize its energy sector by 2020. (Ahto
    Lobjakas)

    THE RECURRING FEAR OF RUSSIAN GAS DEPENDENCY. U.S. Vice President
    Dick Cheney's recent criticism of Russia for using natural gas as
    a political weapon is by no means new. Similar charges leveled 24
    years ago during the Cold War resulted in an embargo on the sale of
    gas-extracting equipment to the Soviet Union and to the U.S. Central
    Intelligence Agency's (CIA) purported destruction of a Soviet gas
    pipeline.
    In 1982, as the Soviet Union was beginning construction of a
    $22 billion, 4,650-kilometer gas pipeline from Urengoi in northwest
    Siberia to Uzhhorod in Ukraine with the intention of supplying
    Western Europe, the CIA issued a National Intelligence Estimate (NIE)
    titled "The Soviet Gas Pipeline in Perspective."
    The NIE, regarded as the definitive product of the U.S.
    intelligence community, reached several conclusions, among them that
    the Soviet Union "calculates that the increased future dependence of
    the West Europeans on Soviet gas deliveries will make them more
    vulnerable to Soviet coercion and will become a permanent factor in
    their decision making on East-West issues."
    In addition, according to the NIE, the Soviets "have used the
    pipeline issue to create and exploit divisions between Western Europe
    and the United States. In the past, the Soviets have used West
    European interest in expanding East-West commerce to undercut U.S.
    sanctions, and they believe successful pipeline deals will reduce
    European willingness to support future U.S. economic actions against
    the USSR."
    The Urengoi gas field, located in northwest Siberia's
    Yamalo-Nenets Autonomous Okrug, was one of the largest Soviet gas
    fields. The main customers for Urengoi gas were West Germany, France,
    and Italy.
    The initial volume of the pipeline was to be 40 billion cubic
    meters per year, which would mean that Soviet gas could account for
    30 percent of German and French gas imports, and 40 percent of
    Italy's. Such figures were approaching a dependency level too
    great for the White House to accept.
    Washington apparently dealt with these concerns in a direct
    manner initially. In January 1982, U.S. President Ronald Reagan
    purportedly approved a CIA plan to sabotage a second, unidentified
    gas pipeline in Siberia by turning the Soviet Union's desire for
    Western technology against it. The operation was first disclosed in
    the memoirs of Thomas C. Reed, a former Air Force secretary who was
    serving in the National Security Council at the time. In "At the
    Abyss: An Insider's History of the Cold War," Reed wrote:
    "In order to disrupt the Soviet gas supply, its hard-currency
    earnings from the West, and the internal Russian economy, the
    pipeline software that was to run the pumps, turbines, and valves was
    programmed to go haywire, after a decent interval, to reset pump
    speeds and valve settings to produce pressures far beyond those
    acceptable to pipeline joints and welds.
    "The result was the most monumental non-nuclear explosion and
    fire ever seen from space," he recalled, adding that U.S. satellites
    picked up the explosion. Reed said in an interview that the blast
    occurred in the summer of 1982.
    The sabotage operation, however, did not halt the
    construction of the Urengoi pipeline. The CIA was forced to revise
    its tactics.
    Responding to the Soviet leadership's support for the
    1981 crackdown on Poland's Solidarity movement, Reagan announced
    a program of sanctions on companies selling gas-drilling equipment
    and turbines for gas-compressor stations to the Soviet Union while
    urging European states not to buy Soviet gas.
    Officially it was declared that this was in retaliation for
    Soviet support for martial law in Poland. But it is also plausible
    that the strategy was meant to ease U.S. concerns about the
    construction of the Urengoi-Uzhhorod gas pipeline.
    The embargo, however, was easier to declare than to
    implement.
    Norwegian scholar Ole Gunnar Austvik wrote in an article
    titled "The U.S. Embargo of Soviet Gas in 1982" that a delegation
    under the auspices of the U.S. State Department sought to induce the
    Western Europeans not to buy Soviet gas and to choose alternative
    sources of energy.
    "The arguments in favor of such diversion were close to our
    notion of economic warfare, even though the whole range of arguments
    was actually used. An economically strong Soviet Union is more
    dangerous than a weak one," Austvik wrote. "The U.S. compensation
    package contained two main components; American coal and Norwegian
    gas were presented as alternatives to Soviet gas."
    Neither alternative, however, existed. The United States did
    not produce enough coal to meet Europe's needs and even if it
    did, the logistics of transporting it there were overwhelming.
    Furthermore, at the time Norway's gas production was not
    sufficient to replace Soviet gas. By November 1982, after the United
    States increased its grain sales to the USSR, the gas sanctions were
    terminated.
    Originally, the Urengoi pipeline was projected to go through
    East Germany, but the West German government protested and it was
    rerouted through Soviet Ukraine. The West Germans were concerned that
    in the event of a crisis, the East Germans could turn off the valves
    and stop supplies. Soviet Ukraine was seen as the more reliable
    transit route.
    The 1982 NIE states that the West Europeans' prime energy
    goal at the time was to "reduce their dependence on OPEC," at the
    time a significant Western concern arising from the Organization of
    Petroleum Exporting Countries (OPEC) oil boycott of 1973. The oil
    crisis that ensued from that boycott may have fueled U.S. concerns
    regarding Soviet gas, lest the Soviet Union someday copy OPEC's
    tactic.
    In November 1983, the CIA issued another NIE, titled "Soviet
    Energy Prospects Into the 1990s," which, in many ways, foresaw the
    current predicament.
    "If Moscow lands contracts to supply even half of the West
    European gas-demand gap now foreseen for the 1990s, an additional
    pipeline...would be required...and dependence on Soviet gas could
    approach 50 percent of gas consumption for major West European
    countries, far in excess of the 30 percent share that we and some
    West European governments regard as a critical threshold for
    political risk" the NIE stated. (Roman Kupchinsky)

    INTERVIEW: WILL RUSSIA'S OIL WINDFALL GO TO MILITARY? WASHINGTON
    May 11, 2006 (RFE/RL) -- While Russian President Vladimir Putin
    focused on domestic political issues in his annual
    state-of-the-nation address to the Federal Assembly on May 10, he did
    mention making new purchases of nuclear submarines and boosting the
    "procurement of modern aircraft, submarines, and strategic missiles
    for the armed forces."
    RFE/RL correspondent Julie A. Corwin asked Brian D. Taylor,
    an expert on the Russian military at Syracuse University's
    Maxwell School and author of "Politics and the Russian Army:
    Civil-Military Relations, 1689-2000," to put Putin's remarks in
    context.
    RFE/RL: In his annual address, Putin talked about
    commissioning two strategic nuclear submarines among other military
    expenditures. Is this how Russia is going to spend its new oil
    wealth? Does this represent a real commitment to higher military
    spending or is this a just bone thrown to the military?
    Brian Taylor: He obviously [has been] flush with oil and gas
    money over the last few years, and it has shown up in defense
    expenditures really starting around 2002 or so. But at the same time
    he himself notes in the annual address this year that they
    shouldn't expect to match the U.S. or even countries like France
    and Britain in terms of how much they're outlaying on defense.
    There is some need for certain investments in strategic
    nuclear forces given that there was very little investment in those
    in the 1990s, but it doesn't mean that we are looking at a new
    nuclear arms race. You know, I think it's probably real that they
    are going to be spending more money in this area but it's nothing
    that from the U.S. perspective that should be seen as alarming or
    worrying.
    RFE/RL: So the procurement budget has already been going up?
    Taylor: The procurement budget has been going up -- that is
    certainly true, but we shouldn't overestimate the extent to which
    things have really sort of taken off. And we also shouldn't
    overestimate what impact that will have on military performance,
    because military performance depends on a lot of other things other
    than weapons systems.
    And he [Putin] didn't have anything really to say -- or
    he didn't have much to say in the speech about that. He talked a
    bit about some of the changes in personnel policy in short term of
    the draft and getting more NCOs [noncommissioned officers] and
    sergeants and that sort of thing.
    But that's been something they have been talking about
    for quite some time, too, and it doesn't seem to have had a big
    impact in terms of reducing certain dysfunctional elements of serving
    in the Russian military, like hazing and death from suicide and death
    from accidents and the fact that most people don't want to send
    their kids to serve in the military.
    RFE/RL: Why not use some of the oil money to recruit soldiers
    and make the army fully professional? Perhaps with the right
    recruitment bonus, young men wouldn't try so hard to avoid the
    draft?
    Taylor: I think people would come for certain amounts of
    money. I mean there are people particularly in rural areas and
    certain working-class families who see it as a viable option. So they
    have increased the so-called professional component of their armed
    forces over time and they're reducing -- in fact they've
    eliminated in terms of the armed forces sending draftees to Chechnya.
    And there is this sort of long-term trajectory towards creating more
    professional forces.
    But again, this is old rhetoric. I mean if you go back to
    [former President Boris] Yeltsin and when he ran for president the
    second time in 1996, he was going to end the draft and create a
    professional military.
    RFE/RL: So what's the U.S. reaction to this speech likely
    to be?
    Taylor: I don't really think the U.S. will respond in any
    sort of serious way, rhetorical or otherwise, and I really don't
    think the U.S. should or needs to. If you just look at the trajectory
    in terms of nuclear forces, which is the one area in which he made
    some specific commitments today, the U.S. is well out ahead of Russia
    in terms of developing new systems -- in deploying new systems, and
    the number of warheads available.
    And really we're in a situation in which the U.S.
    probably has a much larger nuclear arsenal than it needs and the
    trends are sort of down, over time, and somewhat consistent with
    certain arms-control treaties, although those don't have a lot of
    teeth. And Russia is going to continue over time to let the size of
    its nuclear force reduce, too, as older systems go offline.
    RFE/RL: So in conclusion it sounds like you don't think
    the Russian military will be the recipient of the "oil dividend"?
    Taylor: They're going to be one of the beneficiaries of
    an oil-and-gas dividend, but there are other things that Putin wants
    to spend the money on, too, He's got his whole national projects
    in terms of education, agriculture, housing, and those sorts of
    things. And in terms of delivering voters to his anointed successor
    in 2008, if that's the plan, spending the money on the national
    projects seems like a better way to try and attract voters, assuming
    that elections matter, than spending it on nuclear submarines.

    ************************************* ********************
    Copyright (c) 2006. RFE/RL, Inc. All rights reserved.

    The "RFE/RL Russian Political Weekly" is prepared
    on the basis of a variety of sources. It is distributed every
    Wednesday.

    Direct comments to [email protected].
    For information on reprints, see:
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    Back issues are online at http://www.rferl.org/reports/rpw/

    From: Emil Lazarian | Ararat NewsPress
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