Mikes International - Hollandiai Magyar Szövetség

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VII. évfolyam, 1. szám Mikes International Volume VII., Issue 1. _____________________________________________________________________________________ solvent and arms-hungry debtors. Rosoboronexport is in charge exclusively of the arms exports and, according to some sources, the company has a new portfolio of orders exceeding 17 billion US dollars this year alone. Among African nations, Algeria, Ethiopia and South Africa bought a large number of air defense systems, fighters, small arms and military ships. In Asia, Iran bought military equipment with a total value of US$ 1 billion, while Russia maintains its markets in Malaysia, Indonesia and Vietnam, while China and India are considered as strategic partners (the latter is estimated to have imported Russian weapons and military hardware for about US$ 9 billion since 1998). In respect to Latin America, the US$3 billion worth arms contracts signed by Venezuelan president, Hugo Chavez, represented a real breakthrough. 5 The recent visit of Egypt's president, Hosni Mubarak, in Moscow is an excellent example as well. It was announced that Egypt may buy Mig-AT and Mig-29 fighters during Mubarak's visit. In addition, Egypt intends, after a 20-year pause, to revive its civil nuclear program with Russian assistance; in fact, at the end of the 1970s Egypt had wanted to build eight nuclear thermal power stations to produce electricity, but none was built. When interviewed by the Russian daily Vremya Novosti, Mubarak declared: "The United States has its interests, Russia has its interests, and we have our own." 6 According to the Pakistani newspaper, Dawn, Putin, reflecting a truly marketing mentality, stated that "In terms of its significance and scope, the global weapons market is comparable with such segments of the global economy as energy and food. Competition here is extremely strong." (d) ECONOMIC POLICIES AS INSTRUMENT OF GEOPOLITICS: THE RACE FOR ENERGY SECURITY The most important and most astonishing aspect of Putin's geopolitics is the part played by Russia in the worldwide race for energy security. Some observers rightly consider that investment deals, commercial relations concerning Russia's abundant natural resources, even arms business, are an integral part of Putin's geostrategical diplomacy. To object to this approach represents a truly hypocritical attitude, — do the other great powers not doing exactly the same? 7 There are, of course, some politicians in the West who recognize the fundamental changes in interstate relations, like Senator Richard Lugar, chairman of the US Senate Foreign Relations Committee, who recently declared: "We are used to thinking in terms of conventional warfare between nations, but energy is becoming a weapon of choice for those who possess it." 8 It thus happened that the United States global energy-control strategy became a failure; while Washington is preoccupied with implementing democracy in the Middle East and elsewhere, the United States is quietly being outflanked in the rush to secure and control major energy sources of the Persian Gulf, the Central Asian-Caspian Basin, Africa and beyond. Putin understood before everybody else the necessity to win the race for energy security. At a weekend in the beginning of September, he met with Western academics and journalists in Moscow and clearly explained his position in this respect. 9 His views may be summarized in four points: — Russia will act responsibly in global energy markets, as she always did; in this respect he referred to the Shanghai Cooperation Organization which plays a stabilizing role concerning political and energy issues, in the same vein he also stated, without any hesitation, that 'economic power shifts from the Atlantic to the Pacific,' a fact of historical development; 5 Dawn on Internet edition, October 5, 2006 (Ramazan 12, 1427). 6 Quoted in: Bahrain Tribune, November 1, 2006. 7 In the case, for example, of Ukraine and, at present, Georgia, Russia subsidized the prices at which it sold gas to the former Soviet republics (for Ukraine, instead of a world market price of $250, at $130 per 1,000 cubic meters), but now it decided that she will require in the future some compensatory measure. Thus, in April 2006, Armenia signed a 3-year contract to buy gas for $110 per 1,000 cubic meters, after agreeing to sell part of a gas-fired energy plant and part of a new pipeline from Armenia to Iran to Gazprom. Are the Western powers not behaving in the same way? 8 Asia Times, September 23, 2006. "Lugar underlined the crucial importance of a formal coordination of the US energy diplomacy with China and India at a juncture when 77% of the world's oil supply was controlled by 'foreign governments;' when paid 17% more for its energy in 2005 than a year before; when energy costs accounted for a third of the US trade deficit, and when the US was bracing for a whopping US$320 billion bill for its oil imports in the current year." Ibid. 9 The following account is based on articles and reports published in The Times online, The National Interest online, The Belfast TelegraphDigital, and the Berliner Morgenpost online. _____________________________________________________________________________________ © Copyright Mikes International 2001-2007 50
VII. évfolyam, 1. szám Mikes International Volume VII., Issue 1. _____________________________________________________________________________________ — Russia is determined to tap into its energy potential for its own development; therefore, any oil and gas delivery contracts must be fair, long term, and take into account Moscow's needs and interests, 'Security works both ways,' he stated. — In this connection, Putin rejected European Union demands that Russia sign the new European energy charter which calls for open access by independent producers to the Russian pipeline network. He affirmed that this would not benefit consumers or bring the price of gas down, but would hand over any extra profits to intermediaries and would not offer Russia anything in return; — Finally, Putin insisted that he will not splurge the vast earnings from energy exports by increasing social spending (financing of health or education would not be allowed to outstrip economic development and create inflation). He affirmed that the so-called Stabilization Fund would be used only for long-term projects, like paying off debts, investing in infrastructure or encouraging high technology. He made a special case only for agriculture (still employing some 40 million people), though petrodollars would not be used to subsidize agricultural exports through, for example, introducing a system similar to that in Western Europe. 10 In his drive to make Russia independent from energy and monetary dependence on the United States, he made the ruble convertible and shifts a share of its now considerable dollar reserves away from the US currency and announced that it will use 40 billion US dollars to purchase gold reserves. Recent news about Gazprom spurning its foreign partners are exactly in line with Putin's above stated principles. It must be said as well that Russian dissatisfaction with Gazprom's cooperation with foreign corporations, first of all Americans, is due to the contracts signed during the 1990's under the reign of Jelcin, when Western negotiators more or less imposed their terms to the Russians as the latter's country has been in a weak position on the international scene. In addition, having recourse to their methods well known from other geographical areas, Western majors, after having made heavy investments step-by-step increased the cost of the exploration and development of oil and gas fields; thus, the moment when Russia could have started to cash in on the contracts already signed was pushed further and further away. In the case of Sakhalin, where Royal Dutch Shell and Exxon had an enormous, 20-plus billion contract signed years ago, apparently the budgets have been as well busted wide open, project management skills have been shown to be a sham, exposing the companies to humiliating critics from Russian auditors. The price of a barrel of oil being around 60 dollars, oil nationalism is resurgent, as almost a rerun of the late 1970's. The never-expected surge in oil and gas prices enabled Gazprom to go it alone, — for example, in the case of the huge Shtokman gas field, — without having recourse to the technologies of the Seven Sisters (the largest oil companies in the world), but subcontract to, and pay for, any services Russia needs to smaller, specialized, oil service companies in the Western world. Other than very deepwater drilling, there is very little technical expertise that cannot be outsourced or purchased for a price. If money can buy technology, what can the majors sell to the newcomers? As part of Putin's geopolitical strategy, Russia's state-owned natural gas transport company, Transneft, has consolidated its pipeline control to become the sole exporter of Russian natural gas. This was an important move as Russia has by far the world's largest natural gas reserves and Iran the second-largest. This explains what happened at a June meeting of the Shanghai Security Organization, led by China and Russia, where Iran, hitherto an observer, intended to obtain full membership. Evidently, both China and Russia want to reinforce their links with Iran in the framework of the Eurasian energy cooperation. By the way, the Russian Defense Minister, Sergei Ivanov, announced already on May 26 that his country would supply to Iran Tor-M1 anti-aircraft missiles, reportedly as a prelude to supplying even more sophisticated weapons. In the following I shall shortly retrace Putin's moves in order to reinforce Russia's geostrategical position through its weight in the world's oil and natural gas supplies: 10 In the same meeting, Putin indicated some measures taken, first, to bolster the faltering birthrate and improve life expectancy for men; and, second, to alleviate labor shortages by greater immigration. According to him, Russia was always a multi-ethnic state, able to absorb non-Russians because many of the latter spoke the language. However, he called attention to the fact that there could be hurts between indigenous people and immigrants; therefore, the matter has to be handled carefully. _____________________________________________________________________________________ © Copyright Mikes International 2001-2007 51
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