DISPLAYS OF NEIGHBORLY AFFECTION
Mikhail Zygar

Kommersant, Russia
Jan 17 2007

A year before the 15-year anniversary of the collapse of the Soviet
Union, Russian President Vladimir Putin called the Commonwealth of
Independent States (CIS) "a form of civilized divorce." The past year
has shown to what degree Russia and the former Soviet republics have
gone their separate ways. Four of the republics consider Moscow an
outright enemy, while the rest of them are looking for an escape from
Russia’s watchful eye.

Resistance

Last year was a turning point in relations between Russia and
Ukraine. The year started off with a gas war: on January 1,
2006 Russian gas giant Gazprom shut off gas supplies to Ukrainian
consumers. The dispute was resolved by January 4, and the median price
of gas delivered to Ukraine was fixed at $95. Simultaneously with
the gas war, however, all of the other simmering conflicts between
the two countries flared up, including those concerning the status
of the Black Sea Fleet, lighthouses in the Crimea, and deliveries of
Ukrainian agricultural products. The extraordinary level of tension
coincided with the approach of parliamentary elections in Ukraine,
in which Russia unambiguously supported Viktor Yanukovych’s opposition
Party of Regions and clearly hoped that its sanctions on Ukraine would
break the back of the popularity enjoyed by Ukrainian President Viktor
Yushchenko and his allies.

The victory won by the Party of Regions quickly changed the tone of
relations between Kiev and Moscow. The Kremlin ceased its attacks
on Ukraine, and Prime Minister Yanukovych is now a frequent visitor
to Russia who regularly competes with Ukrainian rada [parliamentary]
speaker Alexander Moroz for the title of "Moscow’s best friend."

Nevertheless, it cannot really be said that Russia has finally gotten
an obedient government in Kiev. The majority of the pro-Russian
campaign slogans spouted by Viktor Yanukovych have remained nothing
more than empty phrases. Mr. Yanukovych recently made a landmark
visit the United States that was calculated to demonstrate that he
is an independent politician, not a puppet of Moscow. Kiev has also
confirmed that it intends to fight for lower gas prices and plans to
cooperate with the other countries of the Commonwealth of Independent
States (CIS) that are dissatisfied with Gazprom’s actions.

In the last year, Moldova set a record for political flexibility. At
the beginning of 2006, relations between Chisinau and Moscow were at
their nadir: among the countries of the Soviet Union, Moldova was
competing with Georgia for the dubious honor of being considered
public enemy number one by Moscow. The low point in the relations
between Moscow and Chisinau was occasioned by the new customs regime
introduced by Moldova and Ukraine for goods crossing the border between
Transdniestr, a breakaway self-proclaimed republic of Moldova, and
Ukraine. In Tiraspol and Moscow, the new regime, which was aimed at
weakening the government of Transdniestr President Igor Smirnov, was
derided as an "economic blockade." The Russian authorities not only
came out in full support of Tiraspol but even slapped sanctions on
Moldova. Russia’s top health authority, Gennady Onishchenko, declared
a ban on the import of Moldovan wine to Russia, and Gazprom announced
that the price paid by Moldova for its gas would be raised from $110
to $160 per thousand cubic meters.

Chisinau’s long-suffering attempts to resolve the conflict have yet
to bear fruit. Not long ago, Moldavian President Vladimir Voronin
was refused an invitation to visit Moscow for several months in a row.

Eventually Mr. Voronin, who managed to endure the wait without giving
in to the temptation of harsh words, was rewarded for his forbearance
with a meeting with Vladimir Putin in August.

However, Mr. Voronin had not yet faced the last test of his patience.

Chisinau uttered barely a murmur as a referendum on independence,
which was basically a popularity contest between Russia and Moldova
in which Moldova was seriously overmatched, was held in Transdniestr
last fall. Afterwards, at the CIS summit in November, the Russian
president finally pronounced forgiveness for Chisinau and decreed
that, thanks to President Voronin’s exemplary behavior, Moldavian
wine would once again be allowed into the Russian market. However,
the rosy mood is likely to be short-lived: Moldova remains a member
of the GUAM (Georgia-Ukraine-Azerbaijan-Moldova) alliance and still
hopes to return Transdniestr to the fold. In addition, Moldova’s
neighbor Romania entered the EU at the beginning of this year, and
similar European protection would give Moldova’s confidence a boost.

A turning point also came last year in the relations between Russia
and Belarus, when Gazprom undertook to resolve its problem with
Belarus once and for all by issuing an ultimatum to Alexander
Lukashenko demanding that Beltransgaz be sold to the Russian gas
giant for a token sum. The Belarussian president, conscious that
he would lose his ace in the hole if he were to give in to Moscow’s
demand, refused. Mr. Lukashenko’s refusal was a sign of fundamentally
changing times in the history of his relationship with Moscow: the
former close ally has become something akin to an enemy of the Kremlin.

However, Russia maintained its loyal relations with President
Lukashenko right up until the Belarussian presidential elections in
March of 2006. While the West pilloried Mr. Lukashenko’s regime for
trampling on democratic freedoms, a contingent of observers from the
CIS, organized by Moscow, was the only group to declare the elections
legitimate. It was not until after the elections were over, when the
image of the "batka" (Mr. Lukashenko’s preferred nickname, which means
"little father") was irretrievably tarnished in the eyes of the West
and Minsk was almost completely isolated, that Moscow launched its
attack. Right before Mr. Lukashenko was sworn in for his third term,
Gazprom announced a new price for its Belarussian client: instead of
$46 per thousand cubic meters of gas, Minsk would now be required to
pay $200.

Faced with being deprived of the preferential price enjoyed by his
country for Russian gas, on which hung the entire "Belarussian economic
miracle," Alexander Lukashenko was initially at a loss. He did not
appear in public for several days after the elections, and it was
whispered in Minsk that the president was seriously ill. However,
Mr. Lukashenko eventually decided to fight back, and he spent the
remainder of the year attempting to show the Kremlin that he can
survive without Russian help. He faced down more ultimatums from
Moscow and flatly refused to transfer control of Belarus’s network of
gas pipelines to Gazprom. In September, in response to the Kremlin’s
decision to completely halt subsidies for the Belarussian economy,
Mr. Lukashenko decided to go for broke and threatened to quit the
loose federation that exists between the two countries if Moscow
raised the price of gas.

Then he began to search for new partners. First he hailed China as a
strategic partner before moving on to attempt to ingratiate himself
with the European Community by claiming to admire Viktor Yushchenko
and expressing a wish to create a unified state with Ukraine. He
also asked Azeri President Ilham Aliev to help Belarus avoid Russia’s
interference by supplying gas and oil to Belarus through Ukraine.

However, Mr. Lukashenko’s search for allies did not relieve Belarus
of the necessity of seeking a compromise with Gazprom. Vladimir Putin
insisted that Belarus would be required to pay the market price for gas
in 2007, but he also mentioned that the price hike could be included
in the price of Beltransgaz, whose value was estimated by the Dutch
bank AVN Amro to be $3.5 billion. In response, Alexander Lukashenko
has already warned Belarussian companies to be prepared to pay $120
per thousand cubic meters for gas.

The scuffle will continue throughout this year, and not only over
gas. It is clear that the plan to create a unified state with Russia
and Ukraine is already dead and buried, and the longevity of the
Lukashenko regime is in question. The most severe trials still lie
ahead for Minsk in the new year.

Thus far, Azerbaijan has always had a reputation as one of Moscow’s
most cautious partners in the CIS. The Azeri government has tried
not to quarrel with Russia, but it has also cultivated the image of
a pro-Western state by joining the GUAM alliance and building the
Baku-Tbilisi-Ceyhan gas pipeline, much to Moscow’s displeasure. The
pipeline was finally opened in 2006, and since then Azerbaijan has
been behaving more independently than ever.

The Baku authorities, despite pressure from Moscow, do not support
Russia’s sanctions against Georgia. At the end of 2006, Gazprom
threatened to raise the price of gas for Azerbaijan from $110 to $230
per thousand cubic meters if Baku did not toe the line on Russia’s
energy policies, but Azerbaijan has blithely ignored Moscow’s bellicose
mood. Ilham Aliyev also snubbed the Kremlin by agreeing to supply
electrical energy to Georgia and Iran for this winter, and then he
charged his government with calculating the outcome of refusing to
transport gas through Russian territory via the Baku-Novorossisk
pipeline. The next logical step on Mr. Aliyev’s current course may
be to bring Azerbaijan into the orbit of NATO.

At the beginning of 2006, Armenia had the reputation of being Russia’s
most important ally in the Southern Caucasus. Nevertheless, Yerevan
did once attempt to demonstrate its readiness to rebel against Moscow’s
will, but the mood did not last long.

Gazprom’s announcement last year that Armenia would be required
to pay the market price for gas outraged Yerevan. The Armenian
authorities maintained that, as a special friend of Moscow, Armenia
should receive a discount. The Kremlin refused, and the Russian
government consequently demanded that Armenia sell a fifth of the
energy conglomerate Razdanskaya TES and the country’s entire gas
transit network to Russia for $140 million: an amount that would have
kept Armenia supplied with gas at the old price for only a year.

Yerevan was nudged towards disobedience by its second major partner,
Tehran. The Iranians financed the Razdanskaya thermoelectric power
plant and the Iran-Armenia gas pipeline, and they were annoyed by
Russia’s acquisitive overtures. Nevertheless, Russia put the screws to
Yerevan until Gazprom was allowed to take control of the energy company
Armrosgazprom and to commit itself to investing around $570 million in
the Armenian economy before 2009. The next acquisition in the works
is a bid by Russian Railways to take over the Armenian rail network
in 2007. However, it is not a foregone conclusion that the Armenian
authorities will again roll over at Moscow’s command. The Armenian
parliament has already proposed to demand payment from Russia for its
airbase in Gyumri, although Armenian President Robert Kocharian so
far has not been willing to risk raising his voice against the Kremlin.

No country had such officially promising relations with Russia in the
last year as Kazakhstan, whose presidents met with each other no fewer
than ten times in 2006. However, last year’s amiable relationship
between Vladimir Putin and Nursultan Nazarbayev pales somewhat in
comparison to their near-unanimity the year before, when they were
united against a common enemy: the so-called "color revolutions"
in Georgia, Ukraine, and Kyrgyzstan. Once that threat was gone, it
turned out that the future paths of Moscow and Astana are destined
to diverge as Kazakhstan, busy massing its economic might, begins to
pursue politics more and more independently of Russia.

In the last year, energy-rich Kazakhstan has been a pilgrimage site for
important Western guests: European energy commissioner Andreas Pibalgs
and American vice president Dick Cheney both visited the country and
urged Nursultan Nazarbayev to bypass Russia by exporting Kazakh oil
via the Baku-Tbilisi-Ceyhan pipeline. Astana eventually agreed.

Another piece of unpleasant news for Moscow was an increase in the
price of Kazakh gas. Following Gazprom’s example, Nursultan Nazarbayev
has begun to sell his gas to Russia at the market price.

Finally, at the end of last year Moscow and Astana clashed over
President Nazarbayev’s expressed desire to reform the CIS. He proposed
to make the organization more effective by cutting back the numbers of
areas in which its members are expected to coordinate their efforts and
by restricting membership in the CIS to countries that are prepared to
adopt the new arrangements. Russia quickly squelched Astana’s reforming
fervor, but the struggle will continue in 2007 as Kazakhstan becomes
increasingly eager to flex its muscles in the post-Soviet world.

With regard to Kyrgyzstan, the most restless country in Central Asia,
this year has been fraught with difficulties for Russia. At the
beginning of 2006, acting on Moscow’s advice, Bishkek demanded an
increase from $3 million to $200 million in the annual rent that the
United States pays for its Ganci airbase. Washington refused, but the
question of payment for the base remained on the negotiating table,
and for several months Bishkek found itself caught between the US,
which demanded a lower price, and Russia, which wanted an end to the
American military presence in Kyrgyzstan. Eventually, at the end of
July, the US and Kyrgyzstan agreed that Washington would pay $150
million in installments for use of the base. Moscow was incensed.

In the fall, the Kremlin gave full rein to its dissatisfaction with
Kyrgyz President Kurmanbek Bakiyev. First, the Russian prosecutor
general’s office demanded that its Kyrgyz colleagues gave an
explanation for London-based billionaire Boris Berezovsky’s visit
to Kyrgyzstan. Then, when Kyrgyzstan faced the prospect of another
revolution, Russian state-owned television channels instituted a
near-blackout of the authorities and gave time instead to opposition
politicians. The situation was eventually tamed, but uncertainty
remains both in Kyrgyz politics and in relations between Bishkek
and Moscow.

In 2005, Uzbekistan performed an epic and limber about-face: after the
Andijan incident in May of that year, Uzbek President Islam Karimov
simultaneously made himself a pariah in the West and was welcomed
into Russia’s embrace. Throughout 2006, Moscow and Tashkent drew
together along a carefully-drawn path: following Moscow’s orders,
Islam Karimov signed a cooperation agreement with Russia that gave
him political security, and he also led his country into the Eurasian
Economic Community and the Collective Security Treaty Organization. In
addition, many Russian bureaucrats and businessmen live in Uzbekistan,
and Tashkent has promised to cut them deals on acquisitions of
Uzbekistan’s unprivatized strategic enterprises.

But not everything has gone off without a hitch. Many profitable
deals involving Russian capital have been stalled by bureaucratic
heel-dragging, meaning that, thanks to petty local bureaucrats,
the Russian re-conquest of Uzbekistan is not yet complete.

Thanks to the peculiar personality of its president, Saparmurat
Niyazov, and his certainty that his enormous gas reserves allow him
to take certain liberties, Turkmenistan has always stood apart from
the other members of the CIS. Last year in Ashgabat Turkmenbashi
carried on negotiations concerning increased gas supplies – in which,
according to the opinions of many experts, he offered the same gas to
different clients. He signed an agreement with Gazprom to sell gas to
Russia for $100 per thousand cubic meters instead of $44, and then
he turned around and concluded a deal with China for a much lower
price, apparently with the express purpose of creating competition
for Russia. Previously, much of Turkmenistan’s gas has been bought
by Iran and Ukraine, but this year the list was expanded to include
Pakistan as well. There is no proof, however, that Turkmenistan’s
gas reserves will be enough to satisfy all comers.

Both Moscow and Beijing conceptualize their contracts with Ashgabat in
political terms: the two countries signed them mainly with the goal
of consolidating their influence in the region. When Turkmenbashi
came up with the plan to create a navy in the Caspian last year, a
whimsy that would be impossible to fulfill without help from abroad,
Russia and China set about preparing for a struggle.

Though that plan was presumably abandoned when Turkmenbashi died
unexpectedly on December 21, 2006, many countries are still hustling
for influence in Turkmenistan. For example, the European Union is
interested in diversifying its sources of energy, which may mean
that its leaders will approach Turkmenistan with a proposal for a
trans-Caspian gas pipeline that would deliver gas to Europe without
passing through Russia.

Last year was an extremely important one for Tajikistan. The small
ex-Soviet republic reelected its president, Emomali Rakhmonov, after
a campaign in which Dushanbe expended enormous amounts of effort on,
among other things, winning Moscow over to its side. But towards the
end of the year, relations between Russian businesses and the Tajik
authorities became increasingly complicated. First, Dushanbe announced
that it would not permit the Russian company RusAl to participate in
the privatization of Tajikistan’s aluminum plant. Then Mr. Rakhmonov
decided that the Ragunskaya hydroelectric power station would be built
without assistance from RusAl. Pakistan is known to have expressed
interest in replacing Russia on the project, and Iran and China are
also paying increased attention to Tajikistan.

Confrontation

In 2006, Georgia set a record for plumbing the depths of post-Soviet
relations with Russia.

The harbinger of bad times to come in Russian-Georgian relations was a
series of explosions on two branches of the gas pipeline from Mozdok
to Tbilisi, as a result of which gas supplies to Georgia and Armenia
were interrupted. Georgian President Mikheil Saakashvili blamed Russia.

Moscow struck back with a ban on the import of Georgian wine and
Borjomi mineral water into Russia, a provocation that the Georgian
authorities were all too happy to use as a pretext to attempt
to force Russia to withdraw its peacekeepers from South Ossetia
and Abkhazia. The Georgian parliament has already adopted several
resolutions declaring the present of the peacekeepers illegal, but
they have yet to be withdrawn.

The real escalation of tensions began in the summer. In the Stavropol
region, the Russian army undertook military exercises called "The
Caucasian Frontier 2006" that were designed to prepare troops to
support the Russian peacekeepers in Abkhazia and South Ossetia.

Meanwhile, in Georgia’s Kodori Gorge, rebel commander Emzar Kvitsiani
staged a revolt against the Georgian authorities. The government in
Tbilisi, convinced that the two events were related, launched a wave
of arrests of opposition members in what the authorities claimed was
an attempt to thwart a supposed coup.

In September Georgia won an important victory when NATO announced
that it would begin an "intensive dialog" with Tbilisi, a step that
is widely understood as a tacit invitation to join the alliance. The
next day Mikheil Saakashvili, in a speech to the United Nations,
accused Russia of the "annexation" and "criminal occupation" of
Abkhazia and South Ossetia. Soon after that another series of arrests
took place in Tbilisi, this time of four Russian intelligence agents
whom the Georgian government accused of espionage and participation
in planning a coup.

It is unclear exactly which one of these three events provoked Moscow’s
ferocious reaction, but in any case the magnitude of the fusillade
launched against Georgia was colossal. Russia severed all air,
automobile, sea, and rail links with its Caucasian neighbor. All postal
communications between the two countries were halted, and monetary
transfers were banned. Even more scandalous was the anti-Georgian
campaign unleashed by Moscow. The Federal Migration Service began
to detain and deport Georgian citizens, in the course of which three
people died in official custody. Tbilisi promptly accused Russia of
genocide and threatened to bring the case before the International
Court of Justice.

Towards the end of the year, Russian and Tbilisi had a chance to
dispel some of the tension when Mikheil Saakashvili fired Irakli
Okruashvili, the chief hawk in his administration. Soon afterwards,
the Russian and Georgian presidents met at the CIS summit in Minsk
for the first time after a long hiatus. However, no breakthroughs
were made, and the fight appears certain to drag on, particularly
since the price of gas for Georgia was raised to $230 per thousand
cubic meters at the beginning of the year.

Latvia has always been able to boast of the dubious distinction of
having terrible relations with Russia, even for a Baltic country,
and last year was no exception. Some notable events included the
decision by Rospotrebnadzor to ban the import of Latvian sprats to
Russia, as well as Russia’s opposition to the candidacy of Latvian
President Vaira Vike-Freiberga for the position of United Nations
general secretary. Ms. Freiberga repaid Moscow for its efforts with a
thinly-veiled barb of her own: before the November NATO summit in Riga,
Ms. Freiberga said that "if Martians attack us, I believe that NATO
will react immediately and will take all necessary steps to organize
our defenses," a comment that clearly refers to Russia. "It seems to
me that Russia and the Russians do not resemble extraterrestrials,"
replied Russian Defense Minister Sergei Lavrov a few days later.

The relationship between Russia and Estonia has also been stagnant at
a low point over the last year. After the Estonian parliament accused
Russia of having territorial aspirations in 2005 and Vladimir Putin
subsequently withdrew his signature from a border treaty, relations
between the two countries could hardly be any worse.

In 2006, a former journalist for Radio Free Europe, Toomas Hendrik
Ilves, became Estonia’s president – and the first leader of the
country’s post-WWII government who does not speak Russian. At the end
of that year Ants Laaneots, the new head of the state committee on
defense, provoked a scandal by saying that Russia is an "unfriendly
country" and Estonia’s "biggest security problem."

Lithuania and Russia also endured fairly stormy relations over
the last year. In May the countries of the Baltics and the Black
Sea region held a summit in Vilnius attended by the leaders of many
countries in Eastern Europe and the CIS who are united in opposition
to Moscow’s heavy hand. It was at this summit that US vice president
Dick Cheney gave the famous speech that was interpreted by Moscow
as a rekindling of the Cold War. Moscow also endured criticism from
Lithuanian President Valdas Adamkus, who called on the countries
of the European Community to create a unified front against the
construction of the Northern European gas pipeline. In response,
Gazprom quickly hiked the gas price for Lithuania from $105 to $135
per thousand cubic meters.

Another casualty of the crisis in relations between Vilnius and
Moscow was the government of Algirdas Brazauskas, whose cabinet
was forced to resign after several ministers from the Labor Party,
headed by Russian-born millionaire Viktor Uspassky, were accused of
having ties to Russian intelligence services.

The biggest flare-up of tension, however, came near the end of last
year. Soon after the Lithuanian authorities sold the Mazeikiu nafta
oil refinery to the Polish company Orlen, despite interest expressed
by Russian companies in buying it first, Russia shut off oil supplies
to the plant, claiming that the Druzhba pipeline (whose name,
ironically enough, means "friendship") was in need of repairs. The
Lithuanian government and the European Commission called the repairs
"politically motivated," and the Lithuanian Ministry of Internal
Affairs even threatened to begin "repairs" on the railroad that
links Russia with its Baltic enclave of Kaliningrad. So once again,
the battle will continue in the new year.