RUSSIA ASSEMBLES ITS ALLIES AND PONDERS THE CONTENT OF ITS "PRIVILEGED INTERESTS"
By Pavel K. Baev

Eurasia Daily Monitor
Sept 9 2008
DC

The Collective Security Treaty Organization (CSTO) has never amounted
to much as an alliance which ties Russia with six post-Soviet
states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan,
and Uzbekistan. Its summit in Moscow last Friday, however, was
perhaps the most important event in the 16 years of existence
of this organization because the Russian leadership needed a much
stronger show of support for its policy than it received a week prior
from the Shanghai Cooperation Organization (Nezavisimaya gazeta,
4 September). Convincing the ambivalent allies to condemn Georgian
"aggression" and praise Russia’s "peace-enforcement" efforts was
easy, but making them recognize the independence of Abkhazia and
South Ossetia proved to be nearly impossible.

Russia’s political needs, however, are not limited to the Caucasus. The
"five-day war" has acquired a massive international resonance
and triggered a sharp crisis of relations with the West. Moscow
had to demonstrate that it is not slipping into self-isolation but
indeed consolidating its "pole" in a new multi-polar world where the
geopolitical power-play typical for the 21st-century is complicated
by the existence of nuclear weapons and enriched by the complex
effects of globalization (Gazeta.ru, 5 September). Conceptualization
of these highly competitive international relations is lagging behind
but Russia needs to establish that it is fundamentally different from
the Cold War model, which it certainly would not be able to sustain
(Ezhednevny zhurnal, 2 September). Hence the pronounced emphasis in
the CSTO deliberations on warning NATO against its eastward expansion
and on strengthening its own military "component" as a contribution
to a new "security architecture" (Kommersant, 6 September).

The logic of arguing against erecting "walls" and drawing "red lines"
but for closing ranks against "others" is never straight, but Moscow’s
diplomacy is energized by a remarkably strong conviction that Russia,
despite making risky steps in a force majeure situation, is basically
on the right course. This righteousness clashes with the dominant
perception in the West that Russia was turning in a wrong direction
and has now gone too far in the Caucasus. Old schemes of "containment"
are gaining new currency in Brussels but Moscow remains undeterred,
and Medvedev announced at the special meeting of the State Council last
weekend that external "political pressure" amounted in real terms to
very little because "they will not be able to do anything." Reinforcing
CSTO "solidarity" with high-level networking that stretches from China
to Venezuela and concentrates particularly on the Southern neighborhood
(leaders of Iran, Jordan, Syria, and Turkey were engaged), Moscow seems
to be bracing itself for the next round of virtual confrontation with
the West.

Two key events that have opened this round are the speech of US
Vice President Dick Cheney at the Ambrosetti Forum in Italy and the
visit to Moscow of the European troika, including French President
Nicolas Sarkozy, EU High Representative for the Common Foreign and
Security Policy Javier Solana, and the European Commission President
Jose Manuel Barroso. Nobody in Moscow is stunned or even impressed
with Cheney’s resounding criticism, but for Putin and Medvedev, it
is imperative to prove him wrong in one central point – that they
cannot have it both ways: "to gather up all the benefits of commerce,
consultation, and global prestige, while engaging in brute force,
threats, or other forms of intimidation against sovereign, democratic
countries." Negotiations with the Europeans are crucial in this respect
since it is in the trade with Europe that Russia gains those enormous
benefits that sustain its outstanding growth.

Sarkozy is deeply irritated by the Russian reinterpretation and abuse
of the six-point ceasefire agreement that he so skillfully put into
effect during the first week of fighting, and Medvedev does not need
to antagonize him further. Withdrawal of Russian troops from Poti
and Zugdidi could be presented as a "good-will" gesture, and some
form of international monitoring over the "security zone" beyond the
borders of Abkhazia and South Ossetia might be offered as another
"concession." That might not be enough to spoil the fragile unity that
has emerged in the deeply shocked EU, so some lucrative deals could
be offered to those states that are perceived as Russia-friendly;
Finland, for instance, might be tempted with a compromise over the
issue of timber export.

Russia’s key potential allies, however, are the big European companies
that have large stakes in this fast-expanding consumer market:
Mercedes ships the S-class models that were planned for the US to
Russia where car sales jumped by 40% in the first half of this year,
Carlsberg expands on its insatiable beer market, and Danone expects
strong demand for quality dairy products. Russia’s investment climate
did suffer from the post-war tensions, and the "correction" on the
stock market hit bottom last Friday at a level some 40% lower than the
peak in May (Vedomosti, 8 September). The government is confident,
however, that the fundamentals remain strong and falling inflation
will calm down the traders. At the same time Moscow also is seeking
measures to reassure European investors. For example, the peaceful
resolution of the noisy conflict in the TNK-BP is meant to be a
signal to reassure those investors (RBC Daily, 5 September). Now a
new compromise on the Kovykta project could be hammered out, while
new lucrative deals on developing the Caspian oil- and gas-fields in
partnership with Gazprom may be offered to Italian ENI or French Total.

The guns of August so far have not caused any expansion of state
interference in the economy or redistribution of resources towards
national defense and military industry; to the contrary, both
Medvedev and Putin are pledging to maintain the business-friendly
course of "innovation" and insist that the ambitious social
programs would not suffer from any Soviet-style "mobilization"
(Gazeta.ru, 5 September). Indeed, every step in liberalizing
domestic economic policy delivers a blow to Western readiness to
punish Russia for its misbehavior. Attention-seeking politicians in
Brussels might declare the end of "business-as-usual," but the EU
balancing on the brink of a potentially deep recession in fact needs
"business-as-never-before." The newly assertive Russia is firmly
set to defend its "privileged interests," but Medvedev’s interesting
choice of adjective might indicate that he is ready to move on from
the pointless arguments about "territorial integrity."