Daily Archives: November 6, 2006

The Georgia Test Case

Despite hypocritically insisting that the U.S. and Europe not impose sanctions on Russian allies like Iran and Hamas and Hezebollah, Russia has no hesitation in imposing sanctions on its enemies, like Georgia. The Moscow Times reports below that state-controlled Gazprom plans to double the rate Georgia pays for heating gas, just as winter begins, a tactic Russia has already tried to bludgeon Ukraine.

The Russian people themselves have already been tested on Georgia, and failed miserably. This so-called “friend” of theirs was immediately sold down the river as soon as it dared to show any signs of independence from the Kremlin’s jackboot, including even the use of pogroms. When push came to shove, the Russian stabbed their so-called friend in the back, or stood silently by allowing others to do so. How these same Russians can complain about American influence in the world is simply bizarre.

So now it’s the West’s turn. The amount of money it will take to make up the difference between what Georgia used to pay for gas and what Gazprom now expects it to pay is pocket change for the Europe and America. We can either take that change out of our pocket and give it to Georgia, and show we’ve learned something from our experience with the Soviet Union, or we can do the same thing we did in the past as the neo-Soviet Union rises, sit slack-jawed watching the disaster unfold until suddenly there are missiles in Venezuela. The choice is ours.

A source in the article is quoted as stating: “Russia is correct when it says that if Georgia and Ukraine want a Western orientation, they should pay market prices.” Absolutely true. But it’s also true that if Russia wants a Soviet orientation, it also must pay the price. The U.S. and Europe can make it far hotter it Russia’s kitchen than Russia can make it cold in Georgia’s, as Europe has recently shown by starting to ban Russian travel (see post above). Russia’s economy is a feeble, hollow sham that simply cannot stand up to Western pressure. It can’t even get soccer players to their matches. Russia wants cold war II? Bring it.

Gazprom said Thursday that it would more than double its gas price to Georgia as talks between the two sides’ foreign ministers failed to resolve the simmering monthlong dispute. “I cannot call the talks a breakthrough,” Georgian Foreign Minister Gela Bezhuashvili told reporters after a meeting in Moscow with Foreign Minister Sergei Lavrov. The talks were the first at a senior level since relations between the two countries broke down in late September. The gas price hike would severely affect Georgia, which is already struggling under a full travel and trade blockade imposed after Tbilisi expelled four Russian military officers it accused of spying.

If Gazprom gets its way, Georgia will start paying $230 per 1,000 cubic meters starting in January — more than twice the $110 it currently pays. If agreed, the price would be the highest for any former Soviet republic so far. “Russia must show us the formula by which they got this price. We must know where this price came from and why it is the same as Western Europe’s,” Bezhuashvili said, Interfax reported. “We have suggested a price of $230, but this is not the end of talks,” a Gazprom spokesman said. “The negotiation process is continuing.”

A spokeswoman for the Georgian Energy Ministry said it had received no official notification from Gazprom. Ina Mdivana, spokeswoman for Georgian gas importer Energy Invest, said the company had also received no notice, and that negotiations were due to wrap up in December.Gazprom’s announcement raised the specter of last winter’s dispute with Ukraine, when Gazprom briefly shut the flow of gas to Ukraine in an effort to force the country into accepting the $230 price tag one year after the election of pro-Western President Viktor Yushchenko. Bezhuashvili said he had gotten “an assurance from the Russian side that gas and electricity will not be cut off. “I do hope there is less politics in these gas prices than commercial logic,” he added.

Gazprom has long been seeking to end subsidies to its former Soviet neighbors, but often seizes upon political disputes to push the deals through, analysts said. “The decision itself is commercial,” said Tanya Costello, an analyst with Eurasia Group. “The pace at which CIS countries have been pushed to paying higher prices has depended on the political relationship with Moscow.” Yet she added that “the attention Gazprom pays to Georgia doesn’t fit with the size of the Georgian market, so that does suggest political motivation.” Georgia represents one of Gazprom’s smallest markets, importing just 1.3 billion cubic meters of gas per year. Germany and Ukraine take in over 37 bcm each. Relations between Moscow and Tbilisi began their downward spiral with the January 2004 election of President Mikheil Saakashvili, a decidedly pro-Western politician who has sought to extract his country from Russia’s grip and hopes to have it join NATO by 2008. The new price will be “the price we pay for our choice,” Bezhuashvili said.

Gazprom was reported last month by Georgian officials to have asked for from $170 to $250 for 2007. If agreed, the $230 price would put Georgia on a par with Gazprom’s customers in Europe, who pay from $230 to $250 for their gas. Countries with more pro-Moscow policies pay significantly less. Belarus, for example, pays just $47. Standard & Poor’s forecast that effects of the price increase would be “modest,” shaving 1.1 percentage point off Georgian gross domestic product in 2007. Georgia had “expected such a hike and taken precautionary measures to ensure alternative sources of gas are available,” the rating agency said in a research note.

Bezhuashvili said Tbilisi was in talks with Azerbaijan, Turkey and Iran on replacing its Russian supply. Gazprom provides the bulk of Georgia’s gas, supplying 1.3 bcm per year to the country, which has an annual demand from 1.5 and 1.8 bcm. Georgia first began looking abroad last January, after explosions at a pipeline in North Ossetia disrupted gas shipments and highlighted the country’s reliance on Russian gas. Georgian officials accused Russia of orchestrating the explosions, a charge rejected by Moscow. During that dispute, Georgia increased imports from Azerbaijan and took emergency supplies from Iran.

“Russia’s tendency to use energy sources as a political instrument against Georgia meets strong opposition … thus delivery of gas to Georgia by Gazprom becomes less attractive,” the Georgian Energy Ministry said in an annual report published in May. Georgia currently gets 400 million cubic meters of gas per day from Azerbaijan. That amount is due to jump next year by about 300 million cubic meters next year, with the completion of the South Caucasus Pipeline from Baku to Erzerum in eastern Turkey, which passes through Georgia. The current standoff — which has seen thousands of Georgians deported from Moscow, and rail, air and postal links cut — has provoked international rebuke.

Yet analysts warned that the outcry seen during Ukraine’s pricing dispute, which helped bring a swift resolution to the crisis, was unlikely to be repeated in the case of Georgia. “Europe will not be affected, so this won’t raise the same questions regarding Russia’s reliability as a gas supplier,” said Costello of Eurasia Group. Ukraine acts as a major transit route to Europe, while pipelines through Georgia carry Russian gas to Armenia. Ukraine refused to cede to Gazprom’s demands in late 2005 that it pay $230 per 1,000 cubic meters, a significant increase from the $50 it had been paying. The two sides eventually settled on a price of $95, but not until after Ukraine saw its supplies briefly cut in the middle of winter. Bezhuashvili said that while talks failed to defuse the crisis, the two sides had agreed to “calm down the belligerent rhetoric.”
“The two countries are ready to sit down and engage in a dialogue. That is good news,” he said.

The Kremlin “has made it pretty clear that Gazprom will eventually be getting all its customers to pay market price,” said Chris Weafer, chief strategist at Alfa Bank. “But ultimately, the pace at which they’re allowed to do that is a political decision.” James Nixey, an analyst on Russia and the CIS at London-based think tank Chatham House, agreed. “Russia is correct when it says that if Georgia and Ukraine want a Western orientation, they should pay market prices,” Nixey said. “But even if there is a good economic position behind it, the key factor is always political.”

Yet Gazprom is also facing price hikes of its own. Both Uzbekistan and Turkmenistan have recently said they would raise their gas export prices to Russia from $55 to $100 starting Jan. 1. Despite its standing as the world’s largest gas company, Gazprom has to import gas from neighboring republics to meet its supply commitments as development of new fields lags. Analysts warned that tough negotiations lay ahead. “I think this will lead to cutoffs because Georgia is not ready to pay so much,” said Vladimir Milov, head of the Institute of Energy Policy.

“The prices are being determined by the Kremlin, they can’t be market prices in principle,” he said. “That the Europeans agree to pay such high prices is their choice — they have an alternative.”

Hating the America-Haters is Only Fair, Isn’t It?

Sean’s Russia blog is showing remarkably low standards for excellence in journalism these days. First it praised the lunatic ramblings of ex-eXile sociopath Matt Taibbi in Rolling Stone (of all places) and now it lauds the crazed drivel spewed forth by Russophile nutjob Boris Kagarlitsky (pictured, left — quite a beard, isn’t it?) in the Moscow Times. It’s a real indication of the depleted resources of the rabid Anti-American crowd that this is the best they can come up with for heros. Who’s next? Vladimir Zhirinovksy?

Long ago, La Russophobe exposed Kagarlitsky for the crazed Russian nationalist that he is. Sean says that Comrade Boris is the director of the “Institute for Globalization Studies” but he doesn’t care to tell his readers what that is. And most of them couldn’t find out by following his link, because it’s in Russian, but there is an English variant he doesn’t give in case you are interested. If you check you his resume at IGS, you find out Kagarlitsky brags about lecturing on “modern Marxism” in the late 1990s and about being a regular contributor to the crazed left-wing partisan screed The Nation. Despite this, IGO describes itself as “a Moscow-based non-profit, non-governmental and non-partisan agency with the main purposes of applied scholarly research, public policy advocacy, and political project-building.” The Russian idea of “non-partisan” is remarkably flexible, isn’t it? He’s so famous that he doesn’t have a page in Wikipedia, not even a stub. But he hates America, freedom, democracy and capitalism (IGO’s mission statement includes seeking to undo “ruinous neo-liberal economic policies” that they say destroyed Russia in the 1990s — no mention of Russians electing Politburo members to the first Duma), and apparently that’s good enough for Sean.

Here’s what Comrade Boris has to say about Ukraine: “Without Russia, Ukrainian industry makes no sense, while for the Russian raw materials economy Ukraine represents not only a transit corridor but also an important staging area — an advance outpost on the road to Europe.” It’s a broad-minded, friendly view, isn’t it? Clearly, a model for maniacal American imperialists to emulate (let’s try to imagine George Bush referring to Mexico as America’s “staging area”). Speaking of America, here’s what he has to say about it: “Comparing Chernobyl with [Hurricane Katrina] makes one think that the modern American society copies the negative traits of the late Soviet system, ignoring, however, its positive aspects. The Soviet government was lying constantly, instinctively, even when the lie was absolutely useless or harmful. Well, at least it could provide order and food. American government of today is also lying permanently, but it can’t and doesn’t even try to provide security for the citizens.” Yup, America, the world’s most powerful country, is not even close to being as good as the Soviet Union which no longer exists because it destroyed itself. Of course, it’s not quite fair, because after all the USSR murdered millions of its citizens, so it was not burdened by the need to provide “order and food” for them. But after all, since America is such an evil country, it’s clearly not entitled to fairness. Kagarlitsky thinks (this word must be used quite loosely where Kagarlitsky is concerned) Stalin should have been “understood and forgiven” rather than condemned. In other words, Kagarlitsky is a neo-Soviet madman.

But let’s turn to what he said that so impressed Sean’s Russia blog. Sean, you may remember, has recently attracted Russophile maniac Mike Averko as a commenter after he declared that America is not a democracy and is a threat to Russian security. So it’s perhaps not surprising that he and Kagarlitsky would find much to sympathize about. And the thesis that attracts Sean’s attention is that Vladimir Putin’s government is too corporatist and capitalist, not nearly socialist and/or communist enough, in fact in many ways “no different that [sic] in Germany or America.” Amazing, isn’t it, that such a profound insight could only find outlet in a vehicle as modest as the Moscow Times? How long can it be before this man gets his just desserts, a Nobel Prize in economics?

Kagarlitsky’s grand conclusion is that, surprise surprise, capitalism is fundamentally unstable and bound to break apart (now where have we heard that before?) and that when it does “it is out of these potentially irreparable cracks that Kagarlitsky hopes a popular opposition movement will arise.” Boy, what a thing to contemplate. A whole hoard of brand spanking new, fresh-faced communists and Marxists “crawling out of the cracks” and infiltrating the scheming bourgeouis hierarchy, building a socialist utopia and burying the United States.

Do you have an odd sense of deja vu?

To his credit, Sean admits that “One many [sic] disagree with Kagarlitsky’s splitting of economics and politics into two distinct spheres as if one can be held without the other.
Sean’s suggestion? He says: “I would purpose [sic] that instead of looking at them as in a static equilibrium (the political = the economic) or even a static hierarchy (the political over the economic or vice versa), it might be more fruitful to think of them as in a shifting relationship where in some instances, the economic trumps the political while in others the political subordinates the economic.”

Do you have an odd sense of deja vu? Doesn’t that sound like how a certain someone used to talk, you know that guy whose statue used to be all round Russia pointing at things, a bald-headed short little guy, with a short little name? He babbled a whole bunch of incomprehensible things, confused people, took power, turned power over to one of history’s greatest mass murders and then . . . oh yeah, they’ve got him stuffed like a goose on Red Square.

But hey. It was fun the first time, so why not go for a second spin?

Uh-Oh: Here Comes Neo-Soviet "Education"

ITAR-TASS reports that Russians are proud of Soviet education and rushing to return to its brilliant successes:

The state has addressed the needs of education; despite serious problems one feels headway has been made, Russia’s First Vice-premier Dmitry Medvedev declared at a victory ceremony for winners in education activities in 2006. The tasks selected in the framework of the national project enable to attend to the education reform in practical terms, taking over prestigious, verified experience the Soviet education system was proud of, Medvedev said. For the first time over the past decades the state’s attention to problems of education is backed by financial resources, he noted. In 2007, the expenditures on education will grow considerably, he said. Financing the system of education is aimed at settlement of the current tasks and improving the quality of education and better adapting it to the realities of the 21st century. Support to teachers for students’ guidance off school, innovation development of schools and support to innovator teachers are a priority of the national project, Medvedev said. Russia is interested in innovation development, and it is vitally important to give an impetus to the system of education in order to go ahead, Medvedev told the victory ceremony on Friday.

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The Mother of All Arms Sellers

FrontpageMag reports on Russia’s increaslingly malignant role as supplier of arms to rogue states. The more you believe in the notion of Russian economic revival, the more gratuitious and evil these acts become. The less you believe it, the more these acts confirm Russia’s fiscal desperation.

Mother Russia is also turning out to be the mother of all arms sellers.

The former Cold War superpower, where crusading journalists and anti-corruption bankers are regularly bumped off gangland style and the rule of law has become a joke, has just been designated the leading exporter of arms in 2005 to developing countries by a report issued by the Congressional Research Service, a branch of the US Congress. According to the report, China, India and Iran are Russia’s best customers for its booming arms industry which took in $1.6 billion more than 2004 to reach $7 billion in sales to developing nations. American arms sales occupied third spot behind second-place France.

But it is Russia’s supplying of weapons to rogue countries like Iran and Venezuela that is causing friction with America. Sadly, Russian President Vladimir Putin, whose outward democratic façade hides the heart of the former Cold War KGB official that he once was, sees nothing wrong with arming nations that have made no secret of their intent to use them against their neighbors and to destabilize their regions. Russian arms have also been used against American forces and allies, making one wonder with friends like Russia, who needs enemies?

Last summer’s Israel-Hezbollah war in Lebanon is the most recent example of Moscow’s double-dealing. During that conflict, Israel complained to Russia that Hezbollah was armed with Russian-made anti-tank missiles. This weapon turned out to be one of that terrorist organization’s most effective weapons. According to one report, it was responsible for the deaths of 50 of the 118 Israeli soldiers who died in the 34-day war.

Israel did not accuse Russia of arming Hezbollah directly, but of having given the missiles to Iran, Hezbollah’s supplier. Ehsan Ahari, a defense consultant, confirmed the effectiveness of this weapon when he wrote: “…Russia’s RPG-29s made a name for themselves for making a high kill ratio of Israel’s heavily armored Merkava tanks.” These rockets, the Virginia-based consultant wrote, came to Hezbollah through Syria. America has designated both Syria and Iran state sponsors of terrorism and prohibits arms sales to them. Which obviously would not hinder Russia, since the former communist power itself also has a long history of state-sponsored terrorism behind it

A larger type of Russian anti-tank weapon also destroyed a couple of American tanks in Desert Storm II. However, a complaint to the Kremlin, it was reported, immediately stopped all further supply of this missile to the Iraqi battlefield.

Russian perfidy regarding arms for Iran does not stop with the RPGs. According to Ahari, Russia has also agreed to sell the Iranians 29 SA-15 Gauntlet surface-to-air defense systems and to upgrade its Russian combat aircraft and T-72 main battle tanks. These are weapons America will face if its military should take action to stop Iran’s nuclear weapons program. Already in 2002, a report of the Defense Intelligence Agency stated Iran could temporarily close the Persian Gulf to shipping because of Russian anti-ship missile sales, forcing a halt to the all-important oil shipments.

Last year, Israel asked Russia not to go through with a deal to sell advanced, shoulder-held anti-aircraft missiles to Syria, claiming a deal had been signed between the two countries. Israel rightly feared, as last summer’s war showed, that such weapons could find their way into the hands of Islamist terrorist groups. At the same time, the United States threatened sanctions against Russia if it went through with plans to sell Syria an updated version of a Scud missile that could hit anywhere in Israel. In both cases, Russia denied that any deal was in the works. Such denials, however, would carry some weight if Russia showed it had ever considered all the possible end uses of these weapons by its two shady customers.

In typical unconscionable fashion, Russia also shipped arms in 2004 to Sudan, which was involved in a program of genocide in Darfur that the United Nations termed the worst humanitarian crisis in the world. Russia sent Sudan 12 MIG warplanes five months ahead of schedule right when the UN Security Council was beginning to discuss a resolution against this African country for assisting in the ethnic cleansing. According to statements taken by Amnesty International officials, refugees claim Russian military planes had already been used to bomb the unfortunate Darfur civilian population. It is feared these new planes will also be used against these civilians. At the time of the shipment, Amnesty International and other human rights groups were also trying to get an outright arms embargo against Sudan. Which would not bother Putin’s Kremlin, since it is in the habit of closing down such human rights organizations in Russia.

While earning hard currency is a major reason for arms sales to undesirable states that also include China and North Korea, the Russian leaders’ Cold War mentality of opposing or harming American interests wherever possible also guides their dysfunctional sales policy. But Russia’s irresponsible actions may, in the end, backfire, as her anti-Western customers may eventually turn her own weapons against her interests. But as it now stands regarding the proliferation of Russian arms around the world, Mother Russia should immediately be declared an unfit parent.