Thursday, May 31, 2007

why "wait and see" won't work

Planning the West’s counter-attack against Russia

WAIT until the 2008 presidential election and hope that sense prevails. That, roughly, is the West’s strategy to deal with Russia. It has come at a high price. Russia has largely won the gas wars before most Europeans even noticed they were being fought. So far this year the Kremlin has stitched up the Caspian (by striking a pipeline deal with Turkmenistan and Kazakhstan). It has nobbled Austria, Belgium and Hungary (to add to its powerful position in Germany, France and Italy). By schmoozing other producers it has begun to form a gas cartel. Russia has also built a strong pro-Kremlin camp elsewhere in the European Union (Greece, and Cyprus chiefly; Hungary, Latvia and Slovakia increasingly; and probably Bulgaria too if anybody looked closely). Its banks and businesses have created a fifth column in the City of London and other world financial centres.

On top of all this are the attacks on Estonia’s state websites and the shameless contempt shown by the Kremlin after the poisoning of Alexander Litvinenko, a former KGB officer, in London.

Waiting another year in the hope that someone nicer than Vladimir Putin comes along is wishful thinking. Instead of waiting for the next Kremlin stunt, why not try a counter-attack?




Economist.com




Europe.view

How to fight back
May 31st 2007
From Economist.com



WAIT until the 2008 presidential election and hope that sense prevails. That, roughly, is the West’s strategy to deal with Russia. It has come at a high price. Russia has largely won the gas wars before most Europeans even noticed they were being fought. So far this year the Kremlin has stitched up the Caspian (by striking a pipeline deal with Turkmenistan and Kazakhstan). It has nobbled Austria, Belgium and Hungary (to add to its powerful position in Germany, France and Italy). By schmoozing other producers it has begun to form a gas cartel. Russia has also built a strong pro-Kremlin camp elsewhere in the European Union (Greece, and Cyprus chiefly; Hungary, Latvia and Slovakia increasingly; and probably Bulgaria too if anybody looked closely). Its banks and businesses have created a fifth column in the City of London and other world financial centres.

On top of all this are the attacks on Estonia’s state websites and the shameless contempt shown by the Kremlin after the poisoning of Alexander Litvinenko, a former KGB officer, in London.

Waiting another year in the hope that someone nicer than Vladimir Putin comes along is wishful thinking. Instead of waiting for the next Kremlin stunt, why not try a counter-attack?

For a start: is Russia a fit member of the G8? Clearly not. Russia was admitted to the then G7 to bolster Boris Yeltsin’s attempt to make Russia democratic, free and friendly. That was probably a mistake; it has obviously failed. So either exclude Russia on the ground that the G7 is a democracies-only club, or include China and make it a big-economies club.

Expand NATO, both in scope and membership. Create a cyber-NATO to offer mutual assistance against state-backed internet terrorism of the kind experienced by Estonia. Sweden and Finland might be willing to join such a cyber-group now; if they are wise, they will join NATO while they still can. Restart EU enlargement, especially for Serbia and Montenegro, thus counteracting Russian influence there.

Stop Russian companies from using the international capital markets unless they have clean hands. Conniving in the sale of stolen property is a crime. Why should a Russian oil firm with looted assets (or a gas intermediary whose business seems to consist mainly of standing in the right place) enjoy the privilege of raising capital in London? Equally, the European Bank for Reconstruction and Development should stop its “rent-a-fig-leaf” service to Russians who want to look respectable. Given the colossal amounts of cash sloshing around Russia at the moment, it is preposterous that Western taxpayers are asked to finance anything there.

Crack down on visas. If a Russian tycoon is unwelcome in America, should he be be any more welcome in London? Even better, start chucking people out. Imagine the impact if America, Britain, France, Germany, Canada and Italy—and any other countries that wanted to join in—expelled, on the same day, equal numbers of Russian spies. Say 15 each from the GRU (military intelligence) and from the FSB and from the SVR (the successors to the KGB). The spying, stealing and mischief-making by these outfits matches or even exceeds levels seen in the cold war. So, show some cold-war resolve, and do it in unison.

More tough-mindedness would be useful in other places too, such as in Western countries’ foreign ministries. For the past 20 years, officials dealing with Russia have been promoted if they encourage trade, investment and friendly political relations. Hawkishness has been a career-killer. That doesn't help now that a tough, consistent policy is needed.

Toughness will have a cost. But the coming years need not be disastrous if the West is willing once again to stand up for what it believes in. A “wait and see” policy guarantees disaster.

15 comments:

bonzoq said...

"why not try a counter-attack?" - Because there aren't many western leaders who'd have the guts to do this.

karLos said...

they are good ideas, but imagine the hellish howling cries of doom that would come from russia. they'd get their disturbing nazi.. nASHI rather youth movements onto it rather quickly, i think.

Nothing is Free said...

Further dilute NATO and EU, turn away investment for what purpose exactly? Paranoia reigns. I like the G7 idea though (waste of money) and keeping the Russian tycoons in Russia, including Berezovsky, of course.

Martin said...

"Conniving in the sale of stolen property is a crime."

Edward, I quite agree - however, the difficulty with that posture is that you would also have to exclude, er, the UK...

For if 'nationalisation' is theft, what is 'privatisation' but the handling of stolen goods?

"Even better, start chucking people out."

A policy I wholeheartedly endorse - with Berezovsky and Zakayev at the head of the queue.

Juan Manuel said...

And how would a counter attack to oil and gaz rich Russia look like? Would that mean forgetting about a SC-resolution on Kosovo? (Not to talk about the Iran and North Korea issues)

The only counter attack I can think of would be reducing energy dependency.

Otto said...

The truly effective measure would be to do what Ronald Reagan did in 1985: engineer a crash in the price of oil.

And pick your fights wisely. Independence for Kosovo is no more urgent than for Northern Cyprus.

Nothing is Free said...

RR fanboys like to credit him with the sun rising in the morning. If increasing productions had not been to Saudi Arabia's economic interest, she would not have done so, no matter what sweet things Ronnie whispered in her ear. I don't know if driving competitors with higher production costs out of business was part of the Saudi plan, but it sure was good for Saudi Arabia (and bad for the Soviets).

This is all moot now. No-one has any spare capacity to cause a crash. The only possibility is a massive drop in demand. You'd have to nuke China for that. Or create a cheaper energy source.

db330 said...

say in a parallel universe a lucas edwards wrote: "why wait and see won't work: planning russia's counter-attack against russia."

what would lucas edwards recommendations be? here are some suggestions:

- sign the strategic deposits bill into law, which would forbid western companies from controlling strategic deposits (energy, metals, minerals, etc.) in russia

- finally settle the 90s privatizations issues. say, companies or industries that were sold off for 2 cents on the dollar could get a clean title with, say, a 48 cents on the dollar asset tax - with the current owner of the asset being responsible for the asset tax

- obviously, stop subsidizing energy exports to all countries of the FSU and try as hard as possible to contain supply and let energy prices remain high 4ever

- as consumers try to diversify their supplies, why not diversify your customers? build pipelines to china, india, japan and play them off against europe

- the "brain drain" of the 90s has shown signs of reversal. amplify this by enticing back russian scientists working overseas

- succeed in the nanotechnology, space and defense, and biotechnology fields, some of the key areas for the coming years that maybe western companies or nations thought they had a monopoly on. nothing would upset them more than russian success

- well, sell the dollar. diversify the currency reserves into gold. the u.s. is financially bankrupt, little known fact, and its final realization of its financial incapabilities would at least humble it

- never, ever cooperate with poland and georgia especially, but also estonia and the czech republic: countries, which are openly hostile toward russia. continue with the meat ban and the wine ban and intensify this. i mean, set an example out of these 4 countries

etc. etc. etc. militarily, economically, and on energy russia has many things that it could do it its counter-attack. in my opinion, and excluding the idea of a nuclear war that is not worth talking about, russia could hurt the west far, far more than the west could hurt russia.

in fact, russia could in fact BREAK the west. as edward lucas, not to be confused with lucas edwards, has written above, traditionally western powerhouses like germany, france, and italy are cooperating with russia and aren't taking the bait of "western solidarity." in my opinion actually, this is a done deal. go russia!

urr said...

very good recommendations by mr lucas. even better if the westerners would be able to start to act accordingly.
i would like to add one more: putin must stand on the place left empty by milosevic in european court and he must be accused for all the non-human crimes commited in chechnya by russian troupes during his leadership. i strongly beleave that this day will come in near future.

urr said...

to dbwhatever

everybody who is honest couldn't feel friendly feelings towards nazi-russia. it doesn't means automatically that russian-speaking people are not sympathetic to estonians or georgians. try to clean yourself from the soviet-era thinking which says that you have to BREAK somebody. try to live in harmony with yourself and other alive beings of the earth. breaking will lead only to violence in bigger scale and to the revenge and it will be very hard to get away from this circle.

Nothing is Free said...

Huh! Right after Dubya and his pudel.

dmitriy said...
This comment has been removed by a blog administrator.
Edward Lucas said...

The last comment is potentially libellous and has been deleted.

Giustino said...

- never, ever cooperate with poland and georgia especially, but also estonia and the czech republic: countries, which are openly hostile toward russia. continue with the meat ban and the wine ban and intensify this. i mean, set an example out of these 4 countries

Yeah, set an example by acting like a bully and leading to the irreversible Westernization of all four.

If I didn't lack just one more degree of cynicism, I would say that Russia manufactures these crises with Georgia and Estonia and Poland just to keep those governments in power.

The greatest thing Russia ever did for Andrus Ansip was send its delegation of goons who said that he should resign. Now the guy is destined to be the longest serving prime minister in Estonian history.

As you said, GO RUSSIA!

Nothing is Free said...

Actually Russia did not manufacture those crises, merely reacted (stupidly at times) and mainly for internal consumption at that. Unless you think Ansip is a Russian agent.