Thursday, May 04, 2006

Rich Russia minus ideology equals trouble

It is one thing to feel uneasy about Russia. It is another to see clearly how things can go wrong in practice. During the 1990s, the nasty scenarios were based on Russia breaking up (meaning loose nukes) or the bad guys toppling Boris Yeltsin (and the KGB takes over).

Neither seemed likely enough to be scary. Pre-9/11, loose nukes in the hands of terrorists were hard to imagine. And if the bad guys did re-emerge (say by slotting a cold-eyed junior KGB officer with platform heels into the Kremlin) what could they do? Russia was still bankrupt, decrepit, unable to feed its soldiers properly or heat its people in winter.
Now nobody worries whose finger is on the nuclear button. That's not much comfort: like a frog in a heating saucepan, we barely notice how bad things are. Xenophobia at home and abroad is pretty much official policy; Russia tears up international rules that it doesn't like and befriends tyrants all over the world.
Two new things are really scary. One is Russia's petro-fuelled wealth. The other is that we are greedy.
Rich Russia takes some getting used to. A decade of bailouts and soft loans left many people thinking that Russia couldn't survive without western goodwill. Not any more. The question now (at least as posed by the Russians) is the other way round: whether Europe can stay warm and well-lit without Russian goodwill.
Having shackled most of its former satellites, Russia's cash-rich energy empire is now expanding west. Led by Germany, the big countries of continental Europe have rolled over without a fight. And why not? Surely it's hypocrisy to tell Russia to adopt capitalism and integrate in the world economy and then start objecting when it happens?
That's the greed talking. Faced with the choice between cheap-ish energy and a quiet life on the one hand, and an uncomfortable and costly spat on the other, western countries are overwhelmingly plumping for the former. Rows with Russia are bad for business.
During the Cold War, that greed was tempered by fear. Even if appeasement seemed profitable, the prospect of Communism, or Communist-inspired subversion, made tycoons, mostly, opt to defend capitalism. Not any more. Now we are not just greedy, but flabby and complacent too: that is the wrong state of mind when a stand on principle is urgently needed.
In short: by shedding the unattractive and impractical ideology of Communism, Russian imperialism has become a lot more sinister. Why mess about with the workers when you can buy the bosses?
Anyone who thinks that Russian investment in downstream energy businesses is a purely commercial transaction should look at what has already happened in post-Communist Europe. Dodgy intermediary companies mushroom; politicians of all stripes start getting kickbacks to look favourably on the new order.
The combination of gas pipelines, long-term contracts and Russian investment in the downstream business means that it becomes almost impossible for a country to diversify. It's the equivalent of having a couple of Red Army divisions parked outside your capital city - but a lot more lucrative for the Kremlin and a lot less objectionable for the public.
It's still possible that the Kremlin's crass, bullying manner rouses even the chancelleries of Europe from their cowardly lethargy. Eventually, Russia's troika of dreadful problems (collapsing public health, fraying infrastructure, declining education) may so weaken the state that it implodes.
But I'm sceptical. We are living in a common European house all right - and if Russia heats it today, it looks all set to run it tomorrow.
# Edward Lucas is central and eastern Europe correspondent for The Economist.

1 comment:

dmitriy said...

>Dodgy intermediary companies mushroom; politicians of all stripes start getting kickbacks to look favourably on the new order.

Dodgy intermediaries that sell gas from Turkmenistan and Russia to Ukraine and Europe are controlled by shadowy British businessmen. It is British gas imperialism, not Russian.