Publication: Eurasia Daily Monitor Volume: 3 Issue: 89

U.S. Vice President Dick Cheney used his speech at last week’s conference in Vilnius to address Russia in a blunt new tone. Prior to the conference, Russian President Vladimir Putin’s advisers had assumed that the maximum extent of U.S. criticism had been set by the report, “Russia’s Wrong Direction,” presented by the Council on Foreign Relations (see EDM, March 13). Warning signals from experts and NGO activists who had gathered in Vilnius before the top-level conference were dismissed as “boring preaching from the EU” (Moskovskie novosti, May 5). But the broadside delivered by Cheney, regarded in the Kremlin as a no-nonsense political heavyweight, was compared to Churchill’s landmark “iron curtain” speech 60 years earlier (Kommersant, Ezhednevny zhurnal, May 5).

The cautious response from the Russian Foreign Ministry, which emphasized that the substance of relations had not changed, was obviously an attempt to downplay the effect, also by questioning the competence of VP’s aides (, May 6). There was, however, a rush of defensive comments and rebuffs from outspoken Duma deputies and experts with ties to the presidential administration. Vyacheslav Nikonov and Andrei Kokoshin emphasized that Washington was irritated by Russia’s growing power and decisiveness in asserting its “sovereignty,” while Gleb Pavlovsky called Cheney’s address a “considered nasty provocation” (, May 4, 5). Only Putin, however, can deliver the real answer, and he cannot postpone this answer any further than his annual address to parliament, scheduled for Wednesday, May 10 (, May 5).

According to the carefully controlled leaks, Putin was not satisfied with the drafts presented to him in early April and so postponed the annual event in order to sharpen the focus of the speech, which essentially would be his last address before election season begins in 2007 (Moskovskie novosti, April 21). Foreign policy was supposed to be one of the key topics, but now the “balance sheet” in this department has to be redrawn (Vedomosti, May 3). What had been an impressive record of achievements — from strengthening the alliance with China to making a crucial difference in the Middle East — has unexpectedly become recast as a series of opportunistic improvisations that has put Russia into a tight corner. The claim for restored “Great Power” status is undermined by the simple fact that Russia does not command due respect among its neighbors, and the expected triumph of the G-8 summit in St. Petersburg is seriously downgraded even if Cheney confirmed U.S. President George W. Bush’s intention to take part.

It has become impossible to deny that Moscow’s carefully prepared agenda for the summit has been effectively cancelled and not only because Iran demands top priority or the issues in Russia’s relations with Belarus, Georgia, and Ukraine are creeping in. The main problem is the topic of “energy security,” which was supposed to be a trump card for Moscow but has become — as Vilnius proved beyond doubt — a highly contentious issue (Vedomosti, May 3; Kommersant, May 4). Putin’s courtiers were absolutely certain that the stratospheric rise of oil prices automatically granted their boss a position of strength and still cannot comprehend the magnitude of their miscalculation. The plain fact of the energy “supply-demand” matrix is that Russia is far more dependent upon the export of its hydrocarbons to the European market than the West is dependent upon importing them from Russia. Despite all the talk about conquering the Asian markets and satisfying China’s insatiable appetite, Moscow now and in the years to come is firmly plugged into European distribution networks — and it desperately needs the income from delivering the contracted volumes of natural gas. What eliminates any possibility for building a position of strength is the lack of spare production capacity in oil and gas. Gazprom’s “bad behavior” is on balance a far smaller mistake than its underinvestment in basic assets resulting in their degradation. In any emergency, perhaps a cold spell next winter, Russia cannot be a “swing producer” — and so, for all intents and purposes, is unable to provide any energy security.

In mid-April, greeting German Chancellor Angela Merkel in Tomsk, Putin showed a slight disappointment in the EU’s “unfriendly” attitude towards Gazprom, but now he has to stop nursing grudges and draw some serious conclusions. In his political plans, the G-8 summit has had a far greater significance than just diplomatic history and a prize photo opportunity. It should have sealed his fate as a statesman who impeccably performed a hard mission and could safely retire, remaining respected in the West, influential at home and decently rich as a member of a few corporate boards (Ezhednevny zhurnal, May 5). Now, however, the future looks far more troubled as the perfectly staged crowning moment transforms into a highly unpleasant rendezvous where seven Western counter-parts will enumerate their disappointment in his mismanagement of the energy sector and disapproval of his methods of leadership.

The internal logic of the “vertical” system of power created by Putin rejects any transition of authority to a successor, however carefully chosen. It is far easier for him to “organize” a third presidential term than to implement an “exit strategy” that would forge a new compromise among the greedy elites and guarantee a safe retirement (, May 3). Constitutional “technicalities” could be ironed out with massive public support and the key allies — from China to Kazakhstan to Belarus — would congratulate him with great relief. Western leaders would criticize, but they already do, so there is little to worry about. Cheney’s stern warning that Russia is not “fated to become an enemy” in essence means that Putin’s Russia has to be dismantled; it may be a choice too far for a lonely hostage of the Kremlin walls.