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Analysis & Opinion
27.02.08 Russia Steps On The Gas
By Graham Stack

Germany is Russia’s most prominent European partner, and now Germany’s most important Russia specialist has published a snapshot of Russia and its ambivalent relationship to Europe, containing a wealth of insider information and hot off the press.

Alexander Rahr is almost as well connected in Moscow as he is in Berlin. The foremost German Kreminologist, and member of Germany’s leading foreign policy think tank the German Society for Foreign Policy (DGAP), he is policy makers’ close adviser in the country Russia sees as its natural ally in the West. In particular, he has the ear of former chancellor Gerhard Schroeder and of current foreign minister Franz-Walter Steinmeier. As such, many doors are open to him in Moscow. Including those of the Kremlin.

Rahr’s thesis in his book “Russland Gibt Gas,” published to coincide with the Russian electoral campaign, is a bold one: Russia and Europe need each other deeply in a purely pragmatic, geo-political way, and this basis can be used to build trust and to nurture common values. Rahr sees Russia as actively seeking such a pragmatic interdependence, but in the case it is turned down, it may reorient itself towards Asian giants such as China and India.

His book does not mince words in describing Russia’ many shortcomings – a weak rule of law, lack of media freedom, and human rights abuses. However, in contrast to so many other accounts, it is not primarily a critique of Russia, but of European policy toward its neighbor.

The new Ostpolitik: a pragmatic approach to Russia will bear normative fruit

Rahr argues that Europe’s security depends too much on integrating Russia geo-politically, and this can’t be postponed until European values take over in Russia. Rahr’s thesis is that whether you like it or not, Russia holds the solution to Europe’s energy security problem. Europe has to recognize this pragmatically, and achieve energy supply security by offering the Russians demand security and markets.

If Europe does not do this, Russia could well turn toward Asia. If Europe does do this in a pragmatic way, increased Russian security might well lead to accelerated voluntary value changes in Russia.

Russia may be far from perfect, argues Rahr, but it’s not Saudi Arabia. The fact that Europe, unlike the United States, sources its energy needs from a neighbor with so much shared culture, should be regarded positively in European capitals, rather than as a source of apprehension.

Moreover, Rahr believes the potential for value transfer, once such a deepened long-term pragmatic partnership is established, to be considerable.

It’s no coincidence that this argument comes from a German: the idea takes intellectual roots in the Allies’ post-war strategy of Westbindung of the Federal Republic of Germany. The policy that pragmatically began with the France-Germany coal and steel union, created precisely to defuse the resource question, was the seed of today’s “value community” of the European Union.

The second inspiration was West Germany’s 1970s Ostpolitik (eastern policy) of de-escalating the cold war in Europe by building up trading relationships with the Soviet Union, culminating in the gas pipelines so bitterly opposed by the United States. Again, the pragmatic approach became a non-confrontational channel for value transfer during Perestroika. The historic paradigm that inspires Rahr is thus Wandel durch Handel, change through trade.

The crux of Rahr’s argument is that Russia will be far more open to European values if it is freed from suspicions that these are merely a foil for geopolitical motives, that European “preaching” is simply a pretext for geo-political sidelining and exclusion.

Precisely now that the Russian economy is up and running, Russia is desperately looking westwards for opportunities – markets and investment - to diversify its economy away from the resource base. Such a diversification is both in Europe’s interest and in Europe’s power to support. However, should Europe shut itself off from reciprocal economic engagement of Russia, Moscow could turn east – and take its energy resources with it.

The urgency of the matter means, according to Rahr, that Europe has to lower its suspicion threshold for Russian expansion into European markets. Russia wants access to end customers in Europe for its energy resources, as well as increased cooperation in the high tech area (especially aviation) and in logistics. Russia also wants its companies to be allowed to buy into European ones.

This is hard for Europe to swallow, because Russia’s competitive advantages are in the strategically sensitive areas of energy and defense / aviation, where there is great suspicion of collaborating with Russian state-owned companies. In addition, because of the size of the largest Russian companies and their formal or informal links to the state, Russian acquisition of European companies in almost any sector could be deemed to have some strategic goal.

Rahr, however, argues that Europe must have more confidence in the strength of its own institutions to absorb and “tame” Russian corporations, whether state-owned or private.

It must also be made clear to the Russians that there is no question of Europe loosening its ties with the United States for Russia’s sake. The choice is not whether Europe ties itself to Russia rather than the United States, but that Russia binds itself tighter to Europe than to China.

At the same time, “New Europe” must be convinced that a defensive attitude toward Russia based on Cold War resentment is self-defeating in the long run, and that engagement of Russia is the best path to defusing tensions.

Face to face with the siloviki

Along with the geopolitical analysis, Rahr’s book intrigues readers with its vivid accounts of face to face meetings with top officials in the Putin administration. He tells of a two hour interview with Sergei Ivanov, Putin’s friend of thirty years, KGB colleague and long-serving defense minister, who was widely expected to succeed Putin in office – until the choice fell upon Dmitry Medvedev.

The anglophile Ivanov tells Rahr he sees Russia’s future in a two-party system, as in the Anglo-Saxon world. With Putin having established a strong conservative party, Ivanov calls on the Russian Communists to transform into a social-democratic party as in other post-socialists states, and for the EU to overcome its divisions, so that it can become an anchor of stability for Russia.

Rahr also meets with Viktor Ivanov, one of the top-ranking “siloviki,” former KGB officials working in the Kremlin. Viktor Ivanov takes a piece of paper and sketches for Rahr the tangled maze of channels that were used by oligarchs to bypass the Russian tax authorities, including even the Baikonur Cosmodrome endowed with tax privileges in the cash-strapped 1990s.

Above all, Rahr meets Putin himself regularly in the framework of the Valdai Club of western Russia experts. Their most recent meeting was held in Sochi in October 2007, culminating with a stroll along the beach and Putin calling on the EU to step out of the U.S. shadow as an independent actor.

But this star-studded cast is upstaged by a dacha drinking session among FSB top brass, which Rahr faithfully records – and a debate pitting the “conservative” Viktor against the “superliberal” Yevgeni. The opposing sides reveal how the centuries-old opposition between Russia’s adherence to a special path and Russia’s convergence with Europe divides even FSB generals.

For the FSB general referred to by Rahr as Yevgeni, Russians went to the barricades in 1991 to fight “against the Communist putsch and to win freedom for their motherland. The Russian people’s triumph in 1991 was in terms of historical significance far greater than the Orange revolution in the Ukraine. For Russia, the overthrow of dictatorship during the days of the putsch was the entry ticket to Europe.”

His ideological opponent Viktor counters immediately: “The West has regarded us as an enemy for a thousand years. At best as a supplier of raw materials; nowadays oil and gas, five hundred years ago woods and furs. Tsar Alexander I liberated Europe from the Napoleonic occupation. In the Second World War, Russia defeated Hitler’s fascism. And what thanks did we get? Following the Vienna Congress in 1815, Europe united against us, allied with the Ottoman Empire to try and expel us from Europe in the Crimean war. Western historiography simply ignores our victory in the Second World War and even labels Russia the enemy of Europe. And Europe regards Putin’s Russia as her enemy as well.”

In view of this clash at the very heart of the FSB, it is surprising that Rahr follows the conventional approach in ascribing so much block weight and corporate loyalty to the ex-FSB “siloviki.” Whether anything really unites the siloviki beyond Putin, whether they have a shared ideology rooted in “the corporation,” is all a matter of speculation. The popularly-pedaled version of the story is little more than a conspiracy theory. Exactly how the allegedly pervasive silovik influence has led to Dmitry Medvedev being named as favored presidential successor is anyone’s guess.

The Medvedev candidacy, however, does prove Rahr’s general point: Medvedev personifies Russia’s renewed bid to align itself with Europe. With 2007 marking an economic breakthrough in terms of soaring fixed capital and foreign direct investment resulting in 8.2 percent economic growth, Russia can now claim to have put its house in order after the unsustainable 1990s. Now, in the person of Medvedev, according to Rahr, the West is being given “another chance to take up the idea of an intensive strategic partnership.” Medvedev, a 42 year old corporate law scholar, is in terms of political identity “a European” in his own words, and has a greater chance to achieve such a breakthrough than Ivanov, whose KGB roots would inevitably be held against him.

Will Europe take up the offer?

A positive outcome might depend on a factor that Rahr neglects to consider: the 21st century phenomenon of Russian consumerism.

Rahr, for all his relatively liberal view of Russia, completely excludes society and largely excludes the economy from his analysis. The word “Internet” does not feature in the index, and there is no discussion of how the explosive growth in real disposable incomes across the board, the shrinking of poverty and the very real emergence of a middle class have combined with technological (internet, mobile) and generational change to alter society and lifestyles.

Put simply, for all the democracy and law-and-order deficits, Russia is becoming a European society at a very fast rate – on its own. Reassuring Russian elites that Europe is not intrinsically hostile to Russia through establishing a strong strategic win-win partnership would, as Rahr argues, be the best way for Europe to support this process.
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