IF there is one defining policy in the Putin Kremlin, it is a steady campaign to reclaim Russia’s lost superpower status. The method is economic and diplomatic, not military. Nevertheless, as should perhaps be expected from a leader who rose to prominence via the former KGB and the Soviet Communist system, the execution is blunt and uncompromising.
The pre-emptory suspension of the multibillion-dollar Sakhalin II oil and gas project being undertaken by an international consortium led by Shell is the latest and most startling step in this campaign. It comes after last winter’s temporary suspension of gas supplies to the Ukraine, which also impacted on deliveries to Western Europe. The Russian authorities claim to have acted on the $20-billion project purely on environmental grounds. Nevertheless, industry sources suggest that the environmental objections would disappear, as if by magic, if state-owned oil company Gazprom were to be given larger equity in the project, without incurring a greater share in the investment, the cost of which has almost doubled since the development began.
European and Japanese investors have protested vigorously and there are now fears for other big multinational projects, not simply those relating to oil and gas. The international investment community, still stung by Russia’s debt default a decade ago, is warning that this latest move could seriously affect future investment flows. The Kremlin would undoubtedly have taken this into account. Foreign oil companies originally assumed that besides capital, they could bring technical expertise to the party. In truth, however, thanks to a shedding of some of some closed-door practices, Russia can now easily buy such expertise in the open market. The country is awash with oil money and can well afford both to capitalize projects and purchase whatever technology these require.
For many Russians, the reassertion of the country’s rights over its own natural resources must be a source of pride. However, in common with this new assertiveness at home, it must be hoped that the Kremlin will now use its power on the diplomatic front to re-engage in the Middle East. Ever since Egypt threw out Russian advisers in 1972, Moscow’s influence and interest in the region has waned, leaving the field clear for the United States. The chaotic results of Washington’s ill-informed dominance are now all too clear. President Vladimir Putin’s promotion of Russia’s interests domestically would seem to be as brutal as Washington’s pursuit of its international ambitions. However to be an effective influence in the Middle East, Moscow will need to pursue a subtle and informed policy which extends beyond abstentions in the Security Council, as it did over the vote to send UN peacekeepers to Sudan. One key to its success in the region would be an honorable settlement to the Chechen conflict, which has disfigured Moscow’s international reputation. Another would be a far more active role within the Quartet that is supposed to be brokering a just and lasting end to the agony of Palestine.
