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Nov 14, 2005 | 23:48 GMT

10 mins read

The Far-Reaching Changes in Russia

Summary
Broad-ranging developments in the former Soviet Union indicate an evolution in thinking in the Kremlin. Russia is reaching out to regain its influence in the former Soviet world from the Central Asians, the Eastern Europeans, the West — and perhaps even China.
Nov. 14 witnessed a busy morning in the former Soviet world.
  • Russian President Vladimir Putin is in Uzbekistan to sign an "alliance" agreement which, according to some rumors, includes a military base for Russia in Uzbekistan.
  • Gazprom reached a five-year transit deal with Kazakhstan's state natural gas transit company KazMunaiGas to transit 55 billion cubic meters of Turkmen and Uzbek natural gas a year, giving Gazprom monopoly control over all three states' natural gas exports
  • The Russian Federal Security Service (FSB) has apprehended Igor Reshetin, general director of TsNIIMASH-Export company, and two of his deputies for illegally transferring space technology to the Chinese.
  • The presidential administrators for the Volga and Russian Far East regions — Sergei Kiriyenko and Konstantin Pulikovsky — were dismissed from their positions.
  • Putin promoted presidential chief of staff and chairman of Gazprom, Dmitry Medvedev, to be the country's first deputy prime minister. He will retain his position at Gazprom, but leave the presidential administration.
  • Putin also promoted Defense Minister Sergei Ivanov to the position of deputy prime minister.
  • It is easiest to understand these changes in terms of geopolitics first, personalities second and finally the shaping of policies. Russia is in a vise. Though it has bounced back from the depths of the 1998 ruble crisis, the Russian military, economic, social and demographic fabric not only is badly frayed but continues to tear. Advancing geopolitical pressure from the West, China and the Islamic world compounds these indigenously arising problems; collectively they threaten the future existence of the Russian state itself. Under Putin, the Russian government has been struggling with how to address these myriad threats and preserve itself, and the Nov. 14 changes must be viewed in this light. The rise of people such as Medvedev and Ivanov is hardly shocking. Medvedev is Putin's protégé, while Ivanov is the leader of the siloviki, a loose alliance of Russian foreign, military and intelligence personnel who want to restore Russia to its imperial glory. The two men's stars have been rising for some time, and Putin has been sure to keep them close. Now both potential presidential successors are even closer. Medvedev is a canny operator who is an economic strategist, while Ivanov commands the respect of the bulk of the country's nationalist forces as well as the military. But both of them are also pragmatists like Putin. Their view of Russia's challenges is not drowned in hyperbole while their views of Russia's options are not jaundiced by Soviet-era ideology. These are not men who regularly moan about how unfairly Western markets treat Russian goods, or about how NATO is poised to invade Murmansk. These are men who see things the way they actually are and plan accordingly. Medvedev's role with Gazprom makes him central, and extremely effective, in Russia's relations with Europe, while Ivanov's clear-eyed capabilities have helped him manipulate Russia's more enthusiastically paranoid nationalists into a coherent political force more or less under Kremlin control. Both men's fingerprints — but particularly Ivanov's — are all over the Nov. 14 summit with Uzbekistan. Tashkent has been extremely cold toward Moscow since the end of the Soviet Union, seeing itself — and not Russia — as the natural heir to rule in Central Asia. There are more Uzbeks in Central Asia than any other nationality, and Uzbekistan — not Russia — borders every one of the former Soviet Central Asian states. Such feelings persisted until the Andijan uprising in May revealed both how tenuous Tashkent's political hold on the country was and how quickly the United States could turn on an "ally" that was less than ethically pure. The result was an about-face resulting in a headlong rush into the Russian embrace — one shepherded, we might add, by people like Ivanov. Similarly, both men's fingerprints — but particularly Medvedev's — are all over the Gazprom-KazMunaiGas accord. All natural gas produced in the former Soviet Union comes from Gazprom, Kazakhstan, Uzbekistan or Turkmenistan, with any natural gas originating in a country ending in "stan" having to transit through Kazakhstan and Russia on its way to any market. The KazMunaiGas deal means that Gazprom — and by extension, the Kremlin — now owns all of that gas. Any state wanting to use Central Asian gas in order to get energy independence from Russia is now out of luck. This is particularly worrisome for states such as Ukraine and the Baltic States who now have no reasonable alternatives to Russian-owned natural gas. Russia has been bandying the threat of sharply higher energy prices around for years. Now it has finally taken the concrete step necessary to make that an arbitrary reality. But Russia's efforts to reclaim its authority do not seem to be limited to Central Asia or Russia's western frontier, but also to Russian Asia. For the past several years the Russians have intermittently explored means of forming an alliance with China. The Russian position is that the two adjacent land powers should have a vested interest in working together. As STRATFOR's regular readers know, such an assessment is inherently flawed. States that border each other are far more likely to compete for influence than cooperate. This has been lost on many Russians who are so reflexively hostile to the West that they see the largest threat to Russia's existence from Washington and NATO, as opposed to its own rising Muslim population or the Chinese colossus to the southeast. China, for example, even after downsizing its army, still has more men under arms than NATO did at the height of the Cold War. And while many Russians dream of a Chinese alliance against the West, China has been taking advantage of that misperception and preparing for a world in which Russia no longer matters. It is Beijing, not Moscow, which has been building rail lines and petroleum pipelines into Central Asia and acquiring Central Asian energy firms. It is Beijing, not Moscow, which is now pre-eminent in influence in North Korea. It is Beijing, not Moscow, which quietly sponsors an unofficial policy of encouraging migration of its citizens to resource-rich Russian Siberia. It is Beijing, not Moscow, which is purchasing component after component of Russian military technology as part of a broad-based modernization program. And it is Beijing, not Moscow, which likes to hold large-scale military maneuvers on the border named innocuous things like "Northern Sword." Moscow has been slow to recognize the shifts in China with the transition from Jiang Zemin to Hu Jintao. Just as Jiang was taken off guard by the change from the easily manipulable former Russian President Boris Yeltsin to the more calculating Putin, Russia has misread the evolution of Chinese policies from Jiang to Hu, thinking that China is still pursuing the same means as it did under Jiang's reign. This is not the case. Beijing now looks to enhance its influence globally through integration rather than confrontation. Moscow has misread Chinese intent several times recently, from the evolution of the Shanghai Cooperation Organization to the recent Chinese-Russian defense exercises. China is fully engaged in the old three-player game and views Washington as its major concern, with Russia being simply a tool of foreign policy. Reshetin's arrest and Pulikovsky's dismissal are critical developments in their own right and indicate that the Kremlin is belatedly realizing the depth of the changes in Beijing. Space cooperation is among the hallmarks of Russian-Chinese cooperation. Russian technical knowledge is key to the Chinese space and military missile program, and the FSB is now specifically saying that Reshetin provided the Chinese with dual-use technology. Pulikovsky was Putin's point man in North Korea, and on his watch the Chinese have all but displaced the Russians at the North Korean table. Reshetin's and Pulikovsky's departures from the scene indicate that someone in the Kremlin feels that relations with the Chinese are not proceeding according to plan. Unlike many of their countrymen, Medvedev and Ivanov have a more balanced view of China — seeing among the many possibilities a plausible, and perhaps even probable, threat. In a country as organizationally, institutionally and ideologically brittle as Russia, having the right people in the right positions is essential to putting the country on a sustainable path. STRATFOR has long stated that should Russia not prove able to regain its influence in Ukraine — and indeed, on its own territory — that Russia's ability to even exist is in doubt. Medvedev and Ivanov's rise cannot alone reverse Russia's fall, but their expertise, charisma and influence will at least help give it a chance.
    Dmitry Medvedev is a former St. Petersburg lawyer who has been under Putin’s wing for more than a decade. Putin brought Medvedev to Moscow with him in 1999 and steadily promoted him up the ranks until he replaced Alexander Voloshin (the Kremlin’s gray cardinal) as the head of the presidential administration (chief of staff) in October 2003. Medvedev ran Putin’s election campaign in 2000, the year when he also became chairman of the board of Gazprom. From 2001 to 2002, he served as deputy chairman but was named chairman once again in 2002. Medvedev has Putin’s trust as much as anyone can, and what wealth Medvedev has is largely traced to his links to Putin. Medvedev received his doctorate in 1990; he is only 40 years old. He is a technocrat with a more-or-less Western outlook, and he is quite pragmatic when it comes to evaluating Russia’s potential tools. He is the architect of many Gazprom policies that would both unify and strengthen government control over the firm, while opening it up to foreign investment to raise money. He certainly believes in using Gazprom as a tool of Russian foreign policy, and unlike many others who believe the same, he actually has a clear idea of just how to do it. He is still chairman of Gazprom and now Russia’s first deputy prime minister. Sergei Ivanov is, like Putin, former KGB. He was still in the organization when the Berlin Wall fell and when tanks rolled through Red Square. He is even rumored to have been ejected from the United Kingdom for espionage after the Cold War ended (he was at Russia’s Embassy in London until 1998). Putin made him deputy director of the KGB in 1998, and Yeltsin bumped him up to the Russian Security Council in 1999; Putin retained him in that position. Since then, Putin has experimented with Ivanov in several different foreign policy topics, such as CIS and military cooperation. In 2001, Ivanov became the first civilian to serve as Russia’s defense minister. His experience with NATO has been touchy; thus, the country’s military/foreign policy/intelligence sectors love him. Putin used him to great effect in harnessing nationalism in the 2004 elections, something that he almost proved too good at because a radical nationalist party — Rodina — got more support than the government was comfortable with. Geopolitically, Ivanov is a Eurasianist (as opposed to an Atlanticist or a Asianist) and believes that Russia’s future is in being a stand-alone power balancing the West and China. As such, he would rather not shut off cooperation with either side, but neither does he want to fully ally with either. Ivanov has kept his post as defense minister and is now Russia’s deputy prime minister.

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