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Jul 11, 2007 | 21:33 GMT

4 mins read

Russia: Stirring the Pot in Bashkortostan

Summary
A Moscow court recently ruled that the Russian government can take small portions of the Republic of Bashkortostan-owned Bashneft as reparations for unpaid taxes, Russian business daily Kommersant reported July 11. Bashkortostan is a relatively autonomous region in Russia with substantial natural resources. The Moscow court ruling signals a new willingness to impinge on Bashkortostan's economic and political independence — which could stir up trouble among Russia's marginalized ethnic and religious minorities.
The Moscow Court of Arbitration has issued a ruling allowing the Russian government to confiscate portions of the Russian Republic of Bashkortostan's energy company, Bashkirsky Kapital, on charges of tax evasion, Kommersant reported July 11. State-controlled Bashkirsky Kapital is the majority stakeholder in Bashneft, the controlling energy company in the fiercely independent, oil-rich region of Bashkortostan. The move will allow the central Russian government to take small parts of Bashkortostan's energy resources. This will serve as a test of how much control the Kremlin will be able to assert in Bashkortostan and beyond, in other potentially separatist regions. Bashkortostan and its neighbor Tatarstan are autonomous republics inside Russia. Both have significant oil and mineral wealth, which has greatly facilitated their independence from the rest of Russia. They highly prize and fiercely guard their sovereignty. The two republics share ethnic and religious distinctions from the Russians. Along with the Chechens in Russia's south, Bashkirs and Tatars are Muslim, while the majority of ethnic Russians are Russian Orthodox Christian. Because the regions can sustain themselves economically, are ethnically distinct from the rest of Russia and have furiously refused interference from the central Russian government, they have been able to maintain a great deal of autonomy.
It has become commonplace for Moscow to assimilate or destroy energy assets not under its control. Russian President Vladimir Putin is working hard to consolidate control of Russia's natural resources. However, Russian governments — including the czars, the Soviets and the current administration — have been cautious about threatening the autonomy of Bashkortostan or Tatarstan, and thus Putin has stayed away from taking over the energy assets in either autonomous republic. Of the two, Bashkortostan is the most likely to be targeted by the Kremlin if either is to be truly targeted at all. With a population split among three different ethnic groups (30 percent Bashkir, 36 percent Russian and 24 percent Tatar), Bashkortostan is not as unified as Tatarstan, which makes Bashkortostan a good starting point for the Kremlin to test the waters — but the republic will prove to be a significant challenge. First off, the idea of losing control of Bashneft is no small thing for Bashkortostan. Bashneft produces about 120 million barrels of oil per year, or 60 percent of Bashkortostan's oil production and a solid 20 percent of the Bashkir government's budget. With so much at stake, Bashkortostan will fight tooth and nail against any Kremlin consolidation attempts. Furthermore, the Bashkir economy is, for the most part, controlled by Ural Rakhimov, the Bashkir president's son. Rakhimov is the kingpin of the Bashkir energy and finance sectors and has successfully kept Russian oligarchs out of the Bashkir economy. Any concerted attempt by the Kremlin to relieve Rakhimov of his power and fortune likely would lead to a loud and messy fight. A strong affinity among Russia's ethnic and religious minorities means that attacking the Bashkirs could spark a reaction from the Tatars and the Chechens. With relatively deep pockets and a demographically consolidated territory, Tatarstan has enough security to hit the Kremlin where it hurts by funding violent separatists in other regions. With a government transition fast approaching and unrest in Chechnya only recently quelled, Putin cannot afford to have Chechens refocus their attention against the Russian government, meaning any moves against Bashkortostan and Tatarstan must be made with care. For Putin, bringing these regions to heel would be a weighty task in his quest to consolidate Russia; previous governments that tried to rein in Bashkortostan and Tatarstan were daunted. But as Russia grows more nationalistic and socially consolidated, the focus on these rogue minorities — particularly those with valuable assets — is sure to grow.

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