TCS Daily


Pirates of the Black Sea

By Jens F. Laurson & George A. Pieler - June 27, 2006 12:00 AM

Vladimir Putin claims to be a quid-pro-quo guy. At the Black Sea summit between Russia and the EU, he insisted on "reciprocity" for any European involvement in Russia's "holy of holies", its energy resources and associated state-run industries. Ever the reliable mouthpiece for Russian policy, Gerhard Schröder (until recently a European himself) asserts that all Russian companies operating abroad must get the same "rights" as outsiders operating in Russia.

The Putin/Schröder idea of reciprocity, though, is for Russia to demand privileges from its neighbors and trading partners, while retaining iron control over every foreign presence in the Russian economy. Threatening Ukraine's natural gas supplies, manipulating Gazprom's terms for deliveries to Europe, and scoffing at the EU energy charter are tactics of intimidation pure and simple—and they are effective tactics. Leading up to the July G8 summit in St. Petersburg, Europe is playing the role of peacemaker, glossing over Russia's blustery demands for no-strings access to the WTO and signaling de facto surrender to its energy intimidation. There is a word for Russia's current geopolitical stance—piracy, pure and simple. Operating by threats, extortion, and as a law unto itself, Russia makes Blackbeard look like an amateur.

Indeed, Russia seems almost proud of the way it disregards the rules of the game in global economics. Commenting on a new bill expanding Gazprom's state monopoly over gas exports, the Duma's Energy Committee chairman, Valery Yazev, pointed to "fears that during Russia's accession to the WTO we might be forced to ratify the Energy Charter" which frowns on such monopolies. Putin's G8 factotum, Igor Shuvalov, says Russia will use leverage to get access to western energy markets, including delivery systems (e.g. pipelines), and that leverage includes restricting access to Barents Sea gas reserves. At the same time, Russia is playing footsie with Iran over energy policy and nuclear ambitions alike.

It's not just about energy, either. The Kremlin has suggested that foreign investors would find life more difficult if Russian access to the WTO is held up, or if too many market-opening conditions are imposed on its WTO membership. Further, Russian-origin counterfeit CDs and DVDs are a major US concern. The role of state-owned steelmaker Severstal in trying to block the takeover of Europe's Arcelor by Brit Lakshmi Mittal is cloudy at best, but the Moscow Times noted the takeover of Arcelor by Severstal would have been the first Russian success in getting control of a major Western company. Strange that Arcelor's terms for merger approval created a presumption in favor of Severstal, which can be overridden only by a majority-plus vote of shareholders. This demand for economic privilege under the guise of "reciprocity" permeates Russian society—Russia has dropped from "partially free" to "not free" in the Freedom House rankings for human rights performance.

The growing kleptocracy centered on Putin, his crackdown on press freedoms and use of prosecutorial powers to punish CEOs who do not toe the line, may be strictly domestic problems, and indeed Putin's popularity seems not to suffer from his rhetorical swipes at Russia's competitors. But when these traits of modern Russian society are exported to the arena of global economics, they become everyone's business. While Vice President Cheney was a bit late in challenging Russia's backsliding on the road to democracy, at least he may have cleared away some of the fog caused by fixating on Putin's soul and laid the groundwork for a more realistic geopolitical stance towards Russia. Sen. John McCain calls for a US boycott of the G8 summit, an interesting symbolic proposal but no more than that. Surely it's time to realize that 21st century foreign policy demands linkage between internal politics and external relations as never before. If Russia wants to be a full-fledged member of the Global Leadership Club, it cannot run counter to the democratic tendencies sweeping the world.

Reason enough for Russia to haul down the pirate flag and play by the same rules as everyone else. Even Tortuga, the most notorious pirate-haven in modern history, eventually had to. Interestingly, like Russia today, the shifting foreign powers that "governed" Tortuga in the 17th century blatantly used pirates as an extension of their own power, when convenient. For 21st century Russia, that won't do. Russia is a critical signpost, the bridge between Europe and Asia, and can point towards the expansion of democracy and freedom, or continue further towards the dialectic of raw power politics. In a very real sense, as Russia goes, so may go the undecided nations of the Second and Third Worlds.

Jens F. Laurson is Editor-in-Chief of the International Affairs Forum. George A. Pieler is Senior Fellow with the Institute for Policy Innovation.


7 Comments

But why should they?
The pirates didn't collapse because they were persuaded to by trade advantages bnut because they were destroyed for being a threat to trade. Russia can flout artificial rules as long as no nation will do anything about it. As we have seen in the case of many pariah states there are always businessmen and greedy governments ready to turn a quick buck. Some will do it to make a political point.

Its too bad the author doesn't offer any real solutions to end such behavior, but hey I've always loved pirates.

No Subject
"Piracy", "threats" & "piracy" are very strong terms.
They are not remotely justified.

To sell a your products at the market price is not piracy it is capitalism. Russia is not "threatening Ukraine's gas" in fact currently Ukraine is the one that is insisting on its right to "renegotiate" gas prices downwards. Ukraine is already getting gas at well under the market price but by threatening to steal European supplies, as they did last winter, they hope, with the effective support of the Europeans, to extort a yet lower price.

If this is "piracy" by Russia then the fact that the USA has not haned over all oil reserves in Alaska to Japan in at $20 a barrel must be at least "capturing the Royal treasure fleet". Of course there is no possibility of the US doing so, nor should they, they are a sovereign country not the property of others. The same applies to Russia. For decades we told the Russians that they were an "evil empire" for opposing capitalism. Now you say the same because they are embracing it.

As for the question of Russia's democracy. You accept the obvious fact that Putin is overwhelmingly the people's choice. That is what democracy is about. The wishes of the people are supposed to take first place, even over the demands of G8's new world order.

re: "Russia is just doing Capitalism" naivetee
did you get those talking point from the Kremlin or come up with them on your own?

if you don't see the Russian behavior as highly worrisome - whether it be reneging gas contracts in retaliatory manner or bar important exports from the Ukraine under some ‘legitimate’ excuse or end cooperation on a military transporter (for ‘legitimate military reasons’, of course!), or threaten, or cajole, or bribe its “partners” into doing what Russia says… if you don’t see the Russian “democracy” as troubled, with scantly a free press, blatant blackmail and bribing of officials, zero control of the public over the Duma (except those elections), Kremlin appointed regional governors, imprisoned political opposition candidates (imprisoned, of course, for politics-unrelated, legitimate reasons!!), then perhaps you would deserve to live in that neo-totalitarian, kleptocracy – as a ‘non-privileged’ person.

Looking at the facts
1) They didn't renege on contracts - Ukraine is doing that seeking to lower the price.

2) The US has been known to bar people exporting to them even on excuses like "it is unfiar that poor countries get the advantage of lower wages".

3) Do you seriously suggest that the USA has never been known to bribe, or cajole or threaten not only partners but everybody. Indeed the US has absolutely no compunction about bombing hospitals & committing genocide to get its way.

4) The Russian press is undeniably more honest & free than thev US or any NATO countries. It was NATO's press who said that the KLA were freedom fighters opposing genocide Milosevic's genocide whereas the Russian said that Milosevic was an anti-racist democrat who opposed the KLA's genocide. Obviously nobody but a wholly corrupt Nazi could suggest that, on that basis, the Washington Post is 1000th as honest as any russian journalist.

5 The Russian people freely give the large majority of their votes to the guy whoo froms the government. Neither the US not USA come close to that. Indeed in Britain 64% of votes were opposition ones & in both countries justified cycicism is so rifr that vast numbers of people decide voting isn't worthwhile.

If anything I have said is factually untrue please say what & why becuase it must be obvious that nobody but an out & out racist Nazi could could support corrupt recist genocidal child raping ***** (Clinton in particular) such as I have described.

Neil you forgot
The uses employs four year olds to make lampshades of Jews.

That it uses blacks to develop experimental drugs.

It unbleashes its Marines disguised as Moslems on Paris whenever Europeans get uppity.

That it hunts down Leftists and massacres them regularly and would do it even more frequently if it weren't for the NY Times.

That the last paragraph pretyy much does provide a self description of your state of mind.

Humour in the face of genocide
I think you mean "the US employs"

Actually I meant Hillary employs
I mean her hubby burned up a bunch of people because of their religious beliefs. Isn't that the tolerance of the Left?

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