Thursday, December 28, 2006

S novim godom from Gazprom 

It's an annual event. As temperatures dip in Eurasia, Gazprom gets the itch to increase its revenue stream in Russia. It has had Russian foreign policy as its biggest ally in the past -- witness the last two years' fights with Ukraine or the row with Georgia -- but now has decided to apply thumbscrews to its friends. And not just its nominal friends nearby like Azerbaijan, but now they are trying to stick it to Belarus, the most Russophilic of its neighbors. Captain Ed thinks Gazprom's heavyhandedness will lead to Belarus playing footsie with Europe, but Gazprom is arguing that it has enough already stockpiled in Europe to meet the EU's needs, and the EU isn't making any noise over the Russia-Belarus dust-up just yet. In short, the EU isn't too happy still with Lukashenka after the disastrous elections last March. Sorry Ed, but you seldom play footsie with someone who calls you a "scar on the face of Europe."

Gazprom may recognize that Belarus has less leverage here than Ukraine or Georgia, and has decided as a business matter to use its power for short-run gain. For what reason does Belarus get the same subsidized rate (about a fifth of the European rate) as do Russians themselves? It has always been about politics. If Belarus has no leverage with the West
-- and I hardly expect they will until Lukashenka has a warmer home address than Minsk -- it emboldens Gazprom to seek further concessions. Indeed, the Europeans disinclination to engage in any real policy towards developing democracy and civil society in Russia's near abroad strengthens Gazprom's hand. US weakness after the midterm elections cannot help either.