13.05.2007
Russia Looks to the Orient
№2 2007 April/June

In spite of all
the passions being generated by the upcoming parliamentary and
presidential elections, due in 2007 and 2008, respectively, Russian
foreign policy will continue to be marked by the systematic and
long-term revamping of Eastern policies, which began a partial
resurgence in the 2004-2006 period.

The methodologies
being implemented by President Vladimir Putin will continue to
determine foreign policy beyond 2008 regardless of who will be the
presidential successor in the Kremlin. The key issue will remain
the same, namely, what resources and levers can help Russia return
to the Greater Orient in practical terms, and whether it needs this
return at all. If it is decided that it does need such a return, in
what capacity should it be? As a renovated liberal empire, or an
energy superpower, which has already taken on an early form?
Indeed, the latter concept underscores the proposed establishment
of an Energy Club of the Shanghai Cooperation Organization (SCO),
which will form a new Eurasian energy space embracing Russia,
China, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. If the
project engages SCO observer countries – Iran, India, Pakistan and
Mongolia – it will serve as a counterbalance to OPEC, as well as
other Western institutions and concepts (like the Energy Charter).
It will also provide Russia with a podium for its new
Orient-directed capabilities.

AGENDA FOR THE
MIDDLE EAST

Middle Eastern
developments, which include a new surge in the Arab-Israeli
conflict due to preparations for a larger war between Iran, Syria
and Hizbollah, on the one hand, and Israel and the U.S., on the
other – make Russia partially hostage of the ongoing events. In
2005 and 2006, Moscow established very close contacts with
Palestinian and Shiite movements in the region. While the physical
construction of bridges in war-torn Lebanon is a noble idea, the
construction of a Russian political bridge between the Palestinians
(Hamas) and Syria, on the one hand, and their opponents, Israel and
its allied powers on the other, is apparently dragging its feet.
Clearly, Moscow’s energy-sector diplomacy in that region is not
particularly fruitful while supplies of defense products to Syria
and Iran irritate Israel and the U.S. Hence, it seems Russia will
have to work hard for a place amongst the Quartet of international
peace mediators, and for designing a new version of the Road Map
peace plan.

However, the
Middle East crisis proves that President Putin has obtained new
opportunities to influence separate Arab countries. He has
strengthened bilateral formats with several countries, including
Morocco, Jordan, Egypt and Saudi Arabia. The Russian leader’s
visits to Saudi Arabia, Qatar and Jordan in February 2007 caused
extensive response in the world. In regard to its relations with
Algeria, Russia cancelled debts totaling $7 billion. Russia’s
energy diplomacy is having an influence that frequently
materializes into concrete political results. This is naturally
lucrative for Russia in many ways.

WHAT TO DO WITH
IRAN?

Certain elements
of the Russian-Iranian relationship are rather controversial and
prone to generating conflicts. However, a number of factors,
including the proximity of the two states, the mutual benefits of
nuclear projects and cooperation in defense-related technologies
serve to mitigate these local controversies to some
degree.

In 2007 and 2008,
Russia will continue to honor its relations with Teheran despite
mounting criticism over Iran’s nuclear programs, not to mention the
possibility of UN-imposed economic sanctions against Iran. It is
clear that in the event of the latter, Moscow – as well as Beijing
– will have to readjust its positions and support the sanctions at
the UN Security Council. This, however, will essentially be a more
tactical rather than strategic step. Besides sharing regional
interests in dividing the Eurasian markets of energy resource
supplies, together with nuclear projects in Iran, the two countries
are also bonded by the agenda of forming a multipolar world, which
might be interpreted as covertly anti-American. For Moscow, the
realization of closer ties with Teheran poses bigger risks, as it
has much more to lose, such as the Russian-U.S. partnership,
however formal it may be at the moment, relations with the EU, and
its reputation in the International Atomic Energy Agency, the UN
Security Council and other organizations. Meanwhile, the Iranians
long ago showed their hand as they threw down an overt challenge to
the U.S. and Israel. Thus, Russian-Iranian cooperation is strictly
meted out in doses, especially on the Russian side. The Bushehr
nuclear project, which has been halted by financial questions,
provides a graphic example. More importantly, Moscow is attempting
to publicly exert influence on Iran so that the latter softens its
anti-American stance. Understandably, this will not persuade
Teheran to voluntarily dismantle a number of its nuclear
facilities. It is more likely that the Iranians will schedule the
transition of dual-purpose installations to purely defense projects
for the medium-term, as the chances are high that they still do not
have the technological resources to accomplish the job in the short
term (2007 or 2008).

WHY RUSSIA NEEDS
TURKEY

Presently, the
natural gas trade makes up the core element of Russian-Turkish
economic and, to a degree, political relations. Turkey is a
promising part of Russia’s energy strategy; Russia meets 65 percent
of Turkish demand for natural gas. These supplies travel via the
Trans-Balkan pipeline and the Blue Stream pipeline, which stretches
across the Black Sea bed (and survived some dramatic moments while
under construction). Considering the new opportunities for gas
re-export to adjacent regions, Russia now feels much more secure in
this sphere. In all probability, the Turks will try to reduce their
dependence on Russian gas and establish alternative channels of
energy resources from other countries. Assuming that political
relations will continue to improve – or at least keep at their
current levels – the most promising areas of Russian-Turkish
business in 2007 and 2008 will be in the supply of electric power
and equipment for a number of power plants, existing contracts on
gas, and the development of telecommunications.

INDIA AND THE
PAKISTANI RESOURCE

Objective factors
in Russia and India’s mutual complementability include their
willingness to set up a network of new energy and transport
corridors, and this fits into the SCO’s new Eurasian energy
strategy. On the other hand, the lifting of restrictions imposed on
India by the Nuclear Suppliers Group generates competition from the
U.S. and other countries. Russia is unlikely to have the same
advantages on India’s civilian nuclear power market that it has in
Iran and some other countries. Our economic objectives in India are
localized rather narrowly. First, Russian companies must maintain
their grip on individual segments of the promising nuclear market.
Second, we must fortify trade, including in the realm of defense
technologies. Third, cooperation must embrace the maximum number of
high-tech industries, and the Indians must be encouraged to invest
heavily inside Russia.

Provided all of
this takes place, Russia’s motivation as regards Pakistan may
assume the following pattern. First, new opportunities can be
tapped as Russia positions itself as a mediator in Indian-Pakistani
relations. Second, we can make good use of the Pakistani resource
in combating terrorists and Islamic extremists, among them Chechen
and other militants based in Russia’s North Caucasus. Third, there
are good prospects for cooperation in the energy sector, which
envisions the growing activity of Russian companies, like Gazprom,
for example, on the Pakistani market. Russian Prime Minister
Mikhail Fradkov’s visit in Palestina in April 2007 became a
landmark in relations between the two countries.

ABANDONING THE
POST-SOVIET AREA? FOR GOOD MONEY, OF COURSE

Central Asia and
the South Caucasus have a key role for Russia in terms of security
and potential threats. An analysis of the sequence of regional
events exposes the following features: First, Islamic extremism and
drug trafficking in Central Asia are growing, while radical
movements (Hizb-ut-Tahreer and others) are changing their tactics
and shifting their activity to the legal social field, working with
young people or the elderly, for example. This makes them even more
dangerous for the authorities. Second, Russia’s activity in the
region is growing both at the level of bilateral relations and
collective projects, including in the Collective Security Treaty
Organization, the Eurasian Economic Community, the Common Economic
Area, as well as in the realm of politics, defense, trade and
diplomacy. Third, the Russian-Georgian crisis has reached a
critical point. Russia is cautiously proposing Kosovo’s precedent
for interpretations in the possible self-determination of the
breakaway Georgian provinces of South Ossetia and Abkhazia. Next,
uncertainty is growing over a peace settlement in Nagorno-Karabakh,
as the settlement concept of the Minsk group of mediators, which
Russia is a member of, set up by the Organization for Security and
Cooperation in Europe, has reached a deadlock. Finally, the energy
factor has become more variegated since the Baku-Tbilisi-Ceyhan oil
pipeline opened as an alternative to Russian pipeline routes.
Meanwhile, new anti-Russian political projects (like the overhauled
GUAM organization) are starting to take shape. Add to this GUAM’s
attempts to set up peacekeeping forces that would replace Russian
peacekeepers in the Abkhazian and South-Ossetian zones of
conflict.

To sum up these
tendencies, Russia will continue to build up its political and
economic presence in Central Asia (the energy sector, most
importantly) in the near future, while mitigating instability in
the South Caucasus (Georgia). This tendency presupposes the
possibility of Moscow recognizing de jure independence of South
Ossetia and Abkhazia, together with the signing of bilateral
agreements on mutual assistance with these regions. However,
Russia’s leadership seems to be keeping such a move up its sleeve
as a last resort. On the whole, with the exception of Armenia, the
South Caucasus has become a lost region for Russia, although Moscow
will continue tough bargaining over it with the U.S.

INDISPENSABLE
CHINA

Russia’s
East-Asian strategy incorporates a search for the best possible
paradigm of relations with large and small countries of the
Asia-Pacific region. This includes the simultaneous creation and
development of “bilateral partnership nodes” with countries of
Northeast Asia – China, the Koreas, Japan and Mongolia. Some of
these nodes, like the Russian-Chinese partnership, for example,
have solidified, while others, like the Russian-Japanese and
Russian-North Korean partnerships, are experiencing rather
complicated phases of development. But plans to divert 30 percent
of Russia’s hydrocarbons exports from the West to the East
following the completion of oil and gas pipelines presently under
construction will give new incentives for healthy
partnerships.

Already today,
one can look at these projects as part of a greater Eurasian Energy
Club project of the SCO. If the plans materialize as expected, the
Europeans will feel the real value of Siberian energy resources,
and the European Energy Charter will reduce to the status of a
piece of paper that makes declarations, but fails to relieve the EU
from its dilemmas. Simultaneously, it appears that President
Vladimir Putin holds all the keys to the Europe-Russia-East Asia
energy balance in the years 2010 through to 2012. Incidentally,
although Putin regularly makes open hints, Old Europe is reluctant
to comprehend the far-reaching essence of Russia’s steps, while New
(Eastern) Europe is unable to grasp the situation due to its
overwhelming Russophobic sentiments. Moscow may eventually tire of
its attempts to appease capricious and wealthy Madam Europe and do
what it finds appropriate for itself.

Meanwhile, in its
efforts to build relations with China, Russia tries, on the one
hand, to minimize the growing risks (ecological calamities in the
form of oil spills, the depletion of border rivers, migration,
China’s growing economic might) and, on the other hand, to make
relations as profitable as possible. A Russian-Chinese partnership
will not transform into an absolute benefit or absolute evil in the
nearest future. The most probable forecast suggests parallel
combinations of encouraging tendencies and risks, which will grow
and diversify within the structure of partnership.

WHY JAPAN
CONTINUES TO BE ELUSIVE

Any sort of
romance in Russian-Japanese relations continues to be elusive,
although as early as Boris Yeltsin’s presidency it seemed that
mutual affection was just around the corner, especially after the
success of the casual summit near Krasnoyarsk. The Japanese seemed
to be under the illusion that Yeltsin had some sort of covert
strategy to revert the “northern territories” to their country by
2000, but Vladimir Putin, who appeared on the scene like a strict
teacher in front of a class of undisciplined schoolchildren,
immediately put everything in place. Illusions about open or secret
plans for territorial concessions vanished. Fuel was added to the
fire by a scandal involving the Sakhalin-2 offshore hydrocarbon
project, although the real motives of that incident require
separate scrutiny. In theory, the Soviet-Japanese model arranged in
1956 – the year of the signing of a peace treaty followed by the
division of the Southern Kurile Islands along the 2:2 scheme –
could offer an optimal compromise solution for Russia. Yet, in a
best-case scenario, its practical enactment remains very
problematic until 2010 or 2012. Russian-Japanese relations in 2007
and 2008 will remain in the format of the existing paradigm:
reserved dialog against the background of internal
tensions.

NORTH KOREAN
BLAST CHANGES NOTHING

North Korea’s
underground nuclear tests place objective restrictions on political
relations between Russia and the Democratic People’s Republic of
Korea. The situation in the region deteriorated markedly after
October 14, 2006, when the UN Security Council passed the dramatic
Resolution 1718; Russia and China voted for the Resolution, thus
launching sanctions against Pyongyang. However, Pyongyang’s
declared intention to return to the nearly ruined six-partite
negotiations at the end of 2006, and the success made there,
testifies to continued bargaining between Washington and Pyongyang
– with a certain role played by Beijing – over the future of North
Korea and its nuclear program (possibly centered on an amount of
$15 billion to $17 billion). A collapse of the North Korean regime
would be dangerous and unrewarding for Russia and other neighboring
countries. At the same time, such a scenario would give a chance to
some neighbors in the region – Japan, South Korea and Taiwan – to
become full-fledged nuclear powers.

RUSSIA’S
SITUATION
ON
THE “EASTERN FRONT”

First, Russia is bound for an intense
rivalry for a place under the sun, since its closest allies (China,
Central Asian countries, and India) and more distant partners
(Turkey, Iran, Pakistan, Azerbaijan, etc.) all have their own
notions about dividing the spheres of influence and interests.
These notions occasionally conflict with those of
Russia.

Second, Russia’s Eastern policies will
remain to a large degree discreet and impulsive in 2007 and 2008 in
terms of reacting to newly appearing challenges and events. Thus,
Russia will continue to implement its policy along the principle of
energy resources, which will be projected on to both regional and
global policies.

Third, the odds are high that the
situation in the Islamic zone (the Middle East, Iran, and
Afghanistan) will worsen and the region will turn into a minefield
for Russia. The reorientation of Russian policies toward the
Islamic world would be dangerous as both the Christian Occident and
the Islamic Orient may breed contempt for Russia if given the right
circumstances.

At the same time,
Russia’s renewed and more dynamic position in the Islamic world may
theoretically provide an extra resource for strengthening itself,
while providing an opportunity for regaining old niches and carving
out new ones in the Arab East and Moslem areas of South and
Southeast Asia.