Slavs Put Up Their Dukes By Boris Kagarlitsky The dispute was short but bitter. As it celebrated the new year, Russian society did not notice that on the morning of Jan. 1 it had been drawn into the biggest foreign affairs conflict since the end of the Cold War. The Kremlin knew in advance that Ukraine was unable to pay for gas at Western European rates.
In a paradoxical way, from the point of view of international division of labor, Ukraine and Russia, just as in the Soviet period, make up an integral whole. After 1991, Russia, with its enormous natural resources, became a supplier of raw materials and energy for the West. But not all these resources can simply be sent straight out; indeed, from the standpoint of Europe's economic interests, it makes more sense that part of the energy in question be consumed in its country of origin, in making labor-intensive, fuel-intensive and ecologically harmful products that can then be moved along to the West. This is Ukraine's specialty. Without Russia, Ukrainian industry makes no sense, while for the Russian raw materials economy Ukraine represents not only a transit corridor but also an important staging area -- an advance outpost on the road to Europe. It is this, and not some mythical blood kinship or linguistic unity, that predetermines the invariable pro-Russian orientation of the eastern and southern parts of Ukraine. People speak better Russian in Kiev than in Donetsk. But it isn't the purity of Russian that determines policy and politics. It is economic interests. So the real blow delivered by Moscow's policy was absorbed by the Russian-speaking regions of Ukraine. They use the larger share of imported fuel. The largest share of industry is concentrated there, as is the more urbanized population that depends more on a central supply of fuel. And Ukraine's own fuel sources are located precisely in the west, which has a self-sustaining energy capability. Demanding $230 for gas instead of $50 is the same as demanding Ukraine close down its economy and furlough the population. Which was understood in Moscow no worse than in Kiev. But it's another thing altogether to see that Russian industry could not gain great advantages from the bankruptcy of its western neighbor. The Russian metallurgical industry could not win new markets for itself after a production halt in Ukraine -- as it is now Russian productive capabilities are used only on a by-order basis. For the construction of new enterprises considerable investment would be necessary. Thus the interests of Russian companies that had already poured funds into Ukraine were put at risk. The Kremlin clearly felt it could pressure Kiev via the European Union. The Putin people were fairly chortling at the prospect of watching Ukrainians and Western Europeans bump heads. But that kind of game requires real nerve and a fairly large degree of independence from the West. Moscow's policy would only have been effective if Gazprom had categorically refused to compensate the Europeans for the fall-off in deliveries: We held up our end of things, they could have said; if the gas doesn't go through, blame Ukraine. But having announced their intention to compensate for gas lost over Ukraine, Moscow assumed de facto responsibility for the situation. After a few days, it turned out that Russia's attempt to have its way with its western neighbor had misfired, producing nothing. And the irritation of the Europeans was directed not at Kiev but at the Kremlin. As you would expect, feeling pressure from the West, Moscow immediately did an about-face, covering itself with an attractive compromise. Ukraine was to have a price that gave Russia a minimal profit yet represented the maximum that the user industries could pay. What was all this really about? Please, we can do without fairy tales about an "argument between managerial entities." The decision to launch this war was political, just as was the decision to retreat quickly. Of course the bureaucratic incompetence of the Kremlin bosses and their devotion to market fundamentalism can't be dismissed from the equation. But internal political considerations played no less a part than economic interests did. The rulers of Russia are slowly and uncertainly trying to construct a new "national ideology." This ideology needs an enemy. And Ukraine is just the kind of enemy that meets the appropriate criteria of size and ideology for contemporary Russia's capabilities. Enmity with Ukraine reemphasizes the destruction of the Soviet Union (not only in a formal political sense, but in economic and cultural terms) -- which is the general strategic goal of both the post-Soviet elite in Moscow and the imperial leadership in Washington. Boris Kagarlitsky is director of the Institute for Globalization Studies. http://www.moscowtimes.ru/stories/2006/01/12/008.html Serbian News Network - SNN [email protected] http://www.antic.org/
