Caught in the Vise of Russia’s Illiberal “Liberal Empire”

After the disintegration of the USSR, Russia is bent on building an economic empire. By buying key economic entities across the territories of former Soviet republics, it wants to ensure their dependence on Moscow. So far, Russia has successfully controlled the actions of its neighbors by rewarding the obedient with lower gas prices and vice versa. Recently, Russia has banned exports from Georgia and interfered in other ways to create a government backlash and thwart any pro-West policies. A new Russian empire – economic in form rather than military – poses renewed threats to European security. – YaleGlobal

Caught in the Vise of Russia’s Illiberal “Liberal Empire”

Vladimer Papava
Tuesday, March 20, 2007

Across the West, many people are questioning whether Russia will continue using natural gas as a means of putting economic and political pressure on Ukraine, Georgia, and other countries in what the Kremlin regards as its "near abroad." Using the "energy weapon," however, is not just a tactic: It is at the heart of the prevailing doctrine guiding Russian foreign policy.

Russia's policy toward the post-Soviet countries is based on the doctrine of a "liberal empire," according to which Russia's major government-owned and private companies should assume control of key economic entities across the territories of the former Soviet republics by acquiring their assets. In this context, the word "liberal" should be understood to suggest that the empire of the "new Russian dream" should be built by purely economic means, excluding all forcible action against other nations.

Naturally, the key role in this model is given to the supply of energy to the post-Soviet countries. In particular, the Russian utility giant Gazprom uses increases in gas prices as a means of punishing "disobedient" neighbors. Ukraine was punished in this way for its eagerness to integrate with the West following the Orange Revolution. However, after the return of the pro-Russian Victor Yanukovich as prime minister, the country's pro-Western orientation was significantly weakened. So it should be no surprise that Ukraine has faced no further problems with the supply of Russian gas.

But Georgia remains a major Kremlin-Gazprom target. Russia's attempt to drag Georgia into its imperial net started in the summer of 2003, when the Russian power monopoly United Energy System took control of 75 percent of Georgia's electricity network. After the "Rose Revolution" of November 2003, Russian companies turned out to be the most avid purchasers of Georgian enterprises and their assets.

The first significant obstacle in the way of Russia's designs on Georgia was intervention by the United States, which demanded that the Georgian government drop negotiations with Gazprom and banned Georgia from selling the gas pipeline that connects Russia and Armenia through Georgian territory. Russia punished Georgia almost immediately, banning the import of Georgian wines and mineral waters - both of which are key export goods.

As Georgia's prospects of joining NATO seemed to increase, Russian actions became more illiberal. Ethnic Georgians living in Russia, including Russian citizens, became targets of persecution. Russian actions were aimed at fomenting an anti-government backlash in Georgia, thereby paving the way for pro-Russian political forces to come to power. But the illiberalism inherent in Russian imperialism is not limited to recent behavior, and, more disturbingly, it extends to the question of Georgia's territorial integrity, as Russian troops continue to prop up secessionist regions.

By provoking ethnic conflicts in the territories of former Soviet republics, Moscow hopes to keep them under its control and influence. Ironically, the Russian troops deployed in the renegade Georgian regions of Abkhazia and South Ossetia have been accorded the status of "peacekeepers." But they are really illegal occupiers, as Russia's decision to give Russian passports to these regions' residents attests.

Now Russia is threatening to recognize the independence of Abkhazia and South Ossetia if the West recognizes the Serbian province of Kosovo as an independent nation. To the extent that most of the residents of Abkhazia and South Ossetia have already been given Russian citizenship, the recognition of those two regions' sovereignty would be entirely fictitious and, in fact, an interim measure on the way to full annexation by Russia.

To strengthen Russia's political influence over Georgia's separatist regions, Gazprom, without taking the trouble to ask for permission from Georgia's democratically elected leaders, has begun constructing a gas pipeline connecting Russia and South Ossetia directly. Although there was no interruption of gas supply from Tbilisi to South Ossetia, this step is necessary for the Kremlin to ensure even greater integration of this Georgian region into Russia's economic system.

With Gazprom having already doubled gas tariffs for Georgia, the energy noose is tightening. But, thanks to gas supplies from neighboring Azerbaijan, Georgia has not yet been strangled.

A revived Russian empire, whether it is constructed by force or through economic coercion, is not in anyone's interests. Reining in Russia's illiberal "liberal empire" is the central question of European security today.

Vladimer Papava, a former minister of economy of the Republic of Georgia, is a senior fellow at the Georgian Foundation for Strategic and International Studies and author of “Necroeconomics,” a study of post-communist economic problems. “The Daily Star” publishes this commentary in collaboration with Project Syndicate (www.project-syndicate.org).

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