IN THIS ISSUE

* Gazprom discusses Romanian participation in South Stream
* Warsaw protests over harassment of the Polish minority in Belarus
* Moscow considers World Bank investment in North Caucasus economic development
* Military operation in Ingushetia kills civilians gathering wild garlic
** New in the Jamestown blog on Russia and Eurasia (http://www.jamestown.org/blog):
- The Sino-Russian Race to Sell Arms
- Gone with the Wind

Gazprom Playing With Poor Options on South Stream in the Black Sea

Vladimir Socor

On February 17 in Bucharest, Gazprom Vice-President Aleksandr Medvedev conferred with Romanian officials on a range of bilateral projects. Medvedev hinted at possible Romanian participation in Gazprom’s South Stream pipeline project, from Russia to Europe via the Black Sea. On the previous day in Sofia, Gazprom CEO Aleksei Miller had unsuccessfully tried to “reactivate” Bulgaria’s participation in South Stream (EDM, February 18).

According to Medvedev’s concluding statement and a press release from Gazprom, the Romanian side confirmed its interest in the South Stream project and presented technical data, which Gazprom had requested earlier, toward a feasibility study for South Stream in Romania. The Russian side suggested that Romania’s state-owned gas transmission operator, Transgaz, join South Stream by entering into a joint venture with Gazprom (Interfax, February 17; Mediafax, February 18).

Those Romanian technical data pertain almost certainly to the seabed of the Black Sea in the Romanian exclusive economic zone. Gazprom had indeed requested the seabed data last year and Bucharest was slow to deliver. The Romanian Economics and Trade Ministry’s press release (February 17) listed “developing the [gas] transit network” (apparently, an allusion to South Stream) as one among the topics discussed with Medvedev. The ministry ruled out a joint venture of Romgaz (the state-owned gas producing company) with Gazprom.

Previewing the talks, Russian representatives in Bucharest told the press that Romania has good chances to be included in South Stream due to the country’s location and the unfinished negotiations between Gazprom and Bulgaria (Adevarul, February 17).

Moscow has made several overtures to Romania in this regard since fall 2009, just after the new Bulgarian government had halted its participation in South Stream for the time being and ordered a review of the project’s terms. Moscow is trying to impress Sofia that the South Stream pipeline can be routed through Romania, if Bulgaria stalls.

Gazprom’s overtures to Romania can also unsettle Turkey, if the government in Ankara truly believes South Stream to be a realistic project. Ankara has already agreed to allow the South Stream pipeline to pass from Russia through the Turkish exclusive economic zone in the Black Sea, en route to Europe. Most recently, the Russian and Turkish prime ministers signed an energy partnership agreement, enshrining the Turkish seabed route for South Stream (Interfax, Anatolia news agency, January 13). However, Gazprom’s use of the Romanian zone would rule out the use of the Turkish zone for the pipeline.

Bulgaria is the only country through which South Stream must necessarily pass in order to reach all the countries that have signed up to this project.

Theoretically, South Stream has two options for crossing the Black Sea from Russia to Bulgaria: from the Russian through the Ukrainian, Romanian, and Bulgarian exclusive economic zones, to a landfall point in Bulgaria; or through the Russian, Turkish, and Bulgarian zones, again to a Bulgarian landfall point. On the first option, Ukrainian permission seems unimaginable, as it would allow Gazprom to shift massive volumes of gas from Ukraine’s own transit pipelines into South Stream. The second option is convenient to Russia politically; but the Turkish seabed route is the longest, deepest, and the most expensive of all options.

Theoretically, Gazprom has two bypass options against Bulgaria: from the Russian via the Ukrainian and Romanian zones to a Romanian landfall, then overland into central Europe; or via the Russian and Turkish zones to a Turkish landfall, then overland into southern Europe. This would imply bifurcating the South Stream pipeline in the middle of the Black Sea, then following two circuitous routes around Bulgaria toward southern and central Europe, respectively. Russian planners can hardly consider these options seriously.

Thus, Bulgaria holds an unassailable position and its government is well positioned to bargain hard with Russia over the terms of South Stream or other energy projects.

South Stream can only reach the Romanian exclusive economic zone after crossing the Ukrainian zone in the Black Sea. Thus, Gazprom’s overture to Romania makes no practical sense, if it refers to the seabed route.

However, it is possible to speculate that Gazprom is offering to build an extension of South Stream into Romania overland, branching off from a neighboring country. In that case, Romania would not be considered a transit country for South Stream, but merely a customer country. This is the model that Moscow is currently offering to Croatia, in return for major concessions from Zagreb.

By all public evidence, Medvedev failed to mention any gas reserves that might be available in Russia or elsewhere for the South Stream pipeline. Nor did he mention financing. These omissions occur invariably when Russian government and Gazprom officials discuss the South Stream project with countries that have joined or consider joining the project.

Economics and Trade Minister Adriean Videanu led the Romanian team in these (and some previous) talks with Medvedev. The Romanians have three main objectives in these negotiations. In The goals, in chronological order, are:

1. Creating a joint venture between Romania’s state-owned gas producer Romgaz and Gazprom to build underground gas storage sites in Romania. The capacities would total 5 to 6 billion cubic meters (bcm), including one site at Margineni (northeastern Romania) for 2 or 2.5 bcm. The joint venture would market the gas in European Union member countries (Agerpres, February 17).

2. Eliminating trading companies that Gazprom has inserted in its supply relationship with Romania. The existing supply contracts expire in 2012, at which point Romania wants the two intermediaries, WIIE and Imex Oil, removed, and new contracts signed with Gazprom directly. Medvedev showed some receptiveness to this proposal (Interfax, February 17; Mediafax, February 18).

3. Negotiating the prolongation of transit agreements for Russian gas via Romania en route to Bulgaria, Greece, and Turkey. The transit agreements between Gazprom and Transgaz expire in 2011. Bucharest is now well placed to demand an increase in the transit fees, as Bulgaria demands and Ukraine has, as of January 2010, obtained (EDM, February 18).

One day ahead of Medvedev’s visit, and apparently timed to it, Romania’s Chamber of Deputies (lower house of parliament) ratified the inter-governmental agreement on the Nabucco project.

Belarus Targets the Union of Poles

David Marples

On February 8, around midday, about twenty Belarusian police and officials from the Valozhyn district court descended on the Polish House in Ivyanets (Iweniec), 40 miles west of Minsk, ordered all personnel to leave, and then changed the locks. The Belarusian authorities claimed that the faction of the Union of Poles of Belarus (Zwiazek Polakow na Bialorusi –ZPB) recognized by Poland, but not by Minsk, had taken over the house illegally (www.naviny.by, February 9). The seizure was the latest episode in the turbulent history of the ZPB, which has been under assault from the Lukashenka government for the past five years.

The Polish government reacted sharply. The Polish Ambassador to Belarus, Henryk Litwin, was recalled to Warsaw for talks (he has since returned to Minsk), while the Belarusian Ambassador to Poland, Viktar Haysyonak, was summoned to the Polish foreign ministry where Deputy Foreign Minister Andrzej Kremer expressed his anger (RIA Novosti, February 9). The Polish foreign ministry also requested discussions with Belarusian Foreign Minister, Syarhey Martynau, who visited Warsaw on February 12. Foreign Minister Radoslaw Sikorski called the recent actions against the unrecognized ZPB faction (several dozen members were arrested in late January) “repressive and intimidating” (www.thenews.pl, January 24, www.msz.gov.pl, February 10).

The Polish-born President of the European Parliament, Jerzy Buzek, asked Minsk promptly “to cease the harassment of its Polish minority” (Narodnaya Volya, February 10). Also, the Polish Law and Justice Party, founded by Lech Kaczynski, the Polish President, and his brother Jaroslaw, currently the party chairman, called on the Polish government and the EU to introduce an economic embargo against the Belarusian authorities (Narodnaya Volya, February 11). Only two days earlier, Buzek had also chided Belarusian authorities for detaining a journalist from the Polish TV station in Minsk, Belsat, after security officers had burst into an apartment in which members of the network were staying (Belorusskaya Delovaya Gazeta, February 10).

However, the crackdown continued. On February 16, riot police arrested 24 opposition activists who were preparing for a rally in support of the ZPB in Minsk’s Kastrichnitskaya Square (www.charter97.org, February 16). About 40 members of the unrecognized branch of the union were arrested with three receiving prison sentences of five days. The Polish Sejm in response has adopted a resolution lambasting the Belarusian authorities for their treatment of their Polish minority (www.naviny.by, February 17).

According to official information, the formation of the ZPB derived from the creation of a State Committee on Religions and Nationalities under the Council of Ministers in 1997. Subsequently, 124 public associations were formed, consisting of 25 national minorities, the largest of which was the ZPB with 75 registered primary organizations and 17 “Polish Houses.” In 1999, there were around 396,000 Poles resident in Belarus (4 percent of the population), of which 74 percent lived in Hrodna region. When the ZPB was founded in October 1990, its goal was to resuscitate the Polish language and culture in Belarus with the financial support of the Polish government. Today it has about 22,000 members (http://www.belarusembassy.org/humanitarian/union_of_poles_in_belarus.htm).

In March 2005, when the ZPB held its 6th Congress, the Belarusian government intervened. It declared that the election of the new leader, Andzelika Borys (she replaced Tadeusz Kruczkowski), had taken place with “gross violations” and that the justice ministry refused to recognize it as valid. It demanded a repeat election after riot police had stormed the Polish House in Hrodna (EDM, Aug 2, 2005; www.charter97.org, February 9). Subsequently two branches of the ZPB emerged: the original under Borys (ZPB-B) and a pro-official Minsk version, led by Stanislav Siemaszko (ZPB-S). In March 2009, the ZPB-B held its 7th Congress in Hrodna, with 150 attendees and reelected Borys (Polskie Radio, March 16, 2009). The Lukashenka regime again withheld recognition.

The Ivyanets episode was a replay of events at the higher leadership level. On January 21, the ZPB-B chapter unanimously reelected Teresa Sobol as the local chair and manager of the house. However, simultaneously, at the nearby House of Culture, the ZPB-S, with Siemaszko and other pro-government leaders in attendance, elected Stanislav Buraczewski the chair of the same chapter. After changing the locks at the Polish House on February 8, the militia escorted Buraczewski into the building (www.charter97.org, February 9).

The authorities have accused Sobol of stealing leadership funds in 2004 and no longer recognize her as the branch leader (www.naviny.by, February 9). Similarly, they have also frequently harassed Borys –on one occasion in late 2006, confiscating her passport upon allegedly discovering white powder in her car, thereby preventing her from attending a meeting in Strasbourg (International League for Human Rights, November 30-December 6, 2006).

The goal of Belarusian authorities is to silence what it calls the “unofficial” ZPB by forcing it into a merger with the more compliant wing. The head of the ZPB-S legal unit, Eduard Kolosha, has called for an “open discussion” and a merger from the grassroots level (Belarusian Telegraph Agency, February 5). Poland, however, continues to support the faction led by Borys. The house in Ivyanets was evidently in a shambles before it was bought and renovated with funds from an NGO supported by the Polish government, Wspolnota Polska (Polish Community) (www.naviny.by, February 9).

In supporting a cultural association, Poland has no political agenda. But the Lukashenka regime has perceived the ZPB since 2005 as a “fifth column” that maintains close relations with the Belarusian opposition. Subsequently, it has tried to destroy the “unofficial” wing and its branches by discrediting its leaders, while also undermining foreign media networks, such as Belsat. Such crude and heavy-handed methods are unlikely to improve relations either with Belarus’ western neighbor, or the EU.

Moscow Struggles to Control and Modernize the North Caucasus

Valery Dzutsev

On February 16, President Dmitry Medvedev met the President of the World Bank, Robert Zoellick. The World Bank’s possible involvement in the development of the North Caucasus became one of the three main topics of their discussion. This may signify a major retreat from the long held Russian policy of isolation of the North Caucasus from the outside world. Medvedev’s close aide Arkady Dvorkovich said that the Russian president’s envoy to the North Caucasus Aleksandr Khloponin would be entrusted with the task of carrying out further negotiations with the bank. Dvorkovich estimated the World Bank’s gross investments into new projects in Russia at over $1 billion in 2010 (www.kremlin.ru, February 16).

As yet another sign of the changing policies in the North Caucasus, President Medvedev dismissed the notorious Deputy Russian Interior Minister, General Arkady Yedelev, who had been responsible for security in the North Caucasus (Ekho Moskvy, February 18).

In his state of the nation address in November 2009, President Medvedev called the unstable situation in the North Caucasus Russia’s biggest domestic problem. To deal with the issue, he proposed appointing a special presidential representative in the region. On January 19, Medvedev surprised many observers by redrawing the federal districts’ map, setting up a new North Caucasian Federal District that included Dagestan, Chechnya, Ingushetia, North Ossetia, Kabardino-Balkaria, Karachaevo-Cherkessia and the Russian-speaking Stavropol region. The appointment of Aleksandr Khloponin, the governor of Krasnoyarsk region in Siberia, as Medvedev’s representative in the new district came as another surprise. Khloponin was explicitly instructed to focus on the economic development of the North Caucasus.

Acknowledging the World Bank’s expertise in the developing countries and its applicability to the North Caucasus means that Moscow recognizes it lacks the capacity to modernize the region, be it a lack of financial resources, or of know-how, or both. It also appears to be a tentative step to open up the region to the outside world, contrary to the traditional Russian mantra about Western support for separatism and the insurgency in the region.

The Russian government has made significant efforts to limit foreigners’ access to the North Caucasus. Foreigners from non-CIS countries are not even allowed to cross the border into Russia from the South Caucasus via the North Caucasus republics. Large chunks of the territories of the republics are officially designated “border zones,” meaning that foreigners are required to receive special permits from the Federal Security Service (FSB) to visit them. Most importantly, foreign NGO’s and other organizations working in the region are regularly harassed and forced to curtail their activities or shut down. Russian visas are routinely denied to journalists and human rights activists who wish to visit the region. Given the fear of regular outbursts of violence in the North Caucasus and administrative restrictions imposed by the Russian government, the territory is virtually cut off from the outside world.

Besides trying to engage the World Bank in pursuing its new policy of economic developing the North Caucasian republics, Moscow appears to be heavily relying on the Russian oligarchs.

On February 15, after hiding in Turkey for months, the fugitive Russian oligarch Telman Ismailov suddenly appeared in Grozny. He promised to invest in economic projects in Chechnya, and his son became the vice president of the local soccer team Terek (Ekho Moskvy, February 15). Prime Minister Vladimir Putin was reportedly outraged after Islmailov opened a five-star hotel in Turkey in June 2009 –an estimated investment of over $1 billion. The businessman’s companies suffered pressure from the government, while he himself did not return to Russia until February this year.

Another fugitive oligarch, Mikhail Gutseriev, who comes from Ingushetia, may also return from the UK and invest in the North Caucasus. “The authorities intend to use Gutseriev’s ambitions,” the well-known Russian analyst Stanislav Belkovsky said in an interview with Rosbalt on February 16, adding, “He has offered his services in pacifying Ingushetia and in committing to several big investment projects in the North Caucasus.” In November 2009, Gutseriev unexpectedly reclaimed control over his oil company Russneft, while investigators simultaneously dropped the main charges against him –a coincidence that unmistakably points to the Russian government’s initiative.

Independent observers are skeptical about the Kremlin’s latest efforts to promote the economic development of the North Caucasus. In a commentary entitled “Investment Hell,” Gazeta.ru suggested that the region is too unstable to attract any sensible investors. The author specified corruption, politics and local clans as the main obstacles for substantial investments in the region. Tourism, which seems to be the only viable sphere for investment projects in the North Caucasus, can hardly develop under current conditions (www.gazeta.ru, February 17).

To fight corruption, presidential envoy Khloponin is endowed with the power to dismiss any head of a federal agency branch in the North Caucasus. He might also have a decisive voice in replacing a local governor. Even though this power is not widely advertized, it seems to be very probable. Moscow keeping a closer eye on the governors of the region is a realistic interim solution to reduce corruption; in the long run, however, the corruption mechanisms are likely to adapt and prevail. To fight corruption, the Kremlin would have to undertake political reforms in the North Caucasus and in Moscow itself that are hardly thinkable under the current Russian leadership.

It is thought that the economic advancement of the North Caucasus republics will improve the quality of life and undercut the spread of militant Islam, as poverty is considered to be the breeding ground for dissent. However, there is an important internal controversy in Moscow’s policies. For example, the new strategy specifies reduction of dependence of the republican budgets on transfers from Moscow. Dependence on the money sent from Moscow ranges from over 60 percent in North Ossetia to nearly 100 percent in Ingushetia. But significant reductions of this dependence would undermine Moscow’s ability to ward off rise of separatism, according to a view widely held among Russian policy analysts.

Yevkurov’s Bloody Ramsons

Mairbek Vatchagaev

A special operation in the vicinity of settlements of Arshty and Dattykh ended along the lines of a classic phrase authored by former Russian Prime Minister Viktor Chernomyrdin: “We wanted the best, but it turned out as it always does.” This broadly advertised operation implemented by Ingush troops, Federal Security Service (FSB) personnel and police, was intended to send the following message to the outside world: “Look, we are capable of maintaining order at home ourselves.” The large number of militants reportedly killed – estimates ranging from 14 to 18 – allowed the Ingushetia’s president, Yunus-Bek Yevkurov, to make a virtue of necessity. How else would one explain that simultaneously with the special operation in the foothills of Ingushetia’s Sunzha region (on the administrative border with Chechnya’s Achkhoi-Martan district), Khavazh Geroev, an employee of Ingushetia’s Security Council, was blown up in the settlement of Ordzhonikidzevskaya.

Together with resounding speeches, alarming news started arriving from neighboring Chechnya. Residents of the settlements of Bamut, Achkhoi-Martan and others expressed concern that in the area where their ancestors had been collecting ramsons (wild garlic) for centuries, military operations were being conducted utilizing tanks, artillery, airplanes, and helicopters. In fact, the members of the Chechen sub-ethnic group, the Orstkhoi, who inhabit both sides of the administrative border, do not pay much attention to the official boundaries. At first, the authorities did everything they could to conceal information about the fighting from the general public (www.mk.ru, February 13).

According to various sources, a total of 80-200 individuals came out to collect wild garlic. The FSB did not have enough time to interrogate all those detained in the area of operations. Therefore 70-80 civilians were reportedly evacuated, including those who had already been interrogated and released. However, on February 12, there were reports claiming that some of the residents of the villages of Achkhoi-Martan and Bamut were being buried by their fellow villagers and were likely being identified in official sources as slain militants. It is well known that the Russian government does not release the bodies of slain militants; therefore it is clear that all those buried on February 12 and 13 were exclusively peaceful denizens of Chechen villages. According to Muslim tradition, the dead must be buried immediately on the day of their death before sunset. Therefore, the figure of five Chechens killed (one more is listed as missing) in the Ingush operation does not correspond to reality, because locals say the number of casualties was possibly much higher. It is worth mentioning that so far there has been talk only of Chechen deaths; what happened to the Ingush who were also out collecting wild garlic that day has not been reported so far. People are anxiously waiting for the lifting of the ban on visiting the area of military operations, fearing they will find the bodies of their dead relatives (Kommersant, February 13). The number of dead among civilians can reasonably be assumed to be as high as 14 (www.km.ru, February 13).

Therefore, it is still too early to tally the final numbers of Chechen civilians killed in this operation. It is hoped that as time passes, the exact numbers, despite the veil of secrecy, will be publicized. Meanwhile, the number of 18 militants allegedly killed in the operation dropped back to 14 by the evening of February 13. Of these, only seven were identified as being wanted by authorities (www.ingushetia.org, February 13). Of course, the FSB could not blame the government troops for murdering civilians. According to them, the militants used civilians as human shields and as a result the civilian population suffered (www.vesti.ru, February 14). The FSB analyst did not realize that even if the militants were indeed using human shields, then the authorities should not have risked the lives of innocents. This concept is well-established in the West, but has been ignored by Russia for the entirety of its history in the Caucasus.

The disagreements regarding an apology by Ingush President Yevkurov are evidence that the two neighbors, Yevkurov and Ramzan Kadyrov, have a complex relationship. Instead of visiting the families of victims personally, Yevkurov expressed his condolences through the press to Kadyrov and asked the Chechen to tell the families of victims that he regrets the deaths of innocent Chechen citizens (www.ingushetia.org, February 13). However, the Ingush president’s press secretary, Kaloi Akhilgov, stated that the president had visited the families and expressed his condolences (www.mk.ru, February 13). The Chechen authorities’ calls to coordinate operations in Ingushetia were left unanswered by the Ingush leadership.

Meanwhile, the January 16, 2010 interview with the opposition leader Doku Umarov was posted online (about 18 minutes long). In the interview, Umarov summarized the accomplishments of the past year and claimed that it has been the most successful year since his assumption of command of rebel forces in 2006 (http://www.dailymotion.com/video/xc751r_interv-ju-amira-imarata-kavkaz-dokk_news). According to Umarov, the militants were able to establish proper contact among all commanders. For full coordination, a Great Council of Emirs (Shura) was created, consisting of 49 emirs. Discussing plans for 2010, Doku Umarov said that Russia will feel that the war has arrived throughout Russian territory. In other words, he is planning to expand the insurgency beyond the North Caucasus. He also indicated in the interview that there is almost no difficulty in replenishing the ranks; on the contrary, this process has now become streamlined so that the new recruits are used more effectively.

Ramzan Kadyrov completely disagrees with Doku Umarov. In an interview with the Russian government newspaper Rossiyskaya Gazeta, Kadyrov claimed that no large formations subordinate to Umarov remain in the republic (www.rg.ru, February 12)). Kadyrov spoke very carefully about the assignment of Aleksandr Khloponin to the post of Russian presidential envoy to the North Caucasus Federal District. Kadyrov recommended waiting for the results of Khloponin’s work to emerge, thus underscoring the fact that he does not believe that the presidential envoy will be successful.

Various events are bringing the North Caucasus into the limelight all across the world, although such an approach is not objective. The opposition movement is the engine of many processes in the North Caucasus. To disregard this fact is to bury one’s head in the sand with regard to North Caucasian politics.

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