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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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10 January 2006

Russia loses 'gas war' against Ukraine

© 2006, IRED.Com, Inc., Simeon Mitropolitski

There was a brief natural gas war between Russia and Ukraine in the early days of 2006. The war ended with a 'peace' treaty with duration of five years. This war as any ordinary war had at least 4 different dimensions: political, economic, ideological and international. They all point at Russia as an obvious loser in the struggle. As in any authoritarian political system without proper political checks and balances, the president Putin made a mistake, overestimating his own forces and assuming that some key international players will take his position. This war is a good lesson for Kremlin. It also may become a decisive point of no return for the gradual western movement of Ukraine.

Political dimensions

The energy in Russia is something far exceeding its economic role. It's embodiment of the power itself. The control over energy flows makes Kremlin the master in Russia. Anyone inside the country who claims independent status in this business must choose between the prison and the exile. Those who stay in the country must obey. The prices are therefore a matter of national political strategy. Those who like us will have it cheaper; those who don't will have it much more expensive. Applying this unequal measure stick to neighbors makes the president of Russia to appear strong. He may ruin whole countries with the whim of his will. In geographic regions where winters usually mean weeks and months below the freezing point, being left without energy isn't only an issue of economic survival. This is an issue of biological survival too.

The peace treaty is bad for Russia. More than 80 percent of Russians think it was in favor of Ukraine. By the same token majority of Ukrainians think it was good or very good for their country. It's a zero-sum game, what's good for me must be bad for anyone else. For Kiev it means it will strengthen the current administration and give it additional boost for incoming parliament election. For Kremlin it means Putin will have to heal the wounds he inflicted himself on his prestige. In a society like Russia in 2005-2006 this isn't very difficult. State-controlled media may present this defeat as a victory. Actually they do exactly this. Nevertheless most Russians don't buy it. It will be a good move for Putin to fire the government. In any case he must choose another prime minister to become his successor in 2008, so now may be the right moment for changes.

Economic dimensions

The brief war had also several purely economic dimensions. One of them is of course the fact that Russia won't be able to put under control the gas-distributing system of Ukraine, and won't make Kiev go into Russia-dominated economic block, which has been the main goal of the war itself after months of Russian open and highly mediated intimidations. It isn't still clear whether Russia will have any substantial additional financial benefit out of this new deal.

Ukraine itself will have to adapt to new economic realities by... cutting its dependence on Russian gas, and this means by cutting on its most energy-devouring industries, some of them in the eastern regions, known for their political affiliation with pro-Russian parties. Ukraine economically will have to move toward less polluting and more technologically advanced industries. In this sense making the Russian gas a bit more expansive in a long run may push Russia and Ukraine in two different economic directions. Russia will remain entirely dependent on its low-tech energy exports.

Ideological dimensions

This war made obsolete the 6-year old question "Who are you Mr. Putin?" The most recent episode suggests that the right answer is "an autocrat and Russian imperialist". It's imperialism not in the Soviet ideological meaning; it's rather imperialism in the old-fashioned Russian meaning, recorded in so many history books for 19th c. In the light of this 'revelation', which may surprise only those who had skipped the evolution of the Russian regime in the last 6 years, the Russian interference in the Ukrainian election of 2004 doesn't look like a pure accident.

Presenting himself as an autocrat and Russian imperialist is something Putin would have preferred to avoid in the wake of G-8 summit this year. There is no more Mr. Nice Guy, ready to allow each former Soviet republic to choose its destiny, either in NATO, EU or elsewhere. Here we have a champion of vengeance, ready to punish anyone who behaves independently, who is weak enough not to fight back, and who is close enough to be more dependent on the Russian gas stick.

International dimensions

A part of the Russian script was to make Europe press upon Kiev in order to make it capitulate before Moscow. Brussels refused to give Russia such a service. Most European media took an anti-Russian stand when their gas supplies began to suffer as well. Problems with gas supplies were unheard of even during the Cold War. The time now is different. The Soviet Union then tried to make Europe distance itself from the United States by providing new reliable energy sources. So the supplies had to be reliable. Russia now uses the energy as the last weapon remaining to make nations from its 'neighborhood' choosing its imperial umbrella.

That was a wake-up call for many Europeans. They have decided to diversify their energy supply sources. Russia will remain one of the major providers, but nobody will allow it to play again against its customers. At least the European hope so.

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See also the directory of companies providing real estate services in, and general real estate information of Ukraine.

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