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Books on Russia
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Update No: 325 (29/01/08)
Putin the eternal
There is no doubt about one, or actually, two things concerning Russia. Firstly,
Putin is the most popular leader that the country has ever had. Peter the great,
Catherine the Great, Alexander II, Lenin, Stalin, Khrushchev, Gorbachev, Yeltsin
- they all had their enemies all right. Only the last won a popular election or
two, but in the second case by a lot of trickery. Putin's popular ratings are
now near 80%, spectacular by any standard.
Putin has enemies of course, but they don't count a bit, as they know. They are
either in exile or in prison or are right out on a limb. Gary Kasparov, for
instance, perhaps the greatest chess genius of all time, has decided to throw in
the towel; he is not going to stand in the March election for his democratic
party.
A second fact is that the populace want Putin to continue to run the show. This
he looks likely to do after his second and constitutionally last term expires in
May. By then an election would have happened in March, a sure-run thing for his
own nominee for the succession, Vice-Premier Dmitry Medvedev. He has already
agreed to become premier - yet nobody doubts who will really be in charge.
Putin has two great virtues for a politician - he is shifty to a degree, never
pinning himself down to an ideological parti pris. Once a loyal KGB servant of
the Soviet state, he now derides communism as has-been and hopeless. He is happy
to have the Russian Communist Party as the one and only opposition entity in the
Duma; their days are over and done with. He never over-identified with the
Western thrust of policy under Yeltsin either, although a beneficiary of it all
the same.
He is also enormously lucky, being exactly at the right place at the right time
to ascend the slippery slope to the top. Three people helped him on his way:-
Anatoly Sobchak, mayor of St Petersburg in the early 1990s, when he made him
responsible for foreign investment into this, the most Western-oriented of
Russia's cities; Anatoly Chubais, the cleverest of all the reformers, who
understood perfectly well (unlike the hapless Mikhail Khodorkovsky) that as a
Jew in Russia he had no chance of supreme power himself, but saw an appropriate
successor to Yeltsin, his own mentor in the Kremlin, in Putin; and finally of
course Boris Yeltsin himself.
His most massive luck came on his accession to the presidency in January, 2000
on Yeltsin's retirement. It coincided with a sharp rise in the global oil price
at a time when heavy investment in oil /gas fields and pipelines had already
been made and they were ready for the boom. Russia has been on a roll. The
economy has boomed ever since.
Putin: Mister Gazprom
Putin has seen how Chubais has fared as head of United Energy Systems. A
comparatively ‘poor’ apparatchik in the 1990s when the oligarchs like
Khodorkovsky were making fortunes, he has now made one for himself. As head of
Russian energy usage this was a sure-fire thing.
Putin has apparently made up his mind to emulate Tallyrand, an engaging
rogue, who when asked his ambition in politics, candidly replied: “to make une
fortune immense, une immense fortune” ( he never did a deal without getting a
whopping 'sweetener,' a word that he picked up in the US). Napoleon knew all
about his foreign minister's chicanery, but condoned it. He had a great respect
for his brains. Moreover at a key moment, before the Egyptian expedition,
Tallyrand lent him a lot of money to finance it.
If Putin becomes Prime Minister in May, there is no reason why he should not
double this up with being Chairman of Gazprom, the job Medvedev is vacating. He
could surely name his own price, whether it be in shares or other compensation.
It only involves turning up a dozen times a year to board meetings probably held
in the Kremlin, to determine general policy; day-to-day administration is in the
hands of the CEO.
The possibilities of making money are indeed immense. Gazprom is potentially the
world's largest company. It has over one half of the world's gas reserves and
now (after swallowing up Khodorkovsky's Yukos) a huge amount of oil. It is the
world's largest energy company. Putin doubtless has plans to turn it into a more
heteroclite entity. He is an ingenious man. But its core business will be
energy.
The formation of OGEC
Of course Putin is primarily a politico; he craves power rather than money. He
fancies ruling more than just Russia. He wants to rule the world's energy
market, the key to tackling our premier problem, global warming. For he has his
idealist moment as well.
He knows that, while oil will remain dominant for a while yet, its pre-eminence
in the energy mix is doomed. It leaves too large a carbon imprint. Gas is far
cleaner, although it will also need to be phased out as soon as possible, for it
is after all a fossil carboniferous fuel.
Still it is the fuel of the immediate future. Russia has most of it. Putin has
embraced a new vision of the world's energy market, put forward by others some
fifteen years ago (including ourselves, newnations.com).
He is keen to see a rival to OPEC, namely an Organisation of Gas-Exporting
Countries (OGEC), established. He reckons that he is the man to bring it about.
He has already spoken about the need for such an organisation.
It should consist of Russia, in first place, not Saudi Arabia, although the
Saudis are sitting on vast untapped gas reserves. Then there will be Algeria,
Kuwait, UAE, Norway, Turkmenistan, the Netherlands, even Iran. All gas
exporters. But gas importers could be included too, given the peculiar nature of
the gas market.
Gas is sold under quite different conditions than oil. Long-term contracts
appertain rather than short and pipelines are vital for transport, although
liquefied natural gas, conveyed by tanker, is a major and fast growing
department of the market.
What could prove a clincher is if OGEC and OPEC get together to become OGEC-OPEC.
Doubtless Putin is full of schemes here.
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