For just over three hours Putin explained Russia – Putin’s Russia – to this circle of Western experts. His messages were unequivocal. Stability is the leitmotif in his thinking. He demands predictability, from himself as well as from others. He thinks in terms of Russian raison d’état, but he would not deny that what is good for Gazprom is good for Russia Inc., the emerging super-corporation. Does he believe in political friendship? He knows – maybe inspired by Lord Palmerston – that great states have no permanent alliances but only permanent interests. Friendship is a personal matter.
Putin fills the grandiose frame of the hall named after the German tsarina, a manager of raison d’état – this is how he wanted to be seen by everybody around the table. The man in the grey flannel suit displays an impressive amount of both nervous energy and self-assuredness. His outward appearance – inconspicuous tie, no decorations, let alone adornments of any kind – would in the City of London be described as casual elegance. This man clearly wishes to be seen as a no-nonsense type. If there is a whiff of vanity it is that of a man who does not need to cut a colourful figure. He cultivates the air of the CEO of a global corporation. He is popular, his ratings are at an enviable – and plausible – 60 per cent, not the 99 per cent of the Soviet past, but also not the dwindling numbers that Western leaders tend to achieve after six years in office. The political train is on track, the oil price high, and rising, almost too good to be cheered in Moscow. Russian shares at the nearby stock exchange are soaring towards an all-time high. All of this works in his favour. Russians admire his luck and want to have a little share of it.
Russia’s strength stems from oil and gas, but it is also Russia’s potential weakness. Putin remembers that the Soviet Union went down, together with the world market price for oil in the mid-1980s, and that post-Soviet Russia was near collapse in 1998-90 when the oil price – the price for gas is, in most cases, pegged to oil – went, once again, down to a catastrophic US $10 per barrel. The reason was not a secular reversal of the terms of trade but a slight recession in the Far East’s roaring economies. The ensuing small reduction in demand translated into a major crisis of the oil market, a sharp decline in investment, and an economic disaster for most of Russia’s city dwellers. But ever since the oil price knew only one direction: up and up. However, Putin is painfully aware of the fact that Russia’s fortunes are inexorably dependent on stable prices, preferably well above $50 per barrel – but not too much, as consumer countries would then be forced to look for alternative energies, from nuclear to ethanol, from solar panels to maize. 1998-9 was the low point of Russia’s post-Soviet curve, and Putin knows how dependent on the world economy Russia is and how brittle the newly found wealth could be. Oil, Putin knows, can only be a bridge to a much more broadly based economy.
Referring to energy relations with Western Europe in general, Germany in particular, he mused: ‘We are happy with the situation. Even at the worst of times Russia has never allowed interruptions to take place.’ He was hinting at the strange paradox of the early 1980s when the Soviet Union directed its ultramodern nuclear-tipped medium-range missiles codenamed SS20 at Western Europe while Germans and Soviets, much to the dismay of the Reagan administration, continued to negotiate, and conclude, the gas-pipeline deaclass="underline" the German government under Chancellor Helmut Kohl was not only interested in swapping pipelines and pumping stations for gas but also in sending a signal of business as usual – while the German electorate, driven by nuclear angst, expected the end of the world. It was a balancing act and a masterful manoeuvre.
Now, Russia’s Gazprom reigns supreme, aiming to add a third pipeline on the bottom of the Baltic Sea to the two older and landbound ones carrying natural gas to the West, and Putin is the state monopoly’s prophet: ‘An additional pipeline in the direction of the EU is due in order to broaden the distribution system for Europe.’ But why, the question is bound to follow, not via Eastern Europe this time but on the bottom of the Baltic Sea, from near St Petersburg to Pomerania in Germany and on to the Netherlands and England? ‘The revolutionary movements in Ukraine,’ Putin says with disarming openness – and with more than a little schadenfreude. Poland failed to come up with the money. ‘And this thing should stay outside of politics, anyway,’ he says with a wry smile, as if oil and gas could ever exist in a politics-free zone. ‘We want to exclude nobody,’ he says, and tries to calm rising concern. Then he turns to detail and shows his mastery of the small print: ‘We have concluded contracts for more than sixty billion cubic metres.’ Moreover, Russia is slowly ridding itself of surface pipelines: ‘The first tanker carrying liquefied natural gas [LNG] is on its way to the US.’ As if to warn the Europeans that Russia can find customers all over the world, he adds that soon a pipeline will bring natural gas to Turkey via the Black Sea (by late 2007 around 60 per cent of Turkey’s needs were met in this way). More pipelines are being built in the direction of the Far East. To northern China’s industries or to Japan? ‘Relations with the People’s Republic of China are good. When, fifteen years ago, the Soviet Union collapsed, there were security problems. By now we have reliable treaties concerning borders.’ Did he hint at fears, back in 1991, that China might take advantage of Russia’s time of troubles? Or did he allude to the Russian concern about vast numbers of Chinese looking at the empty spaces of Siberia? Or about filling the power vacuum left by the demise of the Soviet Union in Central Asia? Putin, instead of addressing hidden fears, assured his audience that economic relations with mainland China were good, especially when it comes to military-industrial cooperation. That tends to help the Russian arms industry – but it also leaves Russian generals worrying about the future. In the past, Russia would sell at best second-rate goods to China. By 2005, only the best would be accepted by Chinese buyers paying US dollars.
What role for Japan in the Far Eastern puzzle? ‘For us, Japan is a strategic partner. In the Asia Pacific region we see a balance of power at work.’
Of course, Putin is aware that this complex balance could be seriously upset by North Korea acquiring the bomb. Here, once more, he cites common interests with China and the US, mentioning Great Britain and France in passing. The Nuclear Club has its own set of rules, and its own exclusive interests, and preserving the Non-Proliferation Treaty is essential not only for reasons of security, but also for status and prestige.
The conversation, at this point, was bound to drift towards Iran. In Busheer on the northern shore of the Persian Gulf the Russians are building, after Siemens gave up the site in 1979 due to the second coming of Ayatollah Khomeini, a nuclear power plant which the Americans resent and the rest of the world, especially the Israelis and the Arabs, view with a watchful eye.
Putin: ‘Is it meaningful to summon the Iranians to the UN Security Council? We have talked to our Iranian friends and advised them to keep their unilateral promises. Everything they have done so far is within the rules of the NPT . But we have warned them that throughout the Greater Middle East an explosive situation is forming. We do not exclude referring the matter to the UN Security Council.’ Unlike German Chancellor Schröder, Putin refrains from any criticism of the US in this matter. Controversy ends at the NPT’s edge. ‘Between the US and ourselves there is no problem if there is cooperation.’ And, ‘by the way’, he added a reassuring note to often-heard concerns, ‘Russian control over our own nuclear facilities is watertight.’