Putin Proposes Greater Pipeline Cooperation With Ukraine

February 2, 2007 (RFE/RL) -- During his February 1 press conference, Russian President Vladimir Putin said that Russian officials had discussed the "unification" of the Ukrainian-Russian gas-transportation system with Ukrainian officials.

According to Putin, the Ukrainian government has not only suggested unifying the two countries' gas-pipeline networks, but it has also expressed interest in drilling for oil and gas in Russia.

Putin said he approves of these initiatives and added that it was in the interests of both countries to seek closer cooperation.

In the past, Ukrainian leaders, including Prime Minister Viktor Yanukovych, have said the Ukrainian gas pipeline would not be turned over to Russian control.

Movement

But that stance could be changing. Yanukovych has reportedly authorized officials from the Fuels and Energy Ministry, headed by Yuriy Boyko, to conduct preliminary talks, which, if successful, could "unite" the gas-pipeline networks of the two countries.

If Ukraine turned over a part of its gas pipeline and compressor stations to Russia's state-controlled gas monopoly Gazprom, the country would be even more dependent upon Russian energy supplies -- and have less bargaining power. And the European Union would have to deal only with Moscow when it came to gas deliveries transiting through Ukraine.

For some time now, Russia has been making moves to acquire parts of its neighbors' gas-transit networks.

On December 31, 2006, Belarus and Russia's state-controlled gas monopoly, Gazprom, signed a deal securing Russian gas supplies to Belarus and Russian gas transit across Belarus for 2007-11.

As part of the deal Gazprom is purchasing a 50 percent stake in Beltranshaz, Belarus's gas-pipeline operator. Gazprom agreed to pay $2.5 billion for half ownership of Beltranshaz over five years.

Access To Gas Fields

For Russia -- eager to have control over gas-supply networks in Europe -- integration with Ukraine makes sense. But what about for Ukraine?

Ukraine's state-owned oil and gas monopoly, Naftohaz Ukrayiny, would gain much-needed access to Russian gas fields. Naftohaz is not a major oil or gas producer and is heavily in debt to Gazprom and RosUkrEnergo, the Swiss-based gas trader.

In 2006, Naftohaz entered into a joint venture with RosUkrEnergo to create UkrHazEnergo, a company with the right to sell gas to Ukrainian industrial consumers. By doing so, Naftohaz ceded to UkrHazEnergo millions of dollars in profits.

Serhiy Yermilov, Ukraine's former fuel and energy minister, told Interfax on February 1 that he was skeptical of Putin's proposal.

"Russia has always wanted to gain control over the Ukrainian gas-transport system, so I do not see anything new in what Russian President Putin said," Yermilov said. "If Putin's proposals are transparent, and if the Ukrainian parliament abides by them, then we can discuss the matter, otherwise it is only another attempt to cheat Ukraine."

Yermilov reminded policymakers that Russian Prime Minister Mikhail Fradkov has said that foreign companies operating on Russian soil will not be allowed to control the majority of shares in oil and gas production. At best, Naftohaz could only be a minority shareholder of any joint venture.

Foreign Minister's Resignation

President Putin's comments come on the heels of the resignation of Ukraine's pro-Western Foreign Minister Borys Tarasyuk.

Tarasyuk had been an ardent opponent of turning over control of the gas-pipeline network to Gazprom. But after Yanukovych managed to push Tarasyuk out, some observers have said Gazprom's path is now clear.

Ukrainian President Viktor Yushchenko has not yet commented on Putin's statement, although in the past he has strongly opposed turning over control of the gas-pipeline network to Russia.

Yushchenko is scheduled to visit Moscow in late February for talks with Putin where energy questions are expected to play a major role.

An EU Invasion Waiting To Happen

February 1, 2007 (RFE/RL) -- Hundreds of thousands of Moldovan citizens have sent letters of application for Romanian citizenship, raising concerns that a flood of Moldovan workers will use Romanian passports to enter the workforce of the European Union.

With Romania's entry into the EU, the potential for people from Europe's poorest country to gain a backdoor entrance into Western labor markets has become a major concern for EU policymakers.

Newspapers in Britain were the first to warn of a "Moldovan invasion" caused by Romania's citizenship policies, which allow many Moldovans to claim Romanian passports.

At least four major British dailies featured articles warning that hundreds of thousands of Moldovans, "without money or prospects," may be headed toward the European Union.

530,000 New Romanians?

The British headlines were sparked by a BBC report in October 2006 citing a statement from Romania's vice-consul in Chisinau, Lucian Stanica.

Stanica said that during the months of August and September, the Romanian consulate received 300,000 citizenship requests from Moldova.

Since Romania's accession into the EU on January 1, 2007, this number has climbed even higher.

In a speech in Chisinau on January 16, Romanian President Traian Basescu said there were nearly twice as many applications pending for citizenship from Moldova.

"There are still 530,000 people waiting to hand in their citizenship requests. And out of those which have already been handed in to the Romanian Embassy in Chisinau, the majority concern at least two people -- if not three or even four," Basescu said. "By our evaluation, this means that there are, realistically speaking, around 700,000 or 800,000 requests for Romanian citizenship."

Concerns about mass Moldovan migration into the EU have been further inflamed by the large number of Moldovans already working abroad.

The International Monetary Fund estimates that a quarter of Moldova's economically active population works outside of the country.

For some Moldovans, a Romanian passport is a logical method for legally gaining access to Western labor markets.

Indeed, a survey conducted in 2006 by the IMAS-INC Chisinau polling agency revealed that 48 percent of Moldovans would get a Romanian passport if they could, and 85 percent of those people said they would use the passport to work in the EU.

Red Tape, Long Lines

Romanian citizenship laws have also fueled concern.

Romania defines citizenship based on nationality rather than residence. Citizens of Moldova who can demonstrate that either they, their parents, or their grandparents lived in Moldova when it was a part of Romania before the end of World War II are eligible for dual citizenship.

The process for acquiring citizenship, however, was substantially changed in 2003.

The new laws require that Moldovans undergo a long bureaucratic process before dual citizenship is granted.

The letters of request, which the British reports cited, are only the first step in the process. Of all the letters received since 2003, only 30,000 went to the second step of submitting a file. Of these, only 3,000 people were granted citizenship.

Monica Macovei, of the Romanian Ministry of Justice, told the BBC in an October interview that, since citizenship laws have not been relaxed since 2003, it is highly unlikely that the number of requests granted will increase significantly.

Closing the Border

At the same time as countries in the EU are concerned about potential immigration from Moldova, regular Moldovans are having to cope with the sudden closing of their western border.

For many Moldovans, travel to Romania is a regular part of life. They attend school, work, and regularly travel to Romania for vacation or to visit family.

For example, an important part of the central market in the Romanian city of Botosani, has traditionally been made up of Moldovans selling various goods, particularly food, for less than the price of department stores.

For them, and for the Romanians who do business with them, the new visa restrictions are a significant hardship.

In addition, both the extent of the visa restrictions and Romania's lack of preparation for the new policy have caught many Moldovans by surprise.

Despite assurances by Basescu that Romania's entrance into the EU would not inhibit the free flow of Moldovans across the border, the consulate in Chisinau has been overwhelmed by visa requests.

Operating At Capacity

Romania has added new staff and facilities in an effort to help ease the procedure. In addition to expanding its operations in Chisinau, Romania is opening new consulates in the Moldovan cities of Cahul and Balti. More than 40 staff from Romania's foreign and interior ministries are currently employed in the business of handling Moldova's citizenship and visa requests.

But even with the addition of new staff, including workers for night and weekend shifts, the number of Moldovans visiting Romania dropped threefold in early 2007 compared to the same time in 2006.

Prior to January 1, there was confusion, both in the media and the Romanian consulate, about how border regulations would be implemented.

In one anecdote, a security shift supervisor from Chisinau reportedly found himself in a very difficult situation while returning to Moldova through Romania. He drove to Bucharest with his wife and child, in order to fly to Italy for the New Year. They, like many other Moldovans, prefer flying from Romania, because discount carriers make it less expensive than flying from Chisinau.

Before leaving, the Romanian consulate assured him that he could return to Moldova via Bucharest without a visa. When he and his family returned to Bucharest, however, they were told that a new law, passed on January 2, required that they have a Romanian visa.

They were told to return to Italy and apply for a visa -- a process which would have required a four-day stay and would have cost them at least $1,000 in airline tickets and hotels. Only the last-minute intervention of the Moldovan Ministry of Foreign Affairs prevented them from being forcefully put on a plane back to Italy.

The Dilemma

While some in the EU worry about immigration from Moldova, others raise concerns that restricting the border may produce even more economic migrants. Recognizing this dilemma, international donors have pledged $1.2 billion in aid for Moldova over the next three years.

This is not just an issue for the EU. The outflow of Moldova's workforce is one of the main obstacles to the country's social and economic development.

Not only does emigration drain Moldova's workforce, but between 150,000 to 270,000 of Moldova's children are being raised without a mother or father, and around 40,000 are separated from both. Until citizens are able to earn a living wage in Moldova, however, the attraction of emigration is unlikely to abate.

(Ryan Kennedy is a Ph.D candidate and a Fulbright researcher from Ohio State University, currently in Moldova.)

Whose Friend Now?

January 30, 2007 (RFE/RL) -- Following Russia's more than twofold increase of gas prices and imposition of a sizable duty on crude-oil supplies to Belarus in 2007, President Alyaksandr Lukashenka seems utterly confused and at a loss to decide what course he should take.

Lukashenka has recently made a number of politically incoherent statements, thus reinforcing the general feeling that without Russia's political and economic support, his autocratic regime is vulnerable and insecure. According to his own estimate, because of the new energy prices, Belarus will have to pay $3.5 billion more in 2007 than last year. Some Russian estimates say Russia's energy and trade subsidies and benefits for Belarus in 2006 amounted to as much as $7 billion. Belarus's gross domestic product is roughly $35 billion.

Overtures

In the January 25 issue of "Die Welt," Lukashenka pledged to open the Belarusian economy to Western investors and expressed a desire to cooperate with Europe. He also publicized his idea to "consolidate" energy-transit countries such as Belarus, Ukraine, Poland, and the three Baltic states into a sort of formal alliance, presumably to counteract what he sees as Russia's increasing assertiveness in using gas-and-oil deliveries as a political weapon.

While firmly rejecting the adoption of the Russian ruble in Belarus, Lukashenka did not rule out that his country might join the euro zone in the future. He called in "Die Welt" on European leaders for an "open dialogue" and urged them to lift a travel ban on Belarusian officials, which he compared to "medieval savagery."

On the day following the publication of his interview in "Die Welt," Lukashenka said in a speech to recipients of doctoral diplomas and professorial chairs in Minsk that there will be no "radical change" in Belarus's foreign policy, adding that he will not "rush toward the United States or wherever."

This week Belarusian media reported that Lukashenka had sent an invitation to Iranian President Mahmud Ahmadinejad and that the invitation had been promptly accepted.

The Phantom Union

His statements and moves regarding Russia were no less disjointed. While paying lip service to his unwavering desire to build an "equal" Belarus-Russia Union State, which was conceived as a bureaucratic phantom by himself and former Russian President Boris Yeltsin in 1996, Lukashenka simultaneously announced two steps that appear to be in stark contrast with his integration rhetoric.

Last week the Belarusian president instructed his government to consider charging Russia rent for the use of land under its gas-and-oil pipeline crossing Belarusian territory. And he announced that Russian oil companies will have to pay new, higher duties on oil transit across Belarus if they continue to demand prices "higher than those on world markets" for their oil deliveries to Belarusian refineries.

These steps, if actually taken, might escalate the current energy-price row between Belarus and Russia into a full-scale trade war and lead to the reestablishment of a full-fledged customs border between both countries. For many unreformed Belarusian industries, this would probably mean the loss of the only market on which they can still be competitive and, as a result, their unavoidable collapse.

Therefore, Lukashenka's threats regarding Russia seem to be more of a propaganda exercise than a real intention.

Power Base Shaken

But these threats, as well as Lukashenka's overtures to the West, clearly testify that the Belarusian president has understood something: Not only his self-styled "market socialism" in Belarus but the very foundations of his regime may be eroded by the Russian termination of discount gas and oil supplies.

Most Russian political analysts openly admit that the Kremlin has finally become fed up with Lukashenka's lip service to integration with Russia and decided to goad him into action. And the recent tone of the Russian media commenting on Belarus indicates that the Kremlin's new approach toward Lukashenka is a calculated and well-coordinated campaign.

The Gazprom-controlled Russian daily "Izvestiya" wrote on January 18 that Russia needs "an ally, not an arrogant parasite" in Belarus. This assessment was obliquely echoed by Putin during his meeting with German Chancellor Angela Merkel a few days later, when the Russian leader noted that in its relations with energy-transit countries, Moscow says "'yes' to cooperation and 'no' to parasitism."

Sergei Karaganov, head of the Moscow-based Council on Foreign and Defense Policy think tank, wrote last week that the Russian policy with regard to Lukashenka -- which he labeled with the well-known political aphorism, "He's a son of a bitch, but he's our son of a bitch" -- has suffered a total failure.

According to Karaganov, Russia's unequivocal political and economic support to Lukashenka allowed him to consolidate his regime and reduce Russia's influence in Belarus almost to nil. Karaganov say that by taking advantage of "gigantic preferences" provided by Moscow, Lukashenka has managed to form a political class that does not want any rapprochement with Russia.

Integration With Russia

Like other Russian analysts, Karaganov does not disclose what could be the ultimate goal of such rapprochement. But it should be recalled that the only coherent and realistic scenario for Belarus's integration with Russia voiced by the Kremlin was President Putin's suggestion in August 2002 that Belarus give up its sovereignty and join the Russian Federation as a single federation subject or as six separate oblasts.

Stopping short of an outright call to oust Lukashenka, Karaganov urges the Kremlin not to stop "halfway" and "to swiftly finish the business" of increasing the energy prices for Belarus to European levels.

At the same time, Karaganov proposes that the Kremlin starts developing a truly pro-Russian political elite in Belarus. He even goes so far as to suggest that official Moscow should "take notice" of the human rights situation in Belarus, something it has not done even one time during Lukashenka's more than 12-year-long rule.

For a number of reasons, the West -- in particular Europe -- might decide to give a helping hand to Lukashenka if Moscow attempts to politically absorb Belarus.

First, the disappearance of Belarus -- an independent state and a UN member -- from the political map of the world would set a dangerous precedent for any other attempts at such "integration" in the future.

Second, Europe needs secure and uninterrupted gas and oil supplies from Russia. Belarus as a transit country is an essential link in this supply chain. And Lukashenka, in his attempts to oppose the political incorporation by Russia, may disrupt these supplies more than once.

Therefore, it might well be in Europe's interest to enter a dialogue with the erratic Belarusian leader and try to persuade him that Belarus could remain a sovereign country without playing the role of a bandit on the road.

It is doubtful that Lukashenka could accept Western rules of the game in politics. But he may listen to some economic arguments. He might be persuaded that the best way to counteract Russia's recent "integration" push is to launch market reforms and build his country's independence on a sound economy, which cannot be affected by Russia's malevolence or benevolence to such a degree as now.

The political system built by Lukashenka in Belarus, unshakable as it appears at first glimpse, is very precarious. The machinery works solely due to the absolute loyalty of government officials to the "father of the nation." And this "father" has behaved so far as if he were to rule Belarus forever.

The West might be able to convince the Belarusian president and his compatriots that there is life after Lukashenka and that "afterlife" may not be so costly to them -- and Belarus -- after all.