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Chechnya: Russia May Risk Sanctions

Boston, 13 December 1999 (RFE/RL) -- U.S. analysts say Russia may risk sanctions if it continues the war in Chechnya, resulting in further damage to relations with the West.

International tension has risen in the past week with the Russian campaign to capture Grozny and the growing refugee problem. Moscow's rejection of U.S. and European appeals to end the fighting has led to calls for penalties, including a cutoff of aid.

On Thursday, New York Times columnist William Safire linked the war to Russia's bid to control pipeline routes from the Caspian region and urged a series of steps including suspension of International Monetary Fund loans. The conservative newspaper commentator also advocated a halt to financing by the U.S. Export-Import Bank and steps to lower world oil prices, depriving Russia of income to pay for the war.

The recommendations go beyond those of U.S. presidential candidates, including Republican Texas Governor George W. Bush, who has said that Russia should not expect multilateral loans if civilians in Chechnya are bombed.

In interviews with RFE/RL, some U.S. analysts say that the risk of sanctions will increase as Western sentiment solidifies against the war.

Richard Haass, director of foreign policy at the Brookings Institution in Washington, said: "Each day as it goes along, there will be more and more pressure on Western governments to do something.

While Haass said he believes that unilateral sanctions are generally ineffective, he noted that the disposition toward penalties appears even stronger in Europe than in the United States.

On Saturday in Helsinki, the leaders of the 15 nations of the European Union stopped short of calling for sanctions. But they condemned Russian actions in Chechnya, threatened to review the EU relationship with Russia and vowed strict enforcement of trade agreements, saying that some terms have not been fulfilled. There were also signs of softening in Moscow's line as officials extended the deadline for the bombardment of Grozny and offered safe passage to its citizens.

Although experts see a rising risk of harsh measures if the war continues, some warn that sanctions against Russia would be both ineffective and destructive.

Said Geoffrey Kemp, director of regional strategic programs at the Nixon Center in Washington: "We could make matters worse very easily. If we slap sanctions on the Russians and do some of the other things that have been proposed, that is almost a guarantee that they will misbehave in the Caucasus and the Caspian."

But analysts acknowledge that last week's low point in Russian relations was driven by an outburst of nationalism, shown not only in Chechnya but Kremlin activities ranging from the union treaty with Belarus to the fielding of a new batch of Topol-M missiles. The analysts say the trend appears to be one of greater east-west points of friction that could lead to retaliation.

Robert Ebel, director of the energy and security program at the Center for Strategic and International Studies in Washington, said nationalism is also at the heart of the dispute over the Tyumen Oil company's takeover of a Sidanko subsidiary, despite protests from BP Amoco and other Western shareholders.

Last week, the U.S. Export-Import Bank faced pressure to cancel $500 million in pending loan guarantees for Tyumen Oil as a result of the takeover. Such a move could lead to a further deterioration of bilateral ties and trade.

If relations continue to worsen, another potential target is the Italian-Russian project known as Blue Stream to pipe gas across the Black Sea to Turkey.

The plan could be particularly vulnerable because Russia is paying for the Chechnya war with increased oil earnings. Blue Stream promises to bring Moscow an estimated $3 billion to $4 billion in new revenues from gas. The venture between ENI of Italy and Russia's Gazprom also flies in the face of a U.S.-backed plan to supply Turkey with a trans-Caspian line from Turkmenistan through Azerbaijan and Georgia.

The government of Italy, which owns 36 percent of ENI, has been vocal in its opposition to Russian actions in the war. Last week, Italian Prime Minister Massimo D'Alema called the bombing of Chechnya "horrible" and "unacceptable." In Turkey, the opposition Islamicist Virtue Party has gone even further, accusing Russia of genocide. An official of ENI, contacted by RFE/RL, declined to comment on the tensions or potential repercussions for the Blue Stream project.

Robert Ebel of the Center for Strategic and International Studies said that European countries have often separated their political disagreements from their business dealings. As a result, Ebel said, Blue Stream is unlikely to be affected by European reactions to the war.

But there could still be threats to such investments if the war continues, particularly if columnists like Safire continue to link energy projects to Russia's agenda in the Caucasus. Diplomatic protests and aid delays may convince Moscow to end the war, but if not, critics are bound to look for other ways to bring pressure to bear.