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Toward A New Paradigm For The Post-Soviet Petrostates

Economies and geopolitical clout growing faster than a speeding bullet! Presidents more powerful than a locomotive! Able to ignore demands for political reform at a single bound! Look! On the shores of the Caspian! Nations in transition? Developing countries? No! It's the post-Soviet petrostates!

With oil and gas prices at stratospheric highs, these are the new supermen of the international arena, nimbly casting off the drab garb of "developing," "transiting," and "emerging" nations to perform astounding feats of outsize influence. Four of them have arisen on the territory that was once the Soviet Union: Azerbaijan, Kazakhstan, Russia, and Turkmenistan. Each reaps a significant portion of GDP from the export of oil and gas, and all pose difficulties for Western nations that wish to woo them for their resources.

The competition for those resources is fierce, even as democratic reform in all four countries requires an exceptionally powerful, and perhaps uniquely curved, magnifying glass to be seen. All of this was on display in July, with Russian President Dmitry Medvedev touring Azerbaijan, Turkmenistan, and Kazakhstan, while the U.S. Helsinki Commission held hearings on Azerbaijan and Kazakhstan, wrestling with the vexed issue of resources and reforms.

Medvedev's southern jaunt on July 3-6 sought to advance Russian energy policy, which pursues two complementary goals in the former imperial hinterlands: ensuring a steady supply of gas for the Russian pipeline network and torpedoing alternate export routes. The first aim arises because Russia, which makes vast sums from its gas exports to Europe and faces declining yields at its current domestic fields, has chosen in recent years to buy gas from its southern neighbors instead of investing the huge amounts needed to develop new fields at home. The second aim is a natural consequence of Russia's desire to establish and maintain its status as a 21st-century energy superpower.

Azerbaijan is unique among the smaller post-Soviet petrostates in that it freed itself from export dependence on Russia in the 1990s with the Baku-Tbilisi-Ceyhan oil pipeline. In Baku, then, Medvedev pushed a proposal for Russia to buy gas from Azerbaijan, which recently began producing enough of the stuff to stop purchasing it from Russia. If Russia were to begin acquiring Azerbaijani gas, it could boost the gas balance of state-controlled Russian export monopolist Gazprom while at the same time denying potential supplies to the planned Nabucco pipeline, a European project intended to reduce the continent's dependence on Russian gas. The deal would advance both aims of Russian energy policy. For now, Baku is mulling the proposal.

In Turkmenistan, which sends the bulk of its gas exports -- some 50 billion cubic meters (bcm) a year -- north through Russia (a much smaller quantity goes to Iran), Medvedev elicited a rather fuzzy verbal commitment from his Turkmen counterpart, Gurbanguly Berdymukhammedov, to stick to the terms of a 2003 deal between the two countries "up through 2025," the official Turkmen news agency reported on July 4. But that deal was supposed to see Turkmen exports to Russia rise to 60-70 bcm/year by 2009, a provision that seems unlikely to be met given lackluster production increases in Turkmenistan and the construction of a new Chinese-funded pipeline that is set to come online within three years and eventually move 30 bcm/year 7,000 kilometers across Eurasia to China.
Presidents Berdymukhammedov (left) and Medvedev

Turkmenistan is a small country that gained limited notoriety through the megalomaniacal excesses of former dictator Saparmurat Niyazov, who managed to rename the months of the year after himself and members of his family before his death in December 2006. He was succeeded by Berdymukhammedov, a dentist whose greatest achievement had been presiding as health minister over the apparently near-total destruction of the Turkmen health-care system.

Little of this would matter in the international arena if Turkmenistan were not a petrostate, of course, with natural-gas reserves coveted from Brussels to Beijing. Brussels dreams of securing Turkmen gas, shipped across the Caspian to Azerbaijan through a projected undersea pipeline, to lessen Europe's dependence on Russia. Moscow hopes to head this off at the pass and hold on to those same cubic meters. And China is already building its new pipeline from Turkmenistan, with potentially ominous implications for both European and Russian designs.

Have Oil, Have Influence

Turkmenistan is a particularly striking example of how "petro" can catapult any state to the front lines of a global struggle for resources. But the same goes for Azerbaijan, Kazakhstan, and Russia, which owe much of their current prestige and prominence to the sudden wealth and winsomeness only oil and gas seem able to confer. And they are well aware of this power, flexing their newfound muscles at home and abroad in ways that confound, and at times confront, Western interests.

In an address to Azerbaijani diplomats in early July, President Ilham Aliyev harshly rejected Western criticism of Azerbaijan's record on human rights and political reforms. "It is impossible to put pressure on us," he said, adding, "If we didn't react to this or were silent a few years ago, today we are no longer silent." After blasting "double standards" in the Council of Europe, which had warned Azerbaijan a few days earlier of "serious steps" in the event of a failure to observe democratization obligations in the country's fall presidential election, Aliyev closed his speech with a sarcastically veiled threat: "I stress that when we joined international organizations, we assumed obligations and are fulfilling them. If our membership doesn't please someone, let them say so. What will happen if we're not members in some international organization? Will Azerbaijan fail?"

Kazakh President Nursultan Nazarbaev was considerably more diplomatic while making a similar point in remarks to the 17th Parliamentary Assembly of the Organization for Cooperation and Security in Europe (OSCE) in Astana on June 29. Kazakhstan is slated to assume the chairmanship of the OSCE in 2010, a decision that took Western members some time to make in light of Kazakhstan's spotty record on democracy and the OSCE's own past criticism of elections there. Touching on democratization only toward the end of his remarks, Nazarbaev stressed the importance of "national and cultural specifics" in reform and insisted that his country will pursue a "Kazakh path" to a democratic society.

Meanwhile, as Joanna Lillis noted in a July 22 article on, Nazarbaev's administration has recently presided over an aggressive effort to increase the state's control over the oil industry, feuded with one international consortium over the development terms of the Kashagan oil field, and compelled another to cough up new export duties.

Russia Leading The Way

Russia, as befits the largest petrostate in the region, has gone the farthest on all fronts. During the eight-year presidency of Vladimir Putin, Moscow made it crystal-clear that it would no longer accept pointers on democracy. The OSCE's decision to cancel monitoring of Russia's 2007 parliamentary elections and 2008 presidential election amid disputes over visas and limitations closed that chapter in Russia's relations with the West.

Russia has also muscled its way into energy joint ventures with foreign companies and shut off oil and gas shipments to its neighbors at politically sensitive junctures. Most recently, the British half of the Anglo-Russian joint venture TNK-BP has found itself under attack from a group of four Kremlin-friendly Russian billionaires in a dispute that forced TNK-BP head Robert Dudley, a British national, to flee Moscow for an undisclosed location outside Russia to escape harassment, "The Times" reported on July 31. Meanwhile, the Czech Republic saw oil shipments from Russia briefly drop nearly 50 percent after it incurred Moscow's ire by agreeing to host elements of a U.S. missile-defense system, the "International Herald Tribune" reported on July 30.

Nazarbaev in the Kazakh capital
Against this backdrop, the "2008 Nations in Transit" report by Freedom House, a U.S.-based NGO, warned that oil and gas profits are fueling an assault on democratic governance in the former Soviet Union. The report noted that Azerbaijan, Kazakhstan, and Russia have slid backward on virtually all democratic indicators since 1999. Turkmenistan failed to make this list only because it had no room left for deterioration on democracy by the end of the 1990s. What's more, Freedom House argued that the resource-hungry West is facilitating the process: "Energy needs are increasingly distorting relationships between democracies that consume hydrocarbons and the authoritarian states that produce them."

Though this view is hardly conventional wisdom among Western policymakers, who remain eager to gain and maintain access to Eurasia's hydrocarbon wealth, the counterpoint came in a July 1 op-ed in the "International Herald Tribune" by former U.S. Secretary of State Henry Kissinger titled "Unconventional Wisdom." Focusing on the largest and most important of the post-Soviet petrostates, Kissinger argued that "we are witnessing one of the most promising periods in Russian history," one rife with opportunities for "strategic cooperation between the erstwhile Cold War adversaries."

Kissinger made his case using the same material as Freedom House -- governance -- but drawing radically different conclusions. Surveying the recent anointment of Dmitry Medvedev as successor to Vladimir Putin in a process that resembled a palace intrigue more than a democratic transfer of power, Kissinger nonetheless plugged a presidential election that "marked a transition from a phase of consolidation to a period of modernization." He then concluded, "The growing complexity of the Russian economy has generated the need for predictable legal procedures." A more succinct argument for hydrocarbon-fueled authoritarian modernization is hard to imagine.

Pushback Vs. Modernization

These two views -- let's call them pushback vs. modernization -- were in clear view at recent hearings on Azerbaijan and Kazakhstan by the U.S. Helsinki Commission, with testimony by outside experts arguing either that the countries are pushing back harder and harder against demands for reform or that they are modernizing in their own way at their own pace.

At the July 22 hearing -- "Promises to Keep: Kazakhstan's 2010 OSCE Chairmanship" -- Andrea Berg, a researcher for Human Rights Watch, said the Kazakh government has made "almost no concrete progress" toward implementing reform pledges in connection with its impending chairmanship. At the July 29 hearing -- "Human Rights and Democratization in Azerbaijan" -- Christopher Walker, director of studies at Freedom House, laid out a detailed, hard-hitting case of "new wealth" serving to "propel and intensify authoritarian practices."

Martha Olcott, a scholar at the Carnegie Endowment who is one of Washington's most experienced and respected observers of Kazakh politics, advanced a nuanced version of the modernization thesis on July 22. "The Kazakhs," she said, "are likely to continue to reform their political system, albeit not necessarily at a pace that we try and set for them." She concluded that Kazakhstan "is in a strategic position, has real regional weight, and has a sufficiently diverse as well as wealthy economy to be a donor country in most senses of the term. This kind of country does not take well to lecturing. This leaves us room for attempts at persuasion, but mostly the need to hope they make the right choices on their own."

The same goes for the rest of the post-Soviet petrostates, of course. And what it points to is not a disagreement among experts in Washington, for the testimony cited here differs primarily in emphasis. All of the preceding, from the actions of the petrostates themselves to the statements from their leaders to the attempts of experts to clarify the situation for policymakers, suggests that the dominant Western paradigm for dealing with the post-Soviet world no longer fits the current reality of confidently ascendant petrostates.

The Western paradigm is still premised on the assumption that post-Soviet states have both the incentive and the desire to conduct reforms that will aid a transition from the repressive, communist past to a future of democratic politics and free markets. This paradigm underlies institutional architecture, from organizations like the OSCE to democracy-promotion efforts funded by Western governments, and informs policy, which evaluates post-Soviet states on their progress in a transition from the dismal past to the hoped-for future. In this paradigm, authoritarianism is supposed to be a holdover, not an outcome.

The problem is that the assumption doesn't hold for post-Soviet petrostates. With boatloads of money pouring in and more money looming on the horizon, what rational incentive is there for a largely unfettered and entrenched ruling elite to fetter its ability to siphon off profits (by advancing the rule of law and making itself accountable) or increase its chances of losing power (by enacting political reforms and holding free and fair elections)? And with democratic societies the highest per capita consumers of energy, what reason is there for policymakers answerable to voters to antagonize energy suppliers in a world of ever-more-frenzied competition for access to oil and gas?

None of this is particularly new. Tomas Carothers hailed the "end of the transition paradigm" in a January 2002 article for the "Journal of Democracy." "The New York Times" columnist Thomas Friedman wrote about the "price of oil and the pace of freedom" moving in opposite directions in a May/June 2006 piece for "Foreign Policy" titled "The First Law of Petropolitics." But in Azerbaijan, Kazakhstan, Turkmenistan, and, most importantly, Russia, these trends are coming together in a way that urgently requires a new paradigm.

New Realities

That paradigm will emerge from the myriad pushes and pulls of real-life, real-time policymaking, that imperfect amalgam of global trends, domestic politics, and individual interventions. The most an analyst can offer is a guide to the realities we now confront. In the post-Soviet petrostates, they are:

  • The transition from communism is over and it has come to rest on authoritarianism. A rapacious elite sits athwart the flow of petrodollars, controls the political arena, and maintains a veneer of democratic respectability through sham elections that do not offer a real chance for a competitor to come to power. The elite has neither the incentive nor the desire to implement reforms that would threaten its economic interests or political power. Technocratic modernization is possible, but democratization is improbable.
  • The petrostate elites are globally aware and brimming with confidence. They know the kind of rhetoric Western democracies want to hear in public forums, and will provide it ably on occasion. But they are no longer in search of advice, and they will be increasingly vocal about their objections to Western-sponsored change.
  • The era that began with the Helsinki Accords in 1975 is drawing to a close. The Helsinki Accords provided a mechanism for the West to support the demands of dissidents in the Eastern Bloc through a formal framework of compliance with the obligations that states assumed. This era entered its heyday in the 1990s. The comments by Azerbaijan President Ilham Aliyev quoted above, Russia's rejection of OSCE election monitoring, and Kazakh President Nursultan Nazarbaev's insistence on a "Kazakh path" to democracy even as his nation prepares to assume the chairmanship of the OSCE all point to its closure. In the new era, the enforcement of compliance with Western-sponsored obligations on democratization and human rights will be a less and less important component of international affairs.

These are the factors that will shape a new paradigm for dealing with post-Soviet petrostates. We cannot be sure whether it will emerge, or what it will look like if it does, but if it is to meet the challenges of today's world, it should include the following:

  • An end to the pretense of "transition." When Western officials tout the imaginary successes of "transitions" that have not, in fact, taken place, the resulting impression of hypocrisy and naivete undermines efforts to promote democracy abroad. The authoritarian leaders of petrostates are increasingly outspoken. Reciprocity is called for.
  • Strong, publicly articulated arguments to explain why democracy is a better system of government than authoritarianism -- because it calls rapacious elites to account, safeguards individual rights, makes real change possible, and ensures an orderly transfer of power. The time when democracy's allure could be assumed has passed. Petrostates are enjoying temporary economic security while their elites are using state-controlled media to present this as the justification for permanent authoritarian rule. An intellectual counterattack is needed.
  • An honest admission of national interest. Western democracies should be clear that they support the spread of democracy not simply out of principle, but also because it advances their national interests -- relations between states founded on common values and the rule of law are stronger and more stable, and business more easily conducted. Western prestige has declined sharply in the post-Soviet world since the heady days of the early 1990s, and arguments premised on altruism will fall on deaf ears.
  • New strategies to promote democracy. Much of the infrastructure that emerged in the 1990s to support reform through international organizations and local NGOs assumed that the post-Soviet powers that be had at least a grudging willingness to change. That condition no longer holds, and the democracy-promotion community will have to engage in wide-ranging reassessments and collective brainstorming to come up with new approaches.
  • Contingency plans for the failure of petro-authoritarianism. Petrostates often fall into so-called robust authoritarianism that can last for decades, but the first law of the authoritarian polity is that it is perfectly stable...until it's not. We will be far better placed to deal with the unpredictable challenges of petro-authoritarianism gone awry if we realize sooner rather than later that while crisis and collapse may seem improbable today, we should never assume that this means they are impossible tomorrow.

Daniel Kimmage is RFE/RL's senior geopolitics correspondent. The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL