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#20 - JRL 7062
Analysis: Russia straddling the divide-I
By Sam Vaknin
UPI Senior Business Correspondent

SKOPJE, Macedonia, Feb. 13 (UPI) -- Russian President Vladimir Putin warned on Tuesday, in an interview he granted to the French television channel TF1, that unilateral U.S.-British military action against Iraq would be a "grave mistake" and an "unreasonable use of force." Russia might veto it in the Security Council, he averred. In a joint declaration with France and Germany, issued the same day, he called to enhance the number of arms inspectors in Iraq as an alternative to war.

Only weeks ago Russia was written off, not least by myself, as a satellite of the United States. This newfound assertiveness has confounded analysts and experts everywhere. Yet, appearances aside, it does not signal a fundamental shift in Russian policy or worldview.

Russia could not resist the temptation of playing once more the Leninist game of "inter-imperialist contradictions." It has long masterfully exploited chinks in NATO's armor to further its own economic, if not geopolitical, goals. Its convenient geographic sprawl -- part Europe, part Asia -- allows it to pose as both a continental power and a global one with interests akin to those of the United States. Hence the verve with which it delved into the war against terrorism, recasting internal oppression and meddling abroad as its elements.

As Vladimir Lukin, deputy speaker of the Duma observed recently, with Britain having swerved too far toward America, Russia may yet become an intermediary between a bitterly disenchanted United States and an irked Europe and between the rich, industrialized West and developing countries in Asia. Publicly, the United States has only mildly disagreed with Russia's reluctance to countenance a military endgame in Iraq -- while showering France and Germany with vitriol for saying, essentially, the same things.

The United States knows that Russia will not jeopardize the relevance of the Security Council -- one of the few remaining hallmarks of past Soviet grandeur -- by vetoing an U.S.-sponsored resolution. But Russia cannot be seen to be abandoning a traditional ally and a major customer (Iraq) and newfound friends (France and Germany) too expediently.

Nor can Putin risk further antagonizing Moscow hardliners who already regard his perceived "Gorbachev-like" obsequiousness and far reaching concessions to the United States as treasonous. The scrapping of the Anti-Ballistic Missile Treaty, the expansion of NATO to Russia's borders, the U.S. presence in Central Asia and the Caucasus, Russia's "near abroad" -- are traumatic reversals of fortune.

An agreed consultative procedure with the crumbling NATO hardly qualifies as ample compensation. There are troubling rumblings of discontent in the army. A few weeks ago, a Russian general in Chechnya refused Putin's orders publicly, and with impunity. Additionally, according to numerous opinion polls, the vast majority of Russians oppose an Iraqi campaign.

By aligning itself with the fickle France and the brooding and somnolent Germany, Russia is warning the United States that it should not be taken for granted and that there is a price to pay for its allegiance and good services. But Putin is not Boris Yeltsin, his inebriated predecessor who over-played his hand in opposing NATO's operation in Kosovo in 1999, only to be sidelined, ignored and humiliated in the postwar arrangements.

Russia wants a free hand in Chechnya and to be heard on international issues. It aspires to secure its oil contracts in Iraq -- worth tens of billions of dollars -- and the repayment of $9 billion in old debts by the post-bellum government. It seeks pledges that the oil market will not be flooded by a penurious Iraq. It desires a free hand in Ukraine, Armenia and Uzbekistan, among others. Russia wants to continue to sell $4 billion a year in arms to China, India, Iran, Syria and other pariahs unhindered.

Only the United States, the sole superpower, can guarantee that these demands are met. Moreover, with a major oil producer such as Iraq as a U.S. protectorate, Russia becomes a hostage to American goodwill. Yet, hitherto, all Russia received were expression of sympathy, claimed Valeri Fyodorov, director of Political Friends, an independent Russian think-tank, in an interview in the Canadian daily National Post.

These are not trivial concerns. Russia's is a primitive economy, based on commodities -- especially energy products -- and an over-developed weapons industry. Its fortunes fluctuate with the price of oil, of agricultural produce and with the need for arms, driven by regional conflicts.

Should the price of oil collapse, Russia may again be forced to resort to multilateral financing, a virtual monopoly of the long arms of U.S. foreign policy, such as the International Monetary Fund. The United States also has a decisive voice in the World Trade Organization, membership thereof being a Russian strategic goal.

It was the United States that sponsored Russia's seat at table of the G8 -- the Group of Eight industrialized states -- a much-coveted reassertion of the Russian Federation's global weight. According to Rossiiskaya Gazeta, a Russian paper, the United States already announced a week ago that it is considering cutting Russia off U.S. financial aid -- probably to remind the former empire who is holding the purse strings.

But siding with the United States risks alienating the all-important core of Europe: Germany and France. Europe -- especially Germany -- is Russia's largest export destination and foreign investor. Russia is not oblivious to that. It would like to be compensated generously by the United States for assuming such a hazard.

Still, Europe is a captive of geography and history. It has few feasible alternatives to Russian gas, for instance. As the recent $7 billion investment by British Petroleum proves, Russia -- and, by extension, Central and East Europe -- is Europe's growth zone and natural economic hinterland.

Yet, it is the United States that captures the imagination of Russian oligarchs and lesser businesses.

Russia aims to become the world's largest oil producer within the decade. With this in mind, it is retooling its infrastructure and investing in new pipelines and ports. The United States is aggressively courted by Russian officials and "oiligarchs" -- the energy tycoons. With the Gulf states cast in the role of anti-American Islamic militants, Russia emerges as a sane and safe -- i.e., rationally driven by self-interest -- alternative supplier and a useful counterweight to an increasingly assertive and federated Europe.

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