No one ever said that Vladimir Putin wasn’t smart. No one ever
said he wasn’t a quick study. No one ever said he lacked management
skills. It’s just that no one envisaged him as a business mogul.
But that is exactly the latest operative psychology behind his and
Russia’s swaggering.
For Putin, the little boy from Leningrad who has always striven
for respect, the time has arrived for him to demonstrate what a
really big man he is. And it’s all possible because of the oil and
gas revenue of Russia.
In spite of Putin’s macho pretense, he knows he cannot challenge
the United States militarily. But he does know that through
Russia’s newly created wealth he has the political economic
leverage to stand up to the West.
Russia’s energy lifeline to Europe is a powerful instrument of
coercion, even if only by the potential of its being cut off. In
the same way the rather Hollywood bravura — like placing the
Russian national flag on the seabed of the oil and gas rich Arctic
— is the same as the announcement of a hostile takeover bid
challenging existing claims of the other stockholders: Canada, the
USA, Denmark, and Norway.
Putin has found that being flamboyant in his actions — such as
insisting Russia had to alter its existing missile targeting — was
a preferred method of negotiation on American plans for an
anti-Iran missile defense proposed for placement in Poland and the
Czech Republic. This is not a strategic challenge; it’s a
businessman’s ploy to scare off a perceived rival from setting up
shop in “his” territory.
In hard terms of military planning, threatening the Baltic
States with missile targeting hardly adds anything new to the
strategic equation. It does make good home office copy, though.
Similarly, the announcement of the resumption of long-range
reconnaissance by 14 Soviet era strategic bombers hardly brings a
tremble to the U.S. Strategic Air Command. Nor the does the
announcement that Russian Navy vessels may once again show their
flag in the Mediterranean really bother the vastly superior NATO
Southern Command.
All this followed Putin’s personally announced intention to
place a moratorium on the Cold War period’s arms control accord,
the Conventional Forces in Europe Treaty. An experienced observer
of international affairs would have to yawn a loud ho-hum at these
tough guy poses.
The big stick that Putin has to back up his relatively empty
military strutting is the increasingly muscular Russian financial
and business weaponry. Russia had an oil income of $170 billion in
2006 and substantially more is projected for ‘07, while having
already built up an oil stabilization fund of $160 billion.
Meanwhile, Russian muscle flexing has resulted in cuts to oil
supplies to Germany of about one third in July and August —
without explanation. The Germans can replace the oil, but the
unilateral breaking of the Russian contracts certainly raises
concerns over Russian energy reliability. This whipsawing of their
customers is a tactic that usually precedes a demand to alter
existing agreements to the supplier’s (Russia’s) advantage.
On the financial front Moscow shocked the International Monetary
Fund (IMF) by attacking the former French finance minister who had
been signaled as the next head of the fund. As a play to the
smaller and emerging economies, the Russians put forward the
ex-prime minister of the Czech Republic to take the job. By
throwing a wrench into the nearly already settled matter of the
next IMF managing director, Moscow has announced that it intends to
use all of its newly gained status in the international economic
community to exercise its political will.
At the same time it is emphasizing its role as a nation of “free
enterprise,” the Russian government is tightening control over the
country’s extractive industry sector (oil, gas, minerals) by
playing off the private interests so as to place the resulting
structure under greater government influence. Damned clever!
They’ll get back their central control one way or another, and
Putin’s “inside traders” will have the advantage.
Putin has become very full of himself and the rest of his
government reflects this self-infatuation. It is what is known in
less technical terms as “big shot-itis.” It’s a malady that affects
sports stars, labor leaders, business tycoons and certain
politicians, among others.
All in all, the Russians’ latest chest thumping is a clever way
to exert influence beyond their actual national strength. The
important thing to remember is that these are just the first stages
of the Kremlin’s attempt to use economic wheeling and dealing as a
political lever. Rebuilding its military is not far behind.
So keep your eye on little old “Putkin” for the next several
years — whether in or out of office. That middle-aged guy of
diminutive stature stripped to the waist in his flexed photo op
isn’t just fishing for trout. He’s chairman of the board and CEO
for life, and he’ll be around running Russia, Inc. for a very long
while.
