The facts on Moscow’s side

DIMITRI K. SIMES is president of the Nixon Center and publisher of the National Interest.

RUSSIA FURTHER aggravated its relations with the West during its nasty dispute with Ukraine over natural gas. Moscow was clumsy, aggressive and self-defeating in its handling of the spat with Kiev over how much Ukraine should pay for its Russian gas -- resulting in a temporary cutoff of supplies to Europe.

But neither the facts nor U.S. interests justify siding squarely with Kiev, as Secretary of State Condoleezza Rice did last week. It’s easy to assume the worst from Russia, given its history, its current conduct and American domestic politics, where being tough on the Russians always sells. But contrary to what Americans might assume, this time Russian President Vladimir V. Putin has the facts on his side. Moscow cannot be expected to continue to subsidize Kiev when the Ukrainian government wants as little as possible to do with Russia.

There’s no question that Russia’s behavior left much to be desired. It angrily raised its price by nearly 50% after Ukraine refused to accept an earlier price hike. Russia’s state-dominated gas monopoly, Gazprom, also staged provocative televised exercises demonstrating its willingness to turn off its neighbor’s gas in midwinter.


Though Gazprom and Putin insisted that the dispute was strictly economic, a chorus of Russian politicians and commentators boasted that Moscow would not only punish the defiant Ukrainian President Viktor Yushchenko, but it could possibly even influence voters to elect pro-Russian candidates in upcoming Ukrainian elections.

Moscow’s greatest mistake, however, was in failing to anticipate the obvious fact that once Gazprom removed Ukraine’s share of the gas from Western pipelines, Kiev would (as it had done before) siphon off Russian gas, sharply reducing supplies to Europe. It was equally obvious that Kiev would receive considerably more sympathy from Europe than Moscow.

Under the circumstances, it is perfectly appropriate -- indeed imperative -- for the U.S. and the European Union to engage the Putin government in an urgent discussion about Russia’s obligations if it wants to be a reliable supplier and an energy superpower. But the West should bear in mind that:

* Russia demanded from Ukraine the same market price paid by European nations that do not have special agreements with Moscow. Russia was not contractually obligated to continue to provide gas to Ukraine at prices so heavily subsidized that Ukrainians actually paid less than Russians.

* Ukraine’s price of $50 per thousand cubic meters was not guaranteed beyond Jan. 1, 2006. That deal was based on an economic partnership with Russia that Yushchenko has rejected.

* Belarus pays Russia slightly less than $50 per thousand cubic meters, but it agreed (after Gazprom cut off its gas) to put its major pipeline under Gazprom’s control, an arrangement adamantly rejected by Ukraine.


Rice and others condemned Russia by arguing that the transition to market prices should be gradual. But this seems to be the opposite of what the International Monetary Fund has demanded of Iraq (with U.S. blessing) by tripling gas prices in the middle of the insurgency. Nor was it what the IMF (again with strong U.S. support) demanded from Russia in the 1990s, when it insisted on price liberalization, fueling hyperinflation and massive unemployment.

Reasonable people may expect Putin not to interfere with Ukraine’s Orange Revolution. But it’s unreasonable to demand that the Kremlin actually subsidize political changes it views as damaging to its vital interests. Yet Yushchenko has made supporting revolutions against regimes friendly to Russia one of his foreign policy priorities.

It defies common sense to believe that the U.S. can pursue policies Russia considers hostile and still expect cooperation on Iran, North Korea, counterterrorism and nonproliferation. Rice has made it clear she expects Russia to side with the U.S. against Iran. But deterioration in the U.S.-Russian relationship makes it more more likely that Russia will veto the United Nations sanctions the administration hopes to impose on Tehran. Moscow is far from a perfect partner for the U.S. But we should think twice before taking positions that may prompt it to stop being a partner at all.