The Laughable Spy

Moscow yesterday accused my former Tashkent roommate, British diplomat Chris Bowers, of being a spy. I've exchanged emails with Chris, and he's taking it with his usual good humor.

The Russians claim that Chris, the U.K.'s trade envoy in Moscow, has been a spy for years, even when he was the BBC's correspondent for Central Asia in the early 1990s. Meaning even when he was my roommate on Ivleva Street in the Uzbekistan capital.

If Chris was a spy, he was a terrible one. Having spent much of two years with him, I can say he didn't collect much information, apart from a lot of chatter from Tajiks intent on killing each other in a civil war. Indeed Chris refused to do so. Once, he actually reversed an order I had given to our office manager, Aziza Nuritova, to start news files on all the major topics in the region. "I've got it all in my head. We don't need files," he said, pointing to his curly locks (now short and gray, by the way.).

Most of the time, in fact, Chris was wooing the girl next door. Whom he married by the way.

Chris is about to leave Moscow anyway on to his next diplomatic posting. The Russians know that and are simply targeting the easiest game.

Gazprom: To Fear or Not to Fear

The West often expresses the apprehension that Russia will use its energy for outside political leverage. The answer of course is that it already is -- its oil and natural gas is the source after all of its newfound confidence and influence in Europe. Yet the most vulnerable and victim-prone countries are Russia's former Soviet colonies. The upshot: The Caspian states need to keep up their guard.

Take a look at The Independent of London today, which has a good, long primer on Gazprom. The piece, by Anne Penketh, makes two conclusions: Gazprom is so unwieldy and large that it may end up being a paper tiger; and that, given the combination of Gazprom's management failures and its abiding need for continued profits from Europe, it will end up having to give someone the short end of the stick -- one of its former Soviet brothers.

A key quote for those who follow the non-Russian states comes from Pavel Baev of the International Peace Research Institute: "They are the victims of choice," he tells the newspaper. "A new gas war is predetermined."

Steve's comment: The world caught on to Russia's outside power during the last eighteen months or so when Europe's oil and natural gas supply was disturbed over disputes with Ukraine and Belarus, and the Independent piece focuses on those two former Soviet states.

But the Caspian states and foreigners who work there -- Azerbaijan, Kazakhstan, Turkmenistan and, as a transit country, Georgia -- have witnessed Moscow's willingness to wield the energy club since just a few months after the 1991 Soviet breakup.

Russia starved Georgia of natural gas. It cut off Turkmenistan's access to foreign export markets. It has done the same in Kazakhstan, reducing the value of its giant fields (Karachaganak, one of the world's ten largest natural gas fields, is absurdly reduced to exploitation as an oil field). To its credit, Azerbaijan has responded to Gazprom's threats by going off Russian gas cold turkey, and turning to the local supply.

Transneft's actions in terms of the region's oil exports is well documented and have been discussed previously.

Russia argues that its actions are market-oriented. Maybe. But one must add realpolitik -- Gazprom has been the cudgel to bring feisty neighbors (such as Georgia) into line. And there is no sign that the custom is changing soon.

Russia For Now Holds Its Trump Card

President Putin's reprisal today was measured. (Video) He shrewdly held out his ultimate card -- energy -- as ammunition to be used as he believes the need arises.

For his domestic audience, Putin could have done no less than the expulsion of an equal number of British diplomats, and possibly also the imposition of visa restrictions that was announced. The moratorium on terror cooperation can be taken with a grain of salt -- the two sides share concern on the important grounds, and joint efforts will continue.

As noted in a comment to the previous post, Russia and Britain to a degree are tied at the waist financially -- BP for instance desperately needs continued good relations with Moscow for its current and future production and reserve base. But Russian business relies on London's capital markets as well.

Concern about Russia's future attitude toward British business is well-founded. That remains the likeliest ground for Putin's long-term reaction to what, if one listens to his remarks, he seems to regard as an intolerable challenge to Russia's image and its law. BP's investments remain Britain's soft underbelly.

How Moscow Will Respond to Britain's Expulsion of Russian Diplomats

Britain's soft spot in Russia is BP. Watch for Russia's response to today's expulsion announcement not only in a predictable tit-for-tat removal of British diplomats from Moscow, but in a tougher line toward the British oil giant.

In the past, Britain's Russia policy has been led by the requirements of BP, its largest publicly held company. And BP has walked softly with Moscow from the time of the Soviet collapse. In the 1990s, BP opposed the U.S.-backed Baku-Ceyhan oil pipeline, until it decided that its U.S. interests -- its wish to purchase Arco -- trumped its plans for the former Soviet Union. The British government walked lock-step with BP in the anti-, then abruptly pro-pipeline policies.

In the past few months, BP, like some of the other multinational oil companies, has buckled under to Moscow; they have had to because of the much more challenging global exploration environment. So it is that BP has provided cover to a Russian "auction" of a Yukos property by making a "bid" on it; and it has surrendered its rights to the Kovykta natural gas field.

In expelling four Russian diplomats, Britain has taken a principled stand on the Litvinenko murder case. A component of Moscow's calibrations is likely to take note that a quarter of the global production of Britain's marquee company -- BP -- comes from Russia. That is where President Putin is likely to pressure Britain.