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Eurasia Daily Monitor -- The Jamestown Foundation
Thursday, March 23, 2006 -- Volume 3, Issue 57
IN THIS ISSUE:
*Russian troops sweep Dagestan, resulting in widespread anger
*Kyiv now tilts toward Russia on Transnistria issue
*Tbilisi to receive gas deliveries from Azerbaijan
DESECRATION OF KORAN COULD PROVOKE ATTACK IN DAGESTAN
On March 3 Russian security officials swept through several villages in
the Khasavyurt district of Dagestan, North Caucasus.
According to RIA-Dagestan, "Officers of the Ministry of Interior Affairs
[MVD] and the Federal Security Service [FSB] are combing the Khasavyurt
area adjacent to Chechnya with the support of the 102nd Motorized Rifle
Division, helicopters, and armored vehicles." The Ministry also reported
that a Kalashnikov assault rifle, two hand grenades, and 2,000
ammunition cartridges had been found in the village of Novosasitli in a
house owned by a relative of Rasul Maksharipov, a Dagestani insurgent
leader who was killed last summer (RIA-Dagestan, March 3).
Mopping-up operations, house searches, and arrests of suspected rebel
sympathizers happen daily in Dagestan, but this time Russian military
forces, not local police, took the lead, a tactical decision that
immediately caused trouble.
On March 10, Islamskoe Vozrozhdenie, a website linked to the Muslims of
Russia organization, posted an open letter from residents of
Novosasitli. The letter revealed the details of the sweep and contained
information not mentioned in the official report. Before they started
the mopping-up operation, residents claimed, Russian soldiers forced all
of the residents to leave their homes. The locals complained that the
servicemen were drunk, stole money and jewels during the sweep, and
broke furniture in many houses. One officer threatened to have his
soldiers rape a female village, adding that the attack would be even
worse than "what the Americans do with Muslims in Guantanamo or Abu
Gharib" (Islamskoe Vozrozhdenie, March 10). In addition, people in
Novosasitli insist that all of the weapons found in the village had been
planted by the military to justify their violent raid.
Yet all of these alleged crimes pale in comparison to one specific
incident that might have serious negative consequences not only for
Dagestan, but also for Russia's reputation before the whole Muslim
world. At the home of Makhach Khabibov, Makhsharipov's relative, Russian
officers deliberately desecrated a Koran. According to the letter by the
villagers, a Russian officer pulled the holy book from a shelf and
methodically began to rip out its pages. Then he threw it on the floor
and walked over it. Chernovik, a Dagestani newspaper, confirmed this
information. A correspondent from the newspaper saw the desecrated Koran
himself when he visited the village (newsru.com, March 16).
This provocation was so extreme that even some official Muslim leaders
of Russia, who usually look the other way when officials violate the
rights of ordinary Muslims in the country, protested.
At the end of last week, Mufti Mukkadas Bibarsov, head of the Muslim
Spiritual Directorate of the Volga Region, said that this act of
desecration must receive exactly the same strong condemnation from the
government and Russian society as did the recent Danish cartoons
lampooning the Prophet Mohammad (Islam.ru, March 16).
Mufti Nafigulla Ashirov, head of the Muslim Spiritual Directorate for
the Asian part of Russia, echoed these words, arguing that anyone,
Muslim or non-Muslim, should be angry at such actions and the dangers
they pose to the unity and stability of the Russian Federation
(Islam.ru, March 17).
Leaders of the MVD forces hurried to disavow their involvement in the
incident. A source in the Command called the desecration of the Koran
"a serious case" and said that an investigation into the incident was
underway (Ekho Moskvy, March 16).
Nevertheless, it is unlikely that the desecration of the Koran was done
on impulse. The witnesses say that the entire sweep was well organized
and that Russians in civilian clothes (probably FSB officers)
coordinated the actions of the Interior forces. Given the high level of
advance planning, the provocative behavior of the servicemen, as well as
the desecration of the Koran, could have been premeditated. The
residents of Novosasitli said that, before the sweep began, the MVD
troops fired guns in the air and helicopters flew over the village,
which made the locals feel especially nervous and terrified. The
Dagestani police and even the republic's deputy minister of interior
affairs were forcibly kept away from the settlement during the sweep
(Islamskoe Vozrozhdenie, March 10).
The rough manner of the mopping-up operation resembles the massive
sweeps that took place in Chechnya from 2000 through 2003. The aim of
those "zachistkas" was to terrorize the Chechen population in order to
make them stop supporting the insurgency. The result was exactly the
opposite, however, since this brutal strategy only fueled resistance.
The same reaction could happen in Dagestan, where the local insurgency
had already gained significant public support.
"The desecration of the Koran has inspired serious public discontent in
Dagestan," says Abdurashid Saidov, a respected Dagestani journalist. "No
doubt such blasphemy will stimulate the youth to join the rebels. And it
should be clearly understood that actions such as the desecration of
sacred Muslim items and tormenting unarmed civilians, including women,
will not help security officials to frighten the Dagestanis, but, on the
contrary, this can only lead to a second Nalchik in the largest republic
of the North Caucasus. I do not think the Kremlin will gain anything for
itself if what happened in Nalchik is repeated in Dagestan." On October
13, 2005, insurgents swept into Nalchik, the capital of
Kabardino-Balkaria, capturing key facilities and fighting local security
forces. The authorities attempted to seal off the town, but the rebels
managed to escape.
The Russian military does not listen to people like Saidov, operating
under a different logic. "Religious fanatics understand only the
language of force," says General Yuri Nikolaev, a former army commander
in the North Caucasus (see EDM, June 23, 2005).
Time will tell whose arguments are closer to reality.
--Andrei Smirnov
UKRAINE BREAKING RANKS WITH EUROPE AND MOLDOVA ON TRANSNISTRIA
Ukraine's March 3 decision to cooperate with the European Union and
Moldova on Transnistria is proving short-lived. On that day, at the EU's
insistence, Ukraine began enforcing a new border and customs regime
agreed with Moldova on the Transnistrian sector of the Ukraine-Moldova
border, thus closing Europe's largest "black hole" of contraband and
illicit trafficking. However, the March 15 meeting in Moscow of
Ukraine's National Security and Defense Council Secretary (NSDC),
Anatoly Kinakh, with his Russian counterpart, Igor Ivanov, marked
another turning point in Ukraine's policy (if decisions reversible every
few weeks amount to a policy).
That meeting's officially reported agenda included only two items:
preparing the first session of the presidential Putin-Yushchenko
commission (which has never met since its creation on paper more than a
year ago) and Transnistria (Interfax, March 15). The seemingly peculiar
linkage of these two items reflects the Ukrainian presidency's and
NSDC's long-standing attempts to elicit positive pre-electoral signals
from Moscow in return for Kyiv's alignment with Moscow on Transnistria.
Indeed, on the eve of the Ivanov-Kinakh meeting, Russian Minister of
Foreign Affairs Sergei Lavrov publicly asked Ukraine to return to the
spirit of the December 15 Putin-Yushchenko declaration on Transnistria
(whereby the Ukrainian president had fallen into line with Putin, hoping
to induce him to visit Yushchenko in Ukraine ahead of the March 26
parliamentary elections). Lavrov further recalled the February
joint "inspection" visit to Transnistria by Igor Ivanov's and Kinakh's
deputies, who demonstratively exonerated Transnistria of suspicions
regarding arms production and contraband (Interfax, March 14).
That Lavrov-invoked spirit seems to be back after Kinakh's Moscow visit.
Moscow's consent to open the prospect of a Putin-Yushchenko meeting in
the joint communiqué is a modest but real "positive signal" just ahead
of Ukraine's March 26 vote.
On March 17 and 20, Ukraine's Ministry of Foreign Affairs forwarded two
notes to Moldova's Ministry of Foreign Affairs, in which it complained
of economic damage and political complications that Ukraine is
experiencing as a result of the new border and customs regime on the
Transnistria sector. Between the lines, the notes expressed discontent
with Chisinau's failure to explain the nature of the measures introduced
on March 3 to the public in Ukraine and Transnistria and hinted that
Ukraine cannot be expected to adhere to these measures much longer.
Indeed the Ukrainian Ministry proposes in one of the notes that the new
border and customs regime be "temporarily suspended" after Ukraine's
March 26 elections. It further proposes that Ukrainian customs clear
Transnistria cargos in situations where the March 3 regime stipulates
Moldovan clearance of those cargos.
Meanwhile, Kyiv is already punching some holes in that regime
politically and physically. Politically, Kyiv is undermining the basic
tenet of the European Union's initiative to introduce international
legal norms and standards on this border. That tenet holds that all
deliberations and decisions regarding this border are strictly a
bilateral matter between Moldova and Ukraine. The EU's Border Assistance
Mission (EUBAM) is present on the border and actively engaged in
consultation, advisory work, and monitoring, but in no way substitutes
for Ukraine and Moldova, the sovereign states qualified to make policy
decisions on that border under international law. Thus, the EU opposes
any transfer of deliberations and decisions from the Ukraine-Moldova
bilateral framework into a format that would include Transnistria and
Russia as well. By contrast, Moscow and Tiraspol call for a format of
all
"interested parties," including themselves on an equal footing with
Ukraine and Moldova, to settle the issue.
Kyiv is now inching toward accepting that Russian view. On March 16,
Yushchenko authorized an invitation to Transnistria's self-styled
"foreign affairs minister," Valery Litskay, for consultations in Odessa;
and Yushchenko personally invited Transnistria's leader Igor Smirnov on
March 17 for a meeting in Kyiv. Litskay declined, saying that he would
only attend together with the Russian side. Smirnov accepted in
principle, but only if the agenda and outcome of a meeting with
Yushchenko are well prepared in advance (translation: if Kyiv agrees to
suspend the border and customs regime that were introduced on March 3).
Following this humiliating episode, Kyiv continued consulting with
Moscow.
Beginning with the night of March 16-17, Ukrainian border and customs
authorities, on instructions from Kyiv, are from time to time allowing
road transport to enter Transnistria directly from Ukrainian territory,
bypassing Moldovan customs. Such passage violates the regime introduced
on March 3, which requires such transport to be detoured from Ukrainian
territory to Moldovan customs checkpoints, there to undergo registration
and clearance before proceeding to their destinations in Transnistria.
Some of those cargos are food products, some of which are intended to be
smuggled back into Ukraine or redirected to Moldova; others are scrap
iron for the Rabnita steel plant, Transnistria's most lucrative official
enterprise; and many of the cargos are imports of the Sheriff
conglomerate, the hub of Transnistria's shadow economy.
Official statements from Kyiv portray the passage of such transport as a
welcome sign that Transnistria's authorities are lifting the blockade
they had installed after March 3 on the border with Ukraine. In reality,
Tiraspol relaxed its blockade on the condition that Ukrainian
authorities collude in bypassing Moldovan customs. Tiraspol had stopped
all transport from Ukraine to retaliate economically against Kyiv,
generate political pressure from Ukrainian interest groups on the
government to lift or dilute the new border regime, foster a siege
atmosphere in Transnistria, and furnish a basis for Russian actions to
lift the purported "blockade." Tiraspol's move appears to be partly
successful against wavering Ukrainian authorities.
(Interfax-Ukraine, Moldpres, Olvia-Press, March 13-21)
--Vladimir Socor
GEORGIA EXTRICATING FROM GAZPROM'S BEAR HUG
The winter now ending was almost certainly the last one during which
Georgia had to face Gazprom's commercial blackmail and supply cutoffs.
Within the coming months, Georgia will begin receiving Azerbaijani gas
through the Shah Deniz-Baku-Tbilisi-Erzurum (Turkey) transit pipeline
and will also have an opportunity to receive small volumes of Iranian
gas. This new situation should finally end Georgia's dependence on
Gazprom and constant risk of losing the country's gas transport and
distribution systems to the Russian state monopoly.
Deliveries from Azerbaijan's offshore Shah Deniz gas field are scheduled
to begin in September 2006, reaching 20 billion cubic meters annually to
several consumer countries by the end of the decade. That figure, almost
double the initial projection, rests on revised estimates of the field's
recoverable reserves, which turned out to be far richer than initially
estimated. The consortium for extraction and transport consists of:
British Petroleum as technical operator and Norway's Statoil as
commercial operator, with stakes of 25.5% each; Azerbaijan's State Oil
Company, Total of France, and the National Iranian Oil Company (NIOC),
with 10% each; a partnership of Russia's Lukoil and Italy's Agip with
10% between them, and Turkish Petroleum with 9%.
Georgia is to receive 300 million cubic meters of gas annually in
compensation for the transit service and to purchase another 500 million
cubic meters annually for a deeply discounted price fixed at per one
thousand cubic meters. The aggregate volume of 800 million cubic meters
represents 60% of Georgia's current annual requirement of gas.
Significantly and properly, the arrangement whereby the consortium pays
Georgia with gas, in lieu of cash, for the transit service is deemed
entirely compatible with market economics. Gazprom and the Kremlin
denounced a similar arrangement, whereby Ukraine was receiving under
priced Russian gas in lieu of cash for the transit service until January
1, as "anti-market" and provided an excuse for their predatory move
against Ukraine.
The Georgian government now seeks to increase Georgia's guaranteed
annual intake of Shah Deniz gas, so as to cover at least part of the
remaining 40% of the country's current requirement. The requirement will
increase as Georgia's economic growth accelerates. With Gazprom a risky
option for meeting that requirement, Georgia is looking at the
possibility of importing small volumes of gas from Iran. Georgia began
such imports in late January, following the never-explained bomb blasts
in Russia's North Caucasus that sabotaged two Russian gas pipelines,
interrupting the supply to Georgia and Armenia. The national gas
companies of Georgia and Iran signed an agreement at that point whereby
Georgia would receive 2 million cubic meters of gas per day from Iran,
priced at 0 per one thousand cubic meters. That gas reached Georgia via
Azerbaijan, through the reconstructed small-capacity pipeline
Astara-Gazi Mahomed-Gazakh. That emergency arrangement opened the way to
exploratory discussions with Iran toward a more stable agreement to help
meet Georgia's annual requirements. Meanwhile, 10% of the Shah Deniz gas
to reach Georgia will count as "Iranian" (NIOC's share in that project).
On March 20, Georgia's Ambassador to Armenia, Revaz Gachechiladze,
declared Georgia's interest in receiving Iranian gas via Armenia. Both
Armenia and Georgia could benefit by enlarging the diameter of the
Iran-Armenia pipeline currently under construction, Gachechiladze
remarked (Armenian Radio, March 20). The pipeline's diameter of 700
millimeters barely meets Armenia's own needs. It was initially projected
at 1,420 millimeters with an eye to markets beyond Armenia, primarily
Georgia; but Moscow prevailed on Yerevan to reduce the scope of the
project so as to maintain Gazprom's dominance. Under a 2005 bilateral
agreement, Iran will supply Armenia with 36 billion cubic meters of gas
over a 20-year period, with an option to extend the contract period to
25 years and the volume of supplies to 47 billion cubic meters.
Any gas reaching Armenia and Georgia from Iran is almost certainly not
"Iranian," but rather originating in Turkmenistan and re-exported via
northern Iran. Turkmenistan is supplying northern Iran's market as well.
Under an agreement signed last month, Iran will import 14 billion cubic
meters of Turkmen gas in 2006, up from 9 billion cubic meters in 2005.
The deliveries in 2006 will for the first time fill the Korpeje-Kurt Kui
pipeline -- the sole non-Russian line out of Turkmenistan -- to full
capacity. Part of the additional volume is almost certainly intended for
re-export by Iran to Armenia, Azerbaijan, and possibly Georgia. This
year, Turkmen gas costs per one thousand cubic meters at Iran's border,
up from previously.
Gazprom may well retain some market share in Georgia beyond 2007, but
without the leverage to force Georgia to hand over its worn out trunk
pipeline or distribution systems. At the moment, Gazprom persists with
the offer to supply Georgia with gas at a still "favorable" rate of 0
per one thousand cubic meters (up from ), if Georgia locks itself into
permanent dependence by selling the trunk pipeline to Gazprom for a
deceptively tempting 0 million and throws the main gas distribution
systems into the deal. Some Georgian government officials seriously
considered such a possibility, but three factors have recently doomed
it: Gazprom's unreliability as demonstrated by the January-February
supply crisis, Georgia's receipt of U.S. Millennium Challenge Account
funds (partly earmarked for the trunk pipeline's rehabilitation), and
the Shah Deniz-Erzurum pipeline about to come on stream.
Gazprom was also unsuccessful in targeting Georgia's largest gas
distribution company, Tbilgazi, for takeover. Insolvent and heavily
indebted, the municipally owned Tbilgazi is being restructured under the
just-appointed General Director Bidzina Chkonia, hitherto the Millennium
Challenge Account's Georgia coordinator for energy. Tbilisi is
negotiating with Kazakhstan's gas transport company, KazTransGaz, to
privatize and overhaul Tbilgazi.
(Rustavi-2 Television, March 16, 20; Kavkas-Press, March 15; Interfax,
March 14 – 17, 20; Imedi TV, March 6; see EDM, January 23, 25)
--Vladimir Socor
The Eurasia Daily Monitor, a publication of the Jamestown Foundation, is
edited by Ann E. Robertson. The opinions expressed in it are those of
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Thursday, March 23, 2006 -- Volume 3, Issue 57
IN THIS ISSUE:
*Russian troops sweep Dagestan, resulting in widespread anger
*Kyiv now tilts toward Russia on Transnistria issue
*Tbilisi to receive gas deliveries from Azerbaijan
DESECRATION OF KORAN COULD PROVOKE ATTACK IN DAGESTAN
On March 3 Russian security officials swept through several villages in
the Khasavyurt district of Dagestan, North Caucasus.
According to RIA-Dagestan, "Officers of the Ministry of Interior Affairs
[MVD] and the Federal Security Service [FSB] are combing the Khasavyurt
area adjacent to Chechnya with the support of the 102nd Motorized Rifle
Division, helicopters, and armored vehicles." The Ministry also reported
that a Kalashnikov assault rifle, two hand grenades, and 2,000
ammunition cartridges had been found in the village of Novosasitli in a
house owned by a relative of Rasul Maksharipov, a Dagestani insurgent
leader who was killed last summer (RIA-Dagestan, March 3).
Mopping-up operations, house searches, and arrests of suspected rebel
sympathizers happen daily in Dagestan, but this time Russian military
forces, not local police, took the lead, a tactical decision that
immediately caused trouble.
On March 10, Islamskoe Vozrozhdenie, a website linked to the Muslims of
Russia organization, posted an open letter from residents of
Novosasitli. The letter revealed the details of the sweep and contained
information not mentioned in the official report. Before they started
the mopping-up operation, residents claimed, Russian soldiers forced all
of the residents to leave their homes. The locals complained that the
servicemen were drunk, stole money and jewels during the sweep, and
broke furniture in many houses. One officer threatened to have his
soldiers rape a female village, adding that the attack would be even
worse than "what the Americans do with Muslims in Guantanamo or Abu
Gharib" (Islamskoe Vozrozhdenie, March 10). In addition, people in
Novosasitli insist that all of the weapons found in the village had been
planted by the military to justify their violent raid.
Yet all of these alleged crimes pale in comparison to one specific
incident that might have serious negative consequences not only for
Dagestan, but also for Russia's reputation before the whole Muslim
world. At the home of Makhach Khabibov, Makhsharipov's relative, Russian
officers deliberately desecrated a Koran. According to the letter by the
villagers, a Russian officer pulled the holy book from a shelf and
methodically began to rip out its pages. Then he threw it on the floor
and walked over it. Chernovik, a Dagestani newspaper, confirmed this
information. A correspondent from the newspaper saw the desecrated Koran
himself when he visited the village (newsru.com, March 16).
This provocation was so extreme that even some official Muslim leaders
of Russia, who usually look the other way when officials violate the
rights of ordinary Muslims in the country, protested.
At the end of last week, Mufti Mukkadas Bibarsov, head of the Muslim
Spiritual Directorate of the Volga Region, said that this act of
desecration must receive exactly the same strong condemnation from the
government and Russian society as did the recent Danish cartoons
lampooning the Prophet Mohammad (Islam.ru, March 16).
Mufti Nafigulla Ashirov, head of the Muslim Spiritual Directorate for
the Asian part of Russia, echoed these words, arguing that anyone,
Muslim or non-Muslim, should be angry at such actions and the dangers
they pose to the unity and stability of the Russian Federation
(Islam.ru, March 17).
Leaders of the MVD forces hurried to disavow their involvement in the
incident. A source in the Command called the desecration of the Koran
"a serious case" and said that an investigation into the incident was
underway (Ekho Moskvy, March 16).
Nevertheless, it is unlikely that the desecration of the Koran was done
on impulse. The witnesses say that the entire sweep was well organized
and that Russians in civilian clothes (probably FSB officers)
coordinated the actions of the Interior forces. Given the high level of
advance planning, the provocative behavior of the servicemen, as well as
the desecration of the Koran, could have been premeditated. The
residents of Novosasitli said that, before the sweep began, the MVD
troops fired guns in the air and helicopters flew over the village,
which made the locals feel especially nervous and terrified. The
Dagestani police and even the republic's deputy minister of interior
affairs were forcibly kept away from the settlement during the sweep
(Islamskoe Vozrozhdenie, March 10).
The rough manner of the mopping-up operation resembles the massive
sweeps that took place in Chechnya from 2000 through 2003. The aim of
those "zachistkas" was to terrorize the Chechen population in order to
make them stop supporting the insurgency. The result was exactly the
opposite, however, since this brutal strategy only fueled resistance.
The same reaction could happen in Dagestan, where the local insurgency
had already gained significant public support.
"The desecration of the Koran has inspired serious public discontent in
Dagestan," says Abdurashid Saidov, a respected Dagestani journalist. "No
doubt such blasphemy will stimulate the youth to join the rebels. And it
should be clearly understood that actions such as the desecration of
sacred Muslim items and tormenting unarmed civilians, including women,
will not help security officials to frighten the Dagestanis, but, on the
contrary, this can only lead to a second Nalchik in the largest republic
of the North Caucasus. I do not think the Kremlin will gain anything for
itself if what happened in Nalchik is repeated in Dagestan." On October
13, 2005, insurgents swept into Nalchik, the capital of
Kabardino-Balkaria, capturing key facilities and fighting local security
forces. The authorities attempted to seal off the town, but the rebels
managed to escape.
The Russian military does not listen to people like Saidov, operating
under a different logic. "Religious fanatics understand only the
language of force," says General Yuri Nikolaev, a former army commander
in the North Caucasus (see EDM, June 23, 2005).
Time will tell whose arguments are closer to reality.
--Andrei Smirnov
UKRAINE BREAKING RANKS WITH EUROPE AND MOLDOVA ON TRANSNISTRIA
Ukraine's March 3 decision to cooperate with the European Union and
Moldova on Transnistria is proving short-lived. On that day, at the EU's
insistence, Ukraine began enforcing a new border and customs regime
agreed with Moldova on the Transnistrian sector of the Ukraine-Moldova
border, thus closing Europe's largest "black hole" of contraband and
illicit trafficking. However, the March 15 meeting in Moscow of
Ukraine's National Security and Defense Council Secretary (NSDC),
Anatoly Kinakh, with his Russian counterpart, Igor Ivanov, marked
another turning point in Ukraine's policy (if decisions reversible every
few weeks amount to a policy).
That meeting's officially reported agenda included only two items:
preparing the first session of the presidential Putin-Yushchenko
commission (which has never met since its creation on paper more than a
year ago) and Transnistria (Interfax, March 15). The seemingly peculiar
linkage of these two items reflects the Ukrainian presidency's and
NSDC's long-standing attempts to elicit positive pre-electoral signals
from Moscow in return for Kyiv's alignment with Moscow on Transnistria.
Indeed, on the eve of the Ivanov-Kinakh meeting, Russian Minister of
Foreign Affairs Sergei Lavrov publicly asked Ukraine to return to the
spirit of the December 15 Putin-Yushchenko declaration on Transnistria
(whereby the Ukrainian president had fallen into line with Putin, hoping
to induce him to visit Yushchenko in Ukraine ahead of the March 26
parliamentary elections). Lavrov further recalled the February
joint "inspection" visit to Transnistria by Igor Ivanov's and Kinakh's
deputies, who demonstratively exonerated Transnistria of suspicions
regarding arms production and contraband (Interfax, March 14).
That Lavrov-invoked spirit seems to be back after Kinakh's Moscow visit.
Moscow's consent to open the prospect of a Putin-Yushchenko meeting in
the joint communiqué is a modest but real "positive signal" just ahead
of Ukraine's March 26 vote.
On March 17 and 20, Ukraine's Ministry of Foreign Affairs forwarded two
notes to Moldova's Ministry of Foreign Affairs, in which it complained
of economic damage and political complications that Ukraine is
experiencing as a result of the new border and customs regime on the
Transnistria sector. Between the lines, the notes expressed discontent
with Chisinau's failure to explain the nature of the measures introduced
on March 3 to the public in Ukraine and Transnistria and hinted that
Ukraine cannot be expected to adhere to these measures much longer.
Indeed the Ukrainian Ministry proposes in one of the notes that the new
border and customs regime be "temporarily suspended" after Ukraine's
March 26 elections. It further proposes that Ukrainian customs clear
Transnistria cargos in situations where the March 3 regime stipulates
Moldovan clearance of those cargos.
Meanwhile, Kyiv is already punching some holes in that regime
politically and physically. Politically, Kyiv is undermining the basic
tenet of the European Union's initiative to introduce international
legal norms and standards on this border. That tenet holds that all
deliberations and decisions regarding this border are strictly a
bilateral matter between Moldova and Ukraine. The EU's Border Assistance
Mission (EUBAM) is present on the border and actively engaged in
consultation, advisory work, and monitoring, but in no way substitutes
for Ukraine and Moldova, the sovereign states qualified to make policy
decisions on that border under international law. Thus, the EU opposes
any transfer of deliberations and decisions from the Ukraine-Moldova
bilateral framework into a format that would include Transnistria and
Russia as well. By contrast, Moscow and Tiraspol call for a format of
all
"interested parties," including themselves on an equal footing with
Ukraine and Moldova, to settle the issue.
Kyiv is now inching toward accepting that Russian view. On March 16,
Yushchenko authorized an invitation to Transnistria's self-styled
"foreign affairs minister," Valery Litskay, for consultations in Odessa;
and Yushchenko personally invited Transnistria's leader Igor Smirnov on
March 17 for a meeting in Kyiv. Litskay declined, saying that he would
only attend together with the Russian side. Smirnov accepted in
principle, but only if the agenda and outcome of a meeting with
Yushchenko are well prepared in advance (translation: if Kyiv agrees to
suspend the border and customs regime that were introduced on March 3).
Following this humiliating episode, Kyiv continued consulting with
Moscow.
Beginning with the night of March 16-17, Ukrainian border and customs
authorities, on instructions from Kyiv, are from time to time allowing
road transport to enter Transnistria directly from Ukrainian territory,
bypassing Moldovan customs. Such passage violates the regime introduced
on March 3, which requires such transport to be detoured from Ukrainian
territory to Moldovan customs checkpoints, there to undergo registration
and clearance before proceeding to their destinations in Transnistria.
Some of those cargos are food products, some of which are intended to be
smuggled back into Ukraine or redirected to Moldova; others are scrap
iron for the Rabnita steel plant, Transnistria's most lucrative official
enterprise; and many of the cargos are imports of the Sheriff
conglomerate, the hub of Transnistria's shadow economy.
Official statements from Kyiv portray the passage of such transport as a
welcome sign that Transnistria's authorities are lifting the blockade
they had installed after March 3 on the border with Ukraine. In reality,
Tiraspol relaxed its blockade on the condition that Ukrainian
authorities collude in bypassing Moldovan customs. Tiraspol had stopped
all transport from Ukraine to retaliate economically against Kyiv,
generate political pressure from Ukrainian interest groups on the
government to lift or dilute the new border regime, foster a siege
atmosphere in Transnistria, and furnish a basis for Russian actions to
lift the purported "blockade." Tiraspol's move appears to be partly
successful against wavering Ukrainian authorities.
(Interfax-Ukraine, Moldpres, Olvia-Press, March 13-21)
--Vladimir Socor
GEORGIA EXTRICATING FROM GAZPROM'S BEAR HUG
The winter now ending was almost certainly the last one during which
Georgia had to face Gazprom's commercial blackmail and supply cutoffs.
Within the coming months, Georgia will begin receiving Azerbaijani gas
through the Shah Deniz-Baku-Tbilisi-Erzurum (Turkey) transit pipeline
and will also have an opportunity to receive small volumes of Iranian
gas. This new situation should finally end Georgia's dependence on
Gazprom and constant risk of losing the country's gas transport and
distribution systems to the Russian state monopoly.
Deliveries from Azerbaijan's offshore Shah Deniz gas field are scheduled
to begin in September 2006, reaching 20 billion cubic meters annually to
several consumer countries by the end of the decade. That figure, almost
double the initial projection, rests on revised estimates of the field's
recoverable reserves, which turned out to be far richer than initially
estimated. The consortium for extraction and transport consists of:
British Petroleum as technical operator and Norway's Statoil as
commercial operator, with stakes of 25.5% each; Azerbaijan's State Oil
Company, Total of France, and the National Iranian Oil Company (NIOC),
with 10% each; a partnership of Russia's Lukoil and Italy's Agip with
10% between them, and Turkish Petroleum with 9%.
Georgia is to receive 300 million cubic meters of gas annually in
compensation for the transit service and to purchase another 500 million
cubic meters annually for a deeply discounted price fixed at per one
thousand cubic meters. The aggregate volume of 800 million cubic meters
represents 60% of Georgia's current annual requirement of gas.
Significantly and properly, the arrangement whereby the consortium pays
Georgia with gas, in lieu of cash, for the transit service is deemed
entirely compatible with market economics. Gazprom and the Kremlin
denounced a similar arrangement, whereby Ukraine was receiving under
priced Russian gas in lieu of cash for the transit service until January
1, as "anti-market" and provided an excuse for their predatory move
against Ukraine.
The Georgian government now seeks to increase Georgia's guaranteed
annual intake of Shah Deniz gas, so as to cover at least part of the
remaining 40% of the country's current requirement. The requirement will
increase as Georgia's economic growth accelerates. With Gazprom a risky
option for meeting that requirement, Georgia is looking at the
possibility of importing small volumes of gas from Iran. Georgia began
such imports in late January, following the never-explained bomb blasts
in Russia's North Caucasus that sabotaged two Russian gas pipelines,
interrupting the supply to Georgia and Armenia. The national gas
companies of Georgia and Iran signed an agreement at that point whereby
Georgia would receive 2 million cubic meters of gas per day from Iran,
priced at 0 per one thousand cubic meters. That gas reached Georgia via
Azerbaijan, through the reconstructed small-capacity pipeline
Astara-Gazi Mahomed-Gazakh. That emergency arrangement opened the way to
exploratory discussions with Iran toward a more stable agreement to help
meet Georgia's annual requirements. Meanwhile, 10% of the Shah Deniz gas
to reach Georgia will count as "Iranian" (NIOC's share in that project).
On March 20, Georgia's Ambassador to Armenia, Revaz Gachechiladze,
declared Georgia's interest in receiving Iranian gas via Armenia. Both
Armenia and Georgia could benefit by enlarging the diameter of the
Iran-Armenia pipeline currently under construction, Gachechiladze
remarked (Armenian Radio, March 20). The pipeline's diameter of 700
millimeters barely meets Armenia's own needs. It was initially projected
at 1,420 millimeters with an eye to markets beyond Armenia, primarily
Georgia; but Moscow prevailed on Yerevan to reduce the scope of the
project so as to maintain Gazprom's dominance. Under a 2005 bilateral
agreement, Iran will supply Armenia with 36 billion cubic meters of gas
over a 20-year period, with an option to extend the contract period to
25 years and the volume of supplies to 47 billion cubic meters.
Any gas reaching Armenia and Georgia from Iran is almost certainly not
"Iranian," but rather originating in Turkmenistan and re-exported via
northern Iran. Turkmenistan is supplying northern Iran's market as well.
Under an agreement signed last month, Iran will import 14 billion cubic
meters of Turkmen gas in 2006, up from 9 billion cubic meters in 2005.
The deliveries in 2006 will for the first time fill the Korpeje-Kurt Kui
pipeline -- the sole non-Russian line out of Turkmenistan -- to full
capacity. Part of the additional volume is almost certainly intended for
re-export by Iran to Armenia, Azerbaijan, and possibly Georgia. This
year, Turkmen gas costs per one thousand cubic meters at Iran's border,
up from previously.
Gazprom may well retain some market share in Georgia beyond 2007, but
without the leverage to force Georgia to hand over its worn out trunk
pipeline or distribution systems. At the moment, Gazprom persists with
the offer to supply Georgia with gas at a still "favorable" rate of 0
per one thousand cubic meters (up from ), if Georgia locks itself into
permanent dependence by selling the trunk pipeline to Gazprom for a
deceptively tempting 0 million and throws the main gas distribution
systems into the deal. Some Georgian government officials seriously
considered such a possibility, but three factors have recently doomed
it: Gazprom's unreliability as demonstrated by the January-February
supply crisis, Georgia's receipt of U.S. Millennium Challenge Account
funds (partly earmarked for the trunk pipeline's rehabilitation), and
the Shah Deniz-Erzurum pipeline about to come on stream.
Gazprom was also unsuccessful in targeting Georgia's largest gas
distribution company, Tbilgazi, for takeover. Insolvent and heavily
indebted, the municipally owned Tbilgazi is being restructured under the
just-appointed General Director Bidzina Chkonia, hitherto the Millennium
Challenge Account's Georgia coordinator for energy. Tbilisi is
negotiating with Kazakhstan's gas transport company, KazTransGaz, to
privatize and overhaul Tbilgazi.
(Rustavi-2 Television, March 16, 20; Kavkas-Press, March 15; Interfax,
March 14 – 17, 20; Imedi TV, March 6; see EDM, January 23, 25)
--Vladimir Socor
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