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Sat. August 17, 2019
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Pirates of the Black Sea
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This article first appeared at Tech Central Station. Vladimir Putin claims to be a quid-pro-quo guy. At the Black Sea summit between Russia and the EU, he insisted on "reciprocity" for any European involvement in Russia's "holy of holies", its energy resources and associated state-run industries. Ever the reliable mouthpiece for Russian policy, Gerhard Schröder (until recently a European himself) asserts that all Russian companies operating abroad must get the same "rights" as outsiders operating in Russia. The Putin/Schröder idea of reciprocity, though, is for Russia to demand privileges from its neighbors and trading partners, while retaining iron control over every foreign presence in the Russian economy. Threatening Ukraine's natural gas supplies, manipulating Gazprom's terms for deliveries to Europe, and scoffing at the EU energy charter are tactics of intimidation pure and simple—and they are effective tactics. Leading up to the July G8 summit in St. Petersburg, Europe is playing the role of peacemaker, glossing over Russia's blustery demands for no-strings access to the WTO and signaling de facto surrender to its energy intimidation. There is a word for Russia's current geopolitical stance—piracy, pure and simple. Operating by threats, extortion, and as a law unto itself, Russia makes Blackbeard look like an amateur. Indeed, Russia seems almost proud of the way it disregards the rules of the game in global economics. Commenting on a new bill expanding Gazprom's state monopoly over gas exports, the Duma's Energy Committee chairman, Valery Yazev, pointed to "fears that during Russia's accession to the WTO we might be forced to ratify the Energy Charter" which frowns on such monopolies. Putin's G8 factotum, Igor Shuvalov, says Russia will use leverage to get access to western energy markets, including delivery systems (e.g. pipelines), and that leverage includes restricting access to Barents Sea gas reserves. At the same time, Russia is playing footsie with Iran over energy policy and nuclear ambitions alike. It's not just about energy, either. The Kremlin has suggested that foreign investors would find life more difficult if Russian access to the WTO is held up, or if too many market-opening conditions are imposed on its WTO membership. Further, Russian-origin counterfeit CDs and DVDs are a major US concern. The role of Kremlin-championed steelmaker Severstal in trying to block the takeover of Europe's Arcelor by Brit Lakshmi Mittal is cloudy at best, but the Moscow Times noted the takeover of Arcelor by Severstal would have been the first Russian success in getting control of a major Western company. Strange that Arcelor's terms for merger approval created a presumption in favor of Severstal, which can be overridden only by a majority-plus vote of shareholders. This demand for economic privilege under the guise of "reciprocity" permeates Russian society—Russia has dropped from "partially free" to "not free" in the Freedom House rankings for human rights performance. The growing kleptocracy centered on Putin, his crackdown on press freedoms and use of prosecutorial powers to punish CEOs who do not toe the line, may be strictly domestic problems, and indeed Putin's popularity seems not to suffer from his rhetorical swipes at Russia's competitors. But when these traits of modern Russian society are exported to the arena of global economics, they become everyone's business. While Vice President Cheney was a bit late in challenging Russia's backsliding on the road to democracy, at least he may have cleared away some of the fog caused by fixating on Putin's soul and laid the groundwork for a more realistic geopolitical stance towards Russia. Sen. John McCain calls for a US boycott of the G8 summit, an interesting symbolic proposal but no more than that. Surely it's time to realize that 21st century foreign policy demands linkage between internal politics and external relations as never before. If Russia wants to be a full-fledged member of the Global Leadership Club, it cannot run counter to the democratic tendencies sweeping the world. Reason enough for Russia to haul down the pirate flag and play by the same rules as everyone else. Even Tortuga, the most notorious pirate-haven in modern history, eventually had to. Interestingly, like Russia today, the shifting foreign powers that "governed" Tortuga in the 17th century blatantly used pirates as an extension of their own power, when convenient. For 21st century Russia, that won't do. Russia is a critical signpost, the bridge between Europe and Asia, and can point towards the expansion of democracy and freedom, or continue further towards the dialectic of raw power politics. In a very real sense, as Russia goes, so may go the undecided nations of the Second and Third Worlds. Jens F. Laurson is Editor-in-Chief of the International Affairs Forum. George A. Pieler is Senior Fellow with the Institute for Policy Innovation.

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