[FORUM]Russia’s new Czar?

It seems we should pay more attention to Russian President Vladimir Putin from now on. At the beginning of this year, he announced a surprising decision that made the global village tense. He decided to close the pipeline that supplies gas to Europe through Ukraine. In the cold of the winter, this decision put Europe into turmoil. In two days, the gas was reconnected. Ukraine, which provided the cause for the gas interruption, agreed to raise gas prices four-fold as Russia demanded.
What should be heeded is Mr. Putin’s will and Russia’s power that were revealed in the process of the “surprise show.” Some Western media criticized the show as “Putin’s reckless gambling.” The act of closing the gas pipeline one-sidedly is clearly a senseless act that cannot be understood according to international practices. But upon a closer look into the figure called Mr. Putin, his surprising decision this time was very calculated rather than being reckless. This is because the measure came from Mr. Putin’s painful experience, systematic study and long period of preparation.
Mr. Putin thinks the collapse of the former Soviet Union was “the biggest tragedy in the 20th century.” He was in East Germany as a KGB agent when the Berlin Wall collapsed in 1989. The spy who had maneuvered for the fall of capitalism was frustrated to witness instead the collapse of socialism. After returning to his hometown, St. Petersburg, and working at the State Mining Institute, Mr. Putin mulled over how to find a way out for his fatherland. His conclusion was expressed in his thesis under the title of “Natural resources as an economic development strategy for Russia.” The strategy for the development of Russia and the recovery of the hegemony of the former Soviet Union, as he thought, was to nationalize energy resources.
As soon as he seized power in 2000, Mr. Putin put his ideas into practice. An example was the removal of a new oligarch, Mikhail Khodorkovsky. Mr. Khodorkovsky became the richest man by collecting natural resources that were disposed of at cheap prices when the former Soviet Union fell. Mr. Putin arrested him and imposed enormous taxes on him, and handed his company over to a state-owned oil company, Rosneft. Mr. Khodorkovsky is now in prison in Siberia. Ignoring criticism from western countries, Mr. Putin finished nationalizing oil. Last fall, he also completed nationalizing gas by increasing the government share of the state-run gas company, Gazprom, to 51 percent.
After straightening out domestic affairs, Mr. Putin gathered his close aides just before Christmas and declared with confidence: “Russia’s present and future depends on energy resources. Russia should be a leader in the international community through energy resources.” And then, on Jan. 1, 2006, he cut off the gas supply. The measure was to discipline the Ukraine ― a former state of the Soviet Union which underwent the Orange Revolution and moved rapidly toward the west ― and at the same time, a display of power to the western world.
His decision to choose gas as a means of influence was proper too. Gas is an energy resource that has a stronger destructive power than oil. Gas is harder to substitute as its supply is more limited than oil and its transportation is more difficult. Most natural gas that goes to Europe is supplied through the pipeline. As gas is developed after customers are decided, there is no market immediately available even if there is a demand. Gas has a growing demand in place of oil, and the reserve production of gas is longer than that of oil. Critically, more than 30 percent of the world’s gas reserves are concentrated in Russia.
Mr. Putin achieved his intended goal by using an efficient weapon at a proper time. Some regret that the world, preoccupied with China’s rapid growth, has overlooked the remarkable changes in Russia.
Mr. Putin is a leader who looks far ahead. He may already be preparing for 2008 when he has served two terms. If the constitution is revised, his third term may be possible. We may, perhaps, be witnessing the birth of a new Czar.

*The writer is the international news team leader of the JoongAng Ilbo.

by Oh Byung-sang