Everyone Loses: The Ukraine Crisis and the Ruinous Contest for Post-Soviet Eurasia

In the early 1990s, Moscow’s involvement in these crises was necessary (no other power was prepared to step in) and productive, in that it put a stop to bloodshed. Despite some misgivings in Washington, the US was generally empathetic; Clinton said in Moscow in January 1994, ‘I think there will be times when you will be involved… in some of these areas near you, just like the United States has been involved in the last several years in Panama and Grenada near our area.’[58] The problems emerged after the guns had been silenced. With the exception of Tajikistan, all of the post-conflict arrangements Moscow brokered became mired in stalemate, earning these conflicts the ‘frozen’ label. The lack of political settlements provided a convenient rationalisation for maintaining Russian troops as peacekeepers in Abkhazia, South Ossetia and Transnistria, along with the bases in Armenia and Tajikistan, which the host governments welcomed. And Moscow had direct dealings with both recognised national governments and the separatist enclaves themselves. In Transnistria, South Ossetia and Abkhazia, Russia even began issuing passports to locals. Russian officials were often seconded, so to speak, to the separatist governments.

Economic instruments filled out the Russian toolbox. They were most often used to twist arms on particulars and to produce prosaic commercial advantage for Russian companies, but at times they did rise to the level of geo-economics. Centrality, purchasing power, resource endowment and the hardwired legacy of the Soviet economy gave Moscow substantial advantages. Even though Russia’s economy was in contraction until the late 1990s, there was enough capital accumulation to facilitate investment abroad, including in disputed territories like Transnistria, South Ossetia and Abkhazia.[59] Energy afforded a special abundance of opportunities. Russia was the primary purveyor of oil and natural gas to all but the four other former Soviet republics that had their own hydrocarbon resources (Azerbaijan, Kazakhstan, Turkmenistan and, to a lesser extent, Uzbekistan); it routinely sold on credit and at below-market prices, making for buyer dependence. It also initially controlled all of the former USSR’s export pipelines, including those leading to the profitable European gas market, giving it a financial lever with its four fellow exporters. At one time or another, it bullied uncooperative partners by raising energy prices or suspending deliveries, calling in debts, slapping tariffs on imports or excise taxes on exports, and restricting access for non-Russian oil and gas exporters to its pipelines. The scholar Daniel Drezner recorded 39 occasions when the Kremlin had recourse to such tactics between 1992 and 1997. It produced concessions in 15 cases, or 38%, a respectable rate of success by the standards of political economists.[60] Even success came at a price. By resorting to ham-fisted tactics whenever one of its neighbours did not behave to its liking, Russia aroused threat perceptions throughout the region and came to be more feared than trusted by local elites. The bullying also convinced hawks in Washington and European capitals that, if not reinforced, the independence of the post-Soviet states could be a passing phenomenon.

Russia did not limit itself to bilateral knobs and switches. It also operated through a bevy of multilateral institutions, of which the paramount in theory was the umbrella CIS. In the five years after its establishment in December 1991, the CIS stood up an executive secretariat in Minsk, an inter-parliamentary assembly and 12 coordinating councils (for heads of state, heads of government and ministers). It also spawned a flock of around 50 specialised bodies, dedicated to everything from patents to meteorology, civil aviation and plant breeding. All told, the CIS Council of Heads of State had adopted 500 documents by 2004, and the Council of Heads of Government more than 900; the vast majority of these agreements ‘involved a relatively formal bureaucratic framework’.[61] Russian efforts were also devoted to more focused schemes for coordination of trade and development that smacked of geo-economics. In September 1993, a convocation of CIS heads of state adopted an Economic Union Treaty, featuring plans for a free-trade zone, a payments union and a monetary union. Subsidiary agreements on trade and tariffs, payments, legal harmonisation and rail transport ensued in 1994, 1995 and 1996. Steering power in the union was to be in proportion to economic output, so that Russia was in the driver’s seat.