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Mr. Putin’s Neighborhood

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Dr. Stefan Meister of DGAP has published a new three-page briefing memo analyzing the recent political disputes between Russia and Belarus, finding evidence for a shift in Moscow’s “alliance policy” through the use of economic leverage. Russia’s not winning over many friends on its borders, Meister argues, but with zero competition from any other suitors, these countries are left with few other choices.

In the last five years, Russian foreign policy in the post-Soviet neighborhood has gone from being strongly ideological to highly pragmatic. The realistic assessment of Russia’s resources that took place underVladimir Putin led to an economization of foreign policy, in other words, the use of energy independence and economic stimulus / sanctions to assert Russia’s economic and foreign policy goals. The realization of its limited influence in the post-Soviet states came with the shock of the “color revolutions” in Ukraine and Georgia and led to the cutback of its subsidy policies in its “near abroad.” Russia no longer subsidizes the economies of post-Soviet states that show questionable loyalty. Rather, it seeks to award credits for those who meet clear political demands and pave the way for Russian firms to take over strategic branches of the economies of neighboring countries.

This new Russian policy can be seen in Ukraine, where new president Viktor Yanukovich has been offered a merger between Gazprom and Ukrainian gas monopoly Naftogas, as well as the opportunity to include Russian firms as partners or owners in other key sectors of the Ukrainian economy. This is also the case in Belarus, where Lukashenko is expected to relinquish control of Beltransgas to Gazprom and is ready to sell other important assets of the Belarusian economy – such as the export-heavy petrochemical industry – to Russian firms. The Russian elite is ready to accept any conflicts that arise from the achievement of this goal, which shows how strong an interest they have in expanding their economic gains in the post-Soviet neighborhood. It is also important that although the new Ukrainian leadership has allied itself closer with Russia, and despite developments in Kyrgyzstan and Armenia that suggest a move towards increased cooperation with Russia, Moscow is well aware that economic hegemony is the only way to guarantee a strong influence in the region for the long-term.