Putin's swing through Asia

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See the Sol Sanders Archive By Sol Sanders SPECIAL TO WORLD TRIBUNE.COM

While Americans were mesmerized by what a Saudi prince called their periodic tribal wars, RussiaÕs President Putin paid his third state visit to China. It concluded with less øassuming two of the least transparent governments in the world didnÕt sign secret agreements.

It seems unlikely for Putin announced some unrealized goals before the trip. He insisted RussiaÕs oil policies would be dictated by its own national interests. The Chinese expected MoscowÕs decision to go ahead with a pipeline which would connect new ø with recently expanded reserve estimates ø petroleum finds in Western Siberia with Chinese markets.

The pipeline negotiated over several years had been considered a done deal. But last year the Japanese interloped. Tokyo offered extremely attractive terms even though their route would transit Siberian permafrost and cost four times more. But it would deadhead at Nahodkha on the Pacific with the possibility of sales to the U.S., South Korea, Taiwan as well as Japan. When the Chinese counteroffered, the Japanese raised the ante, suggesting they would fund other deposits the Russians are beginning to tap on Sakhalin Island and look further. Putin has been announcing postponements of the decision ever since.

PutinÕs oil honchos must have told him high prices might not last forever, and Moscow didnÕt want to get locked into one favored customer which might in the future put the squeeze on RussiaÕs best moneymaker. The Russians verbally slapped their wrists when the Chinese suggested they would like to pick up some pieces of Yukos, RussiaÕs largest and most efficient private producer. Yukos had a stake in the original pipeline deal, but when its owner got political ambitious, PutinÕs old KGB fraternity brothers moved in to dismantle it. [That, too, has played a role in rollercoastering international oil prices.]

Putin told the Chinese publicly, too, he wanted more investment from them in hi tech. That might mean his armaments industry which has been coasting downhill on its Soviet era overcapitalized momentum. The yawning gap in R&D has been apparent even with China, as its best customer, buying everything from fighter aircraft to missile carriers, its own armaments industry still not up to speed.

The Chinese have been fishing for Western ø notably French and Israeli øequipment where Russian weapons makers are not at the cutting edge. That was on French President Jacques ChiracÕs wishlist during his recent visit. But no contract was announced, probably because the Chinese know Paris still has a long way to convince its other European Union buddies to remove their post-Tien An Mien embargo on arms sales. [One supposes an EU embargo counts a bit more for the Quai dÕOrsay than the UN sanctions they flouted for IraqÕs Sadam.]

There are reports the Chinese are willing to put up $2 billion for a Moscow-St. Petersburg superhighway, build a ÒChinatownÓ in Moscow. But Putin asked for investment in RussiaÕs empty Far East when he met with representatives of ChinaÕs five northwestern provinces.

Still one has to wonder how much Chinese investment Putin really wants for that region ø if it comes [almost inevitably] with Chinese bodies. RussiaÕs Chinese population has grown from just over 5,000 in the late 1980s to three and a half million in the 2002 Russian count. That makes Chinese ethnics the fourth biggest after Russians [104.1 million], Tatars [7.2 million], and Ukrainians [5.1 million]. More than three-fourths of the Chinese immigrants have settled in Siberia and the Far East.

With new, recent devastating estimates of the continuing decline of RussiaÕs European population, Chinese intentions in areas they have historically claimed were stolen from their Empire with Òunequal treatiesÓ during the European colonial period have to be at the back of PutinÕs generalsÕ minds -- even if his KGB cohortsÕ short time calculations ignore them.

So the pipeline deal hangs fire.

Meanwhile, Puttin dropped in on Central Asia enroute back to Moscow. He announced an agreement for a new Russian military base in Dushanbe, Tajikstan, to replace the arrangement Moscow had with the Tajiks for a border force guarding their border with Afghanistan during the high tide of the Taliban in Kabul. [The Russian force had been something of a fiction, mostly Tajik ethnics under Russian command.]

In return for the base, Putin promised $2 billion investment øin hydroelectric and aluminum development. To cap what Moscow trumpeted as its return to the area, Russia is joining the Central Asian Cooperation Organization, a largely paper outfit, with Tajikistan, Kyrgyzstan, Kazakhstan and Uzbekistan. All this to answer WashingtonÕ post-9/11 influence in the region. Moscow recently set up a smaller military base in neighboring Kyrgyzstan to match a U.S.-NATO air base there. But it also is a counter to BeijingÕs considerable Central Asian political-economic push, which includes a proposal for another pipeline from the new Caspian fields to China, an economically highly suspect project.