Russian gas giant Gazprom has signed a deal with Belarus to sell gas for $100 per 1000 cubic meters (up from $45). The deal was signed right before 2007 hit and also sees Gazprom get a 50% stake in Belarus’ gas pipeline Beltransgaz.

Already one of the largest producers of gas in the world, Gazprom is seeking more command by securing control of the Belarussian pipeline, which is strategically important in delivering gas to Europe.

While there is widespread criticism of Russia for using gas prices to dictate foreign policy, there is also a counter-critique. State owned or not (Russia has a controlling package in the company), Gazprom is in the business of making money. The high profile cases of price hikes come from the Soviet past, with Ukraine, Georgia and others benefiting from friendly prices.

Did Belarus truly deserve to pay $45 when Europe pays over $200? Shouldn’t the market decide the price?

That’s precisely the lesson Georgia learned when it had to cave in to a new price of $235.

Friendly prices are usually artificial. And require friendship, not constant finger-pointing.


Georgian President Mikhail Saakashvili has said that Georgia will not buy Russian gas at $230 per 1,000 cubic metres. Georgian officials have said alternative partners will be sought, like Azerbaijan and Iran. But it remains unclear whether that will be a cheaper alternative to Gazprom (Russia’s gas company).

Georgia is upset that it is receiving an elevated price compared to some of its neighbors, who buy the gas at friendly Russian rates. In fact, Georgia is so desperate for cheaper Russian gas that it has begun scaring European leaders about potential politically-motivated Russian gas hikes. The Georgian President spoke about normalizing relations with Russia and avoiding irreparable damage between the two states. This is yet another signal by the Georgian side, that it needs Russia’s cooperation and that the economic sanctions against the country have indeed been effective. At the same time that Georgia seeks a rapprochement, it continues a provocative discourse regarding South Ossetia, claiming that the referendum held in the breakaway region is illegitimate. This Sunday, residents of South Ossetia voted in favor

Russia announced the gas hike following a Georgian-insinuated diplomatic scandal, which had four Russian officers arrested by Georgian officials.

Gas as Foreign Policy

November 5, 2006

Armenia has confirmed that Gazprom will freeze its prices for the country until January 1, 2009 in return for Armenia transferring control of an electricity plant.

The price freeze doesn’t only have to do with the transfer of the electricity plant, but also with the friendly relations between Armenia and Russia. Unlike Georgia, Armenia does not take unnecessary stabs at its neighbor. Georgia’s President Saakashvili is very well known for his anti-Russian stance.

That’s why this year Georgia will be paying double price for its gas. Unless Saakashvili changes his rhetoric.

That’s gas as foreign policy.

Gazprom, Russia’s state-controlled energy giant has announced plans to double the price of gas for neighboring Georgia.

Russia has been having a tough time with its neighbor of late, following the Georgian arrest of four alleged Russian spies. Without a doubt, the price hike is meant to chastise the former Soviet republic for its anti-Russian attitudes. This tactic is not new — the same strategy was used in the Ukraine last winter. Since, the Ukraine, has been more aligned with Russia; this summer, the Ukranian government settled on pro-Russian Yanukovich, as its Prime Minister.

In turn, Yanukovich has negotiated a friendly gas price with Russia.

Energy as Foreign Policy

Because Russia has used its energy resources as a foreign policy tool in the past — and no one has been able to stop it, due to its great market share — European countries tried to reverse this imbalance earlier this fall. European ministers wanted European companies to have access to the Russian market and have these companies export energy back into Europe. For obvious reasons, Russia didn’t commit.

Russian President Vladimir Putin conducted a televised Q&A session today answering some of the pressing concerns of the country.

Talking of one of the hottest topics of late, President Putin said that Russia will not annex the breakaway Georgian territories of Abkhazia and South Ossetia. Putin stressed that the recent comments he’s made about Georgia have to do with concern over potential bloodshed in the region.

At the same time, Putin did not rule out potential use of force: “There are certain contradictions: on the one hand, Russia supports the territorial integrity of Georgia and other countries. However, a nation has a right to self-determination. Therefore, we should take into account these contradictions and, of course, we will thoroughly consider international precedents, including that of Kosovo.”

The Georgian territories have been pushing for independence and some sort of association with Russia.

Human Rights Violations

Georgia’s Foreign Ministry has made a complaint with the UN High Commisioner for Human Rights.

The complaint has to do with Russia’s crackdown on illegal migrants of Georgian descent, which followed Georgia’s detention of four Russian diplomats last month. Russia’s response has been adequate in terms of foreign policy — the country has exercised restraing and not acted with military force (as, Israel did, this summer). Domestically, however, Russia has failed miserably exercising a policy of ethnic-based discrimination, going as far as asking schools for lists of Georgian students.

Press Freedom Index

Reporters Without Borders published its list of dangerous places to be a journalist. While North Korea has topped the list yet again, Russia does not have a favourable position either: the former super-power was 147 (out of 168 countries). The most recent example of the danger being the murder of Journalist Anna Politkovsaya.

It’s been a week of bad PR for Russia. And rightly so.

Blogging is not about media ethics. But accountability and transparency, I believe, is necessary.

I never intended this blog to be about the Russia-Georgia conflict, but in the last few days I have been drawn to write on this topic. Hence, I have a disclosure to make about a personal bias.

Two and a half years ago, as Georgia had its President Saakashvili sworn in, my cousin’s husband was incarcerated by this new administration. The arrest was political in nature and charges have never been laid since the arrest. It’s been over two years, but the confinement continues.

The Human Rights Watch, the Red Cross and others (I had started a petition) have been involved but without success. Gia Vashakidze continues to be held in a Georgian prison, while his wife (my cousin) is left to raise her child alone in Moscow — and not able to visit her husband.

Because of this, it is sometimes hard for me to accept President Saakashvili’s discourse of freedom. The reason Gia Vashakidze was incarcerated was because he supported a different candidate for the presidency (not Saakashvili); Gia was also an influential General and a deputy defense minister. In his bed for the presidency, Saakashvili thought that sometimes it’s worth to take some freedom away.

Obviously this issue doesn’t make me completely disregard Georgia’s position, but a bias is there. And I feel a need to admit it.

I will try to write on Georgia without compromising a certain level of integrity that I feel I have. But I know that sometimes my emotions may run ahead of me. I apologize in advance.