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Sunday, April 17, 2005

OPI WEEKLY: RUSSIA'S SECESSIONIST SCARE

Recent protests in the central Russian region of Bashkortostan have raised an ominous question: have the velvet revolutions come to Russia itself? Indeed, some sources suggest that the protests are likely to spread to surrounding Russian regions as well. Worse yet for Russia, these regions happen to be some of its most important oil production, refining, and transporting regions. The unrest could threaten not only Russian cohesion, but also the world's already shaky oil markets.

However, other evidence suggests that there might be less to the protests than meets the eye. Indeed, the unrest seems more likely the result of a well-meaning but irrational exuberance than the result of a lasting revolutionary spirit. If so, the protests in central Russia –to the relief of Vladimir Putin as well as the world’s oil markets—are likely to fade away as quickly as they came.

RUSSIAN UNREST

Anti-government demonstrations took place on March 26 in Bashkortostan, a small but vitally important central Russian republic located in the Southern Ural Mountains north of Kazakhstan. An estimated 20,000 demonstrators gathered in the central square of Ufa, the Bashkir capital. On April 7 Bashkir protesters took their demonstration to Moscow to further press their demands. Organized by a broad-based coalition of Bashkir opposition parties and supported by an array of NGO’s in the region, the demonstrators demanded the ouster of Bashkir President Murtaza Rakhimov as well as action on human rights issues. They also threatened to storm the Bashkir government offices.

Official Russian reaction to the protests was muted. President Vladimir Putin’s advice to the Bashkir leadership, to go soft on the protests, seemed only to further embolden them.

The Bashkir unrest marks the first sign that the ‘velvet’ revolutions that have swept through the former Soviet states of Central Europe, the Caucusus, and Central Asia may now be sweeping into the Russian mainland itself. Stratfor, a U.S. based intelligence firm, reported earlier this month that protests similar to –and perhaps larger than—those in Bashkortostan are now being planned in several other separatist-minded Russian republics, including Bashkortostan’s oil rich neighbor, Tatarstan.

If this is the case, the unrest may come at significant cost, not only to Russia’s economy, but also to the world economy. Most of the republics in question are key for Russia’s economy, in particular its prolific oil industry. During 2005, Russia is expected to produce approximately 8 million bbl/d of crude oil, with exports of 5.3 to 5.5 million barrels per day, second only to Saudi Arabia and over 10% of the world’s total. Russia’s Energy Ministry further forecasts that Russian oil exports will grow to around 5.8 million barrels per day by 2007. With prices already near record highs, Russia’s output is thus key to stabilizing oil prices and sustaining world economic growth. An interruption in the supply would undoubtedly rock the world’s oil market and put even more strain on the world economy.

RUSSIA, OIL, AND SEPARATIST STRIFE: THE CHECHEN EXPERIENCE

Russia, of course, is tragically familiar with separatist strife. Its war with Chechnya has come at a huge cost in both lives and wealth on both sides. In Chechnya we can also see the way in which oil might exacerbate any future separatist conflicts in Russia.

Historically one of Russia’s primary oil producing regions, under the USSR Chechnya became a major hub for oil transit and refining. This key industrial infrastructure is one of the reasons that Moscow refused to grant Chechen independence upon the collapse of the Soviet Union in 1991. The region increased in importance in 1999 when the pipeline carrying Caspian oil through Russia for export through the Black Sea port of Novorossiisk commenced operation. Although the government promised to pay the Chechen rebel party a sizeable portion of the transit revenues through the republic, separatists repeatedly sabotaged the pipeline in order to put increased pressure on the government and to steal oil for sale on the black market.

While disruption in oil supplies through Chechnya was not enough to seriously damage Russian exports, the same is not true of other oil producing regions which may soon experience political upheaval and perhaps violence. Bashkortostan, where protests took place last week and where demonstrators have threatened to occupy government offices is a major oil refining and transit point, while independent-minded Tatarstan produces and transits a significant amount of Russian oil.

THE FIRST SIGNS OF DANGER?: BASHKORTOSTAN

Like Chechnya, Bashkortostan had sought independence in 1991 and was refused. And like Chechnya, its importance as a major oil producer and refiner made it far too important for Russia to let go. Not only does Bashkortostan produce about 340,000 barrels per day of oil and claim over 2 billion barrels of oil reserves, it is also a primary refining station on Russia’s massive pipeline complex. Its state-owned oil and gas company refines 12 percent of all Russian oil and 18 percent of the country’s high octane gasoline.

However, given its distance from Moscow and its ethnically diverse population, Bashkortostan has managed since 1991 to retain a larger degree of independence from the Russian Federation government than most Russian republics. Indeed, Bashkortostan’s Rakhimov, is considered to be one of Russia’s most independent-minded governors, exercising tremendous power in the vitally important region. He repeatedly defeated Moscow-backed candidates by running on an anti-federalist platform and flaunting Federal court rulings condemning his election stance. However, increasing Kremlin pressure, and Putin’s 2004 decree stipulating that regional governors be directly appointed by the Federal President instead of elected regionally, has altered Rakhimov’s ability to exercise his independence.

Rakhimov increasingly has been identified with the ‘oligarchic’ and anti-democratic behavior characteristic of those in Moscow he had always opposed. Under pressure from a Kremlin backed opponent in 2003 Rakhimov was only able to survive that year’s Bashkir elections by swearing allegiance to Putin’s United Russia party. The current demonstrations accuse Rakhimov backed police of detaining and injuring several hundred people in a violent sweep of the town of the town of Blagoveshchensk in December 2004. Rights groups claim that over 1,000 men were taken into custody, beaten, and humiliated.

It is difficult to gauge, however, the extent to which the current Bashkir protests are reflective of active dissatisfaction wit the Bashkir leader, and how much of it is a more symbolic ‘spirit of democracy’ inspired by the ‘Tulip Revolution’ in Kyrgyzstan and fueled by increasingly prevalent NGO funds in the region. Rakhimov was a well known member of the Bashkir business community before being elected to the governorship in 1993 and has made his reputation on protecting a significant amount of Bashkir autonomy from the central government. Indeed, his political campaigns have always emphasized that stance.

It is more likely that the current unrest in Bashkortostan is a local mole hill turned temporarily into a national mountain by the prevalence of NGO funds and an exuberance following the 'tulip revolution' in Kyrgyzstan. While there is some dissatisfaction with Rahkimov. and real concern over the December violence, the Bashkir protestors are unlikely to risk serious disruption to the Bashkir –and Russian—economic base in order to press their dissatisfactions to the breaking point.

A LIKELY SECOND?: TATARSTAN

Tartarstan is another region often described as vulnerable to separatist strife. Tatars are one of the most prevalent and self-identified of the Russian minorities. However, in the Tatar case too, the separatism is not of the sort that is likely to lead to major disruption. The republic has had only one President, Mintimir Shaimiyev, since the end of the Soviet Union. Shaimiyev has always secured a significant amount of regional autonomy, while still cooperating in essential ways with Moscow.

Though not recognized by the Russian Federation, Tatarstan in 1990 became the first of the autonomous republics to adopt a declaration of sovereignty. In 1992 the republic even held a referendum on full sovereignty and 61% voted in favor. However, in 1994 Boris Yeltsin and Shaimiyev signed a bilateral power-sharing treaty which recognized extensive rights of self-governance for Tatarstan, though the document fell short of recognizing state sovereignty. In the years since, Tatarstan has privatized over a thousand companies, supplying about 75% of the consumer production within Tatarstan, including Tatneft, Russia's sixth largest oil company and the only one listed on the NYSE.

Oil form both Tatarstan and Bashkortostan is transported primarily via the massive Transneft pipeline system, the eastward extension of which runs through both Republics. The oil from the two regions is blended with oil produced at Russia’s Siberian oil fields to form the Urals blend crude. The Urals blend is a relatively light crude with an API rating of 32º, although it is also a sour crude with a sulphur content of 1.3%. While some of the oil is refined in the two republics’ refineries or transported via rail for export or consumption, most of it travels via pipeline for export via Russian ports at Novorossiysk, Odessa, or Ventspils. Urals blend exports go primarily to the CIS states and to Europe.

Tatarstan reported just over 6 billion bbl of proved reserves as of 2002, most all of it owned by Tatneft. In the first quarter of 2005 Tatneft produced 513,000 bbl/d in the region, bringing the total for Bashkortostan and Tatarstan to nearly 1 million bbl/d. In 2003, 53% of Tatar exports went to Europe, 27% was sold domestically, and 20% was exported to CIS states.

Clearly, unrest in Tatarstan could have a major effect on Russian exports, and hence the stability of the world oil markets. However, despite the historical proclivity of Tatars and Tatarstan toward self-governance, relations with Moscow, even under the more authoritarian Putin, have remained good.

The independent-minded Shaimiyev said recently that he “didn’t mind” the recent decision by Putin decreeing that the federal president, and not regional elections, will determine the regional governor. On the face of it, Shaimiyev’s statement of acquiescence is extraordinary. There are only two possible reasons why one of the most independent-minded governors of one of Russia’s most independent-minded regions would agree to such a pro-Moscow move: either political and economic interests are such that Tatarstan independence can flourish within a united Russian federation, or Shaimiyev has a proverbial gun to his head.

There is no reason to believe the latter is the case. While Putin summarily replaced several regional governors as soon as he announced his decision to change the laws regarding how regional governors are to be chosen, Shaimiyev was asked last month to stay on. There has been no insinuation, in contrast to the Bashkir case, that Shaimiyev had to sell his soul to Putin in order to remain in power, and there his been nary a protest from the residents of Tatarstan.

BORDERS, BREAD, OR RELIGIOUS BELONGING : EXPLAINING THE DIFFERENCE

How do we explain the different attitudes toward the secession found in Bashkortostan and Tatarstan on the one hand and Chechnya and other northern Caucasus regions? One obvious, if not determinative, factor is the character of the Islam found in the regions. While both the Bashkir and Tatars are predominantly Muslim, Islam has never dominated in political, economic, or ideological terms in these regions. It has few if any political ambitions. The historical development of Islam in the region sharply differentiates it from the political Islam characteristic of many Muslims, especially in the Middle East. Neither Tatarstan nor Bashkortostan have experienced religious influence in the political sphere.

In contrast, Islam in Chechnya is largely influenced by the Sunni Islam characteristic of Saudi Arabia and other Middle Eastern countries. This is a faith inextricably linked to politics and political ambitions. However, the extent of this influence in Chechnya is largely, if not primarily, the result of the war itself. The conflict at its outset was about secular political freedom, not political-religious freedom. However, once the war intensified, it increasingly attracted jihadists and took on a more radical bent.

However, the fact that the secessionist movement in Chechnya began as a secular, economic, and historically driven secessionist movement raises the question of whether or not a desire for independence in Bashkortostan and Tatarstan could become similarly religious and radicalized. Fortunately for the Russian Federation, the necessary ingredients don’t seem to be there to have to test the hypothesis.

There are other clear differences as well between Bashkortostan and Tatarstan and the more separatist states of the northern Caucasus. Both Bashkortostan and Tatarstan are economically well-off and integral to the Russian economy. In addition, both are land-locked by other Russian republics and not border states, although Bashkortostan is separated from Kazakhstan by a 30 mile corridor of land belonging to the Russian republic of Orenberg. At one point after the dissolution of the Soviet Union the leadership of the two Russian republics agreed on a land swap whereby Orenberg would get a swathe of Bashkortostan land in exchange for the land separating Bashkortostan from Kazakhstan. However, this idea was popular neither among the peoples of Orenburg, nor the Russian leadership. The idea was quickly dropped.

Finally, there is a higher percentage of Russians in Tatarstan and Bashkortostan than in Chechnya. This integration has no doubt moderated the two Republics. Conversely, in the Tatar case, 75% of all Tatars live outside of Tatarstan, primarily in other Russian regions. While not decreasing the Tatar identity, it likely has a muting effect on the Tatar desire to struggle for full secession.

CONCLUSION

A preponderance of the evidence suggests that recent protests in Bashkortostan are not of a seriously separatist character. Nor does its independent-minded neighbor, Tatarstan, appear to be a likely candidate for secessionist strife. However, the same may not be true of other independent-minded regions. Yakutia in central Russia and Kalmykia in the lower Volga region, both important oil producing regions, are potential candidates for conflict. Regardless, the notion that the velvet revolutions that have spread throughout the CIS states have now swept into Russia is, like the protests themselves, a bit of well-meaning irrational exuberance.

1 Comments:

At 7:30 PM, Blogger Gothamimage said...

Very interesting....

 

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