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Published: Sunday, 9/21/2003

Putin's two black eyes struck by Britain, U.S.

Russian President Vladimir Putin will be sporting two black eyes when he meets his U.S. counterpart this week on the sidelines of the U.N. General Assembly session in New York.

One black eye will come from Great Britain, Washington's unwavering ally in foreign policy. It has just granted political asylum to Mr. Putin's nemesis - Boris Berezovsky, a self-exiled tycoon who used his former media empire to sponsor Boris Yeltsin's re-election as Russian president in 1996 and Mr. Putin's election in 2000. He has since fallen out of Mr. Putin's graces.

Soon after his election, Mr. Putin strayed from Mr. Yeltsin, Mr. Berezovsky, and Company by leading a gang of his ex-KGB cronies and some of their allies controlling Russia's oil and gas monopolies in an assault on media empires and other financial interests associated with Mr. Yeltsin's team, notably Mr. Berezovsky.

The latter retaliated by accusing Mr. Putin of, among other things, orchestrating the bombing of Russian apartment complexes that killed more than 300 in 1999. The government blamed the explosions on Chechen rebels and later used them as an excuse for Mr. Putin to launch an all-out war in Chechnya.

Mr. Putin's propagandists and sycophants in the general attorney's office, in turn, accused Mr. Berezovsky of privatization fraud and demanded that Britain extradite him.

Now that the extradition quest has fallen through, the Russian interior ministry has followed up with vague, non-specific accusations of Mr. Berezovsky's association with Chechen rebel leaders, a desperate attempt to use Russia's presumed alliance with the West in the war on terror to influence Britain's independent jurisprudence.

The other black eye will come from the United States, which last week issued trade sanctions against a leading Russian weapons company for allegedly transferring laser-guided artillery shells to Iran, and broader sanctions against Russia.

Never mind that the latter were immediately waived. If Russia does not clean up its act, they can be easily reactivated.

The sanctions are a good thing. It's high time Washington added a whip to a carrot in its dealings with Moscow, which has a record of turning a blind eye to exports of sensitive or outright cutting-edge military technology to rogue states.

Moscow is concerned with the short-term interest of its own oil and gas monopolies, which provide comfortable kickbacks and own pro-Kremlin media. The latter carefully and understandably avoid such topics as criticism of the Kremlin's policies and environmental pollution.

And that's where weapons' exports come into the picture.

The Kremlin, Russia's oil and gas giants, and Russia's weapons manufacturers and exporters share the same self-interest - keeping crude oil prices (and hence natural gas prices which are effectively pegged to them) high to maximize profits.

Russia's economy is heavily reliant on oil exports - second only to Saudi Arabia. So Moscow quite simply is not interested in stability in the Middle East, specifically not in the Persian Gulf. Such stability would boost oil exports from the region and thus bring oil prices down, which would undermine Russia's revenues from oil and gas exports.

This is exactly why the Kremlin does nothing or too little to stop Russian military exports to Iran. The U.S. idea of a stable, Persian Gulf region does not appeal to it, despite mutual exaltations of the U.S. and Russian presidents.

But by persisting in its extradition quest and by bluntly denying the U.S. charges of selling advanced military technology to Iran, Moscow is only further weakening its bargaining position on the eve of the meeting which it could otherwise use to wheedle U.S. trade concessions.

We can only hope that Mr. Putin's black eyes will serve to help his counterpart choose a sterner, more realistic approach to Russia, and use the threat of reactivating general trade sanctions against Russia as a whip to make it clean up its Persian Gulf act.



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