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10/28/06

The Business - Putin's Power Play - by Richard Orange & James Forsyth


For the complete report in the Global Business News Online click on this link

Putin's Power Play - by Richard Orange & James Forsyth

When a 32-year-old KGB agent called Vladimir Putin was invited to attend the Red Banner Institute in Moscow, one of the Soviet Union’s elite spy colleges, he couldn’t believe his luck.

It was 1984 and the young but deeply ambitious Putin was soon being groomed as a specialist in economic and technological espionage. His teachers were still revelling in a now long-forgotten victory over America: gas was flowing from a brand new Russian pipeline to Western Germany, earning much needed hard cash, despite a lengthy campaign by President Ronald Reagan to block its construction with sanctions.

The pipeline came too late for the Soviets but Putin never forgot what he was taught in Moscow: Russia’s massive energy resources are a powerful weapon in the global power stakes. He reheated the idea in 1997 when he wrote an influential article for a Russian journal recommending that Russia regain control of its energy industry; now, at the height of his powers as President of Russia, he is busily putting his old plans into practice. In doing so this veteran Cold War warrior is waging a new Cold War, as was all too apparent from a disastrous meeting with European ministers last week, though this time Russian power – and the threat that goes with it – is dependent not on Marxism or missiles but on oil and gas. Note EU-Digest: the EU must become more innovative in developing new energy technologies at a faster pace and for the interim negotiate bi-lateral agreements with other major natural gas suppliers such as Venezuela and Iran.

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