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Russia: Putin Is Courting Everyone But The U.S.


International Outlook

Russia: Putin Is Courting Everyone but the U.S.

It could have been just a fluke in two Presidential agendas. But when Bill Clinton and Vladimir V. Putin finished talking on June 4, it was the Russian leader who left Moscow first. Putin hastily departed for Italy and two days of meetings with political and business leaders. His visit produced agreements on trade credits worth up to $1.5 billion for Russia. That contrasted sharply with the not-much-new tone of the Putin-Clinton summit.

Just a month after his inauguration, Putin's foreign realpolitik is coming into focus. If America expects little from Russia these days, Putin is signaling that the feeling is mutual. During Clinton's visit, the Russian leader made no pleas for economic assistance--a staple of the relationship under Boris N. Yeltsin, Putin's predecessor. Instead, Putin is recultivating neglected relations with other nations. He's actively courting three main blocs: selected Western European countries, the former Soviet Republics--including the energy-rich Caspian Sea states--and Asian giants China and Japan. While Moscow cannot match Washington's global reach, Putin's strategy is to strengthen Russia's position as a regional power.

Putin's objectives in Europe are primarily commercial. Russia's trade with Europe for the first nine months of last year totaled $37.7 billion--seven times the $5.1 billion in U.S.-Russian trade. In the same period, both Switzerland and the Netherlands invested more in Russia than the U.S. did. Merloni, the Italian home-appliance manufacturer, announced on June 3 that it will pay $120 million for Stinol, Russia's biggest maker of refrigerators, and spend $50 million over the next three years to expand production. That's the biggest deal to come Russia's way since its August, 1998, financial crisis.

Putin's Italy trip is evidence of a central feature of his strategy: He's favoring nations that have gone easy on Moscow in such matters as the war in Chechnya while downplaying ties with critics, such as France. It's paying off. While he was in Milan, Putin visited Eni, which is building a $2 billion pipeline with Russia's Gazprom to carry Russian gas to Turkey via the Black Sea. The Italian-Russian venture is being propelled by $1 billion in loans from Italian banks--all of them guaranteed by SACE, the Italian export agency.

Putin is moving just as aggressively in Central Asia. While new nations such as Uzbekistan are wary of the Russian bear, they are accepting Putin's offers of security guarantees because they are even more fearful of Islamic insurgencies. In May, Uzbek President Islam Karimov signed a pact with Russia strengthening military cooperation. And while U.S. energy companies are progressing slowly in the Caspian, Russia and Turkmenistan are close to a 30-year pact guaranteeing major Russian gas purchases.LITTLE DESIRE. Then there's East Asia. Putin will visit Beijing in July en route to the Group of Eight summit in Nago, Japan. Beijing seeks missile technology from Russia, suggesting a partnership that could threaten U.S. interests in the region. Japan may prove tougher. The stumbling block to improved ties--Russia's half-century occupation of the Kuril Islands, which Japan claims--remains unresolved. Still, Japan's Ministry of International Trade & Industry and the Japan Bank for International Cooperation have guaranteed $600 million in loans by Japanese banks on the Eni-Gazprom pipeline project. "Tokyo has more in common with Moscow than with Washington," Alexander Panov, Russia's ambassador to Japan, recently declared.

Putin seems to have little desire to drift toward confrontation with the U.S. But he may be trying to capitalize on vague fears of American hegemony that many countries, even some U.S. allies, seem to share. Putin is playing a weak hand well: For Russia, there's life beyond America.By Paul Starobin in Moscow, with Kate Carlisle in Rome; Edited by Rose BradyReturn to top


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