For Putin and the Kremlin, a Not So Happy New Year

By Aussiegirl

The world should not be surprised that Putin acted in the way that he did. He really thought that Ukraine would get the blame for the gas crisis, because, like so many tyrants, he has come to believe his own propaganda.

Putin lives in a time-warp cultural bubble in that Kremlin of his, and in many ways is no more enlightened than the bushy-browed Brezhnev and all Kremlin politburo compatriots.

This is a man who still operates within the old KGB Cold War mentality, who has not traveled extensively, and who still believes many of the myths of the old Stalinist times regarding the motivations and culture of the West.

He is as backward culturally, in his own way, as the Islamofascists, and exists somewhere between the Stalinist and the Tsarist times in his own mind.

The Russian self-image of empire and cultural superiority is an ingrained cultural phenomenon that deserves study in and of itself, and Putin is a prime example. This cultural arrogance and narrow world view makes him as dangerous in his own way, as someone like Ahamdinejad, because he cannot be made to see reality. He hopes to be a player on the world stage, but he's like a clumsy nouveau riche oaf who blunders into high society and attempts to bully and throw his weight around while behaving boorishly and demanding all the goodies for himself.

It is obvious that his blatant bullying has backfired badly, and he is now reaping the reward of losing any ground he may have gained over the last year in terms of world opinion and trust.

In many ways this is a good thing, as it has opened the world's eyes to the real Putin, the one that Ukraine has always known was there -- the dangerous one, with dreams of empire, who cannot be trusted, and who cannot be a reliable political or economic ally. Europe has had its warning. The tiger has revealed his stripes.

For Putin and the Kremlin, a Not So Happy New Year - New York Times

To build what seemed a manageable business dispute with a neighbor into a problem for much of Europe, Mr. Putin, a former K.G.B. colonel who last year called the collapse of the Soviet Union "the greatest geopolitical catastrophe of the century," cast himself anew.

For the purposes of this quarrel, he became not only a capitalist but a monopolist, embracing a free-market rationale in its harshest form. His position was clear: If Ukraine does not like the price, let its factories slow down, let its lights dim, let its people freeze. And let Europe worry if it will have heat this winter, too.

Other problems followed, as the dispute attracted more attention. While the Kremlin argued for market rates, it refused to acknowledge why Ukraine's gas prices have been so low. The job of clarifying the record fell to Andrei N. Illarionov, who was Mr. Putin's top economic adviser until he resigned in frustration last week.

Mr. Illarionov said in a radio interview that Ukraine's subsidized rate was essentially a problem of the Kremlin's own creation. Gazprom had agreed to the $50 price in 2004, he said on the Ekho Moskvy radio station, to help a Kremlin-backed candidate in Ukraine's presidential election.

The $50 deal was supposed to last until 2009, he said. But when the Kremlin's candidate lost the presidency to Viktor A. Yushchenko - who wants Ukraine to join the European Union and NATO - the Kremlin changed the rules. Market rates were invoked.

Moreover, Gazprom has been using different pricing criteria for different nations. Georgia pays $110 for the same amount of gas, as does Armenia and Azerbaijan. The Baltic states, which are members of the European Union, pay $120 to $125. Moldova pays $160. Belarus, a firm Kremlin ally, pays $47.

The origins of Ukraine's current rate, and this variable pricing regime, allowed critics to suggest that the Kremlin suffers from amnesia and hypocrisy alike.

The problems only piled on. Experts also charged that Mr. Putin had undermined the credibility of Gazprom, Russia's largest company.

Gazprom has been seeking international respect and trying to shed its image as a Kremlin stooge. But at important moments last week, it was not the company's official leadership making proposals for settlement, but Mr. Putin.

Mr. Putin's appearances put to rest any questions about who is handling this affair, and underscored anew that Gazprom is a company bound to the whims of a head of state.

Investors will get some measure of how the company has fared in the short term when the Russian stock market reopens after the Russian holiday season, on Jan. 10. The news, experts say, has been bad.

"Once again we are seeing that Gazprom is not a leading international company," said Dan Rapaport, managing director of CentreInvest, a Moscow-based investment firm, "but a tool of policy making for the Kremlin."