Russia Sees Gains in Bush Reelection

by Sergei Blagov

MOSCOW (KWR)--The Kremlin suggested that Bush's electoral triumph was a victory over international terrorism. In the meantime, despite remaining differences, Russia appears to eye economic and political benefits in the U.S. election outcome, which could also affect Moscow’s Asian policies.

Meanwhile, the Kremlin eyes economic and political benefits in Bush’s reelection. Russia’s Renaissance Capital brokerage said that Bush's re-election would be "better for Russia." A second Bush administration would probably give President Putin a freer hand in domestic and post-Soviet affairs, and preserve high oil prices, which would fuel economic growth, Renaissance said in the report.

Annual bilateral trade only accounts for about $11 billion and Russia accounts for a little more than half percent in U.S. foreign trade. However, Moscow seemingly hopes to boost bilateral trade by energy supplies.

In its drive towards the American energy market, Russia has been focusing on natural gas, particularly in its liquefied form. Last August, Russia’s gas giant Gazprom pledged to move commercial gas sales to the U.S. Supplies should start before 2010. Russia, which holds the largest gas reserves in the world, has been viewing the United States as a long-term major market of liquefied natural gas (LNG) by sea.

Russian companies have been also attempting, with government backing, to take over from Saudi Arabia as the main oil provider to the U.S. The companies are also seeking American capital for investment in Russian oil, which could help deliver Russian oil to America's West Coast.

Meanwhile, direct oil and gas shipment to the U.S. remains a challenging task given the distance and the lack of infrastructure in Russia. In 2002, Russia's state-owned Rosneft oil company and the US firm Marathon Oil Corporation announced a decision to participate jointly in Urals North American Marketing (UNAM), a project to supply oil from the Urals region in Russia to North America. Oil supply under this project was due to begin in 2003, but the ambitious plan is yet to materialize.

Most Russian media outlets pronounced Russia better off with a re-elected U.S. President George W. Bush. "Bush's victory is beneficial for Russia," Alexander Livshits, Putin's former economic adviser, wrote in a commentary. "We know him, we know members of his team. We are used to them, and they are used to us. Bush's administration does not tell us how to live. It does not interfere much with our country's domestic affairs. And the personal relationship that our two presidents have established is also important," he wrote.

The fall of 2001 was a high point in U.S.-Russian relations and Russia seemed to become one of the United States' close allies for the war on terrorism. Yet subsequently the two countries were struggling to overcome their differences over the U.S.-led war on Iraq as well as Iran’s nuclear ambitions.

For instance, last month Russia responded coolly tothe deployment of the U.S. missile shield following the announcement that the missile defense system could become operational in Alaska later this year. The U.S. defense system is designed to deploy a field of interceptors in Alaska and California that would fly into space to meet and destroy a missile. U.S. officials have acknowledged that the system would not defend against Russian or Chinese technology, but against the countries like Iran or North Korea that are developing long-range missiles and weapons of mass destruction that could be carried by the missiles.

After President Bush pulled out of the 1972 Antiballistic Missile Treaty in order to pursue the new antimissile defense program, to be launched in Alaska, Russia announced it no longer felt bound by previous agreements that prohibited missiles with multiple warheads. In February 2004, Russia said it successfully tested a new strategic supersonic system, that would allow avoid U.S. defenses. Russian officials claimed that the prototype weapon proved it could maneuver so quickly as to make "any missile defense useless."

Moves towards strengthening its own strategic deterrent have caused little controversy, but Russia has long come under fire from Washington for its help in building the Bushehr 1,000 megawatt light-water nuclear plant on Iran's Gulf coast. The U.S. insisted that the Russian technology could be used to develop nuclear weapons, but Moscow and Tehran argued that the plant could be used only for civilian purposes. Russia has vowed to complete construction of Iran's first nuclear reactor at Bushehr, despite U.S. concerns that Tehran was using $800 million project as a cover for a nuclear weapons program.

Apart from Iran’s nuclear ambitions, there have been other bilateral disagreements as well. Washington has warned against Russia’s richest man Mikhail Khodorkovsky’s case implication for the rule of law in Russia and the country's commitment to free markets. Russia accused the U.S. of double standards approach. Moscow has described the U.S. comments on a variety of events in Russia, including recent moves to limit elections and boost centralized controls, as “interference in Russia’s internal affair.”

Moscow’s move towards Kyoto ratification happened to come as a blow to the Bush Administration, which had been pressuring Russia not to ratify. Russia recently moved to approve the Kyoto Protocol, bringing the international treaty to limit greenhouse emissions closer to coming into force worldwide. George W. Bush rejected the pact in 2001, saying the tough regulations would adversely affect the country's economy.

On the other hand, Moscow has been keep to continue security cooperation with the U.S. Russia has offered some help in tackling security threats, including standoff with North Korea. In the wake of Bush's reelection, Moscow could become more pro-active in search for a solution of a crisis over Pyongyang’s nuclear ambitions.

Putin has openly supported Bush's reelection bid and has demonstrated intention to overcome acrimony over Iraq. The Russian leader made several statements over the last months, voicing his strong support for Bush’s reelection bid. Last summer, Putin said that the Iraq invasion was indeed justified, because Saddam was planning terror attacks against U.S. targets, according to Russian intelligence. Two weeks before the US vote, Putin said international terror groups aimed to sink Bush's reelection efforts.

As democrats have voiced stronger criticism of Russia, concerns were voiced in Moscow that relations with the U.S. could decline under the Democrats. Subsequently, Russia has been aiming at stronger ties with China, seemingly to balance those with Washington.

Hence it remains to be seen whether shared interests of the U.S. and Russia could outweigh potential problems. Official pledges to overcome differences in bilateral relations are to be followed up by more concrete results.

Editor: Dr. Scott B. MacDonald, Sr. Consultant

Deputy Editors: Dr. Jonathan Lemco, Director and Sr. Consultant and Robert Windorf, Senior Consultant

Associate Editor: Darin Feldman

Publisher: Keith W. Rabin, President

Web Design: Michael Feldman, Sr. Consultant

Contributing Writers to this Edition: Scott B. MacDonald, Darrel Whitten, Sergei Blagov, Kumar Amitav Chaliha, Jonathan Hopfner, Jim Letourneau and Finn Drouet Majlergaard

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