Russia's Global Strategy: Consolidating Power and Redrawing Borders

Russia's economic elite has descended upon St. Petersburg for the International Economic Forum, where President Dmitry Medvedev and other high-ranking officials are touting a message of innovation and diversification. However, whispers among the economic heavyweights reveal a more sinister strategy at play: consolidating Russia's control over global resources and reorienting its exports to suit Moscow's interests. As the White House navigates a complex web of diplomacy and energy politics, Russia's true agenda is beginning to reveal itself in the farthest reaches of the world, from Mongolia to Azerbaijan.

Key Takeaways:

• Russia is pushing hard to consolidate its positions in commodities and energy resources in both European and Asian markets, using a combination of carrots and sticks.
• Moscow has offered Azerbaijan a deal to sell its gas exclusively to Russia, in exchange for Russia's help in resolving the Nagorno-Karabakh conflict with Armenia.
• The proposed agreement would mark a significant shift in Azerbaijan's export policy, moving from the proposed Nabucco pipeline to a Russian-controlled pipeline system.
• Gazprom has played rough with Turkmenistan, demanding that it decrease gas exports or cut the price after a pipeline explosion in April.
• Russia is expanding its hold on neighboring Mongolia, offering a railway modernization project that would grant Moscow development licenses for key mineral fields.
• The Mongolian government has already signed a contract with Canadian company Ivanhoe and Rio Tinto for the Oyu Tolgoi gold and copper field, but Russian firms are eyeing the same deposit.
• The Obama administration faces a difficult decision: to allow Mongolia to redirect MCC funds to other projects or cede strategic initiative to Russia.

Statistics:

• 2%: Russia's stake in Facebook, acquired in a recent deal
• $300 million: The amount of funding from the Millennium Challenge Corp. that the Mongolian railways are entitled to receive for capital improvements
• 6 hours: The length of Russian Prime Minister Vladimir Putin's visit to Mongolia, where he pressed officials for deals in uranium, copper, gold, and coal
• Multiple billions: The value of multi-billion dollar projects in commodities and energy control that Russian Prime Minister Vladimir Putin is prioritizing

Sources:

• Agence France-Presse/Getty Images (photo of Dmitry Medvedev speaking at the International Economic Forum)
• Veteran energy diplomat Richard L. Morningstar's statement that the White House hopes to short-circuit the proposed gas exports agreement between Russia and Azerbaijan
• Azerbaijani diplomatic sources stating that Russia promised to help Azerbaijan resolve its conflict with Armenia over Nagorno-Karabakh in exchange for gas exports
• Gazprom's decision to play rough with Turkmenistan, demanding that it decrease gas exports or cut the price
• Russian Railroads (RZhD) offering Mongolia a railway modernization project that would grant Moscow development licenses for key mineral fields
• The Mongolian government's contract with Canadian company Ivanhoe and Rio Tinto for the Oyu Tolgoi gold and copper field
• The Obama administration's decision to dispatch veteran energy diplomat Richard L. Morningstar to Baku, Azerbaijan, with a personal letter from President Obama to President Aliyev
• The Heritage Foundation's Davis Institute for International Studies