Far from threatening creation of a new empire, Russia is less of a threat now to the independence of the Baltic states than it ever has been before
For the past year, there has been a debate in Washington as to whether or not the Russians were going to roll tanks into the Baltics. They took over Crimea “at gun point,” the saying goes, so their ex-Soviet enclaves along the Baltic Sea were surely next. It is no surprise then that presidential candidate and former Secretary of State Hillary Clinton reiterated that concern during Thursday’s debate with Bernie Sanders. Russia was a bully. We have to send our NATO allies (as in members Lithuania, Latvia and Estonia) the message that we will protect them from Vladimir Putin’s aggression.
Hmmmm…maybe they won’t see me coming. Hillary Clinton thinks Vladimir Putin wants to take the Baltics back. (Photo by SERGEI KARPUKHIN/AFP/Getty Images)
I don’t do tanks and missile launch pads. So I don’t know if Russia has amassed heavy artillery along the borders of the three Baltic states. But if that is the case, then it is also true that NATO has done the same. In fact, in the Grand Chessboard of Eastern Europe, NATO has been a first mover with new missile bases in another Baltic seaside country — Poland.
But what I can tell you is that based on Russian businesses there, Russia capital and influence is waning. Russia has absolutely zero soft power in the Baltics. If the bulk of humanity there is waving foreign flags, it’s the stars and stripes, not the red, white and blue of the Russian Federation by a long shot.
Yet, we are told that the Russians are coming. This narrative does not go away. Here in the U.S., this is all part of the “Vladimir Putin is the new Hitler” meme that gets repeated by a litany of Washington think tanks of similar mind (if not similar family ties, like the PNAC spin-off Foreign Policy Institute and the Institute for the Study of War) and very rich and very disgruntled expats who have an axe to grind with the Kremlin.
I was in Lithuania for a week in September. People between the ages of 25 and 70 all had something lousy to say about the Russian government. They didn’t like it. They had bad memories of Soviet times. The older ones believed Russia could invade, just like Americans believed the Russians would do in the 1980s. They never came into Alaska. I’m betting they never make it to Riga, either.
Using the largest and most populous of the threesome, Lithuania, I can tell you there is no RT influencing the populous to Putin’s world view. RT is merely a program on ViaSat, the Swedish owned satellite TV provider. Lithuania cable does not allow for RT. I don’t know if that is true it Latvia or Estonia.
Like Latvia and Estonia, Lithuania gets nearly all of its oil from Russia and most of its natural gas.
However, last year, Lithuania launched a floating liquefied natural gas terminal and all of that LNG comes from StatOil. The vessel was built as a Russian energy deterrent. Russia had no say. Russia didn’t blow up the boat, sabotage the boat, or raise its prices for natural gas. Instead, thanks to StatOil competition, Gazprom lowered their price of gas.
Russia’s privately owned oil and gas firm LUKOil left Lithuania last week. Austria’s AMIC Energy Management took over LUKOil’s businesses in Poland, Lithuania and Latvia on Feb. 4. They did the same further south in Ukraine last April. They get the message: you’re not welcome here.
In 2014, Russian state owned energy powerhouse, Gazprom , sold it’s shares in Lietuvos Dujos and Amber Grid due to the implementation of the so-called Third Energy Package, which has basically ousted Russia from the power grid business.
Russians are involved in Lithuania, but most are either self-exiled techies looking for a better start-up culture, or Moscow-born billionaires like Andrey Melnichenko who like to make money.
He recently transferred his share ownership in Lithuania’s Lifosa phosphate and fertilizer company from Russia to Switzerland. Now Lifosa’s parent company, Melnichenko’s EuroChem Group, is an international company instead of a Russian one. Lifosa, however, remains a full corporate tax entity of Lithuania and one of the country’s biggest employers.
Russian capital has been relatively flat to stable in Lithuania, while Nasdaq and Barclays Capital and Wells Fargo are all occupying new, modern office towers in Vilnius, the nation’s capital. I don’t see Micex moving in. I don’t see search engine Yandex. I see the financial powers of the world staking claim, as they have since the fall of the Soviet Union.
Some 197 Russian entrepreneurs brought money into Lithuania in 2014, down from 204 the year before, according to Invest Lithuania. Corporate investment, which drives Russian branding and connects Lithuania, and other Baltics, to Russian industry, fell by hundreds of millions of dollars last year. There is no money flying out of Russia and trying to take over Lithuanian business.
Years ago, when I first moved to Brazil, I remember young, left-leaning college students who were both fascinated by me as an American and hated me at the same time. They didn’t like Washington. One day, I was walking with this kid and I remember he say a Coca-Cola can on the side of the road and he purposely went out of his way to punt it a few dozen yards into a grassy field. He was kicking American culture, its soft power, to the curb.
There is nothing to kick in Lithuania. Except Gazprom. And as I just said, Gazprom’s grip on the Baltics is under threat by the Arab and Nordic oil and gas producers. One day, it could even lose market share to Americans.
If Russians had any money, they’re not pouring it into Lithuania to gain influence in its economy, or make friends with politicians looking for jobs for his constituents. The first three quarters of 2015 saw a total of $633 million in direct foreign investment into Lithuania from Russia. That is down from $1.3 billion in the same three quarters of 2014 and $1.4 billion in 2013.
Everyone is looking for a fight with the Russians. One wonders why. Maybe if you want the war on terrorism all to yourself, from its boogeymen (both real and imagined) to its useful idiots, then you don’t want the Russian government to take part in that. It’s harder to control. So you demonize.
Democratic presidential candidate former Secretary of State Hillary Clinton greets U.S. Sen. Al Franken during a get out the vote organizing event at Great Bay Community College on February 6, 2016 in Portsmouth, NH. Last week during a debate with Bernie Sanders she said Russia was “beginning to explore whether they could make some inroads in the Baltics.” (Photo by Justin Sullivan/Getty Images)
It’s bad business.
I was in Kyiv in September at the Yalta European Strategy Conference. There, ex-Latvian president Vaira Vike Frieberga said Russia did not respect the rights of citizens in her country, and throughout the Baltics.
Hillary Clinton’s comments at the debate Thursday suggests she believes the same. The Russian government is disrespectful of other countries. It just thinks it can roll into a sovereign nation whenever they want to. Who do they think they are? That’s our job!
Some will argue that Russia could foment civil unrest in Latvia and Estonia, where 24% and 27% respectively are of Russia descent. It is worth noting that there was no ethnic Russian uprising in Crimea. There was a vote. The Crimeans voted to secede. The Western media says the vote was just Russian propaganda. But Gallup, Pew and GfK found that an overwhelming majority of Crimeans in Ukraine said that the referendum vote to secede was legitimate.
There is an ethnic Russian uprising in eastern Ukraine, backed by the Russian government. Could this happen in Latvia or Estonia? Perhaps it could. But only if those governments were to act overtly against Russian interests and replace its leaders with friends of Russia’s old enemy, the U.S. Then we have a ball game.
We don’t have to have a ball game.
Are the Baltics poor victims? No. Their economies are better in terms of GDP growth than any country in Western Europe. Did Russia stir up unrest when Lithuania, Latvia and Estonia were joining NATO? If so, how did that turn out? Clearly not in Russia’s favor.
Russia has failed the soft power war in the Baltics. It was lost since in the 1990s and is never coming back. The Scandinavian banks dominate Lithuania. There is not a Sberbank or a VTB Capital to be found. Amored weapons on the border, if there are any, does not translate into a pending invasion. NATO has just as many weapons on the same borders. The truth is that Russia does not have a seat at the table in the Baltics, and part of that is by design, both in the Baltics, and in Hillary’s Washington.