Moscow — A leading U.S. oil company cuts capital spending on a project to develop a rich field in Kazakhstan from $500 million to $50 million because it is not realizing expected profits.
Armenia recommissions a nuclear power plant to provide for a third of its energy needs at a cost of $60 million, despite its struggling economy and cash shortage.
What do these unrelated events, which took place this year in nations separated by mountain ranges, seas, thousands of miles and ethnic and language differences, have in common?
For the answer, look to Moscow — that's where Kazakhstan, Armenia and 10 other former Soviet republics are looking more and more lately when they need a place to lay the blame for their economic woes — or a source of cash to cure those ills.
Four years after gaining independence following more than seven decades of Soviet rule, the former Soviet republics are having a difficult time escaping the grasp of the Kremlin, felt by some as a benevolent bear hug and by others as the less pleasant pressure of a hungry boa constrictor.
Now that the flags flying in the capitals of the former republics no longer feature the obligatory hammer and sickle of the Soviet Union, the Russian leadership can no longer send tanks and troops in to protect its interests in local politics and oil production, as it has in the Russian republic of Chechnya.
But while it cannot throw its military weight around as much as before, Moscow still has its hands on economic levers, and is using them to seek more control over its neighbors and fight back against what it sees as a Western and particularly a U.S. push toward Russia's shrunken borders.
Central to the struggle is a drawn out showdown for control over the rich oil reserves of Central Asia and the Caucasus mountain region, and for lucrative contracts to ship the black gold out of those landlocked areas to the energy hungry West.
The Cold War may be over, but the battle for the energy reserves of the southern tier of newly independent states — most notably Kazakhstan and Azerbaijan — is still just heating up, and both sides are claiming victory in some of the biggest skirmishes.
When Kazakhstan signed a $40 billion deal with the U.S. Company Chevron in 1992 to develop the massive Tengiz field in the western reaches of the nation, the government of the newly-independent nation was looking to the west with dollar signs in its eyes.
But it looked so hard it missed the major obstacle next door in Russia, through which any pipeline to the West must travel from Kazakhstan, unless it is to go through Turkmenistan and Iran.
Kazakh leaders also forgot that their nation gets most of its burnable fuel from Russia in a situation left over from the Soviet era, when Moscow was the clearinghouse that received raw materials as tribute from the peripheral republics and sent finished goods back in return.
With that leverage, Russia has sought to grab a piece of the profits from the rich oil field next door, forcing Chevron to build a costly plant to clean the oil to suddenly environmentally-conscious Russian standards. It also kept the company outside a pipeline consortium to pump the oil across Russia by asking it to foot most of the bill while handing Moscow a big chunk of the profits.
After years of conflict, the expected gush of investment dollars from the project has slowed to something like a trickle and what was called the "deal of the century" has become a bellwether of the multifaceted risk of plunging money into oil fields separated from the market by Russian land and interests.
An even larger battle has been joined over another $7.4 billion deal to develop three fields in the Azerbaijani sector of the Caspian Sea — a deal that is also called the "contract of the century", but whose participants are beginning to wonder whether they will see profits in this century.
Russian officials are at odds over how to make money from the windfall next door. Diplomats and lawmakers say the deal shouldn't go through at all, citing decades-old Soviet-Iranian agreements that give all nations in the Caspian Sea a say in what others do in its oil-rich waters.
More pragmatic Russian oilmen, seeing from the get-go that the members of an international consortium to develop the oil fields will not bow to the 1921 and 1940 agreements between Teheran and a now non-existent state, pulled levers to get a 10 percent stake from the Azerbaijani government and are now pushing hard for a Russian pipeline route for the oil.
On a whirlwind July tour of Georgia, Armenia and Azerbaijan, Russian Parliament chief Vladimir Shumeiko used both arguments, saying the pipeline "must go through Russia" and blasting the "U.S. position" that Moscow has no legitimate claim to oil in the Azerbaijani sector of the Caspian Sea.
Russian officials have pushed a pipeline through Russia, saying that it is the cheapest and safest choice and pointing to ethnic and political unrest in Armenia and Georgia, where an alternative route would lie.
With profits from the transport of millions of barrels of oil hanging in the balance, it is no surprise that Russia would want a piece of the action, but the Kremlin is also throwing its weight — and its money — around the former republics where the potential returns on its investments are less impressive.
Calling for implementation of a customs union with Belarus, Russian Foreign Minister Andrei Kozyrev warned lawmakers last month that letting the document gather dust imperiled Russia's improving relations with the nation — seen here as a buffer against the Western military alliance that appears likely to accept neighboring Poland before the century is out.
"The key issue now is to make sure that these agreements and this political will do not get suspended midair or derailed on the level of specific economic projects," Kozyrev said. "If this happens, it is not at all hard to predict that enthusiasm will wane and the focus will shift from the East to the West."
Kozyrev's call for bounteous financial aid to Russian neighbors indicated that the current Kremlin policy toward the former Soviet republics resembles Soviet Cold War policy of costly and blind support to Communist nations of the Third World in the face of the capitalist onslaught.
"In the process of economic integration within the CIS, we cannot go back to the reckless and limitless support for our friends in the Commonwealth," he said. "We have to keep a record of aid, which should be accounted for as their debts, but we should not approach these processes from the narrow accountant's point of view.”
Kozyrev's statements sounded the death knell for an opposing viewpoint saying Russia should shed its neighbors like a bad habit, and indicated victory for a costly crusade led by Yeltsin to maintain influence in the former Soviet republics.
It also partially explains why Russia has invested so much in Armenia's nuclear power plant.
But Yeltsin's crusade has run up against serious opposition at home from pragmatic politicians and economists who feel Russia should have seized its chance during the Soviet breakup and cast its poor neighbors aside.
Economists like former Prime Minister Yegor Gaidar and Presidential hopeful Grigory Yavlinsky have had some effect on policy in the past, convincing Moscow to quietly ignore, at least so far, to form an economic union with Belarus.
The argument against such a union is clear: by taking a poorer slower-to-reform nation under its wing, Russia runs the risk of being dragged down by its country cousin's sagging economy at the very moment when it is seeking to stabilize the situation at home and balance its own books.
The risk of busting his country's budget appears to have convinced Yeltsin not to bring Belarus all the way back into the fold, but top officials have made it clear that they are willing to shell out money to retain influence in the near abroad and counter what many see as a direct threat from the West.
