Summary
Russia's Gazprom last week shut off gas supplies to the Republic of Tatarstan, officially for non-payment of bills. However, it appears that Moscow is once again using the fuel supply lever it used in February against Lithuania, only this time domestically.
Analysis
On March 15, 1999 a delegation of government officials left Tatarstan for Moscow in order to resolve a crisis involving the Russian gas company Gazprom. Gas supplies to Tatarstan were halted last week by Gazprom, prompting Tatar president Mintimer Shaymiyev to declare an emergency in the republic. The Tatar government in Kazan' had reached an agreement with Gazprom last month in which Gazprom would wait to collect past debts if Tatarstan paid for future gas supplies. Gazprom moved to shut off gas supplies after Tatarstan racked up an additional 100 million rubles in debt to the gas company. However, it appears that there is more to the situation than the mere problem of non- payment. Russia is not only having trouble maintaining its influence over the now-independent former Soviet republics, but in the face of its economic collapse, is also having difficulty controlling its own federation members.
To begin with, all Russian Federation members are having trouble paying their bills. However, the real issue is not the inability of Tatarstan to pay their gas bill, it is Tatarstan's refusal to pay taxes to Moscow. In September 1998 Tatarstan joined other Russian republics and regions in withholding revenue from the central government. As the Russian economic crisis developed, members of the Russian Federation rebelled against what they saw as mismanagement of their taxes. Furthermore, Russian republics are angry at being forced to pay taxes to Moscow and not receiving the benefits to which they believe themselves to be entitled from the central government. Tomsk Province Governor Viktor Kress led this rebellion when he announced in early September that his government would suspend tax transfers to Moscow. Although Tomsk Province eventually resumed payments after Yevgeny Primakov became Prime Minister, other regions like Kalmykia, Khabarovsk, Kaliningrad, and Tatarstan announced they would also suspend payments to Moscow.
In February 1999, Moscow applied pressure on Lithuania by cutting off oil supplies. Using the Russian oil company, LUKoil, Moscow attempted to demonstrate to Lithuania that it was still in control even though Russian troops and T-72 tanks weren't on every street corner in Vilnius. It appears that Moscow is using the same tactic in its domestic policy as well. In an interview with Russian radio station Ekho Moskvy, first deputy head of the presidential administration, Oleg Nikolayevich Sysuyev, said that the current unlimited power enjoyed by regional governments should be curtailed. This latest incident between Tatarstan and Gazprom is undoubtedly meant to send the same message to the Tatar government that Moscow sent to Lithuania in February: the central government is still in charge. Moscow is reminding Tatarstan just how dependent it really is on Russia's good graces.
The issue of taxes is one of the most important issues facing Russia. If Moscow is unable to find a way of reining in its rebellious federative states, economic problems will soon spill over, registering serious political and social consequences. Perceived economic independence can quickly transform into calls for political independence and the breakup of the Russian Federation. The Soviet Union attempted to deter separatism by structurally imposing economic dependence between the 15 Soviet republics. Still, that was not enough — not for the Soviet republics nor for the Chechen republic of the Russian Federation.
And if the economic separatism of Tatarstan meets the cultural separatism of Chechnya, the risk of disintegration of the Russian Federation increases dramatically. Moscow is already extremely worried about the spread of Islamic fundamentalism to Russian republics. In a February 15, 1998 Agence France Presse article on the Afghanistan War, Russian foreign policy expert Maxim Yusin warned that the spread of politicized Islam could "destabilize Tatarstan... and all the republics along the Volga River." Facing dual separatist threats in Tatarstan, Moscow is moving decisively to show Kazan who's boss.
Russia's Gazprom last week shut off gas supplies to the Republic of Tatarstan, officially for non-payment of bills. However, it appears that Moscow is once again using the fuel supply lever it used in February against Lithuania, only this time domestically.
Analysis
On March 15, 1999 a delegation of government officials left Tatarstan for Moscow in order to resolve a crisis involving the Russian gas company Gazprom. Gas supplies to Tatarstan were halted last week by Gazprom, prompting Tatar president Mintimer Shaymiyev to declare an emergency in the republic. The Tatar government in Kazan' had reached an agreement with Gazprom last month in which Gazprom would wait to collect past debts if Tatarstan paid for future gas supplies. Gazprom moved to shut off gas supplies after Tatarstan racked up an additional 100 million rubles in debt to the gas company. However, it appears that there is more to the situation than the mere problem of non- payment. Russia is not only having trouble maintaining its influence over the now-independent former Soviet republics, but in the face of its economic collapse, is also having difficulty controlling its own federation members.
To begin with, all Russian Federation members are having trouble paying their bills. However, the real issue is not the inability of Tatarstan to pay their gas bill, it is Tatarstan's refusal to pay taxes to Moscow. In September 1998 Tatarstan joined other Russian republics and regions in withholding revenue from the central government. As the Russian economic crisis developed, members of the Russian Federation rebelled against what they saw as mismanagement of their taxes. Furthermore, Russian republics are angry at being forced to pay taxes to Moscow and not receiving the benefits to which they believe themselves to be entitled from the central government. Tomsk Province Governor Viktor Kress led this rebellion when he announced in early September that his government would suspend tax transfers to Moscow. Although Tomsk Province eventually resumed payments after Yevgeny Primakov became Prime Minister, other regions like Kalmykia, Khabarovsk, Kaliningrad, and Tatarstan announced they would also suspend payments to Moscow.
In February 1999, Moscow applied pressure on Lithuania by cutting off oil supplies. Using the Russian oil company, LUKoil, Moscow attempted to demonstrate to Lithuania that it was still in control even though Russian troops and T-72 tanks weren't on every street corner in Vilnius. It appears that Moscow is using the same tactic in its domestic policy as well. In an interview with Russian radio station Ekho Moskvy, first deputy head of the presidential administration, Oleg Nikolayevich Sysuyev, said that the current unlimited power enjoyed by regional governments should be curtailed. This latest incident between Tatarstan and Gazprom is undoubtedly meant to send the same message to the Tatar government that Moscow sent to Lithuania in February: the central government is still in charge. Moscow is reminding Tatarstan just how dependent it really is on Russia's good graces.
The issue of taxes is one of the most important issues facing Russia. If Moscow is unable to find a way of reining in its rebellious federative states, economic problems will soon spill over, registering serious political and social consequences. Perceived economic independence can quickly transform into calls for political independence and the breakup of the Russian Federation. The Soviet Union attempted to deter separatism by structurally imposing economic dependence between the 15 Soviet republics. Still, that was not enough — not for the Soviet republics nor for the Chechen republic of the Russian Federation.
And if the economic separatism of Tatarstan meets the cultural separatism of Chechnya, the risk of disintegration of the Russian Federation increases dramatically. Moscow is already extremely worried about the spread of Islamic fundamentalism to Russian republics. In a February 15, 1998 Agence France Presse article on the Afghanistan War, Russian foreign policy expert Maxim Yusin warned that the spread of politicized Islam could "destabilize Tatarstan... and all the republics along the Volga River." Facing dual separatist threats in Tatarstan, Moscow is moving decisively to show Kazan who's boss.
