Three stories about Russia caught my eye.
Story number one: Playing the Sorcerer’s Apprentice comes with its own particular risks. Not long after Putin played the cat with the canary over the Russian role in the overthrow of the Bakiyev government in Kyrgyzstan, Russia is now anxious since that country is at risk of spinning out of control.
Russia has already made noises about protecting militarily Russians in the Central Asian country. Given that (a) Russia has already announced a policy that it reserves the right to protect Russians abroad, and (b) “protection of Russian citizens” was a pretext for the invasion and de facto annexation of Abkhazia and South Ossetia, this could be a prelude to a Russian military intervention in Kyrgyzstan. But I doubt this is an appealing option to the Kremlin–or to the Russian White House (which is what probably matters). Military engagement in Kyrgyzstan would be a far different kettle of fish from the invasion of Georgia, since (a) Kyrgyzstan is not continguous to Russia, and hence would present some serious logistical issues, and (b) intervening in a civil war in a backwards, Muslim country would bring back bad memories, and the prospect of a thankless and pointless task with no readily identifiable end game.
So, driven by its obsessive desire to hamper US and NATO operations in Afghanistan, and to deny the US any presence in Central Asia, Russia has contributed to the creation of a mess that it will present it with few appealing options. (Not to mention that hampering US/NATO operations is completely contrary to its continued whinging about the NATO failure to eradicate, or even target, Afghan opium production.)
Be careful what you ask for: words to live by.
Story number two: Ukraine and Russia have apparently concluded a deal whereby Ukraine will extend the Russian lease on the Sevastapol naval base in exchange for discounted prices on gas. Before commenting further, I should say that using “concluded” and “a deal” in any sentence involving either Russia or Ukraine, and especially involving Russia AND Ukraine, is quite dangerous. No deal is ever really concluded when these jokers are involved.
In some respects, this is good news (again, to the extent that the deal is real, and not just the forum for ex post opportunism by one side, the other, or both in the months and years to come). First, it provides Russia relief on gas prices without Ukraine conceding any control over its gas infrastructure to Russia. (Though this means that that infrastructure could become a flash point in some future dispute.) Second, it reduces the prospect for conflict in 2017, which would have been almost inevitable if Ukraine had attempted to force out the Russian Black Seas Fleet. Third, it may also reduce tensions with Georgia (reduce, but not eliminate) because if forced from Sevastapol, Russia was considering building a naval base in Abkhazia, which would have created numerous problems in the region. It is also probably a net economic winner for Russia, as it saves itself the cost of building a new base for its (shambolic) fleet.
Story number three: Gazprom earned the world’s largest profit in 2009, but was a distant 30th in market capitalization. Little needs to be said of this: it is yet another testament to how aggressively the market discounts the future prospects of Russian companies, and for good reason.