Boston, 23 July 1998 (RFE/RL) -- The International Monetary Fund (IMF) has come to Russia's rescue once again this week, but it seems to have done little for other republics that depend on Russia's Gazprom for energy and exports.
After tough talk on the need to collect tax payments in cash from the gas monopoly, the IMF approved an $11.2 billion loan package amid lingering doubts that cash would be paid.
Prime Minister Sergei Kirienko denied that Gazprom would again be allowed to pay part of its taxes with offsets despite a reported deal that would allow the world's largest gas company to reduce its planned monthly payments from 4,000 million rubles to 2,500 million.
Gazprom has threatened Russian regions with cutoffs because of the government's collection pressures, and there have been reports of a draft agreement that would turn state enterprise gas debts over to regional governments, potentially giving them funds to buy gas. Other reports suggest that Gazprom's tax arrears may be restructured or deferred.
But while Russia and Gazprom seek solutions, the furor over cash collections has spread to Gazprom's customers in the near abroad.
Gazprom is at the center of Russia's tax and cash problems, but it also stands in the middle of inter-republic flows from gas suppliers like Turkmenistan to consumers like Ukraine, Moldova and Belarus.
The IMF call for cash payments instead of barter or offsets has started a chain reaction. Gazprom has increased its pressure on Moldova, for example, to pay its gas debts in cash by August 1. Moldova's initial response has been to threaten a cutoff of Russian gas that transits the republic to other customers in Turkey, Greece, Bulgaria and Romania.
The pattern is a familiar one that has also helped to shape Russia's relations with Ukraine since the winter of 1993-94 when the republic diverted Russian gas bound for Europe in response to supply cuts and debt collection pressure.
Despite its regional power, Russia's isolation from European markets and lack of direct pipelines on its own territory make it less likely that it will succeed in squeezing western republics for cash. The situation is critical for Russia which has depended on gas for 23% of its exports so far this year.
But supplier republics in the east are even more isolated and more likely to suffer. They are also feeling the cash squeeze because Russia has been slow to pay its own inter-republic bills. In the case of Turkmenistan, Russia recently proposed to settle its $107-million commercial debt to the republic with a 70% payment in goods rather than cash.
Turkmenistan President Saparmurat Niyazov blasted the proposal as "unacceptable," noting that his country is also in dire need of funds. Gazprom has refused to carry Turkmen gas over former Soviet pipelines for a reasonable fee since March 1997.
Debt settlement with Turkmenistan is not a condition of IMF loans to Russia. In spite of its new financing, Russia is likely to cite its continuing cash needs as an excuse to delay repayment to Turkmenistan. It will also claim that it needs pipeline capacity for Russian gas to earn all the income it can get.
Turkmenistan's choices are few. It has no recourse to the IMF because it has yet to negotiate a lending program. It also appears that a World Bank plan to split off Gazprom's pipelines into a separate entity has gone nowhere. There has been an outcry over Western demands to allow pipeline access by users other than Gazprom. These proposals have drawn strong opposition from Russian newspapers like Segodnya, which have raised fears of a conspiracy to shut Russia out of European markets in favor of Turkmenistan. Whether those fears are justified or not, Gazprom may have succeeded in defending its position of power again. It hardly comes as a surprise. Gazprom's revenues were about 10 times the amount of Turkmenistan's entire gross domestic product last year.
Turkmenistan may also be the loser as the result of an agreement by Kazakhstan last week to supply Turkey with 30,000 million cubic meters of gas annually.
Details of the deal between Kazakh President Nursultan Nazarbayev and Turkish President Suleyman Demirel are still sketchy. But some analysts believe the arrangement is taking place in cooperation with Russia to exclude Turkmenistan from the Turkish gas market.
Julia Nanay, director of the Petroleum Finance Co. in Washington, said the plan appears to be part of a strategy to use lower-cost gas from Kazakhstan to fulfill Russia's commitments to Turkey. The gas may be piped through Bulgaria or over a new line on the eastern shore of the Black Sea that has reportedly been discussed with the Belgian firm Tractebel, which runs Kazakhstan's power sector.
Either way, the gas is likely to bring rewards to Gazprom while competing with Turkmenistan's plans to supply Turkey with lines through Iran or across the Caspian Sea. Russia may also favor Kazakhstan because of its recent agreement on dividing Caspian sectors with Moscow.
There appears to be one constant in all the Russian crises and strategic maneuvers over energy in the region. They all eventually work to Gazprom's advantage, leaving other republics to serve Russia's interests or pay a high price.