Russia's Foreign Minister Sergei Lavrov said on Wednesday, Oct. 12, that the main diplomatic resources of Russia are natural gas, oil and electric power and promised to use Âall of the means of economic pressureÂ on disloyal CIS neighbors. According to Nezavisimaya Gazeta (Independent Gazette) daily, Lavrov made these statements at a closed meeting of Federation Council, upper house of the Russian parliament, according to MosNews.
There was some talk a few months back about what the appropriate Russian response should be to the recent government dismissals in Ukraine. There were three possibilities. The first one was that Russia should go for the jugular while Ukraine is weak by upping the price of natural gas to world levels. That would create economic chaos and lead the fall of the government and disenchantment with the revolution. Russia would then sweep in and pick up the pieces.
Otheeh other end was the idea that Ukrainshoulddl be dealt with diplomatically just as other states deal with other states diplomatically. That requires thinking of Ukraine as an equal. For some Russians. especially those in the Kremlin, that seems impossible to do.
The tird apporach was somewhere in between these two.
The first would be devastating to the economy. The price paid by Ukraine right now for natural gas is less than a third the world price. It is partly due to the low cost of energy that Ukraine's export success has depended. Raising the price of natural gas would make a lot of export commodities like steel uncompetitive.
And it would raise the cost of living for Ukrainians as well. Right now the cost to heat an apartment is pretty low by American standards but the people here are living on a lot smaller incomes. They might be able to pay the price right now but if it were tripled or quadrupled, what would they do? It gets pretty cold here in the winter. And a lot of people use gas for cooking. Could they afford to if the price hit world levels? I doubt it. Heating a home and cooking might become unaffordable.
But does this statement by Lavrov mean the Russians intend to do it? They have been threatening this for a number of months, so the threat of it is nothing new. But that threat has always been in the context of price negotiations on the natural gas. Now that threat is coming from the Foreign Office. That might mean the Kremlin has settled on the policy. Looks like it's door number one.