Putin's High-Stakes Chess Game

The Russian President is playing all sides on the issue of Iraq at home and on the world stage -- and so far with aplomb

By Paul Starobin

Like much of the rest of the world, Russia does not want this coming war. The Kremlin views Saddam Hussein as containable, not an imminent threat. It doesn't want to set a precedent for "regime change" as a policy practiced by the U.S. or anyone else. It fears a backlash from Muslim countries on its southern rim as well as its own Muslims -- 10% of Russia's population. Besides, the tense status quo is enabling Russia's domestic oil producers to reap a windfall from surging global oil prices. That could evaporate if postwar Iraqi oil floods world markets.

So will President Vladimir V. Putin do all in his power to stop the war? No. Putin knows that ex-superpower Russia can't keep the Bush Administration from attacking and removing Saddam. Having staked his presidency on a broad strategic partnership with America -- which he sees as key to Russia's political and economic integration with the West -- Putin is not likely to let Iraq become a make-or-break issue.

That's true even though Russia is supporting a French-German proposal to allow U.N. inspectors four more months to scour the country. Although Russia probably won't vote in favor of a new U.N. Security Council resolution authorizing force against Iraq, a veto is also improbable. "Russia could [still] be the pivot in the Security Council for us," says Samuel R. Berger, a former National Security Adviser. For now, though, Russia is a charter member of the coalition of the sullenly resigned.


  If you think resignation is a simple role to play, just check out the diplomatic dance Putin has been performing. He is not bargaining, Turkey-like, for a huge package of economic aid. Instead, damage avoidance is the strategy. He is taking pains to voice publicly his differences with Bush's Iraq policy -- a stance that dampens criticism of him from antiwar constituencies at home, as well as in Europe and the Middle East. At the same time, he's trying to ensure that Russia's interests are protected in a postwar Iraq.

It's a complex piece of public and private maneuvering that risks appearing hypocritical -- and risks irritating Washington. But so far it seems to be succeeding. On one front, Putin's high-profile stand with the French and the Germans to give more time for the U.N. inspection effort sets him apart from British Prime Minister Tony Blair. Putin does not want to be criticized, as Blair has been, as a poodle on Bush's leash.

With parliamentary elections this fall, Putin worries that his United Russia party could suffer from too close an identification with the U.S. on Iraq. That's also one reason he recently dispatched former Prime Minister Yevgeny Primakov to Baghdad to urge Saddam to comply with the U.N. It was a signal to Communists, with whom Primakov has close ties, that Putin is trying hard to avert war.


  But Putin is also keeping his lines open to Washington. His chief of staff, Alexander Voloshin, and a trusted emissary, Mikhail V. Margelov, chairman of the foreign-affairs committee in the upper house of Parliament, visited Washington the week of Feb. 24 to consult with top White House and State Dept. policymakers on Iraq. For Margelov, the trip was a continuation of what he calls a "triangular" discussion involving Washington, Moscow, and London on key postwar issues. "We have to think about the structure of the society and the government the international community wants to see in Iraq," he says.

The Kremlin is also signaling its expectation that any future U.S. occupation regime -- and any successor Iraqi government -- will be mindful of Russia's economic stake in Iraq. Russia's largest oil company, Lukoil, already has a $3.5 billion deal to develop one of Iraq's biggest oil fields -- a contract signed with Saddam but still valid even if there's a regime change, Russian officials insist. Iraq also owes Russia $8 billion in Soviet-era debt, which the Kremlin expects to be honored.

For now, Washington and Moscow are not attempting to reach an explicit deal on either of these matters, U.S. and Russian officials say. In part, that's because U.S. officials do not want to be seen as carving up the spoils of post-Saddam Iraq. However, Washington is offering quiet assurances that it understands how important these issues are to Putin.


  And on a related matter -- Moscow's concerns that a postwar surge in Iraqi oil exports could depress global oil prices and harm Russia's domestic oil industry -- Bush officials say they share the goal of price stability in energy markets. "What we've told the Russians is that we're prepared to take their interests into account," says a senior Bush Administration official.

When the shooting stops, Putin will have to hope for sympathetic treatment from Bush, with whom he has nursed a close relationship that survived Washington's exit from the Anti-Ballistic Missile treaty last year. Bush has not taken umbrage at Putin's criticism of his Iraq policy -- in contrast to his disdainful reaction to the French and German opposition. Indeed, Bush seems to feel for the Russian leader's predicament. With luck, Putin's damage control may just work.

Starobin is BusinessWeek's Moscow bureau chief

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