Monday, December 7, 2015

Russian Businesses Oppose Putin’s Plan to Avoid Baltic Ports

 Paul Goble

            Staunton, December 7 – Vladimir Putin said last week that Russian firms will use ports in the Russian Federation rather than those in the Baltic countries, but Russian businesses are against such a shift at least now and thus Putin’s proposal is unlikely to be carried out, according to Sergey Artyomenko, a specialist on regional development in the post-Soviet space.

            On the one hand, he tells the Regnum news agency today, “one needs to consider that the largest Russian companies are firmly ‘anchored’ in the Baltic ports having invested large amounts of money in the capacity of the terminals there. And they do not intend to leave” (

            And on the other, given tariff arrangements, railroad charges and logistical considerations, Russian firms find it “as before easier to work with the ‘hostile’ Balts than with Russia’s own’ customs services and Russian Railways.” As a result, they want to continue to operate as they have up to now, regardless of what Putin says.

            Artyomenko gives details about the investments of some of Russia’s largest companies in the Baltic ports and the ways in which they have found it easier and more convenient to work with the authorities in these three countries than they have with ports and carriers in the Russian Federation.

            Thus, there is no reason to think that they wills top using the Baltic ports anytime soon, “despite all the unfriendly declarations of the leaders of these countries toward Russia and despite the desecration of the memory of fighters of the anti-Hitler coalition and Russophobic declarations.” Business is business and it will continue.

            The only kind of transit which might shift in the next few years, he suggests, involves oil. New pipelines to Russian ports would in fact be cheaper than the current shipping of oil via train over Baltic rail lines. But the decision to make any shift will be about price not politics, at least as far as Russian businesses are concerned.

            But pipeline projects face at least three problems: At present, Moscow can’t find the money for them. There are environmental concerns all around. And there are even concerns that Belarus might oppose another Russian pipeline across its territory, the Russian economic analyst suggests.

            This doesn’t mean that the amount of Russian trade through Baltic ports will not fall – it already has especially in Latvia -- but such declines are driven less by a desire to punish Estonia, Latvia and Lithuania than by a general fall-off in Russian exports in the current economic situation.

            This is an example of a more general problem: Putin is giving orders or making suggestions, and Russian firms and even other parts of the Russian government are making choices not on the basis of what the Kremlin leader says but in terms of what is in their own interests or possibilities.

            Today, there are two other news items which highlight this trend. Russian firms are concerned that Western investment that should have come to them will be welcomed by and go to countries like Kazakhstan which are supposed to be close allies of the Kremlin (

            And despite Putin’s repeated statements that the Northern Sea Route in Moscow’s to control, Deputy Prime Minister Dmitry Rogozin has suggested that Beijing should become a co-developer of this route, another case where economic realities are trumping political desires (

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