The Politics of Energy Dependency: Ukraine, Belarus, and Lithuania between Domestic Oligarchs and Russian Pressure

Book Review

Reviewer: Marat Gizatullin (Metropolitan University Prague)

Publisher: University of Toronto Press, 2013 ISBN:
Author's page: Margarita Balmaceda

The Politics of Energy Dependency: Ukraine, Belarus, and Lithuania between Domestic Oligarchs and Russian Pressure

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This book is focused on three countries that have experienced the rapid, and dramatic, change from being part of one energy rich country to political independence and energy dependence on supplies from a single source, Russia. Additionally, these states and serve as transit routes for the sale of energy resources from Russia to its main European consumers. Balmaceda, has spent much time in the case countries gathering and processing sources in local languages as well as conducting a series of interviews in order to provide a solid analysis of the factors that affect Russia’s use of energy as a geopolitical tool in the region. According to Balmaceda, those factors include the peculiar territorial position, local influence groups, external pressure from Russia, and special conditions on the energy prices. Those factors have made diversification and move towards the minimisation of the energy security threats impossible for the case countries during considered time period.
One of the key concepts used in the book is the ‘energy rents.’ However, unlike previous use of this term by others in describing energy exporting countries, Balmaceda applies this concept to the energy dependent states. She argues that those rents can be very profitable for certain domestic influence groups while influencing the very political systems of these countries. Those rents can emerge from the transit fees, infrastructural and storage costs, as well as from price differences. They can serve to finance local influence groups, oligarchs, and various corruption schemes. The author attempts to follow those rents in order to understand the changes they provoke in the political systems of energy dependent states. Namely, how those rents are “reincorporated” and “recycled” in the political systems, what kind of political actors they produce, as well as to what degree future of those actors depends on the rents. The rents, according to Balmaceda, come in various sizes and types, and are used to support different actors. She concludes that the impact of the rents on the political systems of the Ukraine and Belarus was considerably larger than on the Lithuanian political system.
The time period covered by this book is referred to by the author as ‘the golden age of energy rents.’ It is the period when the energy prices for the case countries (Ukraine, for example), were significantly lower than those for the EU markets (Germany, Italy, etc.), providing huge possibilities for corruption and flourishing of certain actors. Since 2009, when the prices in the case countries started to increase to the European level, the corruption has transformed into different forms.
Balmaceda underlines that it is important to concentrate on the problematic of this book from what she calls a ‘non-Russian perspective.’ She insists on going deeper than simply considering Russia a unitary actor using energy as a political weapon. As evidence, a historical parallel is drawn in the book between changing sets of actors (such as Ukrainian oligarchs) and simultaneously changing actors within Gazprom. This approach seems very promising in understanding the complicated logic behind Russia’s energy politics.
One of the main conclusions of the book is that the energy is not only a weapon and used as one by Russia, but also it has many other uses by Russian actors. Energy plays crucial role in defining relations between Russian oligarchs and the state, enrichment of certain oligarchs, etc. Basically, Russia uses energy as a weapon; however this is done in a much broader context.
This book is very useful not only because it provides a valuable historical look at causes of the recent developments in Ukraine, but also because it addresses some of the most important problems facing the post-Soviet energy dependent countries: relations between local oligarchy and the state under constant external pressure. This problem, largely overlooked by researchers in the field of energy security for many reasons, but mainly because of concentration on Russia as a unified actor using energy as a weapon, constitutes a major challenge for the energy security of both the post-Soviet energy dependent countries and EU as a whole, since those countries are either a members states or crucial transit routes for the energy resources.
This book is recommended to those who study the energy security of the EU as well as those who are interested in the politics of post-Soviet countries. It is well structured and easy to read. Some readers may argue about the fact that notes constitute roughly one third of the text, however it is understandable since the author has done colossal work in systemising local language based sources from four (!) countries that provide extremely valuable information on the topic.

2019 - Volume 13 Issue 3