Vladimir Putin’s imperial ambitions are dependent on the technological, financial and commercial capabilities of his state-owned enterprises, such as Gazprom and Rosatom. This is the third article in a series about the importance to Putin of Rosatom, which calls itself Russia’s state-owned nuclear energy company. Rosatom also oversees nuclear weapons technology, in addition to nuclear energy technology.
In fact, much nuclear technology is ‘dual-use,’ meaning it could be used for either civilian or military purposes. That makes Rosatom the Russian agent for procuring equipment, know-how and spare parts to build and maintain nuclear weapons and power plants. It also puts Rosatom in charge of the nuclear ice-breaker fleet that enables Russia’s Arctic exploration (or that would facilitate a potential Arctic invasion).
Comecon and the Soviet Industrial Supply Chain
Most Russian technology today is based on Soviet technology, and Russia’s military industrial supply chain reflects that Soviet history. In 1949 Joseph Stalin established Comecon, the Council for Mutual Economic Assistance among Communist countries. Comecon’s stated purpose was to strengthen economic cooperation between the Soviet Union and its newly acquired satellites: Czechoslovakia, Poland, Hungary and Romania. A more cynical interpretation is that it was designed to force enslaved countries to supply the Russian homeland with superior skilled labor and materials at artificially low costs.
NATO Membership, Russian Interoperability
The Soviet Union acquired advanced industrial capacity and military technology when the Red Army occupied Eastern Europe. Many entire factories were transferred to the Soviet Union, although significant capacity remained, especially in Czechoslovakia. Comecon allowed the Soviets to consolidate advanced technology within their empire and harness it for their military use.
Comecon collapsed in 1991 and free market economics kicked in, but the military technology of former Warsaw Pact countries is still interoperable with Russia’s. Nearly 20 years after joining NATO, many former East bloc armies still use Soviet-style technology. Even privatized enterprises still respond to demand from former Soviet republics.
Cutting a New Channel From Ukraine Through Europe
The Soviet central planning system had assigned a significant proportion of heavy industrial production for conventional and nuclear weapons to the Ukraine. In fact, until the 2014 Ukraine crisis Russia was still heavily dependent on Ukrainian industrial capabilities. Russia subsidized Ukrainian industry with cheap fuel to sustain the inefficient supply chain.
Putin smiles during a summit meeting with then-President Leonid Kuchma of Ukraine. (ITAR-TASS photo / Sergei Velichkin and Vladimir Rodionov) (via Wikimedia Commons)
The Ukrainian crisis crippled the Russian supply chain, and the end of the fuel subsidy closed down many enterprises. Some Ukrainian companies still found ways to circumvent bans to supply spare parts and other products to Russia, but the flood had slowed to a trickle. Russia began to increase the supply from former Comecon economies to fill the gap.
Meanwhile, other Ukrainian companies have been evading their government’s ban on shipping military supplies to Russia. Like a river cutting a new channel through a marshy delta, they have been selling materiel to companies in the Czech Republic, other NATO countries, and Belarus, who re-export it to the Russian military machine.
Rosatom and the Supply Chain
This task is heavily supported by Russian intelligence services. Rosatom’s public relations company threatened to sue me for suggesting that the company provides cover for officers of Russian intelligence agencies, but it remains my opinion that this is the case. I continue to believe that Rosatom has clandestine intelligence and military components embedded within its structure to facilitate its needs for Russian military and nuclear development.
The importance of Rosatom was demonstrated clearly by Vladimir Putin when he awarded the Hero of Russia medal to Rosatom chief Sergey Kiriyenko earlier this year. Most Hero of Russia medals are awarded for life-endangering acts of valor; nearly half have been awarded posthumously. It is unusual for the medal to be awarded to a bureaucrat.
Kiriyenko implemented Putin’s vision for Rosatom. His reward was not just a medal, but promotion to the prestigious position of deputy chief of staff of the presidential administration. Kremlin appointments are opaque, but we may speculate that Kiriyenko is still in charge of Rosatom with an enlarged portfolio, under the immediate command of Putin himself.
Rosatom’s Foreign Policy Role
The role of state corporations doesn’t end with clandestine operations and restoring the supply chain. Rosatom, Gazprom and the others play a crucial foreign policy role when they sign lucrative contracts for goods and services all over the world. It is logical to suspect that those lucrative contracts may motivate many political leaders to act in Russian interests.
Hungary’s Viktor Orban could be considered an example of a successful influence campaign. The lede of a recent Reuters article, datelined Moscow, says it all. “President Vladimir Putin said on Tuesday that the Russian state atomic energy firm Rosatom would start the construction of two new reactors at the Paks nuclear power plant in Hungary soon.”
Note that Putin made the announcement from Moscow about the Hungarian decision; Orban did not announce it from Budapest. That is a likely indicator of who made the decision.
Corruption as a Tool of Statecraft
Ultimately, Russia seeks to use energy dependence to subjugate countries. Putin also uses corruption – bribery and kickbacks to corrupt officials in foreign governments – as a tool of statecraft. Eastern European countries are especially susceptible. Although their countries have entered NATO, many Eastern European elites still are heavily dependent on Russia economically. Many of them have benefited from Putin’s largesse, and are now subject to blackmail by the threat of exposure.
The Trump Administration cannot sit idly by as Obama did. American policy makers must face the hard fact that Putin commands influence in our Eastern flank. We must respond decisively, using law enforcement and counterintelligence to expose corruption and active measures campaigns by Russian intelligence agencies and their enablers.
America should lead NATO allies to create more economic incentives for European and American industry to integrate. They can begin by negotiating stricter interoperability standards for NATO suppliers. Companies that supply Russia – even the civilian sector – should be barred from supplying NATO, because of the inherent military-civilian fusion of Russian industry. Rosatom is a prime example of this military-civilian fusion.
This must be done for all NATO and reinforced by more aggressive sanctions enforcement. We are in a Cold War with Putin, and Putin’s increasing capabilities may lead to confrontation. We must act swiftly and resolutely in order to prevail over the Kremlin.