From Persuasion to Coercion

1
From Persuasion to Coercion

• Russia UkraineEnergy Crisis Case
• International Conflict Group

Fundamentals of Conflict Studies
Prof. Catherine Gerard
2
Presentation Outline

• Discussion on persuasion coercion
• Energy Structure Russia Ukraine
• Tit-for-Tat
• Analysis
• Group Exercise
• Conclusion

3
Three Types of Inducements

• Persuasive inducements
• Rewards as inducements
• Coercive inducements
• All three alternatives combined to form conflict
  strategy

Coercion
Persuasion
Reward
4
Persuasive Inducements

• Persuasive inducements are efforts to influence
  an opponent by communicating arguments,
  information, or appeals that alter their
  perception of the conflict. If effective, the
  tactic of persuasion involves the recipient
  becoming convinced of the other's goal and
  voluntarily accepting it. Can be appeals to
  shared values or trying to convince other party
  what you want is also good for them.
• Rewards can play a role in persuasion. Money,
  land, access.

5
Coercive Inducements

• Coercion, or negative sanctions. Coercion refers
  to actions, including symbolic ones that injure
  or threaten injury to the adversary. The actions
  are intended to intimidate and deter the
  adversary from acting coercively themselves,
  and/or to force the opponent to yield to one's
  demands. The cessation of coercion is conditional
  on the opponent's compliance with these demands.
• Can be threatened or actual acts. Usually
  coercion is threaten first.
• Violent coercion and non-violent coercion.
  Violent coercion includes acts of terrorism,
  sabotage, assassination, military attacks, and
  police suppression. Coercion can also be
  nonviolent withholding purchases or services, as
  in boycotts or strikes

6
When persuasive/coercive tactics are used

• PERSUASION
• Use rewards in closing stages of a conflict.
• Use rewards to transform a conflict
• In combination with coercion

• COERCION
• To induce an adversary to change against their
  will
• In combination with non-coercive tactics

7
Four factors affect the escalation tactics and
strategies

• the disputants' goals in the conflict
• their internal characteristics
• the relations between them
• their social environment.

8
Energy Structure Russia-Ukraine
9
Russia

• 22 of the world's total annual natural gas
  production.
• Has a fifth of the worlds known reserves of
  natural gas.
• Presently supplies about 25 of Europe's natural
  gas imports through Ukraine (Soyuz, Brotherhood)
  and Belarus (Yamal-Europe pipeline)

10
Gas Production Chart
11
Ukraine

• 4th largest importer and 6th largest consumer of
  natural gas in the world
• Corresponds to 85 of its annual energy needs
• Highly dependent on imported gas from Russia
• Important transmission site for gas exported from
  Russia to Western Europe
• Gas transmission system is the second largest on
  the continent

12
Pipeline System Russia to Ukraine

• Ukraine has approximately 35,600 kilometers of
  gas pipelines, all operated by Naftogaz
• Druzhba Pipeline (friendship pipeline)
  transports large quantities of Russian oil/gas to
  Europe
• Countries include Russia, Ukraine, Germany,
  Poland, Hungary, Belarus, Czech Republic, etc.
• Disputes addressing taxation rights and ownership
  of the pipeline territory have occurred between
  Russia and Ukraine

13
Existing and planning pipeline to EU

14
Background

• CIS formed in Dec 1st 1991
• Non-payment leads to shutting down supply (1992)
  
• Gazprom and Naftogaz signed an 11 year Contract
  in 2002
• Addendum 4 (2004) fixed prices and rent per 1000
  cubic meters

15
Crisis Builds Up

• Moscow to continue subsidizing gas contingent
  upon political considerations
• Orange Revolution (2004)
• Gas price increased worldwide (2005)
• Russia demands for price adjustment (160)
• Ukraine refuses relying on legal contract
• Russias new demand increases (230)

16
From Persuasion to Coercion

• Russia offers to increase rent to Ukraine to
  1.74 ( Tariffs range from 0.9 to 2.7 )
• Ukraine offered to pay price increase in weapons
  and also agreed to gradual increase
• Russia argues they are paying for Ukrainian gas
  and offers a consortium
• Ukraine threatens to revise Black Sea Fleet
  Contract
• Russia refuses to revise the lease rate as it was
  against the provisions of the 1997 Treaty

17
Tipping the Scale

• Ukraine strengthens ties with the West
• Russia issues ultimatum to turn off gas supply
• Ukraine suggests international arbitration on Dec
  13th 2005
• Prime Minister Yuriy Yekhamrov visits Moscow for
  talks on Dec 19th to phase the hike
• Russia offers a 3.6 billion loan to Ukraine to
  offset price increase
• Also agrees to postpone increase to April 2006
  contingent upon immediate agreement on price

18
For your entertainment
19
Interests Motivations
20
Interests Motivations

• Rights of Pipeline
• Russia
• --- Pro-Moscow president at the Ukraine
• --- Market Prices
• --- Secure supply (aging infrastructure)
• Ukraine
• --- Political Independence
• --- Secure Energy source

21
Timeline Exercise

• Identify when persuasion and/or coercion was used
• Succinctly comment on its effectiveness
• Discuss better Alternatives (if any)
• e.g. Interest-based Negotiation
• Mediation
• Litigation

22
Timeline Exercise

• Results
• Strengthening of the Orange Revolution
• Election of pro-western democratic leader
• Russian finacial support (3.6bn loan)
• Wake-up call to EUs dependence on Russian energy
  supplies
• EU to diversify energy sources

23
Debrief

• Conditions when Persuasion is a better tactic
• Conditions when Coercion is a better tactic
• Mixing the tactics to obtain the most beneficial
  outcome

24
For your entertainment Continued
25
Aftermath

• Russia resumes supply of gas to Ukraine on 3rd
  Jan 2006
• Agreement reached between Russia and Ukraine on
  4th Jan 2006
• Gazprom receives 230 for Gas
• Ukraine receives 1.60 as enhanced tariff

26
Thank you