In a recent podcast, Kevin Schulte (NTV) provides an overview of the political situation in the individual post-Soviet states, their attitude toward Russia, and Russia's interests toward them. Various military experts and political scientists, including Hannes Meissner of LM PRISK, contribute to the analysis.

In the Deutsche Welle TV news program "Der Tag", Hannes Meissner analyses Russian interests in the Republic of Moldova and the post-Soviet space. He argues that Russia is pursuing a hegemonic project in the post-Soviet space that also targets Moldova. Due to the precarious situation in which the country finds itself and due to multiple dependencies on Russia, the EU's possibilities for exerting influence are limited. Please follow the link to the video (in German).

The crisis in Moldova continues to escalate after the government says it has prevented a plot with Russia in the context of the anti-government protests. Hannes Meissner analyses the current situation in a news contribution by Birgit Schwarz (ORF) in the Ö1 Mittagsjournal (13 March).

“Russia's war of aggression against Ukraine shifts the focus to the small republic of Moldova. Russian soldiers are stationed in its eastern autonomous region of Transnistria - and Moldova's pro-European leadership is warning of a coup. Stephan Ozsváth talks about this with political scientist Hannes Meißner.” Please follow the link to the interview.

Johannes Leitner analyzes the current situation in Georgia in an ORF news report

Georgia is another emerging conflict zone in the post-Soviet space. While the population is pro-Western, Russia is increasingly trying to reintegrate Georgia into its own sphere of influence. The oligarch and former prime minister Bidzina Ivanishvili plays a decisive role in this game. In this context, the political risks for foreign investors and companies are also increasing. Political instability is growing, and clientelism and corruption are on the rise again.

NTV Podcast by Kevin Schulte with Hannes Meissner

In a new NTV podcast, Kevin Schulte analyzes the worsening political crisis and security situation in the Republic of Moldova. The Western-oriented government is facing hybrid influence and destabilization attempts by Moscow. A military invasion is currently unlikely, as Russian troops are tied up in Ukraine. However, the country is dependent on Moscow in many respects and has not built up any resilience in recent decades, making it highly vulnerable to hybrid warfare and possible attempts to overthrow the pro-Western government. In the podcast, Hannes Meissner provides an in-depth analysis of the constellation (in German).

Hannes Meissner as a guest on the radio program Ö1 Punkt eins "Moldawien”.

The crisis in the Republic of Moldova continues to escalate. As tensions rise between supporters of the pro-European government and pro-Russian demonstrators, fears are being raised that Russia may be planning a coup d'état. On February 22, Hannes Meissner discussed current developments with Barbara Zeithammer (Ö1 moderator), including questions from the audience. Please follow the link to the radio discussion.

The Republic of Moldova is dependent on Russia. At the same time, Moscow threatens the small country. While the government wants to join the EU, the opposition has strong connections to Russia. Putin's extended arm is an oligarch who lives in Israel to avoid a prison sentence in his homeland. Dr. Hannes Meissner analyses the situation in an NTV Podcast with Kevin Schulte (in German).

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News Corner

Eastblog article by Dr. Hannes Meissner, Dr. Johannes Leitner and Dr. Elkhan Nuriyev

The war in Ukraine is a geopolitical conflict of global dimension, as Putin is determined to change the global balance of power and transform Russia into a world power. It is a proxy confrontation, essentially between Russia and the USA. Increasingly, the global fault lines are becoming apparent along the axis of Russia, China, Iran and their allies on the one hand, and the U.S., Europe and their partners on the other.

In spite of Ukraine’s recent war successes, it is unlikely that Putin’s Russia will give in before the actual goals are achieved: The reintegration of Ukraine into Russia's sphere of influence and the recognition of Russia as a world power by the United States, through acceptance that the post-Soviet space is Russia’s geopolitical zone of interest and the assurance of associated security guarantees. However, the current constellation is a non-win situation. The initiation of talks with Russia would be a painful step for the U.S. and the Western community of states, which would not only be associated with a massive loss of face. It would rather be the admission that the Western-dominated, treaty-based world order, which has had unipolar features since the 1990s, finally belongs to the past.

Dr. Hannes Meissner, Dr. Johannes Leitner, and Dr. Elkhan Nuriyev analyze the motives and goals behind the war in Ukraine. The article was published by the platform Eastblog and the Austrian daily newspaper "Der Standard". Please follow the link to the full article (in German).

Stabilität, Kontinuität und politische Risiken im Zeichen pragmatischer Kooperation mit Moskau

Der geopolitische Konflikt zwischen dem Westen und Russland steigert das öffentliche Interesse an Zentralasien – einer strategisch zunehmend wichtigen Region zwischen China und Europa, die traditionell als Moskaus geopolitische Einflusszone gilt. Zuletzt beschäftigte sich eine Reihe von Expertenmeetings mit damit verbundenen Fragestellungen. Auf einer dieser geschlossenen Veranstaltungen teilte Dr. Hannes Meissner zuletzt Einblicke in das Fallbeispiel Turkmenistan.

Die leitenden Fragen des Vortrages waren: Wie positioniert sich Turkmenistan in der Region, seit der Sohn des vormaligen Präsidenten Gurbanguly Berdymuchamedow, Serdar Berdymuchamedow, die Macht übernommen hat? Und welche innerstaatlichen Veränderungsprozesse sind zu erwarten?

Trotz der Machtübernahme durch seinen Sohn, zieht Vater Gurbanguly im Hintergrund weiter die Fäden. Zentrales Steuerungselement ist dabei der Sicherheitsapparat. Demzufolge sind im Inneren keine Reformen zu erwarten. Turkmenistan zählt nach wie vor zu den repressivsten, korruptesten, am meisten verschlossenen und autoritärsten Staaten der Welt. Die damit verbundenen hohen politischen Risiken für Unternehmen behindern den sozioökonomischen Aufschwung, da ausländische Investitionen fernbleiben, insbesondere von Unternehmen aus dem Westen. Drei Politikbereiche politische Entscheidungsprozesse zeugen davon, dass das Land von seiner bisherigen Politik im Inneren unter Serdar nicht abrückt:

1)     Die Rolle der Farbe Weiß, die Lieblingsfarbe von Gurganguly Berdymuchamedow, wird im öffentlichen Lebensalltag weiter verankert. Nachdem nur noch weiße Autos zugelassen sind, wurden zuletzt auch schwarze FFP2 Masken verboten.

2)     Nachdem zuletzt Nordkorea Covid19 Fälle eingeräumt hat, bleibt Turkmenistan nun das einzige Land der Welt, das nach offiziellen Angaben von der Pandemie ausgespart worden ist.

3)     Der Umgang mit Frauen: Frauen ist das Autofahren offiziell verboten, auch wenn dieses Gesetz in der Praxis nicht hart umgesetzt wird. Zuletzt wurde allerdings auch beschlossen, dass Frauen unter 40 Autos auch nicht mehr kaufen, und auf dem Beifahrersitz nicht mehr Platz nehmen dürfen.

In der Außenpolitik, bzw. regionalen Wirtschaftspolitik, gilt die propagierte immerwährende Neutralität fortan. In der Praxis allerdings strebt das Land im regionalen Raum pragmatische Kooperationen an, darunter mit den Taliban und dem Iran. Auf solche Weise wird versucht, sich vom zuletzt starken wirtschaftlichen Einfluss Chinas ein wenig zu lösen.

Gleichzeitig sind alle Blicke der herrschenden Elite auf Moskau gerichtet. Die Staatsbesuche Serdars in Moskau zeugen von der pragmatischen Nähe des Landes zu Russland. Am Ukrainekrieg, über den nach Ausbruch in den staatlichen Medien tagelang nicht berichtet wurde, wird nur vorsichtig Kritik geübt, auch wenn in internationalen Foren das Prinzip der Souveränität und Nichteinmischung durch äußere Mächte in innere Angelegenheiten unterstrichen wird. Auch gratulierte Serdar dem ukrainischen Präsidenten Wolodymyr Selensky zum Unabhängigkeitstag. In der Praxis stehen die Beziehungen zu Moskau aber im Zeichen einer engen Kooperation, die vor allem auch aus sicherheitspolitischen Interessen getrieben ist. Das Interesse Russlands für Stabilität und Herrschaftskontinuität in den Ländern der Region zu sorgen, ist mit den Interessen der herrschenden Elite kompatibel.

Unter diesen Bedingungen sind auch mittelfristig Herrschaftskontinuität, ausbleibende Reformen und damit anhaltend hohe politische Risiken für westliche Unternehmen in Turkmenistan zu erwarten.

Auf Einladung des Multilateralen Dialogs der Konrad Adenauer Stiftung hat Johannes Leitner an einem zweitägigen Expertenpanel an der Universität Passau teilgenommen. Dabei wurden EU-Initiativen und Politikstrategien wie der Green Deal, die Erweiterungspolitik, Außen- und Sicherheitspolitik sowie die Wirtschafts- und Währungspolitik analysiert.

Johannes Leitner hat besonders die unternehmensrelevanten regulatorischen Maßnahmen wie die ESG-Berichterstattungspflichten, aber auch die Anforderungen des im Entwurf befindlichen Lieferkettengesetzes an Unternehmen in die Diskussion eingebracht.

Europa hat mit dem Green Deal einen besonderen Weg eingeschlagen. Das Konzept beruht auf der Annahme, dass durch eine schnelle, ökologische Transformation der Ökonomie und somit auch der Unternehmen, eine Technologieführerschaft europäischer Anbieter geschaffen werden kann.

Der Green Deal soll die Nachhaltigkeitsagenda mit Industriepolitik koppeln, um die Wettbewerbsfähigkeit auszubauen. Für Unternehmen geht aber gerade die Transformationsphase mit regulatorischen und nicht-finanziellen Risiken einher, die durch Transparenz und spezifischem Fachwissen abgefedert werden können.

Herzlichen Dank für die hervorragende Veranstaltung an das Team der KAS Wien und das Team des Jean-Monnet-Lehrstuhls an der Universität Passau!

Comment by Dr. Johannes Leitner on the Rotax case

The Austrian company Rotax is currently receiving high attention in the media. Engines produced by this company are installed in Iranian combat drones, which are inter alia used by Russia in Ukraine. The company, which produces in Upper Austria and is part of the Bombardier Group based in Canada, once again faces high reputation risks.

The company itself has so far been very reticent about the incidents, stating that an investigation has already been initiated. Already in 2020, Rotax was confronted with similar allegations, when alleged Rotax engines were used in Turkish combat drones deployed against the Kurdish PKK as well as by Azerbaijan in the fight against Armenia. Back then, the company proclaimed it would no longer supply engines to countries characterised by unclear usage.

The question arises how to evaluate this incident. The implicit power of the message is enormous: Austrian technology is killing innocent people in Ukraine.

The company complies with all regulations – on the surface at least

Since these engines were certified as products for purely civilian use, there is no need on the part of the company for approval by the Austrian bodies of export control. One may of course be surprised that no dual-use classification was made, but that is the way it is. This in turn means that Rotax is allowed to sell its engines abroad, unless other export restrictions such as sanctions and embargoes take effect, which was again not the case.

Rotax, on the other hand, does not sell its engines directly to end customers, but through distributors. These usually buy the products and sell them on to further intermediaries or end customers.

It is precisely at this point that the question arises as to the producer's obligations to ensure that its products are not put to abusive end uses. This abusive end use has obviously taken place through the installation in military combat drones, assuming the engines are indeed from Rotax and not a copy from another manufacturer.

Where does the company's responsibility end?

Maintaining a widespread, international dealer network is nothing atypical and even less reprehensible. But it does not absolve the manufacturer from fulfilling its obligations. These obligations are aimed, among other things, at ensuring, with reasonable effort, that the products will not be subject to abusive end uses.

In this respect, the question arises whether the company can critically scrutinize and elicit the actual market volume for civil applications for Rotax engines. If dealers order volumes that do not correspond to the market volume, the manufacturer must at least ask himself what happens to the products ordered by dealers but which are above the expected sales volume. How plausible and resilient are the dealers' explanations? Are the deviations substantial, or marginal?

In Europe and particular in Austria, companies have done very well for years with the strategy, better not to look closely. The motto has rather been, the less I know, the less I can be accused of.

Accountability and the "ethical risk"

However, the (international) legal environment has evolved. Increasingly stringent compliance regulations, stricter case law, rising accountability requirements and, not least, more active media and civil society attention mean that companies can no longer pretend not to know. Instead, companies must prove and document that they have done everything reasonable to avoid breaking the rules. In other words, they must have implemented a well-functioning compliance management system, conducted a risk assessment, and so on.

Just as in similar incidents in the past, the "ethical risk" is by far the most relevant risk factor in this context. "Ethical risk" refers to public expectations that companies have to act in a "morally correct" manner. There is no doubt that it is an unethical action, when engines are installed in combat drones that are then used in a war of aggression, attacking civilians. It is then irrelevant whether the company has complied with the legal framework in this case. In other words, even if Rotax has not violated any legal regulations, the company is now posed to public "blaming and shaming". Rotax now has to respond to this.

L&M PRISK Business Circle # 12

L&M PRISK maintains a series of events where our Senior Experts discuss innovative and exclusive insights on current topics with selected companies confidentially under Chatham House Rules. On 22 September, our Senior Expert Dr. Elkhan Nuriyev (www.lm-prisk.com/elkhan-nuriyev) shared his insights on the current developments in the Ukraine war in particular and in the post-Soviet space and Central Asia in general. The meeting promised new insights for two reasons in particular. First, Dr. Nuriyev has deep insights into Russia's ruling system. Second, the event coincided with Russia's announcement of partial mobilisation and recent Ukrainian gains in terrain.

Dr. Nuriyev's remarks revealed that, despite difficulties in the course of the war, there is no admission of weakness or loss of control on the Russian side. On the contrary, the course of the war is following a clear plan with different levels of escalation. Russia's goal is to regain exclusive control over the entire post-Soviet space, including Central Asia. In contrast, the West is acting from a position of weakness, as it cannot provide the governments of the post-Soviet states with any security guarantees. In the perception of Russia's ruling elite, the West, especially the USA, is the real and true aggressor, grossly disregarding Russia's historical, cultural and security claims and refusing to negotiate on an equal footing over geopolitical zones of influence. Against this backdrop, after a Russian victory over Ukraine, new conflict hotspots are likely, for example over Moldova and/or Georgia, and along the border to Poland and the Baltic States. This is why the next few years will prove decisive in the struggle to reshape the post-Soviet neighbourhood. Given this background, companies in the region have not only to prepare for a long-lasting conflict, but also for the opportunities and risks of a new European post-war order, as Dr. Johannes Leitner, Managing Partner of L&M PRISK concluded.

For decades they together formed the largest country on earth, but since the dissolution of the Soviet Union the relationship of the former Soviet states to Russia could hardly be more different. Some stand closely by the Kremlin's side, others fear they could become Russia's next target. Some are pursuing a double strategy. Kevin Schulte from NTV provides an overview of the different countries’ positions, drawing on statements by Dr. Hannes Meissner. Please follow the link to the podcast.

The Russian attack on Ukraine worries other post-Soviet states. They fear the Kremlin and Putin's imperial ambitions. The Russians' relationship with Uzbekistan is particularly strained, where protests in an autonomous region took place recently. Dr. Hannes Meissner analyses the situation in an NTV Podcast with Kevin Schulte.

Kazakhstan usually maintains good relations with Russia. But the former Soviet republic does not support Russia's attack on Ukraine, instead even courting the EU with possible gas and oil deals. What is the government of the world's largest landlocked country planning? Dr. Hannes Meissner provides answers in the NTV Podcast with Kevin Schulte.

Against the background of the Russia-Ukraine conflict, the question arises as to the prospects for the future development of the Eurasian Economic Union (EEU). Dr. Johannes Leitner provides answers to this question in the magazine "OstContact - Das Außenwirtschaftsmagazin", Vol. 2/2022. The contribution is available under this link.

Moderated by Gernot Rohrhofer (ORF), Johannes Leitner discussed the impact of the Covid-19 pandemic and the Ukraine war on the global trade system and the fragility of supply chains with, among others, Jochen Danninger (Member of the Provincial Government of Lower Austria, in charge of economy, tourism and sports), Christian Moser (Vice President of the Lower Austrian Business Council), Barbara Brenner (Dean of the Faculty of Economics and Globalization at the University for Continuing Education Krems) and Philipp Gady (Head of the Trade Division at the Austrian Business Council). For information, please follow the link to our press release.

Dr. Johannes Leinter (L&M PRISK) and Gernot Rohrhofer (ORF)

L&M PRISK supports the Club Alpbach Niederösterreich’s scholarship programme, providing students the opportunity of participating at this year's European Forum Alpbach 2022. The ceremonial awarding of the scholarships took place during the 20th anniversary celebration of Club Alpbach Niederösterreich on Friday, June 10 in St. Pölten. This year the European Forum Alpbach takes place under the motto “New Europe”. The event will be dedicated to the current challenges Europe faces as well as to make Europe stronger, more resilient, and a worldwide role model.

From left to right: Dipl.-Ing. Wolfgang Viehauser (Hypo Noe), Christian Koudela, Dr. Johannes Leitner (L&M PRISK)