Gerald Warner: Putin flexes his muscles and fuels a new world order

THE gas man cometh: the EU and Russian monitors assembled in Kiev for the biggest meter-reading in history are symptomatic of a new era of politico- economic games playing. Vladimir Putin, fresh from inflicting humiliation on Georgia, has begun to flex his muscles in other areas by cutting off gas supplies to Ukraine.

This is one domino theory you better believe. Within 48 hours of the Russian switch-off, schools and hospitals were closing in Slovakia, Romania and elsewhere. The ostensible provocation was Ukraine's "theft" of gas pumped through its territory to other nations. Ukraine insists it has only siphoned off gas for the legitimate purpose of operating the compressor stations on the pipeline.

All this, of course, is a carefully choreographed drama designed to serve the Kremlin's broader agenda. Five countries – Slovakia, Finland, Bosnia, Macedonia and Turkey – rely exclusively on Russia for their gas supplies. Many EU states are dependent for a large proportion of their supplies. Britain is in the fortunate position of depending on Russia for only 2.5% of its gas.

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Putin is playing games and most of them breach the health and safety regulations of global diplomacy on a massive scale. This former KGB officer grew up in a hard school and he knows how to bluff his opponents. The reality is that if Russia turned off gas supplies for any prolonged length of time it would be cutting off its nose to spite its face. With oil prices tumbling, gas is Russia's principal source of revenue. Gas prices, in turn, are predicted to fall later this year, so Vladimir is trying to shake down Ukraine.

Last year, like a drug dealer offering favourable rates to a new customer, he sold gas to Ukraine at bargain basement prices; now he wants to charge much more, but Ukraine is holding out, prolonging negotiations until prices fall. One says "he" because nobody is in any doubt about who runs Gazprom, the Russian gas giant. The highly public way in which Putin ordered the chief executive of Gazprom to cut off the supply to Ukraine, on television, was done for deliberate effect: the Tsar issued a command and was instantly obeyed.

We have experienced a wave of de facto nationalisation in this country recently; but even in today's climate Gordon Brown would not order the chief executive of Scottish Gas to pull the switch, on prime-time television. Putin enjoys giving an order that has pensioners a thousand miles away shivering within 48 hours: it is very Russian.

So much for the political theatre; but the principal element in this synthetic crisis is economic. Last year, buoyed up by soaring oil prices, the Russian economy grew by more than 8%; this year the optimistic forecast is 2.4%, with recession not entirely ruled out. As the recent downturn deepened, Russia is believed to have spent as much as $2bn a day on supporting the rouble; its reserves have sunk from $600bn five months ago to $480bn today.

Putin desperately needs to sell gas – as much as the creaking, rust-bucket infrastructure of his industry will permit him to produce. Last year gas production accounted for $90bn of his budget. With unemployment rising, social programmes unaffordable and growing public unrest, the Tsar has no intention of keeping the gas tap turned off for long, as the negotiations in Kiev demonstrate. There is a bad time coming for Russia, but American commentators are exaggerating the situation.

To read some of them, one would think Putin's coat was hanging on a very shoogly nail indeed. Much has been made of last month's brutal crackdown by police on demonstrators in Vladivostok and the passing of new legislation enlarging the scope of the treason laws. Russian police have no Dixon Of Dock Green tradition and Putin has every intention of holding on to power, deploying every tactic available to him to enhance Russian influence. In that context, the inauguration of President Pantywaist in nine days' time must have the hard men in the Kremlin salivating with anticipation.

It is nave to denounce Russia as "undemocratic". Russia is not a democracy because, with the exception of a small minority of westernised intelligentsia, it does not want to be. Russians look to a strong man to lead them. Keyserling may have coined the term Fhrerprinzip, but the idea it expressed was more native to Russia than to Germany.

Nor are we, after nearly 12 years of New Labour, in a position to criticise. In Russia, an undemocratic government is doing what the people want; in Britain, a democratic government is tyrannising its people. The era of neocon crusading to impose democracy is over. The world will be more plural in ideology from now on.