Defence and Security Committee Sub-committee on Northern Security Issues Kaliningrad: Source of Tension or Incentive for Co-operation? Final Report Mr. William Rompkey (Canada) Rapporteur* 5 October 1999 * Until this document has been approved by the Defence and Security Committee, it represents only the views of the Rapporteur. TABLE OF CONTENTS I. INTRODUCTION II. THE HISTORICAL ROOTS III. THE TRANSIT PROBLEM IV. THE STRATEGIC ASPECT V. FEARS OF FOREIGN INFILTRATION; GERMANISATION OR LITHUANISATION? VI. THE ECONOMIC AND SOCIAL MISERY VII. A "EUROPEAN WAY " OUT OF THE DEAD END? VIII. CONCLUSIONS APPENDIX: MAP 1: 1919-1939: EAST PRUSSIA SEPARATED FROM GERMANY (not available electronically) APPENDIX: MAP 2: 1945-1991: KALININGRAD: A SOVIET MILITARY FORTRESS (not available electronically) APPENDIX: MAP 3: KALININGRAD'S INSULAR STATUS (not available electronically) APPENDIX: MAP 4: MILITARY FORCES IN KALININGRAD REGION (not available electronically)

I. INTRODUCTION Between 1919 and 1945, East Prussia with its capital Kšnigsberg was a German enclave. The problem of transit through Polish territory strained relations between Berlin and Warsaw and gave Hitler a pretext to attack Poland and start the Second World War in September 1939. Since 1991, the same area, now called Kaliningradskaja Oblast (region), with its capital Kaliningrad, is an enclave again, this time a Russian one with the same problem as 60 years ago. The question of transit through Lithuanian and Polish territory causes concern and is a potential for conflict once again. The Sub-Committee's 1996 Report on Baltic Security [AN 233 DSC/NS (96) 4] contains a few paragraphs on Kaliningrad which underline the problem of transit, the fear of Germanisation and the military role as matters of concern. With the ongoing enlargement process, a new field of potential conflict arises. Poland is the only new NATO member which has a common border with Russia, namely with the Kaliningrad oblast. This adds to Moscow's general opposition to enlargement. There are grave concerns that, if Lithuania were to join NATO, Kaliningrad would be completely surrounded by NATO territory. The Rapporteur wants to draw attention to this potential field of future conflict because Kaliningrad serves as an example for the need of early warning and of timely conflict prevention. Another reason for addressing the situation in Kaliningrad is that this region is an outstanding example of how history can have an impact on the current geo-political and socio-psychological state of affairs. This history has to be taken into account adequately, if one wants to solve today's psychological, social, economic and security problems. II. THE HISTORICAL ROOTS Act One: On 8 January 1918, US President Wilson delivered a speech in the House of Representatives on fourteen points as a condition to end the war in Europe and to secure permanent peace. Among other things, President Wilson called for the establishment of an independent Polish state which should be granted free access to the sea. The Treaty of Versailles accorded the city of Gdynia (which became a port in 1922) to the restored state of Poland. East Prussia was separated from Germany by the Polish land corridor that ran through West Prussia to the Baltic Sea. The problem of transit was one of the major factors which caused constant tensions between Poland and Germany (see Appendix - Map 1). Act Two: In his speech before the Reichstag on 28 April 1939, Adolf Hitler demanded the return of the Free City of Danzig (Gdansk) and the construction of an extra-territorial transit passage through the corridor. Poland refused such demands, which had previously been made by Hitler in October 1938 and March 1939. With the German-Soviet Treaty of Non-Aggression of 23 August 1939, the efforts to win Stalin as an accomplice for the liquidation of Poland - in exchange for a considerable haul (a third of Poland) - were successful. The grenades fired from the battleship-of-the-line Schleswig-Holstein, which had arrived in Danzig on the eve of 1 September, on the Polish ammunition depot in Westerplatte at 4.45 started the Second World War. A formal declaration of war had not been considered necessary. Act Three: During the conference of the Allies in Teheran in late November and early December 1943, Roosevelt, Stalin and Churchill discussed how to continue the war against Germany and what shape the future Europe should have. On the afternoon of 1 December they first talked about the "shifting" of Poland towards the west and then discussed plans on the fragmentation of Germany. Towards the end of the meeting, as Churchill recalled, Stalin drew a line on the map saying that Russia needed the ice-free port of Kšnigsberg. Act Four: The German defeat in World War II fulfilled Stalin's desire and led to the partition of East Prussia. The northern territories went to the Soviet Union, and the southern regions became Polish. Kšnigsberg, which was heavily damaged in the war, received its current name Kaliningrad (see Appendix - Map 2). Practically the whole German population either fled or was expelled from Kaliningrad. It was gradually replaced by Russians, Chuvashes, Tartars, Belarusians and Ukrainians. The region became one of the most militarised areas in Europe and was almost completely sealed off from the outside world. Act Five: After the collapse of the Soviet Union, the region of Kaliningrad found itself to be an island cut off from the Russian mainland overnight. This region now threatens to develop into a permanent trouble spot or even an explosive centre of conflict. Today, Lithunania, Latvia, Belarus and Poland bar the way between Russia and the Kaliningradskaja Oblast. The general staff in Moscow considers this the westernmost region as an indispensable military outpost (see Appendix - Map 3). III. THE TRANSIT PROBLEM One important area of potential conflict is inevitably the issue of transit, even though the situation has, in general, seen some positive developments. However, with Poland becoming a member of NATO, the question of Russia's access to Kaliningrad remains a delicate issue. The transit of civilian goods was settled in 1991. The question of transit through Lithuania was solved by signing respective bilateral agreements. The transit of dangerous and military cargo is carried out only by rail, in accordance with the rules set by the Lithuanian government. No serious accidents concerning transit procedures have been noted. The Russians, for their part, want to make greater use of the sea route. Kaliningrad used to be the Soviet Union's largest port; just like the port of Baltiysk (Pillau), it was mainly used for military purposes. Civilian trade traffic and cargo transhipment started some years ago. For the Russians, the port of Kaliningrad is particularly important because St. Petersburg and Kronstadt are not considered to be ice-free during the winter time. This is another reason why the loss of ports such as Tallinn (Estonia), Riga, Ventspils, Liepaja (Latvia) and Klaipeda/Memel (Lithuania) is so painful for the Russians. The Soviet Union had mainly used Klaipeda, which was also the only rail-ferry port on the Baltic Sea coast, for coal and oil transhipment. Ventspils used to be another important port of the Soviet Union for oil transhipment operations. The Kaliningrad port complex consists of the Sea Commercial Port, the State Marine Port and the River Port. These ports are connected with the Baltic Sea by a 42 km long shipping canal. The Russian Ministry of Transport is now planning to establish new ports in the region of St. Petersburg and estimates that the losses caused by transit vary from $1 to $2.5 billion per year. It hopes that these new ports will ensure that money remains inside Russia. As far as road connections to Kaliningrad are concerned, Russia intends to build a motorway connecting Kaliningrad to the Russian mainland via Poland and Belarus, thus avoiding Lithuania. Poland rejected this proposal in 1996, probably because of the way the Russian and Belarus authorities had handled the matter vis-ˆ-vis the Polish government. At the time, Polish newspapers reported that the Foreign Ministry was not well-informed about the project. Russian officials even used the critical term of "corridor" in the context of this project, which brought anxious memories to the surface on the part of the Poles, since Hitler had used the same expression when demanding access to the port of Danzig. On the other hand, if one wants to set a precondition for the stabilisation of the region, Russia will have to be assured of some reliable land connection with Kaliningrad which must involve transit through either Poland or Lithuania. This need has become particularly clear during recent tensions between Russia and its Baltic neighbours on transit tariffs. IV. THE STRATEGIC ASPECT A second area of potential conflict is the strength, composition, weaponry and mission of the Russian armed forces in Kaliningradskaja Oblast. The Soviet Union developed former East Prussia as a strategic position after 1945. In 1956, the headquarters of the Baltic Sea Fleet was moved from Leningrad to Kaliningrad. The deep sea port of Baltiysk was made into a naval base. Strong army and airforce units were stationed in the region of Kaliningrad. This high level of militarisation was not only directed against the West but also served as a possibility to exert pressure on Poland. The forces were increased at the beginning of the 1990s when the forces from Germany and Poland were withdrawn to Russia via Kaliningrad. Their deployment to Kaliningrad was to be seen on a temporary basis. Today, the number of these forces is one of Kaliningrad's last secrets (see Appendix - Map 4). The International Institute for Strategic Studies in London estimates a total number of about 20,000 soldiers currently in Kaliningrad of which 14,500 belong to the ground forces, and the rest to naval and border forces, and the interior troops. There are two Russian submarines, two destroyers, four frigates and 30 other surface ships in the Baltic Sea. Tactical nuclear weapons are believed to be in storage. Kaliningrad reinforces Russia's belief in its status of a great power by maintaining a regional balance of power. According to the Russian Duma's anti-NATO group, Poland has doubled its military personnel in the region near Kaliningrad since 1994 to 22,000, while Lithuania has concentrated 3,000 troops on their common border. As a reaction to "NATO expansionism" to Poland and Lithuania, Deputy Defence Minister Nikolai Mikhailov told reporters in early December 1998 that troops in the Kaliningrad region would play the role of a "deterrent". He was quick to add that the deployment of those troops was not intended to intimidate. The harsh language reveals, however, how uneasy Russia feels about the territorial isolation of Kaliningrad and the prospect of being surrounded by NATO members and thereby finding itself in a situation which resembles that of West Berlin during the Cold War. The problem of security is - to a great extent - that of diverging perceptions of actual or potential threats, including the issue of NATO enlargement, on the part of the various countries involved. The solution of the problems of local security as they are perceived by Russia and the countries neighbouring Kaliningrad is closely linked to our ability to find answers to the questions of security and security perceptions on both the European and the global level. V. FEARS OF FOREIGN INFILTRATION; GERMANISATION OR LITHUANISATION? A third area of concern is the fear on the part of the Russian population that the Kaliningrad region might be "re-Germanised". Speculation about this started when great flows of tourists from Germany came to Kaliningrad when it was first opened to foreign visitors in 1990, among these many former East Prussians. Many Germans still have a strong emotional relation with the former city of Kšnigsberg, not only because it was the East Prussian capital, but also because the famous German philosopher Immanuel Kant lived there. However, the number of German visitors decreased rather quickly, from 50,000 in 1990 to barely 5,000 in 1995. One reason for this development is perhaps the fact that not much is left of the old and glorious Hanseatic port that the former East Prussians remember. Speculation in the early 1990s spread the rumour that President Yeltsin had offered to sell Kaliningrad back to Germany. House-building projects, supported partly by right-wing German extremists, and the growing number of German advertisements may have encouraged popular misgivings over "re-Germanisation". The local Duma passed a resolution to enact a law on the protection of the Russian language, in addition to the corresponding provision in the constitution. A recent bill of the Kaliningrad Oblast legislature on the sale of land has also fuelled Russian fear. The Russian newspaper Nezavisimaya Gazeta has warned that this draft law may mean the beginning of the process which will lead to Russia losing Kaliningrad. The new law may result in the sale of land to the "old owners", the Germans. Another factor behind the fear of "re-Germanisation" may be the gradual and silent influx of so-called Volga Germans into the Kaliningrad region. Some sources speak of a total annual growth of the population of 15,000 to 20,000, including about 1,000 Germans, whereas the local newspaper Yantanrnyy Kray estimates an increase of only 10,000 in the period from 1992 to 1996, of which 74 per cent is of Russian origin. The population of the Kaliningrad region is approximately 1 million. Around 78.5 per cent are of a Russian origin, approximately 8.5 per cent Belarussian, 7.2 per cent Ukrainian, 2.1 per cent Lithuanian, 0.8 per cent German, and 3.5 per cent have another origin. Despite the above-mentioned resettlement of Germans from other territories of the former Soviet Union, it is believed that since 1991 the German population has never been more than 5,000 over the whole area. Kaliningrad turned out to be a transit point for many of the German immigrants on their way to Germany. In the 1990s, President Yeltsin signed a decree establishing Kaliningrad as a Special Economic Zone, which was expected to bring about positive results. However, realists do not share the romantics' dream of a new Baltic province based on a multi-ethnic and multi-cultural prosperous model of co-existence, sometimes described as a "Baltic Hong Kong". They predict continuing tensions in the region which stem from nationalist resentments, inflexibility and stubbornness. Germany is eager to underline that it has no territorial claims in the region. In all the cultural links that it has established with Kaliningrad, it is doing everything possible not to fuel Russian fears about "re-Germanisation". While Kaliningrad is involved in economic, cultural and croos-border co-operation in the Baltic Sea region, the question of territorial claims is not acute. In close collaboration with the federal government of Russia and local authorities in Kaliningrad, Lithuania has initiated projects and activities in the fields of promotion of investments and creation of favourable climate for investment, training of public administration, environmental protection, civic security, energy and infrastructure. The United States, Poland and the Nordic countries are active in the support of LithuaniaÕs co-operation projects. Currently, under the initiative of their respective prime ministers, Lithuania and Russia are preparing joint proposals on how to involve the Kaliningrad region into the European UnionÕs Northern Dimension initiative. Lithuania has no territorial claims on the Kaliningrad region, and neither does Russia have any territorial claims on Lithuania. The Lithuanian-Kaliningrad border is settled by bilateral agreements and by the provisions of international law. On 19 October, 1999, the Lithuanian Parliament ratified the treaty concerning the state border between Lithuania and Russia. The enforcement of this treaty now depends on its ratification in the Russian Parliament. Ratification of the treaty would contribute to the development of friendly neighbourly relations and stability in the whole region. VI. ECONOMIC AND SOCIAL MISERY The general economic and social situation is desperate and has worsened because of the Russian crisis. The income per capita is only 83 per cent of the federal average, although the living costs are virtually the same. A quarter of the population is unemployed. Lithuania, Poland, Latvia and others have even started aid programmes for Kaliningrad. The ports are working below full capacity. The current turnover of the State Marine Port is 3 million tons a year, while the Sea Commercial Port exceeds a turnover of 5 million tons. The cargo which is handled in the Kaliningrad ports includes general cargo like food products, cars, paper, etc., and various bulk cargoes like coal, ores and coke. However, if one compares the turnover of the Kaliningrad ports with those of other ports in the region, one comes to the conclusion that the importance of Kaliningrad is relatively small. Kaliningrad is not considered to be a close competitor to the ports of Ventspils, Tallin, Gdansk, Klaipeda, St. Petersburg, Helsinki and Riga. Its rather limited economic role becomes particularly clear in a comparison with the most important port of the region, Ventspils, which is also connected to a Russian oil field by a pipeline. The turnover of the Free Port of Ventspils has grown to 36.8 million tons per year in 1997. This means that the total turnover of Ventspils is about four and a half times that of the Kaliningrad ports. Moreover, Kaliningrad is exposed to strong competition by the fact that Lithuania and Poland have signed a free trade agreement and also that Klaipeda, in Lithuania, has received the status of a free economic zone. A representative of UNICEF in Finland described the health status of the Kaliningrad population as deteriorating. The birth rate is decreasing and infant mortality is growing. Socially related infectious diseases, for example HIV/AIDS and tuberculosis, have increased considerably. This also alarms Kaliningrad's neighbouring countries, which have started to regard cross-border drug trafficking and prostitution as a severe problem in relation to the spread of AIDS. Other matters of concern to the security of the region are, for example, organised crime, smuggling of goods, including radioactive material, and deficiencies at the border control. Governor Gorbenko even signed a decree announcing the state of emergency last September because of the worsening socio-economic crisis. In accordance with the decree, the Kaliningrad region is to create a reserve of financial and material resources. No concrete measures have been adopted, but it seems that the situation in the region is slowly improving. The Kaliningrad region was granted the status of a Free Economic Zone - Special Economic Zone in 1991. After this status was abolished in 1995, the Federal Statute on the Special Economic Zone in the Kaliningrad Region was adopted in 1996. The so-called Yantar free economic area is to attract foreign investors by exempting them from import and export duties and value added tax (VAT) on goods in a wide range of circumstances. Moreover, payment of VAT on transportation costs and obligatory currency exchange requirements can be waived under certain conditions. Kaliningrad still has tremendous difficulties converting its heavily militarised economy to civilian production. Revitalisation of the region depends on an influx of foreign capital. There have been some positive developments, such as the fact that per capita investment in Kaliningrad has grown to a level which is 50 per cent higher than in the rest of Russia. The administration elected in 1996 has introduced a new strategy of regional development and the Targeted Federal Programme of Development of the Special Economic Zone. This programme has been approved by the Government for the period of 1998-2005 and is to become a substantial source of federal investment. It presupposes an allocation of 1 billion roubles of federal money as budget credit and capital investment. However, even if one takes into account additional private domestic capital, more initiatives and funding from the West would be needed to solve the problem of modernising the economy. On the other hand, there is a fear of foreign control. This has been the classic Russian dilemma since the time of Peter the Great. The massive inflow of foreign consumer goods has led to a recession in production in the region. Per capita industrial production in Kaliningrad is rather low compared to other regions in Russia; whereas it amounts to 15,649 roubles per year (1998) in Murmansk and to 8,772 in the city of Moscow, it is only 4,269 in Kaliningrad. The oblast nowadays is highly reliant on imports, e.g. 80 per cent of its consumption depends on imported goods. The Russian Government has decided to impose more restrictive limits on imports while keeping the status of a Special Economic Zone in principle. The purpose of the restrictions is to limit the amount of goods transhipped to the mainland of Russia without the payment of import fees, which costs the federal government several hundred million dollars annually. As a reaction to initiatives to even revoke the region's status as a Special Economic Zone, the head of the Reforms-New Course movement, Vladimir Shumeyko, has proposed to make Kaliningrad an autonomous republic in order to strengthen Russia's western border. VII. A "EUROPEAN WAY " OUT OF THE DEAD END? Could there be a "European way" out of this dead end? The European Union is establishing programmes to support Kaliningrad in modernising infrastructure and linking transport and communications networks with the Western infrastructure. The region is represented in Brussels with the help of the Danish city of �rhus. It is also linked to the "Baltika" Euro-region and included in the Baltic Co-ordination Committee, which is funded by the European Union. There are some exchange programmes at the Kaliningrad State University which are supported by the European Union. The Kaliningrad issue is also dealt with in a number of regional fora such as the Council of Baltic Sea States. In addition, there have been growing ties between the Kaliningrad region and the Nordic countries under an agreement dealing primarily with security, environment, investment and education. The European Union has been very cautious in its approach towards Kaliningrad so as not to alienate Moscow. Kaliningrad only falls under the TACIS assistance programme, whereas Poland and Lithuania, as applicants for EU membership, benefit from the PHARE and Interreg programmes. Within the European Union's programme to establish nine European Transport Corridors, which would also include Kaliningrad, the borders between PHARE and TACIS countries have been criticised as being artificial. There has been no implementation of the motorway project from Hamburg via Gdasnk, Kaliningrad and Riga to St. Petersburg. It is noteworthy, that its original name, Via Hanseatica, was dropped because it was considered it might fuel the fear of "Germanisation". It is important to ensure that, as Lithuania and Poland integrate into the EU and NATO, inhabitants of Kaliningrad do not feel isolated and could benefit from this fact through greater involvement in regional and sub-regional co-operation and growing people-to-people contacts. It would be desirable if the European Union could assist the countries concerned in the improvement of their infrastructure because this is a precondition for the further growth of cross-border economic co-operation and, therefore, for an environment that facilitates the increase of welfare. Within the Kaliningrad administration, there seems to be some optimism as to the possibility of solving the problem of reconciling strategic interests with economic interests. This will be a very difficult task, however, given the lack of financial support from Moscow. Improvement of the situation will also depend on greater autonomy of the region, but this also means that those forces become stronger, possibly with the help of the younger generation, who are not caught in historical sentiment or in centralised, bureaucratic and imperial thinking. Administrative difficulties and restrictions to free trade seem to be growing instead of disappearing. The call for protectionism is strong, but will not improve the economic and social situation. Further liberalisation may lead to more competition, particularly from the neighbouring countries, but the abolishment of barriers to trade has proved to be the precondition for an overall increase of welfare, as is shown by the results of European integration. There have been some positive developments in this respect. For example, Poland and Lithuania are actively enhancing ties with Kaliningrad. The number of joint ventures has grown considerably. About one third of the companies having their legal seat in Kaliningrad are Polish. The establishment of a network of bilateral agreements to create a framework for cross-border economic relations is a promising development. However, the feeling of national superiority, the evoking of hostile enemy images and the desperate desire for better living conditions reveal a serious socio-psychological instability which can easily be abused - on any side - by extremist nationalists. A stabilisation in the neighbouring countries, both with regard to the economic situation as well as with regard to perceptions of strategic security, will also have a stabilising effect on Kaliningrad. The westward move by Poland and Lithuania should, therefore, not be considered as a threat but as a chance for peace, stability and welfare. VIII. CONCLUSIONS The purpose of this report is to attract the attention of European politics to a latent conflict. In order to prevent a potential conflict from developing into an acute one, all parties involved have to identify and tackle the problems in good time. Compared to other potential areas of conflict, Kaliningrad is limited in scope. This offers a unique opportunity for a demonstration of the political will to co-operation, which will be fruitful to all sides. If Europe cannot even solve such a limited problem, will it ever be able to find solutions to the big conflicts that we are facing? Kaliningrad is completely cut off from the rest of Russia, and since the enclave situation is a rather unique situation in today's geo-politics, much political sensitivity and creativity will be needed to solve the problems resulting from this situation. Every nation should be allowed to pursue its own national interests. However, it is of prime importance to take into account one's neighbours' interests as well. Territorial claims which destabilise the trust in existing borders have to be disavowed strongly. We call upon Poland and Lithuania to seek a co-operative solution that ensures Russian civilian access to and from Kaliningrad region without compromising Polish or Lithuanian security or sovereignty, in the context of EU enlargement. Russian civilian access without compromising Polish or Lithuanian security or sovereignty. This approach will help to reduce potential areas of conflict. The Russians must try to break their psychological nutshell, which the long period of communist rule separation has caused, and to come to terms with reality. Security should no longer be seen as a purely military issue. A modern, broad approach to security needs to focus on economic and social problems as well. Russia should realise that by encouraging economic creativity, and cross-border co-operation, rather than by maintaining or even establishing new barriers, it will lay the foundations for economic welfare and social stability and, thereby, establish a secure environment and be able to appreciate foreign assistance and advice. The insular character and the westernmost location of Kaliningrad may on the one hand worry the Russians and may strain relations in the region, but, on the other, it offers a unique chance for building a bridge to and from Europe. One simple prerequisite to encourage creativity and the spirit of enterprise and international co-operation would be for Russia to reduce stifling bureaucratic restrictions and to simplify customs procedures. NOTES AND REFERENCES Chris Klimiuk, "The Controversial Kaliningrad Corridor", RFE/RL, 5 March 1996. Created in 1992, the Council of Baltic Sea States offers a framework for co-operation between Denmark, Estonia, Finland, Germany, Iceland, Latvia, Lithuania, Norway, Poland, Russia, Sweden and the EU. Paul Goble, "The Internationalisation of Kaliningrad", RFE/RL, 20 January 1999. TACIS stands for Technical Assistance for the Commonwealth of Independent States. It is a European programme which provides grant finance for the transfer of know-how to the former Soviet republics. The PHARE Programme is currently the main channel for the European UnionÕs financial and technical co-operation with the countries of Central and Eastern Europe. Set up in 1989 to support economic and political transition, Phare had by 1996 been extended to include 13 partner countries from the region. The aim of the Interreg programme (1994-1999) is to assist both internal and external border areas of the EU to overcome the special development problems arising from their relative isolation by promoting cross-border co-operation and the completion of energy networks.