Georgia

Many journalists and politicians are using the word “cold war” again when speaking about the Georgian crisis. This has originated from the Russian resolution recognising the separatist republic of South Ossetia and Abkazia. If this decision of the Russian parliament is adopted by the Russian government, it will only enlarge the cracks to gaps in the relation between Russia and the USA. The White House is accusing Russia of violating the terms of the ceasefire and is talking about “reviewing its relationship with Russia”.

Amongst western countries sanctions against Russia have been discussed. The possibility of blocking Russia’s membership of the World Trade Organisation (WTO) has been raised. Russia is now the largest economy that is not a member of the WTO.

Nevertheless, experts say that it is unlikely the Kremlin would act immediately on the parliamentary resolutions, since the votes allowed it to increase pressure on Georgia’s government and improve Russia’s negotiating position with NATO, knowing that the Georgia conflict is moving from a military one to a diplomatic one.

On how the situation is going to evolve, experts draw a parallel with Turkey’s invasion and recognition of Northern Cyprus in 1974-75. The separatist republic of South Ossetia and Abkazia will remain mostly unrecognised internationally. But the Georgia conflict will also have its ripple effect in connection with other issues, which involves the relation between Russia and the USA; and we are not just pointing at NATO.

Western leaders have already condemned Russia’s recognition of South Ossetia and Abkazia. The German Bundeskansler Merkel and the French Minister of Foreign Affairs Kouchner say that such recognition is contrary to International law. Both refer to the resolution of the UN Security Counsel and the Six Points Plan for Peace agreed under the French presidency of the European Union (EU).

What is all of this going to mean when the permanent members of the United Nations Security Council are starting discussions on the new set of sanctions against Iran and its nuclear plans. Is Moscow going to continue with being a qualified co-operator with its western partners; will it still swallow its reservations, as it did times before, in order to remain within the fold. As a near neighbour of Iran, Russia has an interest in ensuring Iran does not acquire a nuclear bomb. But this may change when sanctions are imposed due to the Georgia conflict and Russia might defect from the current UN sanctions strategy. This would signal the return to rival power politics in the Middle East, which will be much welcomed by Iran.

The Georgia conflict is actually another test case for monitoring the post cold war relations. Western states have already toned down earlier Iran sanctions proposals in order to have Russia and China join their camp. European states for example have also defused an early US drafted resolution on Georgia that would have pushed Russia into a corner. Also the Condemnation of Russia’s “disproportionate” response was carefully phrased, said a European ambassador. The increasing European dependency on Russian energy sources, whether this is oil, gas or else, cannot be neglected in this matter. Moreover, Russia has proved in the past it will use the energy card if necessary.

Europe has a special interest in Georgia as it is of strategic importance for Europe and the US. Since the break up of the Soviet Union in 1991, western oil companies such as ExxonMobil, BP, Royal Dutch/Shell and others have successfully entered the Caspian Sea region committing billions of dollars of new exploration, production investments and not to mention the infrastructure on gas and oil pipelines.

Looking back on past matters, such as the Kosovo declaration from Moscow’s UN envoy that the recognition of Kosovo’s independence would encourage other separatist movements. Russia’s veto of the sanctions against Mugabe’s regime in Zimbabwe and not to mention the differences regarding Burma and Sudan weakened the Security Council importance, pushing it back into the role it had during the cold war.

Most recently the Russian diplomats made the direct link between the action in Georgia and the recognition of Kosovo’s independence. Moscow is going even further with asking for a weapons embargo against the Republic of Georgia, which is interpreted by Westerners as asking for a regime change. This is in direct collision with western countries, which ever since the revolution of the roses in 2003, wish to support the young democracy of Georgia. Through the US the IMF even granted Georgia a loan of 750 million dollars. Moscow continues to challenge these western countries by rejecting to recognise Saakashvili as president of Georgia and calling him a political corps as a reaction to Saakashvili’s decision to recall Georgia’s diplomats in Russia.

The Georgia conflict is without doubt a diplomatic war, but specialists do not see this as a return to the cold war era. Russia’s interests (read capital investment) in the western countries are too important to be endangered and Russia is also too eager to attract foreign investors (e.g. the new Russian Depository Receipts since August 2008, RDR’s). With this conflict we see that attacks are verbally and the big dogs do not bite each other. Georgia will remain an area of conflict that from time to time will make the news. A conflict that probably will drag on as the US and Russia will support their respective interest with ‘just enough to sustain, but not enough to solve’ measures. This will impoverish the region and will limit the interest to make investments in that region, making the Caucasus region a pawn to be used for the benefit of the greater political powers of this world. Is this sense there is nothing new under the sun.

The absence of a stable governmental system makes it all too dangerous for exporters to this region, which may fall prey to corruption, as the government is unable to cope with it. Warnings must be made for unsecured deliveries. People are invited to contact us if they are confronted with unpaid claims whilst doing business with Georgia.