Tag Archive 'Medvedev'

A Shattered Idol in the Black Garden

Baku skyline
(photo: Rahim Alizadeh)

In Verdi’s opera Nabucco –the namesake of the western gas pipeline to Europe that holds the promise of partial independence from Russian energy reliance– the Jewish patriots take the daughter of the Babylonian king hostage, in order to compel his charity for Jerusalem. Today, after the Georgian invasion, Azerbaijan is a victim of a not dissimilar hostage-taking by example, and it’s just as perilous.

So much a captive to the gambit is Azerbaijan, that it had to be seen embarrassingly consulting with the Russian president, while the American vice president was left to rant to reporters in their captial. Cheney wanted a Nabucco pipeline endorsement from Azerbaijan, although he didn’t get the rejection portrayed in the press, he didn’t get approval either. He got the thing Dick hates most: strategic ambiguity.

Sympathy for the Azeri position here is mandatory. Their heart is with the United States, but their survival instinct forces them to withdraw into balance. An overt endorsement of a pipeline under American pressure would have potentially been against every instinct for a country that has been playing the game of pacifying powerful neighbors for far longer than the Americans have even been aware of the region. Any pipeline threaded through Turkey to Central Europe –which Iran has been refused access to, and is designed specifically in order to bypass Russia– has long promised the Azeris hostility from her two invidious and lethally powerful neighbors. (more…)

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Medvedev’s Caribbean Dream

A depressingly confused analogy from Medvedev on US aid to Georgia:

“I wonder how they would like it if we sent humanitarian assistance using our navy to countries of the Caribbean that have suffered from the recent hurricanes.”
(AFP)

We’d welcome that. It’s distressing that the Russian government hears only our resistance, without our reasons for it. And here again, there is a certain naiveté to Medvedev that always makes one think it might someday be possible to penetrate the reality distortion field of Putinism that imprisons his imagination.

(more…)

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Anders Aslund on the Russian Economy

After forcefully savaging the Russian invasion of Georgia, controversial Swedish economist Anders Aslund lays out ten reasons he expects an impending economic collapse in Russia. Each point is sound, although some are more problematic than others.

Particularly cogent are the following Aslund points IMO:

4. Renationalization is continuing and leading to a decline in economic efficiency. When Putin publicly attacked Mechel, investors presumed that he had decided to nationalize the company. Thus, they rushed to dump their stock in Mechel, having seen what happened to Yukos, Russneft, United Heavy Machineries and VSMP-Avisma, to name a few. In a note to investors, UBS explains diplomatically that an old paradigm of higher political risk has returned to Russia, so it has reduced its price targets by an average of 20 percent, or a market value of $300 billion. Unpredictable economic crime is bad for growth.

5. The most successful transition countries have investment ratios exceeding 30 percent of GDP, as is also the case in East Asia. But in Russia, it is only 20 percent of GDP, and it is likely to fall in the current business environment. That means that bottlenecks will grow worse.

6. An immediate consequence of Russia’s transformation into a rogue state is that membership in the World Trade Organization is out of reach. World Bank and Economic Development Ministry assessments have put the value of WTO membership at an additional growth of 0.5 to 1 percentage points a year for the next five years. Now, a similar deterioration is likely because of increased protectionism, especially in agriculture and finance.

[...]

8. Oil and commodity prices can only go down, and energy production is stagnant, which means that Russia’s external accounts are bound to deteriorate quickly.

9. Because Russia’s banking system is dominated by five state banks, it is inefficient and unreliable, and the national cost of a poor banking system rises over time.
(Moscow Times via Robert Amsterdam)

As for all this leading to a Russian economic apocalypse, it should be noted that the accuracy of Aslund’s predictive powers leaves more than a little to be desired. I note that we’re still waiting for his prediction of a military coup against Medvedev to come true.

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The Vandalism of Russian Occupation

Ceasefire be damned,* the Russian army reportedly destroyed the Metekhi-Grakali railway bridge. The bridge was used by Georgian refugees fleeing the mayhem in the Russian occupied zones given that the highway is controlled by the Russian army, which has naturally acquired a rapacious reputation among Georgians. Thus it could expand the humanitarian crisis in Western and Central Georgia.

Oddly, the Russian military has denied it destroyed the bridge, which is perhaps further evidence of factional schizophrenia in Russian policy, given that the bridge is in fact destroyed (photo).

In reaction to this and continued Russian occupation of Georgia, Secretary Rice said that the Russians are “perhaps” just liars. That’s news to no one at this point, but there’s reason to assume command-and-control is fantastically weak within the occupation army (much less within the state).

There’s also an energy oligarch-faction corruption rationale for a Russian action on the bridge, as it was the conduit for Azeri oil export which has now had to cease.

* Edit: Attack was coordinated to occur a couple of hours before Medvedev signed the agreement.

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Going to Tbilisi?

Russian units are on the move again in Georgian territory, apparently in violation of the truce agreement. One Russian soldier in a large convoy shouted an ominous flirtation to a press photographer outside Gori, hopefully in jest or lust:

“Come with us, beauty, we’re going to Tbilisi.”
(AP)

A week in a Caucasian foxhole will make any soldier promise a pretty girl the world, but it’s certainly likely elements of the Russian military leadership wouldn’t mind actualizing his advance.

(more…)

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When There’s Nothing Left to Burn You Have to Set Yourself on Fire

Sorry for my absenteeism on this, guys, but I’ve barely had the time to write on Registan.net about the war in Georgia (seriously, go there for some really in-depth discussions about what is going on), and have simply neglected copying posts over here. I’m sorry. Since I don’t have the time to follow the play-by-play very closely thanks to work, and since in my experience that doesn’t indicate much of use anyway, I’ll summarize my writing on the conflict so far.

For starters, this was a surprise to no one. Weeks before Saakashvili struck Tskhinvali, the South Ossetians were simultaneously shelling Georgian positions while using Russian transports to evacuate thousands of women and children for “summer camp” in North Ossetia right when Russia was massing troops across the border. Coupled with the years of Russian provocations in Abkhazia, including downing of Georgian drones by Russian aircraft, and the repeated military strikes by Russian helicopters on Georgian territory, it should surprise no one that Saakashvili finally reacted.

That being said, Saakashvili obviously miscalculated the extent to which he was being baited by Russia, and his normal brinksmanship sort of telegraphed that he would take decisive action at some point.

At the same time, the ultimate result of this fight will not be the annexation of Georgia by Russia, nor will it be an immediately dramatic reordering of the energy policies of the region. Russia will not touch the BTC pipeline, nor will it occupy Tblisi. They just want Saakashvili gone—the equivalent is how we used to view Fidel Castro… and if the opportunity presented itself we would have tried (and did several times) to kick him out of office without formally occupying the territory.

It is also important to note that Russia’s financial markets are not doing well right now. They have been steadily sinking since outright hostilities broke out, and they can be expected to sink further the longer conflict continues. So don’t expect anything long term from the Russian military—war is not as profitable for them as it is for us. If they do drag this war out much longer, they lose big time—financially, militarily, and internationally. Which they might do, because one should never underestimate Russian hubris.

Believe it or not, Russia actually is responsive to global opinion. Just not in the way we like to think. A key part of Russia’s geopolitical strategy is to breed European dependence on Russia energy, a goal they have largely achieved. At the same time, that isn’t permanent, and if Russia pushes too far Europe could panic, actually bother to come up with a unified energy policy, and diversify its supplies. Russia does not want that. But they do want to dictate terms along their southern flank.

Russia also has a compelling interest in preventing Georgian ascension into NATO. It has been interesting to see how much diplomatic activity has been in Brussels, rather than Tblisi, Tskhinvali, or Moscow. They are keenly aware of their audience here, and given the fact that they’ve made their point—NATO’s stipulation that Georgia solve its “frozen conflicts” is clearly still valid—they have little reason to occupy the capital and provoke a global response.

Questions remain. Did NATO’s stipulation, along with years of American support, funding, and supply, create the conditions for this war? Right now, it looks like it did (so what culpability does the West have?). Does this war conclusively prove that Russia is politically rotten, and that Medvedev is worse than a paper tiger since it’s all been about Putin? Quite possibly. Does this mean that Caspian energy will no longer flow according to Western interests? Almost definitely. Can this mean, since Russia stands a serious chance of overstepping its bounds and provoking a counter-movement from the international community, that the U.S. might in all of this emerge the actual winner? A remote possibility.

More ominously, what happens to Georgia? Saakashvili is finished, but there is no one to replace him. As the electoral crisis last year demonstrated, even when he voluntarily resigns and holds fair and open elections, he remains the only real leader the Georgians have. Alas, he is finished now. What, or more importantly who, comes next? It will almost certainly be one of the many opposition leaders, all of whom share varying degrees of warmth toward Russia. The winner of that political fight—which will be metaphorically if not physically bloody—will determine the ultimate result of this war. So in that sense, Russia is taking just as big a gamble here as Saakashvili did.

But basically, it is all very fluid, and there are too many variables to conclusively discuss what the war will really mean. Which is a cop-out in a way, but it is all one should feel comfortable saying.

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