Gunpowder Chronicle posted on August 9, 2008 1:22 PM | Rating:
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No, not the heart of the old Confederacy, but the former republic of the Soviet Union. This is bad news. Georgia and Russia have been at each other's throats for some time. Other than Ukraine, Georgia was one of the former separatist republics that hurts the most, because it provides direct access to the trans-Caucusus oil fields and deeper into Central Asia. In fact, one of the primary pipelines for bringing oil out of Central Asia runs right through it. And that is why this is not good.
The pretense for this little war has been Georgia's insistence that South Ossetia remain part of the country. I don't buy that for one second. Yes, Russia would like to see Georgia destabilized. They have been working on that since the breakup of the Soviet Union. But I think the bigger driver here -- for the Russians at least -- is energy prices.
In the last month, as oil prices have dropped from around $147/bbl to below $120/bbl, that has cost Russia around $100 billion in hard currency profits. Hard currency that they use to prop up their economy and keep it running. Moreover, some of their client states -- like Hugo Chavez's Venezuela -- owe them billions in hard currency for recent weapons purchases. With the dramatic drop in oil prices, their ability to pay is severely compromised. That leaves the Russians holding worthless credit accounts.
Americans -- and especially American intelligence services -- rarely recognize such political jujitsu in the international arena. Our culture (and therefore our outlook) is too "straightforward", and so our leaders frequently miss the sublety that is going on. I hope that in this case, I am wrong, and the National Director of Intelligence is tasking his analysts to look at the out-of-the-box, off-the-wall explanations for why Russia would suddenly want to pick another war (remember Chechnya?) on its frontier, with a country that is working hard to gain NATO membership, and is looked upon favorably by many NATO members.
I hope he has told his analysts... "follow the money".