THE CAUCASUS: SMALL WAR, BIG DAMAGE
By Soner Cagaptay

Washington Institute for Near East Policy
http://www.washingtoninstitute.org/template C06.php?CID=1176
Sept 8 2008
DC

Georgia's attempt to take South Ossetia has backfired. In a
blitzkrieg, Russia drove the Georgian military completely out of South
Ossetia. Moscow also made forays into Georgian territory. Many people
in Turkey and across the transatlantic community have interpreted
the war as a by-product of Georgia's aggressive attitude, and then
propagated a neutral position toward the conflict. Whatever is the
cause of the war, Russia's foray into Georgia cannot be dismissed
as nuisance. The war has immense negative ramifications for the
transatlantic community, including Turkey and the United States,
as well as the European Union, or EU.

Russia's motives

The major impact of the war has been in the realm of energy and
pipeline politics. Russia may not be a global superpower anymore,
but it is certainly an "energy power." Moscow's strength lies in
immense oil and natural gas reserves. Such that, even though Russia's
population of 145 million is twice as big as the Turkish population,
the Russian economy is smaller than its Turkish counterpart if the
energy sector's contribution is subtracted.

Energy sector's behemoth dominance in the Russian economy shapes
Russia's foreign policy motives. Russian gas giant Gazprom's policies
and Russian foreign policy serve each other's mutual interests. Russia
takes advantage of exorbitant energy prices to increase its political
and military power -- the arms industry is the second largest sector of
the Russian economy after energy. Energy politics is key to Russia's
military and political ascent especially in the former USSR. In order
to grow further, Russia wants to achieve monopoly over the global
distribution of oil and natural gas from the former USSR countries.

This rationale seems to be the driving factor vision of Georgia. When
the Cold War ended and the USSR was dissolved, the United States
allied with Turkey to create a blue print to bring the newly explored
oil and natural gas from the Caspian basin to the global markets. The
shared U.S.-Turkish vision aimed to market Azeri, Kazakh, and Turkmen
oil and gas to the world, not via Russia, but through the East-West
corridor spanning the Caspian Sea and Turkey.

Georgia and Armenia

The U.S.-Turkish vision worked well in the pre-9/11 era when Russia
was under the politically incompetent rule of Boris Yeltsin and Moscow
was economically weak due to low oil and natural gas prices. As a
first step along the East-West corridor, the U.S. and Turkey backed
the building of Baku-Tiflis-Ceyhan oil and Baku-Tbilisi-Erzurum gas
pipelines. The second phase of the U.S.-Turkish vision envisaged
extending these pipelines; east to Kazakhstan and Turkmenistan, and
west to Europe. A big part of that vision was the Nabucco pipeline
between Turkey and Austria, the poster child for EU's energy policy
that would have for the first time allowed Europeans to buy Caspian
gas without Russian intermediary.

Russia's occupation of Georgia has dealt a blow to such plans. Georgia
and Armenia are two countries along the East-West corridor that lie
between the Caspian basin and Turkey. Since Turkey's border with
Armenia is closed, this leaves Georgia as a key country along the
corridor. Georgia is mutilated by Russia and unstable. It is hard to
imagine today how any energy company would invest in extensions to the
East-West corridor, along which Georgia has become the weak link. By
occupying Georgia, Russia has exhausted the U.S-Turkish plans to
boost the East-West corridor and make Turkey an entrepot of Caspian
energy. Moscow has also preemptively blocked the EU's plans to buy
energy from the Caspian basin without having to go through Russia.

Back in the USSR

A second transatlantic casualty of Russia's invasion of Georgia is
the West's political influence in the former USSR. Since the 1990s,
Turkey and the U.S. have managed to wield influence over countries in
the former USSR, especially Azerbaijan, Georgia, and Ukraine, building
military and political ties with these states. Now that Russia has
taught Georgia a lesson about its pro-Western stance, Ukraine and
Azerbaijan will think twice next time they have a chance to take cue
from the United States or Turkey, respectively. Russia's foray into
Georgia has demonstrated to the countries of the former USSR that
Russia is the regional hegemon and that they better listen to it.

As long as oil and natural gas prices remain high, Russia will project
further political and military influence over the Caucuses and the
Black Sea basin, and such influence will come at the expense of the
transatlantic community. Russia's invasion of Georgia is a milestone
that marks the dawn of a new era. A small war has indeed produced
big results.

Soner Cagaptay, a senior fellow at the Washington Institute for Near
East Policy and a visiting professor at Bahcesehir University, would
like to thank Melis Evcimik for her assistance with this article.