Diminishing Marginal Utility

Source: PINR

October 2, 2006

Russian troops in Georgia were put on "high alert" on Sunday and ordered to "shoot to kill if provoked" while defending Moscow's two military bases in the Caucasian country. Tensions between Russia and Georgia are escalating after Tbilisi arrested four Russian officers on September 27 on spying charges.

As a consequence, Moscow withdrew its diplomats from Tbilisi and warned that it could postpone pulling out its troops by 2008 as initially planned. Russian Foreign Minister Sergei Lavrov told the press on September 27 that the situation is "very serious," and, therefore, "when the U.N. Security Council will consider the Georgia-Abkhaz settlement in the next two weeks, we will insist on assessing Georgia's activities as subversive."

The crisis has its roots in the pro-Western, pro-U.S. turn of Georgian national elites epitomized by President Mikhail Saakashvili and his "Rose Revolution." The situation had already worsened in August when Georgian security forces attempted to secure control of the Abkhazian river valley of the Kodori Gorge in order to regain control of the breakaway regions of Abkhazia and South Ossetia. Tbilisi then called for the replacement of Russia as the official mediator in Georgia's regional conflicts. Moscow maintains peacekeepers there along with two military bases.

This escalation signals that Georgia is likely to become the catalyst for U.S.-Russian geopolitical conflict for strategic and economic influence in the Caucasus. Washington criticized Moscow's reaction to the officers' arrests and continues to sponsor Tbilisi's gradual integration into N.A.T.O. Saakashvili has never concealed his pro-U.S. stance and frequently accuses Russia of being the destabilizing force behind breakaway regions South Ossetia and Abkhazia. Although Moscow officially says that Georgia is a sovereign state and is free to join N.A.T.O., Russia is working to maintain strong influence in the Trans-Caucasus region.

As PINR pointed out on September 19, the recent Russian-backed Transdniester pro-independence referendum may be a pattern for the two Georgian separatist regions' attempts to gain national independence. The United States and N.A.T.O., however, are likely to be more active in preserving Georgia's national integrity by strongly supporting Saakashvili than they have been in Transdniester. Therefore, a continued dispute between Tbilisi and Moscow with significant U.S. and European participation on the Georgian side is to be expected in the coming months. [See: "Intelligence Brief: Transdniester Votes for Independence"]

The stakes in the southern Caucasus region are significant. Georgia and Azerbaijan form a gateway linking the Black Sea to the Caspian Sea and are vital for the control of Central Asia's massive fossil resources, as the well-known Baku-Tbilisi-Ceyhan pipeline testifies.

Georgia's geographic position is also critical to N.A.T.O.'s ability to secure the Black Sea region and it allows Washington to project power toward the Middle East. Furthermore, at a time of uncertainty on Turkey's E.U. accession bid and on Ankara's geostrategic orientation -- due to Turkish Prime Minister Recep Tayyip Erdogan's unwillingness to subscribe to U.S. military actions in Iraq -- Georgia's geostrategic importance for Washington is increasing.

Tbilisi's new pro-Western course is predicated upon a strategic relationship with the United States and N.A.T.O. and serves the purpose of a post-Soviet national elite that is eager to eliminate Russian hegemony. Disputes with Abkhazia and South Ossetia are worrying Tbilisi, but, on the other hand, they are enabling the Saakashvili administration to distract international attention from its increasingly authoritarian rule and provide him an effective ideological tool to boost nationalism and use it against remaining Russian influence.

As a consequence, tensions are likely to remain high in the coming months. While it is unlikely that Russia and N.A.T.O. will make moves that could openly put one against the other in the region, Moscow's support for separatist movements in Abkhazia and South Ossetia will probably continue. Chances that a smooth diplomatic solution to Georgia's regional issues will be implemented soon are decreasing, while Tbilisi's approach to separatism remains militaristic.

Posted by Hugo Albert Orwell at 08:42 PM | Permalink | TrackBacks (0)

Source: The Pioneer [India]
By Sandhya Jain

If Iranian President Ahmadinejad is serious about opening a Euro-based oil bourse in Tehran to undermine the US dollar, now is the time to strike. Strategic experts believe that internationally, the mega strategic energy deals are slipping away from corporate America, whose strong arm tactics are alienating growing nationalist sentiment across the world.

Washington's use of the September 2001 New York terror strike to cynically assume a commanding position in oil and gas rich Central Asia has startled the international community, especially after the unwarranted invasion of Iraq and takeover of its economy by cronies of the White House. This has forced a major rethink in world capitals, and resource-rich regimes in the Gulf and Central Asia are responding to Russia and China, who are cooperating to combat America's monopolistic ambitions.

Pakistan is Washington's non-NATO ally in the war against terror, but has turned to China for economic development, as evident in troubled Balochistan. It is keen on an energy deal with Iran, bete noire of Uncle Sam, but the tripartite energy deal with India cannot take off due to Pakistan's status as the epicentre of jihadi terrorism. As a rising Asian economy, India is also engaging with the Central Asian Republics for better energy security, though its anxiety for American goodwill has upset Iran and caused a stalemate over the price of LNG.

Saudi Arabia, however, is moving out of the American orbit by sewing up energy deals with China and India, though Washington has compensated itself with the oilfields of Libya. Yet the unmistakable geo-political trend among oil and gas producing nations of the Gulf, Latin America, Africa and Central Asia is to avoid US oil companies in favour of nations that do not interfere in their internal affairs. America's high comfort levels with dictatorial regimes on one hand, and promotion of puppet democracies on the other, as per its corporate convenience, has diminished its value as a desirable economic and strategic global partner.

Central Asia is alert after the string of 'coloured' revolutions. America currently retains bases in Kyrgyzthan, Tajikistan, Ukraine, Georgia and Azerbaijan. But Uzbekistan asked it to vacate the crucial Karshi-Khanabad (K2) base after the failed Andijan riots. President Islam Karimov was warned by ousted Georgian leader Eduard Shevardnadze against American financier George Soros and West-funded NGOs; he promptly expelled the Open Society Institute, stifled other NGOs, and courted Russian President Putin. A gas deal with Russia's Gazprom is expected to affect America's hydrocarbon pipeline over Afghanistan to the Arabian Sea. Karimov has invited India to share an energy partnership along with Russia and China, a move that makes profound geo-political sense.

Meanwhile, the Shanghai Cooperation Organisation (SCO) is pressing America to wind up its bases in Central Asia, especially as heightened tensions with Iran raise fears of another regional misadventure. Kazakhstan, which has enormous hydrocarbon resources, is also upset with President Bush, and even allies like Kyrgyzstan and Tajikistan favour a security relationship with Russia. Tajikistan made the Russian military base there permanent after President Putin's visit in October 2004, while Russia has a base at Kant in Kyrgyzstan.

China is very proactive in the region. There is a thousand kilometre pipeline from Kazakhstan's central Karaganda region to Xinjiang, part of an ambitious three thousand kilometre link to the Caspian Sea. China has also invested heavily in Russia's energy sector, especially Siberia's coal and oil. It is active in Uzbekistan, Tajikistan and Kyrgyzstan.

Experts opine that Russia is leading the attempt to marginalise Western multinational oil companies. The move strikes a chord because the White House is dominated by a cartel of the oil and gas industry and some banker-financiers, and the oil-rich nations of Central Asia, the Gulf and Latin America prefer joint ventures with State enterprises rather than these rapacious multinationals. Thus, a very basic economic nationalism drives their tilt towards Russia and China. The West, used to more than a century of de facto imperialism in the oil and gas sector, finds itself on a sticky wicket.

The new oil-and-gas producer States and the key consumer Asian economies (China, India) are joining hands to forge State-to-State joint ventures and arrive at strategic energy security. Analysts say this could eventually diminish the role and status of OPEC in future. Russian leaders had cleverly positioned the Russian Federation to take advantage of global energy trends, and is now emerging as natural leader of the world's key producing and consuming powers.

Washington facilitated this process by its unacceptable oil greed in Iraq. In a path-breaking work, "The Bush Agenda: Invading the World, One Economy at a Time," Antonia Juhasz exposes the US corporate invasion of Iraq. So far, 150 US corporations have received a staggering $50 billion worth of contracts for the failed reconstruction of Iraq, even as a new oil law has opened the oil sector to private foreign corporate investment.

Copyright © 2006 Nick Anderson, Houston Chronicle

Under the Geneva Convention, it is completely illegal for an occupying power to change the laws or political structure of the occupied country. Yet the United Nations and the international community have been idle bystanders as the Bush Administration has changed all basic economic and political laws, while totally failing in the primary task of providing for the security and basic needs of the Iraqi people. Thus, as many as 30 oil contracts signed by President Saddam Hussein with oil companies from all around the world, except the US, were simply cancelled. Iraq oil is now being guzzled by Chevron, Exxon and Marathon. And when you consider that some geologists believe that Iraq's oil reserves are larger or at par with those of Saudi Arabia, you can envisage a very slow American pullout from the region. No wonder the Central Asian nations with American military bases are no longer keen to play host to Uncle Sam.

America's obduracy has reinforced the global preference for State-to-State long-term agreements and contracts which serve the energy-security interests of nations, rather than private corporate entities. Russia's domination of oil and gas flowing to the West has helped it re-emerge as a global power in concert with its strategic partners. And, surprising as it may seem, Washington lacks the global leverage to refashion events in its favour.

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