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The · Psychohistorian

Georgia and Russia, two months later

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As usual, the conflict in Georgia fell off the front page soon after the shooting stopped. That conflict, though, was far from over. Indeed, only the opening had been played.

That opening left Russia in control of South Ossetia, and in stronger control of Abkhazeti than before. It also left them in control of Gori in central Georgia and Poti, Georgia's main port. Medvedev, Russia's president, had signed a treaty brokered by Sarkozy, the president of the E.U., promising to withdraw to within a few miles of the borders of South Ossetia and Abkhazeti, and thence to prewar positions when unspecified peacekeepers were in place, but the treaty had been signed before the Russian army's advance into Poti and had not prevented that advance. Putin, Russia's prime minister and former president, had basically ignored the treaty, as had the Russian army, and Medvedev's statements vacillated between Putin's hard line and assurances that Russia intended to honor its treaty.

The Russians had reason to believe they had a strong position. Only very limited U.S. forces were available in the area. The E.U. has no significant military forces, and is dependent on Russia for oil; their opposition to the Russian action seems to have been discounted by the Russians as a front for American policy. No other major powers have any influence in the area at all.

And yet, something happened that forced Russia to reconsider.

What happened was that the Russian stock market fell by a third. The reason for that is interesting. Basically, with uncertainty about whether Russia was going to revert to Soviet cold war policies, European investors pulled out. That, in turn, caused a financial collapse in Russia, because Russia's domestic financial markets have been subject to so much political interference that nobody participates in them.

Suddenly Russia had to pay attention to Europe again. Perhaps it also became clear to Russia that Europe was not just a front for the U.S., but is an independent player. That meant that Russia needed to take Medvedev's peace treaty - nominally with Georgia, but negotiated by the E.U. - seriously. And Medvedev's position was strengthened by the fact that the political interference that had so hobbled Russia's domestic financial markets was political interference that had been done by Putin, not by Medvedev.

So, Putin shut up. Russia dropped their insistence on a monitoring force over which they would have some control, and accepted an E.U. monitoring force. Russian forces withdrew from Gori and Poti, and largely retreated to within the borders of Abkhazeti and South Ossetia.

The game isn't over yet; Russian forces have yet to withdraw to their prewar positions, and Georgian forces certainly haven't advanced back to their prewar positions. Meanwhile, Russia is trying to strengthen diplomatic ties with Armenia, on the other side of Georgia. However, there are signs that Russia is moving away from it's initial Soviet style tactics to a policy of greater engagement and diplomacy. That's at least a small step in the right direction.
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