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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Jon Koplik who wrote (1071)10/29/1999 12:45:00 AM
From: CIMA   of 1301
 
Russia Pressures Georgia

Summary:

Russian border guards, withdrawing from offices in the Georgian
capital Tbilisi, left behind a little present - an anti-personnel
mine. The Russian gesture is a small example of a much broader
concerted campaign by Russia to reassert its influence over Georgia
and the rest of the Caucasus region. Russia must reassert control
over the southern Caucasus in order to ensure its continued control
over the northern Caucasus and continued influence over Central
Asian resources. The current Georgian government is an obstacle to
Russia's goals - an obstacle Moscow is now committed to removing.

Analysis:

The headquarters of the Republic of Georgia's State Border Guard
Department was evacuated Oct. 27 when what media described as an
"anti-personnel cluster land mine" was discovered in an office
previously occupied by Russian troops. The incident marred
ceremonies commemorating the withdrawal of Russian border guards
from the building, part of an overall withdrawal of Russian border
guards from Georgia. Georgian border guards commander Lt. Gen.
Valery Chkheidze charged that Russian officers refusing to accept
that Russia had lost another "colony," masterminded the incident.

But while Chkheidze framed the incident as a petty reprisal, the
mine incident and other Russian moves against Georgia are better
interpreted as a campaign to recover its lost colony. Russia's
departing gift was just a small example of the increasing pressure
Moscow is exerting on Tbilisi.

In Dagestan and Chechnya, Russia has finally set out to reverse its
national retreat. But Russia cannot regain lasting control of the
northern Caucasus without the cooperation of the southern Caucasus,
and Georgia and Azerbaijan have been anything but cooperative.
Moscow has accused both countries of assisting the Chechen rebels
by providing a conduit for the movement of people and supplies.

Georgia and Azerbaijan have also made clear their desire for
membership in Western European political, economic and military
organizations, including NATO. In an Oct. 25 interview with the
Financial Times, Georgian President Eduard Shevardnadze stated his
intention to "knock loudly on NATO's door" within five years.
Georgia and Azerbaijan are already members - along with Ukraine,
Uzbekistan and Moldova - of the decidedly pro-Western GUUAM group,
which has grown from an economic alliance to include security
cooperation.

Part of that cooperation is already evident in the joint force
established to defend the new Baku-Supsa pipeline from Azerbaijan
to the Black Sea coast of Georgia. The pipeline and plans for
others like it add to Russia's motivation to reassert its
influence. The explicit purpose of the Baku-Supsa pipeline and the
planned Baku-Ceyhan pipeline through Georgia to Turkey is to create
a route for oil from Central Asian countries outside the control of
Moscow - posing both an economic and strategic threat to Russia.

Therefore, in conjunction with its campaign in Chechnya, Russia has
begun to increase pressure on Georgia. This pressure currently
takes three main forms: threatening military intervention on
Georgia's border with Chechnya; backing Georgia's three separatist
regions, Abkhazia, South Ossetia and Ajaria; and finally,
supporting the major Georgian opposition party.

First, Russia has explicitly warned Georgia to cease its support
for the separatist Chechen government and its armed forces. Russia
insisted that, if Georgia does not seal off the 80-km border it
shares with Chechnya, Russia will. In an Oct. 26 interview with
Moskovsky Komsomolets, Lt. Gen. Gennady Troshev, leader of Russian
troops in Chechnya, said Russia would "slam shut" the border in an
upcoming operation.

Moscow charges that not only has Georgia provided safe haven and
free transit for Chechens in the past, but that hundreds of Chechen
guerrillas have mingled with the refugees fleeing into Georgia and
are now massing in Georgian territory. Former Georgian Defense
Minister Tengiz Kitovani confirmed the Russian accusations,
claiming Oct. 27 that more than 450 armed Chechens were massing in
the village of Birkiani, in the Akhmeta district, near the border
with Dagestan.

Georgia's Border Guards Department vehemently denied the charges.
President Shevardnadze also denied that Georgia allows armed
Chechens to transit its territory, but refused to close the border
to refugees. If there is any truth to the Birkiani story, Georgia
could see a repeat of the Omalo incident, where Russian aircraft
"accidentally" bombed a Georgian village en-route to targets in
Dagestan.

On a second front, Russia is exploiting its influence in the
separatist regions of Georgia. In late September, Russia abrogated
a bilateral agreement and opened its border with the breakaway
region of Abkhazia, providing economic and military opportunities
for the region. [ stratfor.com ]
Though it temporarily resealed the border in October, Russia
reopened it Oct. 26. Abkhazian leader Vladislav Ardzinba stated his
intention to ally with Russia against Georgia and its NATO
aspirations. Abkhazia has also reportedly begun taking over
facilities and equipment left behind by withdrawing Russian border
guards - items that technically should have become the property of
the Georgian border guard service.

South Ossetia has also demonstrated an affinity for Russia.
President Lyudvig Chibirov told Georgia's Prime-News on Oct. 25
that the region's government fully supported the Russian campaign
against "terrorists" in Chechnya. Chibirov said Russian Prime
Minister Vladimir Putin is "on the right track." Chibirov called
Putin a "businesslike person," who would likely contribute to the
economic recovery of South Ossetia.

Russian border guards also reportedly left behind artillery in the
separatist region of Ajaria that has since been taken over by that
region's government. Ajaria has been Georgia's greatest bane
recently, withholding taxes from the federal government and
refusing to allow representatives of the ruling party into the
region. Ajarian police also reportedly confiscated and destroyed
ruling party campaign materials for the Oct. 31 parliamentary
election.

The third part of Russia's campaign in Georgia is concentrated on
the upcoming election. Shevardnadze alleged that Russia is
financing the opposition Union of Georgia's Democratic Revival,
which is headed by Ajarian leader Aslan Abashidze. Abashidze is
widely seen as pro-Russian, and has supported the Abkhazian
government against the Georgian government. Shevardnadze describes
the opposition campaign as an attempt to stage a parliamentary coup
- not by force of arms, but by bribery, blackmail and threats. The
goal, argued Shevardnadze, is to take control of Parliament and
subsequently undermine and overthrow the president.

Shevardnadze's accusations are likely more than mere campaign
rhetoric: Moscow previously stated its intent to support pro-
Russian officials and candidates in the Ukrainian election. In
fact, the Russian military commander in the Ajarian capital of
Batumi, Maj. Gen. Vyacheslav Borisov, publicly declared that the
opposition Democratic Revival groups would not only win the
election, but would proceed to sign a treaty allowing Russia to
maintain bases in Georgia for 25-30 years. Georgian officials
condemned Borisov's statement as gross interference by Russia in
internal affairs and declared the general persona non grata in the
country.

Russia has Tbilisi in a difficult position. Georgia's separatist
regions are allying with Russia, the major opposition party is
Russian-backed and Russia has threatened a combat operation to seal
off Georgia's border with Chechnya. The assassination and hostage
crisis in Armenia Oct. 27 only intensifies this pressure. Russia's
main ally in the southern Caucasus, Armenia, is now politically
destabilized, and has already appealed to Russia for help. The
Russian Federal Security Service's elite Alpha commando unit was
deployed to Yerevan Oct. 28, and the pro-Russian Armenian military
has issued a public warning to the government that it will not
stand idly by while the country's security is threatened.
[ stratfor.com ]

In response to events in Chechnya and Armenia, Georgia's State
Border Guard Department announced Oct. 28 that it had doubled the
number of troops and mobilized all officers along the Armenian
border. And although Georgia has tightened control over its border
with Azerbaijan, the effort comes as too little, too late. Closing
off the Armenian border will not keep Russian influence out of
Georgia.

Russia has launched a full campaign to reassert control over the
southern Caucasus, and NATO is nowhere near riding to the rescue.
Armenia and Georgia are only a foretaste of Russia's strategy for
recovery of its lost empire. The campaign does not require Russian
armies to roll against its now independent former satellites.
Rather, Russia stands ready to bolster its allies in the region and
to exploit crises as they arise - or as they are created. The
strategy is in place in Georgia and Armenia. Azerbaijan can only be
next.

(c) 1999, Stratfor, Inc.
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