Caucasus

While my special interests are laying in Balkans I keep an eye on Northern Black Sea - Caucasus, Ukraine and Bessarabia.Events there sure have their impact also in Balkans – if not direct so at least through their geopolitical, security or economical consequences.Today’s Caucasus with its surrounding regions is a frontline of power politics where U.S. and Russia are searching the limits of their sphere of influence.EU – without vision, strategy nor independent will and muscle – is trying preserve some foothold there as well its member states more or less depending their history, interests and priorities.

Last year was highlighted by conflict in Georgia.Separatist regions around the globe had waited Kosovo’s unilateral declaration of independence (UDI). Throwing international law to garbage western powers showed that independence gained by violence could be possible and even acceptable; South Ossetia and Abkhazia implemented their project first with help of Russia who following U.S. example could get rid rebuff of UNSC.

An other battlefield was and still is energy.Last year’s highlight was Gas crisis which had its effect also in most parts in Europe.Few months ago an agreement was made between Russia and Ukraine;my estimation is that if not even this weekend then later this year conflict is back.

What’s up 2009

Since Georgia is now parcelled up as frozen conflict I expect this year some interesting developments especially in Moldova and Ukraine if we speak about states.Speaking about issues related to the whole Caucasus – energy is the top one and it includes much more than only gas transit via Ukraina.Besides energy giants also U.S. military-industrial complex has some interests in region and with Nato’s helping hand some tensions could be provided to secure company profits also during recession period.

Moldova

In 1992 Moldova and Transdnistria aka Pridnestrovie fought a brief, bitter war which the separatists won, with the assistance of a contingent of locally-based Russian troops left over from the Soviet Red Army. Cease fire left Russian troops in place as peacekeepers and Transdnistria has since then acted de facto as independent - although not recognized – state.Conflict was frozen nearly ten years, then started first serious try to find sustainable solution. In the Spring 2003 Dimitry Kozakin – a special envoy of Russian President Putin – started to broke deal between local stakeholders. His plan known as “Kozak plan” was ready and preliminary agreed to sign on November 2003 but western powers put some pressure towards Moldova and everything was cancelled by President Voronin’s rejection.

2004-2008 “outsiders” like U.S., EU, OSCE as well Ukraine and Russia made some attempts to launch new negotiation process but without success. (More in my article “Transdnistrian numbergame”)

It will be seen this year if the “Kozak plan” still is valid for further examination, if yes, it will consolidate Moldova’s neutral position as the plan included the change of the Moldovan state’s structure – creation of the federation where Transdnistria and Gagauzia would be granted extensive rights including the right to block the undesirable bills.Moldova will have general elections on Spring 2009 so of course it is possible that the state can take new course e.g. towards Western Powers. In that case Russia might be more inclined to formally recognize Pridnestrovie’s separation from Moldova.

Ukraine

On October 25th 2008, in Mukachevo, the 2nd European Congress of Transcarpathian Rusyns took place; decision on declaration of "Rusyn statehood" and "reconstruction of republic of Subcarpathian Rus", proclaimed in 1938, was accepted there. A meeting demanding to recognize this republic was held at the building of Mukachevo City Council. (AXIS 30.10.2008) The Office of Public Prosecutor of the Transcarpathian area has brought a case against leaders of Rusyns organizations on suspicion in attempt against territorial integrity and inviolability of Ukraine.

Besides such a criminal case has been brought in the Crimea regarding ” The Popular front Sevastopol-Crimea-Russia” which was created in August, 2005, and unites 12 public associations of the peninsula. Investigation is going on of its activity in connection with the "appeals to revision of territorial integrity of Ukraine" and similar case will be also in Donetsk republic.

SBU also considers necessary to expand powers of law enforcement bodies to more efficiently counteract to distribution of radical Muslim religious currents in the Crimea, Ukraine’s security services have also detained some mujahedeen who were going to Russia with an aim of recruitment of group of radical Islam fighters.

According the Security Service of Ukraine (SBU), separatist organizations in Ukraine do not possess serious threat for security of the country.As concerns the scale of the threat – these organizations are small and moreover, as a matter of fact, they are established from abroad and with external financing.

SBU’s estimation about importance of separatist movements is probably right, but I see the big divide between NW Ukraine – dominated by sc. Orange revolution parties and SE Ukraine – dominated by pro-Russian Viktor Yanukovich’s the Party of Regions.While ruling “Orange” coalition is seriously divided the pro-Russian opposition can win or lead ruling alliance in future, reconstruct better relations with Russia and minimize the impact of old parties of Orange revolution. So coming elections in Ukraine will decide if this huge country is seeking alliance more from Nato/EU or Russia and will the divine be so big that the whole country will split.

According economic terms Ukraine is already practically bankrupt. Grimly forecast is that Kiev will not be able to pay its next instalment for Russian gas deliveries in coming days so triggering a new cut-off. Even if this particular payment is averted, there is still next one coming on April.

Energy game

After “Cold War” US has all the while expanded its influence post-Soviet territory with aim to guide those region’s natural resources under US companies.  As stakes have been control over the oil and gas of the Caspian Sea/Black Sea/Caucasus basin, and the control of multiple key energy pipelines criss-crossing the region.  Economical interests have been linked to political game e.g. Nato enlargement.  While EU has been more bystander Russia has during last couple of years weight down the scale in favour of its own interests by series of successful operations.

GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group was founded 1999 with help of US to foster favourable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor.  GUUAM was dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically.From its part GUUAM was designed to support sc. Silk Road Strategy Act – adopted by US Congress March 1999 - which outlines a framework for the development of America’s business empire through development of an Europe-Caucasus-Asia transport corridor.

Now GUUAM is coming to end of its short road.  Already earlier Uzbekistan withdraws from it leaving behind a stump GUAM.  Then Georgia started its aggressions with false idea of western support leading today’s situation. Moldova was aiming towards Nato and EU but after conflict in Georgia it started to look other alternatives.  Political attitudes of Azerbaijan and Russia have approached each other.  Russia again took the initiative acting as a mediator between Armenia and Azerbaijan to solve long term conflict of Nagorno-Karabakh. The last piece of GUUAM is Ukraine and also this last fortress has degenerated to stagnation.

The latest gas dispute made it clear that Ukraine is not reliable transmitter of Russian gas to Europe. This boosts EU’s Nabucco –plan to new level. The same is true also with Russia’s South Stream, Nord Pipe and plans to increase more Liquefied natural gas (LNG) production and transport facilities. When impleneted – probably until 2015 – the new line(s) are invalidating the significance of Ukraine as transit route of energy.

Individual countries in Balkans and central Europe are considering their positions between those two projects; some have already made their selection like Serbia who allied with South Stream. Romania is open to investing in the Gazprom pipeline South Stream, not just the EU Nabucco project, designed to reduce energy dependency on Russia, Romanian minister of economy Varujan Vosganian said on October 2008, contrary to the president's statements. "Romania is ready to support any EU project, both Nabucco and South Stream," the liberal minister, whose party is at odds with the country's conservative President Traian Basescu, said, newswires report.

EU

The EU Commission has called on EU nations to provide more aid for Ukraine and four other ex-Soviet states as part of a proposed "Eastern Partnership" program aimed at making the bloc's Eastern doorstep more stable. The new policy, to be launched at an EU summit in Prague in May, is designed to help Ukraine, Moldova, Georgia, Armenia and Azerbaijan come closer to the EU. Belarus may also be involved, if it resists Russian pressure to recognise Georgian rebels in Abkhazia and South Ossetia as independent states.

EU has said to have a "crucial strategic interest" in Northern Black Sea region. Unveiled by the European Commission last December, the "Eastern Partnership" foresees granting some 350 million euros ($448 million) in extra help between now and 2013 to the EU's ex-Soviet neighbors.Negotiations about implementation of plan are still ongoing. Some EU member states have expressed reservations about the proposal.France, which pushed the EU's Mediterranean Union project last year, is reported to fear that increasing funding to the bloc's eastern neighbors would shift the EU's strategic focus away from North Africa and the Middle East.

The plan aims to promote economic and political stability in the countries and reduce Russia's influence in the region. It includes free trade agreements, visa waivers, financial aid and economic integration with the EU.In return, the eastern neighbors are expected to step up progress toward economic modernization, democracy, the rule of law and human rights. The "Eastern partnership" scheme is planned to be approved this Spring and launched in May if everything goes without further delay.

Eastern Partnership is interesting also from an othet reason.With EPp its possible to test sc „Third Way“ for EU allies those are not coming EU member-states in near future.If the outcome is promising so it could be applied with Turkey to avoid its membership.

Other topics

With new leadership in U.S. it is of course possible that the new “Détente” starts between Russia and U.S.This probably would increase the possibilities to find some kind of peaceful cooperation between Iran and western block to avoid bombing this old civilization back to stone age.Elections in Iran can support this outcome.

The Gas Exporting Countries Forum (GECF), organization of world`s leading gas producers, was established in Tehran in 2001 to foster the concept of a gas cartel. Yet it does not have same organizational level as OPEC but some developments can take place. Last Autumn Russia, Iran and Qatar have taken the decision to form a “big gas troika”. ...The idea is that the three countries will work on joint projects across the entire gas chain from geological exploration and production to distribution and marketing of gas.  This cooperation combination could come remarkable player in Middle East politics too.

More articles about issues above one may find from my BalkanBlog!

After years of deadlock year 2008 showed some promising signs of progress with dispute between Moldova and Transdnistria/Pridnestrovie – its separatist region or independent state depending of viewpoint. After a 7-year long pause the leaders of Moldova and Transdnistria met on April 2008, conflict in Georgia launched new process while Russia took a stronger role as mediator. The culmination of year was meeting between President Voronin/Moldova and President Smirnov/Transdnistria on Xmas week. Short history

In 1992 Moldova and Transdnistria fought a brief, bitter war which the separatists won, with the assistance of a contingent of locally-based Russian troops left over from the Soviet Red Army. Cease fire left Russian troops in place as peacekeepers and Transdnistria has since then acted de facto as independent - although not recognized – state.

Conflict was frozen nearly ten years, then started first serious try to find sustainable solution. In the Spring 2003 Dimitry Kozakin – a special envoy of Russian President Putin – started to broke deal between local stakeholders. His plan knownas “Kozak plan” was ready and preliminary agreed to sign on November 2003 but western powers put some pressure towards Moldova and everything was by President Voronin’s rejection.

2004-2008 “outsiders” like U.S., EU, OSCE as well Ukraine and Russia made some attempts to launch new negotiation process but without success. (More in my article “…''numbergame'' …” .

2008

The mediators and observers in the so called "5+2" process - Russia, Ukraine, the OSCE, the EU, and the US - continue to call regularly for resumption of the negotiations. However, a full-scale negotiating round scheduled for October 7-8 in Vienna failed to materialize.

Russian Foreign Minister Sergei Lavrov brokered a one on one meeting between Voronin and Smirnov in April 2008; the two had not met in person since August 2001. Shortly after his Sochi conversation with Voronin, Medvedev also received Smirnov.

Kozak plan was still on the background but Transdnistria stresses that at present Transdnistria sees the improving of the relations with Moldova within the Treaty “On Friendship and Cooperation between the Republic of Moldova and the Transdnistrian Moldovan Republic” as two international legal entities. The treaty was proposed at the April meeting.

As events in Kosovo and Georgia developed in 2008, Moldova took more moderate position as e.g. Georgia. Moldova did not recognize Kosovo, declared itself a neutral country and announced that it had no need to seek NATO membership. Russia from its side has not recognized Transdnistrian independence.

Xmas

Before Xmas meeting President Voronin said that the most essential questions for the present moment were: to resume talks in the 5+2 format, to set in motion the work of the Moldovan and Transdnistrian expert groups; and to create proper conditions for a free movement of people, goods and capitals.

President Voronin asked his Transdnistrian colleague to set a date for talks in the said format, but Smirnov refused to, saying that there are yet many problems that need to be solved prior to that. In his turn, Vladimir Voronin remarked that the negotiations are necessary for "reintegration and reunification of the country, and this is our chief task", on which Smirnov agreed that "really, this is your task... As for me, I am fulfilling the will the Transnistrian people spoke out at the 2006 referendum on Transnistria's independence... We have never been a part of your country".

Transdnistrian leader Smirnov offered Moldovan President Voronin to fix legislatively a status for Russian peacekeepers, who he believes should remain in the conflict zone until the conflict has been finally settled.

Voronin and Smirnov nevertheless proceeded with their conversation, but they were unable to agree upon the 5+2 negotiations resumption. However they reached an agreement on continuing consultations on Transdnistrian conflict settlement in a format of 2+1 - between Moldova, Transnistria and Russia. The two officials have agreed to meet next in March 2009 and some expert groups are trying to solve minor and technical questions. (Source INFOTAG and MOLDPRES, Dec. 24.)

Some remarks

The bottom line in my view anyway is that there has been gradual progress with meetings of local stakeholders – without talks it hard to agree anything. Some other topics are also worth to watch for in 2009:

• In western media there has been exaggeration of Russian military presence in Transdnistria. However Russian troops now stationed in the Transdnistrian region (around 1400) is no match in military terms for either the Moldovan or the Transdnistrian armed forces. Including their armies, special forces, militia, interior ministry and security troops, both Chisinau and Tiraspol can muster between 12000 to 18000 men under arms. So Moscow will probably use political not military means for finding solution to this frozen conflict.
• It will be seen this year if the “Kozak plan” still is valid for further examination, if yes, it will consolidate Moldova’s neutral position as the plan included the change of the Moldovan state’s structure – creation of the federation where Transdnistria and Gagauzia would be granted extensive rights including the right to block the undesirable bills.
• Moldova will have general elections on Spring 2009 so of course it is possible that the state can take new course e.g. towards Western Powers. In that case Russia might be more inclined to formally recognize Pridnestrovie's separation from Moldova.

More my articles in BalkanBlog

Today (2nd Dec. 2008) the Foreign Ministers of Nato have decided during their "transatlantic dinner" that Ukraine and Georgia will not get the NATO Membership Action Plan (MAP). US, Poland and Baltic States were supporting MAP for both states however "the old" continental Europe was against.

The background is of course recent conflict in Georgia, turmoil in domestic politics in Ukraine. Besides according polling the majority of population in Ukraine is against Nato membership.

Nato's position to both issues above will determine the outcome of OSCE meeting on 4.-5. Dec. in Helsinki, where some 40-50 Foreign ministers - US and Russia included - will take part. The outcome can be nothing at worst but at at best it can lead through summit at presidential level to new dialogue between great powers with change to even start policy of détente again. When Nato now has put "soft" stop for Ukraina's and Georgia's Nato dreams it is also possible to find more or less positive answer to Russia's initiative over new European security proposal.

The decision makes it possible to restart dialogue between USA and Russia. It remains to see whether there will be any common position in EU about cooperation with Russia. However some base for development of international relations has now made and further progress could be achieved during OSCE meeting this week - 4.5.12.2008 - in Helsinki, where some 40-50 Foreign ministers will take part. The outcome can be nothing at worst but at at best it can lead through summit at presidential level to new dialogue between great powers with change to even start policy of détente again. It remains to see whether there will be any common position in EU about cooperation with Russia.

More my views over Balkans and Caucasus one may find from my Archives:Blog

Ari Rusila

International affairs

EU summit meeting o 14th Nov. 2008 with Russia in France is designed to reopen talks on a pact of cooperation after the crisis in relations caused by the Georgia conflict on August 2008. Before meeting hard words have been changed over Kaliningrad missiles, Nato radars and EU/OSCE monitors in Georgia. However the core question can be the energy game. A day before summit EU came out with its supergrid plan and Russia questioning Baltic Pipe. Southern energy corridor is an other battleground.

Power supergrid plan

EU’s Power supergrid plan is partly designed to decrease EU’s dependence about Russian gas. The Timesonline got look about plan and describes it as follows (Source: Timesonline):

The building blocks of the proposed supergrid would be new cables linking North Sea wind farms, and a network patching together the disparate electricity grids of the Baltic region and the countries bordering the Mediterranean, according to a blueprint drawn up by the European Commission. EU states will also be asked to pay for at least two ambitious gas pipelines to bring in supplies from Central Asia and Africa. The plans also call for a Community Gas Ring, or a network allowing EU countries to share supplies if Russia turns off the taps.

The EU Energy Security Plan notes that Europe imports 61 per cent of its gas, a figure projected to rise to 73 per cent by 2020. Russia sells about two-fifths of the total, including the entire supply of several countries.

How the supergrid will work is described in graphic europesupergrid2(Source Timesonline)

Same time in South…

One part of energy game is the southern energy corridor. During 2008 Russia has put also the southern corridor pipeline in doubts. Gazprom has override “Nabucco” with its rival “SouthStream” project. Same time GUUAM Group in Caucasus – cooperation body supported by US energy giants and military-industrial-complex - is breaking up as well rest of US “Silk Road Strategy”. (More about this in my previous artcles ”War on pipes” 9/9/2008 and “Is GUUAM dead” 4/11/2008 from my Archives:Blog)

…and in North

Also a day before Russian Prime Minister Vladimir Putin has questioned the construction of the Nord Stream pipeline for the first time since the signing of the agreement with Germany to establish the gas delivery network, as gas is set to become cheaper along with the drop in oil prices.

"Europe must decide whether it needs this pipeline or not," Mr Putin told Finnish Prime Minister Matti Vanhanen on Wednesday (12 November) at a meeting in Moscow. "If you don't, we will build liquefaction plants and send gas to world markets, including to European markets. But it will be simply more expensive for you," he added.

The Baltic states and Poland strongly oppose the project, concerned they would be cut off from existing gas infrastructure with Russia, as Moscow would probably channel most of the gas deliveries through the direct pipeline to Germany. Sweden also opposes the project due to environmental concerns, echoed by MEPs, who have called for a new investigation into the pipeline's impact on the environment. Finland, one of several EU states that has a say in approving the project, will conduct an environmental review of the plan next year, Mr Vanhanen said after the meeting with his Russian counterpart on Wednesday. (Source EUobserver.com)

So for Baltic states and Poland Nord Stream is more political and partly economical question, for Germany mainly economical topic and for Sweden and Finland mostly environmental question.

The bottom line

It is interesting to see how the power game will be developing. How big share gas, oil and wind will claim from energy markets? Where the pipes will be? How environmental and economical aspects will match with political aims? The game is still open.

More my articles one may find from my BalkanBlog

The future status of Transdnistria – or Pridnestrovie - is again, inspired maybe the events in Georgia on August 2008, coming to negotiation tables. With local stakeholders there is some readiness to discuss further to solve this frozen conflict, however the outsiders are twisting arms about formalities. What is the content of number games 5, 5+2, 3+2, 2+1 is also designing the outcome - e.g. alternative solutions - of negotiations.

In 1992, the Moldovan government engaged in a short war with authorities in Transdnistria. Hostlities ended after a Russian military intervention by the then Russian 14th army stationered in Transdnistria. Since then Transdnistria has de facto been on its own like independent state.

The original 5

The format created after war was 5, which always consisted of the five “full” participants:

• Moldova and Transdnistria as the parties to the conflict;
• Ukraine and Russia as mediators and also guarantor states, guaranteeing to both parties to the conflict the fulfilment and respect of (and enforcement of) whatever negotiated outcome the talks could bring; and
• OSCE as joint mediator, alongside fellow mediators Russia and Ukraine.

2+1 = Kozak plan

In the spring of 2003, Russian President Vladimir Putin had named Dmitri Kozak — at that time the deputy head of his presidential administration — as his special envoy to Moldova. His task was clear - to find a solution to the frozen conflict that had emerged in 1992. Thanks to compromises brokered by him, Moldova and Transdniestria found common ground for agreement know as “Kozak plan” or Kozak memorandum.

The Basic Principles laid out in this document was about the unitary, democratic, demilitarized and neutral character of the state. The federal state had to have 2 sub-entities, PMR and the Gagauz autonomy, with their own recognized local government structures, anthems and flags.

Kozak plan was initialed page by page by both Moldova's President Vladimir Voronin and Transdniestria's President Igor Smirnov. The idea was that on 25 November 2003, the thenRussian President Vladimir Putin scheduled a surprising visit to Moldova to witness the signing of a federalization document as the solution to the conflict.

The visit was canceled by President Voronin’s last minute rejection. Moldova nixed the “Kozak plan” within hours of its planned signing as the result of pressure by hardliners in the West: The Moldovan President was informed by the then OSCE Dutch chairman Jaap de Hoop Scheffer, the U.S. Ambassador to Moldova Heather Hodges and the EU Council Secretary General Javier Solana about opposition that Washington and Bruxelles had concerning the mutually agreed-upon settlement plan between the two sides.

5+2 is not 7

The two sides were then at starting point without any settlement. Transdniestria continued to act like a sovereign independent state under the name of PMR (Pridnestrovskaaia Moldavskaia Respublica). Moldova had rejected the only viable plan that both sides could conceivably agree on.

With this background the “5″-format became “5+2″ in 2005, when the European Union and the USA joined the table. They joined as mere observers, a role which they still have today. They are the “2″ add-on’s and the reason why the 5 didn’t become the 7 when they were added: Because they are not full fledged participants but are merely there to watch and, at most, give suggestions and constructive advice if asked. Some times there is also 3+2 format meetings including representatives of the mediators - the Russian Federation, Ukraine and the OSCE - as well as the European Union and the United States as observers.

1+2 = Kozak plan II

August 2008 was the turning point in negotiation process. Conflict in Georgia was in background when Russian President Medvedev first held talks with Moldova’s President Voronin in Sotchi on August 25th and later with Transdnistria’s leader Smirnov on September 3rd. 5+2 format was replaced with 1+2 format including Moscow as mediator, Chisinau and Tiraspol as the parties of conflict.

The basic elements of new deal are probably similar like in Kozak plan I. The price of reunion will be high to Moldova because probably federation form with strong minority or veto rules would neutralize Moldova’s foreign policy related integration towards EU and Nato.

Higher price for Moldova could be even stronger sovereignty of Transdnistria with thread that also other autonomous territory of Moldova – namely Gagauz region – would follow the steps of Transdnistria.

Negotiations are now ongoing and the aim is signing the conflict-settlement documents in a Medvedev-Voronin-Smirnov meeting soon. One part of time frame is the fact that reunifying Transdnistria with Moldova could bring the win to Moldova’s current leadership in general elections in the Spring 2009.

Progress in sight 2008

Year 2008 has showed gradual progress to solve Transdnistria/Moldova conflict. However there is still the number game on table. From my point of view I always prefer bottom to top approach over opposite process. So if 1+2 format can bring a solution mutually acceptable to “conflicting parties” - i.e Moldova and Transdnistria – it should be legitimate.

EU and US are of course not pleased about today’s development and e.g. Kalman Mizsei – EU representative/Moldova – said that the approved international format of 5+2 should be followed, adding that the EU won’t accept any solution brokered outside this format. This can be seen a bitter statement of bystander but if outsiders can not facilitate constructively so let parties find solutions on their own.

The best outcome could be if a political settlement made directly in the 1+2 format by conflicting parties and Russia’s mediation would afterward be referred in 5+2 format for Western blessings so everybody could be officially happy.

More my articles over Balkans and Caucasus one may find from my Archives:Blog

Caucasus

Georgia 08/08/08 is the date when headlines in Western mainstream media started to tell how big, bad aggressive Russia attacked to tiny, democratic, good Georgia. After that the West continued accusations about occupation a free sovereign state started rethink enforcing its frontlines around Russian border in new cold war era. Al this despite the fact, that day earlier 7th August 2008 Georgia had started the moths before planned war against its separatist province (look my article “OSCE report fault Georgia - one trivial statement more from EU summit” 4th Sept.2008 from my [BlogArchive|). All this despite he fact, that USA had already showed the way how to break international law e.g. by bombing Kosovo and orchestrating the quasi-independence of that separatist province.

While speaking about new confrontation between East and West the (mostly western) political commentators have used first nice, warm words like freedom, democracy, sovereignty, humanitarian catastrophe to justify their planned harder actions to response Russia’s aggression. However if we scrub the soft spoke for dummies – sorry for public – we can find the hard reality and bigger game behind recent headlines of Caucasus or Balkan events. I try next to highlight few aspects with this power play.

Pipes

First element I would like to mention is energy. Georgia is part of a NATO military alliance (GUAM) signed in April 1999 at the very outset of the war on Yugoslavia. It also has a bilateral military cooperation agreement with the US. These underlying military agreements have served to protect Anglo-American oil interests in the Caspian Sea basin as well as pipeline routes. (The alliance was initially entitled GUUAM, Uzbekistan subsequently withdrew and the name was changed to GUAM: Georgia, Azerbaijan, Ukraine, and Moldova). More you may find from my article 9th Sep.2008 "War on Pipes: Transport corridors as core of US-Russia confrontation" where is write about GUUAM and SRS (Silk Road Strategy Act). Article one may find from my BlogArchive.

To reduce reliance on Persian Gulf oil, the Bush Administration has sought to strengthen relations with other non-OPEC, oil-rich countries. For example when (then) Defense Secretary Rumsfeld visited Kazakhstan, his main agenda was to promise security assistance for Kazakhstan's oil pipelines and facilities on the Caspian Sea, where an estimated 7-9 billion barrels of oil were recently discovered (the largest oil discovery anywhere in 30 years). Azerbaijan, Georgia, and Turkey recently signed a U.S.-backed deal to build an oil pipeline to bring that oil to ports on the Mediterranean. The U.S. has military ties with each.

U.S. oil demand is huge and increasing. Today, the U.S. has less than 5 percent of the world's population, yet it consumes more than 25 percent of global oil production-about 20 million barrels per day (mbd). Oil is the dominant fuel in the U.S. energy market, meeting almost 40 percent of total U.S. energy needs. Most of this is consumed by the transportation sector. If current U.S. oil demand trends continue, by 2025, the US. will be consuming over 29 mbd. More larger and heavier cars and trucks- with bigger engines, driven more miles each year- will account for most of this growth. All tolled, today, the world is consuming a little over 80 mbd (30 billion barrels per year). By 2030, global demand is expected to grow by 50 percent to 120 mbd (45 billion barrels per year).

After August events in Georgia everything did not happen according US plan. Russia could warm its relationship with Azerbaijan which was clearly to seen when Dick Cheney made his travel around Caucasia and came back empty hands. Also the situation in Ukraine developed away from US hopes. Paul Goble concludes in his “Window on Eurasia” Sep. 5th 2008 following: “With Iran’s declaration that it opposes the construction of any undersea pipelines in the Caspian on "ecological grounds" and thus will block any delimitation of the seabed that allows for them and Baku’s decision not to back the West’s push NABUCCO project, Moscow can claim its first major political victory from its invasion of Georgia.”(Source).

These actions mean that the Russian government will now have full and uncontested control over pipelines between the Caspian basin and the West which pass through Russian territory and will be able either directly or through its clients like the PKK to disrupt the only routes such as Baku-Tbilisi-Ceyhan that bypass the Russian Federation.

Military-industrial complex

Second let me mention "military-industrial complex". When Russia’s invading forces choked roads into Georgia with columns of armoured vehicles and struck targets from the air, it instantly bolstered the case being made by some that the Defence Department isn’t taking the threat from Russia and China seriously enough. It was said that "Christmas Comes Early For the Military Industrial Complex”.

The Military-industrial Complex has been one of the biggest players in US foreign policy since President Eisenhower. Details about Iraq killing Iranians with US-supplied chemical and biological weapons significantly deepens our understanding of the current hypocrisy. It began with "Iraq-gate" when US policy makers, financiers, arms-suppliers and makers, made massive profits from sales to Iraq of myriad chemical, biological, conventional weapons, and the equipment to make nuclear weapons. Reporter Russ Baker noted, for example, that, "on July 3, 1991, the Financial Times reported that a Florida company run by an Iraqi national had produced cyanide some of which went to Iraq for use in chemical weapons and had shipped it via a CIA contractor." This was just the tip of a mountain of scandals.

A PBS Frontline episode, "The Arming of Iraq" (1990) detailed much of the conventional and so-called "dual-use" weapons sold to Iraq. The public learned from other sources that at least since mid-1980s the US was selling chemical and biological material for weapons to Iraq and orchestrating private sales. These sales began soon after current Secretary of State, Donald Rumsfeld traveled to Baghdad in 1985 and met with Saddam Hussein as a private businessman on behalf of the Reagan administration. In the last major battle of the Iran-Iraq war, some 65,000 Iranians were killed, many by gas.

Coming back to present days one could easily find out how the US government borrows heavily to cover its off-the-charts defence spending—$587 billion this year. Spending in Iraq and Afghanistan is from 2.9 - 5.0 bn$ per week or 280.000 - 500.000 $ per minute.

The five largest American Defence contractors are Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. They are being followed by Honeywell, Halliburton, BAE Systems and thousands of smaller defence companies and subcontractors. Some, like Lockheed Martin in Bethesda (Maryland) and Raytheon in Waltham (Massachusetts) draw close to 100 percent of their business from defence contracts. Some others, like Honeywell in Morristown (New Jersey), have important consumer goods divisions. All, however, stand to profit when expenditures on weapons procurements increase. In fact, U.S. defence contractors have been enjoying big Pentagon budgets since March 2003, i.e. since the onset of the Iraq war. As a result, they have posted sizable increases in total shareholder returns, ranging from 68 percent (Northrop Grumman) to 164 percent (General Dynamics), from March '03 to September '06.

For war profiteers, soldiers returning maimed or in caskets, and an over $500 billion Pentagon budget paid for by the taxes of ordinary citizens, are externalities -- costs and consequences borne by others.

NATO became even more threatening to Russia because, at the same time, the alliance shifted its mission from defending the soil of member countries to offensive missions outside the treaty area - for example, bombing Bosnia, Kosovo, and Serbia.

The trend toward autocracy in Russia is maybe horrible for some Russian interest groups, but it is little threat to the United States. Even autocracies have legitimate security concerns, and Russia has been invaded several times through Eastern Europe, which is why the Russians are worried about a hostile alliance on its borders. Empirical evidence shows that authoritarian regimes aren't necessarily externally aggressive - for example, the dictators in Burma - and that democracies are no less belligerent than autocracies in their foreign policies. In fact, data show that the most aggressive nation on the planet after World War II has been the United States - not the Soviet Union - with more than 100 military or covert interventions in other countries.

If we make contrast to today’s’ financial turmoil one should remember following. Wall Street analysts concur that "war is good for business" particularly during a period of "economic slowdown". The top five U.S. defence contractors generated almost $129 billion in revenues and $8 billion in profits in 2006, double the revenue and profits in 2000 when George Bush became President. I bet that they want this to continue.

Lobbyists

Third there are lobbyists. Their business turnover is minimal compared two above mentioned elements but they are important glue between business and public affairs. Lobbyists can channel business money as donations or bribes to political figures or parties who then can facilitate the needs of donors.

In Georgia case most famous is Randy Scheuneman. Top McCain foreign policy advisor, Randy Scheuneman, was paid $200,000 recently by Georgia for consulting services, about one day before McCain issued a policy statement backing and emboldening the Republic of Georgia in its grab for disputed regions. And it now appears that McCain may have signalled that the US would essentially have Georgia's back if it tried to assert possession of the territories. Since 2004 Scheuneman got $900.000 from Georgia. Recently US promised over 1 bn$ taxpayers money to Georgia - god investment I must say, for Georgians.

In the mid-1990s at the stint of the Clinton administration the United States launched the process of involving “former Soviet satellite nations” into both the European Union and NATO with an eye at securing a more efficient control over their political activities. The rapid expansion of the North Atlantic alliance was a part of the strategy of a “new American age” worked out by R.Cheney and his team. In 1996, Bruce Jackson, one of Cheney’s close friends and a top manager of the military-industrial corporation “Lockheed–Martin” took the reins of the influential lobbyist organisation “American Committee on NATO Expansion”. Bruce Jackson was appointed as head of the US Committee on NATO by President Clinton and put in charge of integrating the Eastern European countries into NATO in spite of assurances that had been given to Soviet leader Mikhael Gorbachev that this would not be done. This integration involved selling US weapons systems to these countries so that they would be compatible with ours.

Lobbying can have also win-win effect to players. E.g. Bruce Jackson founded the Committee for the Liberation of Iraq in 2002, a few months after retiring from Lockheed Martin. One can image, as the war in Iraq grinds on at a cost of some $250-400 million per day, and another contractor-heavy organization, the Iran Policy Committee, calls for a pre-emptive strike against Iran, how US Foreign politics is guided.

The New Defence Agenda (NDA) is part of Brussels growing military-industrial complex. Set up in 2003, it is funded by arms producers Lockheed Martin and BAE Systems in order to promote higher European military spending. Others arms industry lobby groups include the European Association of Aerospace Industries (AECMA) and the European Defence Industries Group (EDIG). The arms industry is also using the Lisbon Agenda and competitiveness to argue their case for increasing the EU?s current defence spending of about 3 percent of GDP to the US level of 6 percent.

New and Old Europe

Discussing about transatlantic relationship with Russia I can see a triangle drama with "western" camp. US has found stalwart allies from "New Europe" Polish-Lithuanian tandem as its spearhead, who are serving as America's watchmen on Europe's periphery as well cannon fodder in demanding theatres. The tandem with some wingmen (Estonia, Latvia) have their role in expanding Western military ties to East Europe and checking Russia's energy grip on Europe.

We have "Old Europe" like Germany, Italy some cases Spain and France also, who are more interesting about strategic political and business partnership with Russia. Old Europe countries are also developing bilateral cooperation with Russia when they see its advantages.

While some "New Europe" countries still have some post-Soviet trauma, US is tied to her self-caused conflicts and "Old Europe" is wondering how the Union will look in future, it is demanding task to find a common approach to relationship with Russia. While Russia also considers its options I can only hope that some neutral forum for dialogue could be found.

Yes I hope that one or more forums can accommodate different dialogs. Europe schizophrenia will be cured either in some common forum or with two rail development where new and old Europe maybe are going with different speeds and maybe also different directions - the trauma symptoms maybe are similar in new and old Europe countries but the cause/motivations differ. Post-Soviet new ones maybe have more emotional cause for their actions, US maybe have more economical priorities as well some old EU states.

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While Russia now is backing independence of South Ossetia and Abkhazia the road which started from Kosovo UDI seems to continue long because it is estimated that there is about five thousand ethnic groups on globe. After Georgia's separatists my bet is that in Europe Transnistria could be the next breakaway province (maybe before Ukraine which I forecast to have separatist conflict on Spring 2009). Let's look this maybe next new state closer.

Pridnestrovie - also known by the unofficial name, Transnistria - is a new and emerging country in South Eastern Europe, sandwiched between Moldova and Ukraine. Although widely seen as part of Moldova, historically, Transnistria and Moldova were always separate. Throughout 2500 years of history, the Dniester River forming the current border has been a traditional border between Slav lands (Scythia, 450 B.C.) to the East and Romanian lands (Dacia) to the West.

The population is some 550.000. The inhabitants of Transnistria are for the most part Slavic. This is in stark contrast to Moldova, on the other side of the Dniester River, where 4/5ths of the population are of Romanian descent and where ethnic Russians and ethnic Ukrainians only make up 6 to 8 percent, respectively.

Statehood?

Transnistria meets the requirements for sovereign statehood under international law, as it has a defined territory, a population, effective elected authority, and the capability to enter into international relations. It is currently seeking international recognition of its de facto independence and statehood.

About requirements for sovereign statehood I have quite optimistic picture. I quote an analysis “The EU in Moldova – Settling conflicts in the neighbourhood” published by the European Union Institute for Security Studies:

"The secessionist authorities in Transnistria have managed to build a more or less functioning statelike entity. Transnistria has an organised political leadership, control over a defined territory and seeks international recognition."

Economy?

The economy of Transnistria is a mixed market-based economy. Following a large scale privatization process, most of the companies in the country are now privately owned. The economy is export-oriented and based on a mix of heavy industry and manufacturing. According to the latest data from the nation's Customs, Transnistria now trades with 99 foreign countries. By the region’s standards the separatist leadership has good base to claim that economically Transnistria is a functioning entity.

Let me compare Transnistria's economical base of Kosovo - which western Powers recognized some time ago. The export from Transnistria is over 500 m$ when Kosovo's export is some 70 m$ even when Kosovo has a population four times bigger than Transnistria. Also economical base of Transnistria is much more stronger including is a supplier of ferrous metal, machine-building products, light and food industry, electrical power, specialty construction materials and woodworking products. Transnistria is an important supplier of electrical cabling, winding wire, electric insulating material, explosion-proof engines, power transformers, AC generators, laminates and laminated bakelite insulations, molds for shoe production, and low-voltage electrical devices and pumps. Industrial output is dominated by export from manufacturing enterprises (around 90% between 1997-2002).

Since a reform-oriented program of privatizations begun in 2001-2002, more than 120 large companies have successfully been privatized.

Transnistria is exporting to nearly 100 countries. Italy, Germany and the United States are important export markets, nevertheless, the bulk of the production still goes to the geographically closer CIS countries. Other notable countries for Transnistria's foreign trade include Switzerland, Romania, Great Britain, Poland, Cyprus and Turkey. Just over forty international joint ventures operate in Transnistria. Partners include companies from Bulgaria, Canada, Hungary, Germany, Ireland, Poland, Russia, and Italy; employing nearly 6,000 people in total.

Trafficking?

There is lot of doubts about illicit trade, trafficking and smuggling related to Transnistria but again I think that problems smaller than e.g. in Kosovo where these activities have estimated over 1 bn$ turnover annually. This problem has been taken seriously in EU and "The EU Border Assistance Mission to the Republic of Moldova and Ukraine" was established in response to that. With this mission EU supports for capacity building for border management, including customs, on the whole Moldova-Ukraine border, including the border between Ukraine and the separatist Transnistrian region of the Republic of Moldova, because the Moldovan border authorities are unable to be present there. The mission works in cooperation with FRONTEX and OLAF (EU agencies for border control and organized crime) and reports about this work have been quite encouraging.

More comments about Balkan and Caucasus politics in my BalkanBlog