Over the last couple of days, the post-mortems have begun to roll in from big-thinkers on Russia. The prescriptions advised in order to bring about status-quo ante in Georgia -- ejecting Russia from G-8, distancing Moscow further from global trade treaties -- add up to a consensus of "Oh Dear, Oh My." Non-membership in G-8 and WTO no doubt is provoking snickers in the Kremlin.
Contrary to these views, however, the West and the U.S. in particular do have one very real lever, one that Karl Rove might recognize -- Russia's very strength.
Russia's Achilles Heel is its petro-power. It's a message that both senators Barack Obama (and his running mate Joe Biden) and John McCain should keep in mind as they prepare to deal with Russia.
For more than a year, O and G has been describing progressive U.S. setbacks in what I've called the Pipeline War, the struggle with Russia for energy-driven political influence in Europe. We've also been writing here during that period about the growing tensions between Russia and Georgia.
In a nutshell, Russia understands that power in a large swath of the world -- Europe, the former Soviet Union and parts of the Middle East -- can be exerted from control of oil and natural gas pipelines. That's how the U.S. has inserted its power into Russia's backyard -- through the Baku-Ceyhan oil pipeline that crosses the country of today's conflict, Georgia. Now, Vladimir Putin intends to build on Russia's restored power by erecting two gigantic new natural gas pipelines into Europe, which already relies on Russia for almost a third of its gas.
Here's where the Achilles Heel comes in. One of these pipelines -- South Stream -- would pass through nations like Bulgaria, Hungary, Serbia and Austria. These are countries in which the U.S. has influence.
If the U.S. wants Russia's attention, persuade these countries and others -- for instance Germany, the main European partner on the second pipeline, called Nord Stream -- to freeze their support for the lines until it's satisfied that Georgia's sovereignty is no longer compromised.
Energy, and specifically Nord Stream and South Stream, are a Russian strength, and a genuine vulnerability.
In the midst of Vladimir Putin's land grab in Georgia, BP suffered another blow in its oilfield tussle in Russia. Last week, a Russian court barred Robert Dudley, the CEO of BP's joint venture in Russia, from running the company for two years. Now BP is trying to figure out how to secure its Russian assets, which account for a quarter of the company's global production.
BP and its partners at TNK-BP -- four Russian oligarchs who are mainly financiers and bankers -- have been in a dispute since spring. In a nutshell, the Russians value the company for the dividends it pays out; BP sees the company as more of a growth play, and wants to plow as much of the oil profit as possible back into the company. While that sounds like a balancing act managed at almost all companies around the world, it's turned ugly in this case.
As O and G readers know, I see this brawl ending badly for BP. Given the pressure the Russians have brought to bear, with the obvious collusion of the Kremlin (it's absurd to claim, as the Russian partners have, that an army of inspectors could have a free-for-all at the company unless the Kremlin were okay with it), I don't see how BP comes out with anywhere near its current 50% share of TNK-BP.
Indeed I think it's entirely possible that the British company is forced out entirely. In that case, BP itself -- meaning the global oil company -- is at risk; Wall Street will pummel its share price, and that would make it a vulnerable target for takeover. Some predict that Shell is the likeliest suitor, and I agree.
The partners are scheduled to meet to brawl again face to face on Sept. 25.
Dmitri Medvedev is trying desperately to recover from failing his first test as Russia's president: After suffering a severe case of deer-in-the-headlights 11 days ago, and leaving it to Vladimir Putin to blow the trumpet of war against Georgia from the Olympics in Beijing, Medvedev now is practicing a swagger, a sneer, and presidential gutter talk.
When Medvedev was with French President Nicolas Sarkozy a few days ago, he managed to form his lawyerly mouth into the words "bastards" and "hoodlums." In another setting, he threatened a "crushing response" to any future uprising such as the Georgians displayed. After all, the Georgians were people who got "idiotic ideas in their heads."
I have been predicting that Medvedev's performance will lead to his replacement on the 2012 presidential ticket. Putin surely won't tolerate a leader indecisive at the moment of truth, and will find someone else to run (I'm among those who believe that Putin wants to rule from the prime minister's seat so as not to have to keep leaving the seat of power every eight years, which under the constitution he would have to do as president).
But Medvedev has clearly seen the error of his ways. Perhaps he's still working himself into the role, and will yet emerge as the type of naturally tough leader that Russians have come to expect.
If his heart fails again, however, he clearly will be one-term Dima, another loser from the 2008 war in Georgia.
Russia says it will start withdrawing its troops from Georgia tomorrow. If that truly happens -- and there are contrary signs -- a new, probably far more important stage of the Georgian crisis will begin. That's the assessment of the affair by the arc of countries -- from Europe, swinging south and east to the edge of western China -- that are directly affected by what Russia does.
How these countries perceive the U.S. response to the war in Georgia will determine whether Russia has effectively crippled a hard-fought, 15-year-old American effort to inject itself as a power in Russia's backyard.
So far, much ink has been spilled over whether the U.S. and Russia are in a new Cold War. In Washington, we hear that the era of a post-Soviet U.S.-Russia alliance is over. The Kremlin counters that the West is intent on provoking it, and thwarting its natural rights as a great power.
The truth is that Moscow's presumptions are essentially correct -- the U.S. has conducted a definitively anti-Moscow policy on Russia's western and southern rims, one dressed up as reformist- and energy-minded, but nonetheless centrally designed to contain Russia within its borders.
But this policy well-suits American security aims, and those of the West as a whole. Conceived in the Clinton administration, it foresaw this very day, when then-forlorn Russia would regain its feet and possibly threaten the independence of its traditional colonial backyard.
One thing to keep in mind is that Russian disgruntlement with Georgia didn't originate with NATO expansion, Kosovo independence, Russia's resurgent petro-power, or Georgian President Mikheil Saakashvili's alleged jokes about Vladimir Putin's height.
In other words, there's strong reason to believe that nothing Saakashvili did, short of capitulation to Russian domination of Georgia, would have satisfied Moscow. Friends tell me that Shevardnadze finally found an accommodation with Russia. If so, it was an accommodation that included the threat of assassination if he went too far.
Georgia wasn't the rationale behind American policy. But the Caspian Sea policy, conceived, as O and G readers know, by a today-forgotten National Security Council officer named Sheila Heslin, did attempt to get Russia accustomed to living within its own borders, and not threatening its neighbors.
The policy was dual. It involved a continuation of the expansion of NATO initiated by President George H.W. Bush, in order to prevent a future, resurgent Russia from gobbling up pieces of the former Soviet bloc in eastern and central Europe. And, on the Caspian, to the south of Russia, the U.S. promoted the construction of energy pipelines to link the Caucasus and Central Asia to the West, and provide them the financial wherewithal to withstand any Russian economic pressure. As a transit point for three of the new pipelines, otherwise-isolated Georgia, situated right on Russia's border, became a U.S. strategic partner.
After 9/11, the Bush administration -- carrying the policy further -- established military bases in Central Asia for the assault on Afghanistan, and then left them in place after the Taliban were dispersed.
The policy made sense considering U.S. interests. The West had a stake in making sure that Russia did not again become a threatening power; by encouraging Russia not to expand back into its former Soviet lands, it might express its nationhood in other ways, such as in business. (For those who see all policy as oil-generated, remember that there was no oil shortage in the 1990s; oil was much-discussed, but it was an instrument of policy -- how to give the Caucasus and Central Asia some breathing room from Russia -- rather than the rationale for it.)
Many of the eight presidents of the region embraced the U.S. agenda. At once, there was a lever against centuries-old Russian dominance.
But ten days ago, Russia put that declaration to the test. With its assault on Georgia, it seemed to expose the U.S. policy as a superpower vanity.
And it seemed true that Washington was caught off-guard. It seemed either to have forgotten the rationale behind its Caspian Sea policy, or, more probable, to have staked its policy on the hope that by now Russia had changed, and would not rotely use its military in the face of a perceived challenge.
Whichever the case, Russia's invasion of Georgia threatens the very real gains of these 15 years. If Russia is seen to have come out ahead, the U.S. may retain its influence in Europe, where Moscow could even suffer a backlash -- Europe could decide after all to build new pipelines to diversify away from Russian natural gas. But America's carefully built role as a great power in Russia's south would be in jeopardy.
The Central Asian and Caucasus leaders are watching.
I myself wonder now whether it matters if Russia in fact does withdraw all the way into Abkhazia and South Ossetia (which I doubt. I think Russia will maintain at least some troops outside the territories. It seems improbable that Russia will entirely give up the ground it gained within Georgia proper.).
Russia has demonstrated that it can and might cross borders of its former Soviet colonies when it sees fit. In Russia's view, these are not international borders; they are Georgia, they are Kazakhstan, they are Azerbaijan -- not real independent states, but former Russian territories.
Ultimately, Azerbaijan's Ilham Aliyev, Kazakhstan's Nursultan Nazarbayev and Turkmenistan's Gurbanguly Berdymukhamedov -- the stewards of the region's great energy wealth -- understand the language of power.
They understood when a parade of American officials visited and argued that it was wise to cultivate a relationship with the most powerful nation on Earth.
The trouble is that, these days, it's not clear any longer that the U.S. is very powerful in its declared zones of strategic interest.
For those who prefer to listen while in the car or on the tredmill, I spoke with Chris Power, Business Week's international editor, about the conflict in Georgia. It's downloadable onto your ipod or computer.
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Steve LeVine covers foreign affairs for BusinessWeek. He previously was correspondent for Central Asia and the Caucasus for The Wall Street Journal and The New York Times for 11 years. His first book, The Oil and the Glory , a history of the former Soviet Union through the lens of oil, was published in October 2007. Putin’s Labyrinth, his new book, profiles Russia through the lives and deaths of six Russians. It was released this week.
