The Sweep of Georgia's Impact

I'm just back from two weeks in Kazakhstan, looking at the ripples from the events in Georgia. The short takeaway is that Russia's short, victorious war will be felt for years to come all the way from Central Asia to western Europe. Here is the piece in this week's Business Week.



What doesn't seem to be much appreciated is that the main problem isn't really Georgia. It's that Georgia is the thread hanging off the tattered sweater; you pull it, and the sweater falls apart. Not counting the suddenly transformed politics of the Eurasian continent, but just economics, will Azerbaijan and Georgia manage to widen the Caucasus energy corridor to accommodate another 1.5 million barrels a day of Kazakh oil over the coming years, as Kazakhstan would like? What of hopes to diversify Europe's natural gas supply? The answer to both is "perhaps," but that Russia will have to be accommodated.

What would Russia want in exchange for allowing the corridor expansion to go through? For starters, as it's made plain, it wants all of the Azerbaijan state's natural gas supply, the very same volumes that the State Department is pushing President Ilham Aliyev to ship to Europe. As for Kazakhstan, it's not clear what it will be asked -- President Nursultan Nazarbayev, the balancer of great powers, has already been so deferential to Vladimir Putin that one wonders what more there is to surrender. From Europe, Putin would like continued demand for Russian gas at current or greater volumes.

One thing that's sure is that Russia doesn't have to use its Army again. Having deployed it once, Putin has made his point. Besides, Russian energy pipelines provide it all the leverage it needs without its army.