Georgia: An Exercise in Image-Building

Six days before Dmitri Medvedev takes over the helm of Russia, Vladimir Putin has put the country on a war-footing with its favorite punching bag, the neighboring nation of Georgia. Putin has shifted troops to the seaside Georgian region of Abkhazia -- just in case, Moscow says, Georgia mounts a military attack against the separatist region.

As readers recall, Georgia and Abkhazia fought a brutal war during the early 1990s that left the two divided.

Igor Yurgens, a brainy and urbane Medvedev adviser who is making the rounds in Washington, London and Paris, told me in a phone chat yesterday that Moscow "will not use military force" in order to absorb Abkhazia, whose citizens already have been given Russian citizenship.

Yet Putin is still in a lather over the West's decision to recognize Kosovo's independence from Serbia, and this most recent flareup of tensions with Georgia seems to me of a different order from the countless previous flareups between the two over the last seventeen years. Putin is sticking his chin out.

NATO ambassadors said yesterday that the move "risks undermining stability." But Yurgens doesn't seem swayed. "We are not going to be pushed and bullied on this question after Kosovo, that's for sure," he told me.

What is Russia's move really all about? Surely it's not concern over Abkhaz security -- a Georgian military attack in order to bring the region back into the Georgian fold verges on ludicrous, mainly since Georgian President Mikheil Saakashvili knows he would lose, either to the Abkhaz themselves or a predictable Russian counter-offensive.

Is Putin simply demonstrating yet again that Russia won't be pushed around? Is he bestowing an image-building conflict on his successor, in the way that Chechnya built up Putin's own nationalist credentials when he took power in 1999 with a popularity rating of 2%? Perhaps Putin simply couldn't resist lest anyone forget what he has done for Russia's feeling of well-being? According to Itar-Tass, he is leaving office with an almost 85% approval rating.

When pressed on its general foreign policy, Russia says the West is mired in Cold War thinking, and that its strategy is straightforward and not political. If that's true, one wonders why Putin been unable to strike win-win deals with Georgia, Ukraine and the Baltics.

The prevailing wisdom is that nothing will change under Medvedev, whom experts think will keep the wheel straight and hope that things turn out as well for him as they did for Putin. Nothing Medvedev has said seems to argue otherwise.

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Let’s be friends, Guys

Vladimir Putin's remark just about sums up the NATO Summit that ended today in Bucharest. "Let’s be friends, guys, and be frank and open,” he told reporters on the topic of whether a new cold war was in the making. The sentiment will carry over into Sunday's meeting between Putin and President Bush in the Black Sea resort of Sochi, where the two leaders will sign an affable "Strategic Framework" agreement.

As those familiar with the ways of Moscow know, such empty, toothless pacts -- known as the "protocol" in that part of the world -- are what companies and countries sign when they can't agree to anything conclusive.

In short, the NATO gathering ended with the U.S. attempting to dress up a setback against Putin as by and large a show of unity by Europe.

Bush put much on the line by announcing that he would seek to push forward Ukraine's and Georgia's bids to join NATO. But what did he walk away with? European agreement to a missile defense system that doesn't work. European agreement to add troops to a conflict -- Afghanistan -- about whose merits there's almost no disagreement anywhere in the world.

On the question of Ukraine and Georgia, Europe buckled, at least for now, to Putin's objections to their obtaining so-called MAP -- or Membership Action Plan -- status.

So Putin closed out another week of diplomatic triumphs. There will be no advance for now in NATO's expansion to the Russian border. And, with Bush's appointment of a harmless old family friend this week as Eurasian energy czar, there will be no serious challenge to Putin's policy of dominating European energy.

As for the Strategic Framework agreement to be signed Sunday, it's Putin's stated sentiment on paper -- gosh, can't we be friends?

I personally think that Georgia and probably Ukraine will eventually join NATO as full members. But it could be going more smoothly.

For a solid commentary on the spectacle from the perspective of Germany, this piece by Ulrich Speck at RFE-RL is highly recommended reading.

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C. Boyden Gray: Ho-hum on the Caspian

The Bush administration has finally named a senior diplomat to challenge Russia in the pipeline war in Europe. He is C. Boyden Gray, the Bush family friend and GOP partisan lawyer.

As O and G readers have read over the previous months, Russia and the West, particularly the U.S., have been in fierce competition to control the natural gas supply to Europe, and ultimately to influence the continent's politics. Under Vladimir Putin's determined, hands-on leadership, Russia has been far in the lead and, unless something changes fast, will win the contest.

Hence a push within some circles, including Senator Richard Lugar specifically and the Senate Foreign Relations Committee in general, for Washington to get serious by naming a prominent senior statesman to spearhead the U.S. effort. The first nominee was Thomas Pickering, but his personal finances turned out to be a conflict of interest. Then, someone suggested Bush family friend Donald Evans, the former Commerce secretary, but that also went nowhere.

Now the administration has settled on Gray, who was counsel to George H.W. Bush, and named as a recess appointment by President Bush as envoy to the European Union when the Senate refused to confirm him.

Gray comes from similar aristocratic stock as the Bushes -- with inherited wealth, his father was secretary of the Army under Harry S. Truman, and his grandfather was chairman of R.J. Reynolds Tobacco. He graduated from Harvard, and clerked under Supreme Court Chief Justice Earl Warren.

I'm perplexed. Is this the man to general the West's battle against one of the world's consummate players of brutal market economics, namely Vladimir Putin?

To find out whether I'm simply out of the loop, I took a sampling of some of the best-connected readers of O and G. As usual, this sampling will be anonymously sourced:

1. "Doesn't sound like the person we need to bring some coherency to our policy in that part of the world."

2. "(The Senate Foreign Relations Committee) pressed Condi hard to DO SOMETHING, so, [this is] more or less her saying ‘Get this off my plate!’ This was the political compromise. Politics, not grand strategy.”

3. "[Gray's] pluses -- close to the White House, maybe gravitas (but he is a pompous ass), smart guy. Minuses -- intensely partisan, loves to hector the EU, does not know energy, [does not speak] Russian. Bottom line -- not great but could be worse."

4. "Really lousy appointment. Can hardly think of anyone worse."

What's obvious is that no one of significance would accept the appointment. Which is why you have Rice simply adding new duties onto an existing envoy's portfolio. Which is also why the announcement was made in a one-paragraph statement issued with no fanfare.

In other words, this is a dull spearhead.

Showdown in Bucharest

After the spectacle and fireworks of recent years, we're about to see the latest picture of the balance of power in Russia-West relations. The venue will be the NATO summit that begins tomorrow in Bucharest. The issue is whether to advance Georgia and Ukraine's applications to join the military alliance.

The two former Soviet countries want to push forward their status to what’s called MAP – a Membership Action Plan. True membership would come down the road, once they meet the various necessary qualifications. France and Germany oppose moving to a MAP for the two. "France will not give its green light to the entry of Ukraine and Georgia," French Prime Minister Francois Fillon told France-Inter radio. "We are opposed to Georgia and Ukraine's entry because we think that it is not the correct response to the balance of power in Europe, and between Europe and Russia."

Stephen Fidler and Stefan Wagstyl of the Financial Times rang up Georgia's Mikheil Saakashvili, who has a reputation as a hothead, but sounds eminently sensible on this issue. "No matter what some Europeans might be thinking, it's basically giving [Russia] direct veto rights, because that's how they'll perceive it," Saakashvili told the FT.

Saakashvili has that right. Russia’s foreign minister, Sergei Lavrov, suggests that Georgia will use NATO membership to force the breakaway regions of Abkhazia and South Ossetia back into the Georgian fold. This is a red herring – it’s absurd to suggest that NATO would commit troops to crushing Abkhazian or South Ossetian politics. It can't even raise sufficient troops for Afghanistan.

Instead, the issue is simple -- Vladimir Putin wishing to demonstrate Russia’s influence now, and to retain its pressure points on its former colonies in the future.

Saakashvili has done smart political spadework. He has offered power-sharing to Abkhazia, and 500 Georgian troops to Afghanistan. The latter move at minimum could quiet France’s objections.

The ultimate decision will indicate whether Putin has at last succeeded in shifting the balance of power more toward Russia's direction.

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Finally, Some Sanity on Missiles

The U.S. proposal to install an anti-ballistic missile shield in eastern Europe appears unlikely to advance under the watch of its conceiver, President Bush. The new Polish government says it won't permit the shield right now because it's not clear that the next U.S. president will want it, and meanwhile it's not worth aggravating Russia.

Bush wants to place components of the shield in Poland and the Czech Republic. Russia's Vladimir Putin has opposed it, and Polish Foreign Minister Radek Sikorski has provided his government's position in an interview with the Polish newspaper Gazeta Wyborcza. They were kindly passed on in an article yesterday by Judy Dempsey at The New York Times.

Poland's shift is gratifying news for those like myself who think that there are so many divisive issues on the table with Russia that there's no reason to add another, especially when the shield is unreliable at best when decoys are used. When the shield definitely works, let's talk deployment.

The Polish position is built on multiple levels. It's tied up with Moscow's plans to build the Nord Stream natural gas pipeline from Russia to Germany, crossing the Baltic Sea and averting nations with which Russia has tense relations, like Poland.

Polish Prime Minister Donald Tusk wants Russia to reconsider Nord Stream. If the gas continues to cross Poland, Russia would find it harder to cut off the country during predictable periods of strained relations. Poland has also raised environmental concerns about installing a pipeline in the Baltic.

Prosecuting Foreign Bribery Under the Bush Administration

When they unveiled the indictment in April 2003, U.S. prosecutors portrayed their case against James Giffen as open and shut -- the largest foreign bribery case in U.S. history. And by the looks of the detail, they had reason for confidence. There they were -- six individual examples of U.S. oil company payments totalling some $80 million being coursed through European bank accounts linked to the president of Kazakhstan or his associates.

As regular readers of this blog recall, Giffen once controlled the biggest oil deals in the world as oil adviser to Kazakhstan President Nursultan Nazarbayev. He's the principal character in The Oil and the Glory.

Yet in a New York court hearing today, the case seemed a lot more complex. Judge William Pauley, who two years ago issued fiery warnings to both sides to accelerate the pace, was reduced to a mild rebuke of the prosecution, and scheduling the next hearing for April 18th. And jury selection? Not a hint.

There's also a strange moseyness about the prosecution. At one point, Pauley directed the government team to proceed with depositions of European witnesses who in previous hearings they mentioned requiring; the prosecutors themselves seemed to lack the initiative to grab these folks before they die or forget all they know.

That's not the main holdup. It's the defense, brilliantly led by former U.S. prosecutor William Schwartz, who wants documents from a handful of U.S. intelligence agencies to prove Giffen's contention that the whole time he was negotiating those oil deals for a fee, he was doubling as an effective agent for the American government.

This being probably the most secretive administration in U.S. history, dislodging such documentation takes time. Perhaps a friend of mine is right -- we may not see a trial until this administration is out of office.

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Blow to Bush: Russia Says No New Sanctions on Iran

Russia today joined China in a public rejection of the Bush administration's effort to increase sanctions on Iran. In Moscow, Russian and Iranian officials announced that they moved closer to finalizing Russian construction of a $1 billion nuclear power plant near the southern Iranian city of Bushehr.

The agreement in itself is unimpressive -- another of those interim pacts in which the parties agree to do something later, in this case to finalize a timetable for completing the plant, which is at the heart of Western concerns about Iran's uranium enrichment program.

But it puts meat on Vladimir Putin's resistance to further Iranian sanctions after a U.S. intelligence estimate last week said Iran had stopped trying to develop nuclear arms four years ago. The Bush administration has continued to push for stepped-up sanctions, saying the new intelligence doesn't mean that Iran is less dangerous.

The Russian position makes it even harder for Bush to get agreement since China on Sunday made its feelings on the matter known when Sinopec, the Chinese oil company, signed a $2 billion oil contract with Iran.

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Diplo-Capitalism: Bush's Clintonian Iran Strategy

One needn't be a gene physicist to see that President Bush looks a lot like -- gulp -- former President Clinton these days. He's hosting Israeli-Palestinian talks, speaking with Syria, and now we hear that he's opened a pen-pal exchange with the mother of all totalitarians, North Korea's Kim Jong Il.

As my former Wall Street Journal colleague Jay Solomon notes today, neo-con John Bolton hates this shift. "Our foreign policy is in free-fall at the moment," the former U.S. ambassador to the U.N. and advocate of uni-polar diplomacy tells Solomon. Engaging dictators, Bolton says, will only "diminish our prestige and influence."

Bah humbug.

So what's next in Bush's embrace of the foreign policy he's spent seven years deriding? Adoption of Clinton's diplomatic two-step with corporate America?

As readers of this blog know, I see one of America's most triumphant foreign policies of the last decade as the successful linking of the Caspian and Mediterranean seas through the Baku-Ceyhan oil pipeline. When this million-barrel-a-day came on line last year, it cemented a decade-long challenge to Russian suzerainty in Central Asia and the Caucasus.

And it was all a joint diplomatic-commercial effort of Clinton administration officials and Big Oil, specifically BP, Pennzoil and a few other companies. It was cutting-edge stuff -- geopolitics at the intersection of diplomacy and commerce.

Now it seems Bush is following the same tack. Today my friend Dean Rose was kind enough to pass along a transcript of Bush's news conference this week on the fresh intelligence that in fact Iran stopped seeking development of a nuclear weapon four years ago.

Bush said he's working to get companies both in the U.S. and abroad to help persuade Iran to stop enriching uranium. One presumes Bush was talking about oil companies -- what other type of company would he be describing?

Here's Bush's direct language when asked what's next in U.S. policy on Iran:

"And I believe now is the time for the world to do the hard work necessary to convince the Iranians there is a better way forward. And I say, hard work -- here's why it's hard. One, many companies are fearful of losing market share in Iran to another company. It's one thing to get governments to speak out; it's another thing to convince private sector concerns that it's in our collective interests to pressure the Iranian regime economically.

"So I spend a fair amount of time trying to convince our counterparts that they need to convince the private sector folks that it is in their interests and for the sake of peace that there be a common effort to convince the Iranians to change their ways, and that there's a better way forward."

This is not to mock Bush but simply to note the dovetailing of long-standing foreign policy practices.

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The High-Stakes U.S. Courtship of Turkmenistan

The Bush administration's imminent creation of a powerful new Eurasian energy office is part of a late but broad strategy to catch up to and overtake Russia's advanced natural gas juggernaut in Europe.

As I reported a couple of days ago, the administration plans to appoint a potent two-man diplomatic team -- former ambassador to Russia Thomas Pickering, and Steven Mann, currently a senior State Department official on Central and South Asia.

People with whom I've been exchanging messages say the duo's main task is this: To transform a long-shot European natural gas pipeline proposal called Nabucco into reality. Nabucco would carry natural gas from the Caspian Sea to Europe.

By accomplishing that, the U.S. would blunt the impact of an advanced Russian pipeline project that's meant to secure and increase its position as Europe's most important natural gas supplier (Russia's Gazprom already controls about 30% of Europe's natural gas and oil supply).

While Russia sees itself as simply forwarding the market principles that the West espouses as a mantra, the Bush administration and the European Union think it's a bad idea for Gazprom to carve out greater economic influence in Europe. And Nabucco would give Europe a channel for Caspian natural gas independent of Russia.

The key to all this is the republic of Turkmenistan -- possessor of the world's fourth-largest supply of natural gas -- and its neophyte president, Kurbanguly Berdymukhamedov. A dentist by training, Berdymukhamedov was catapulted to the presidency last December on the death of Turkmenistan's ultra-bizarre ruler, Saparmurat Niyazov.

Now the new, 50-year-old Turkmen leader is the subject of one of the world's most curious diplomatic courtships.

Russia's Vladimir Putin is all over Berdymukhamedov. Were they not just five years apart in age, one wouldn't be surprised to hear of Putin trying to adopt him as his only son. Russian delegations are in the capital of Ashkabad almost constantly, and Putin himself has gone down at least twice to see Berdymukhamedov, in addition to meeting him one-on-one in Tehran and Russia.

Why? Putin wants Berdymukhamedov to agree to export almost all his natural gas north to Russia for onward shipment to Europe. And he seems close to succeeding. There actually is a handshake deal (in my experience in the former Soviet Union, a signed contract is equivalent to a western handshake; it only becomes a genuine contract when the pipes arrive on site for welding, and the work actually begins.).

Enter Washington. The State Department has been dispatching regular teams to Ashkabad since last summer. The European Union has, too. They've dangled a higher price for Turkmen natural gas to lure Berdymukhamedov into committing to a competing pipeline -- a trans-Caspian line that would ship his gas to Europe via Azerbaijan, Georgia and Turkey, into Nabucco.

In September, President Bush got into the act with a one-on-one chat with the Turkmen president in New York during the United Nations General Assembly.

But that hasn't been sufficient. I'm told that Berdymukhamedov keeps bringing up the Chinese, who have themselves decided to build a $26 billion natural gas pipeline east to China, absent any participation by the Turkmen at all.

If the West is so interested in the trans-Caspian line, the Turkmen leader says, why doesn't it emulate the Chinese and just go ahead and build it? Isn't the U.S. as great as the Chinese? Why must he aggravate his giant neighbor to the north -- Russia -- by taking the lead?

Plus, Berdymukhamedov is suspicious about the West's human rights agenda. Under the previous Turkmen leader, the republic had one of the worst human rights records in the former Soviet Union, which is saying a lot. Berdymukhamedov has moved to loosen up, but he isn't about to go European.

Washington and the EU have replied that the West isn't like the Chinese -- pipelines have to be built by private companies; the countries don't get involved in actual construction. And on the human rights side, "we tell him, 'We're not asking you to be Sweden or the U.K.," one person involved in the Western courtship tells me. For comparison purposes, they are telling Berdymukhamedov not to look to Europe, but to his neighbors Kazakhstan and Azerbaijan. They've got their autocrats, but generally aren't known for dark prisons with men in chains. "If we can get KazAzerTurk on the same page, that would be a nice little club," this person says.

Berdymukhamedov isn't quite biting, which brings in Pickering and Mann. Washington hopes they can manage to nudge the pipeline over the finish line.

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America's Unnoticed New War

As I've traveled this week for the launch of The Oil and the Glory, I've been asked if we're at the start of a new Cold War with Russia. Even my wife says that I at times seem to regard Russia as the devil.

The answer is no.

Yet, the West and Russia are undeniably in a new battle for influence and power.

But there is a difference in how their armies are arrayed: Russia, in the person of Vladimir Putin, has fought brilliantly so far. But the U.S. seems barely to have noticed that it has a new war front in addition to terror.

The war is over the flow of oil and natural gas from the former Soviet Union to Europe. It's similar to the 19th and 20th century struggle for mastery of sea lanes in that the conflict is over who will control arteries vital to everyone.

The stakes are high -- influence in Europe, on whom the U.S. relies for support on political and economic issues around the world. And, so far, Russia has the pronounced advantage.

The odd thing is that the U.S. actually won the first battle of this war, but it's Russia that's learned the lessons and applied them.

The U.S. victory was the construction of the Baku-Ceyhan oil pipeline, linking the Caspian and Mediterranean seas. Its launch last year spelled the first break in Russia's nation-breaking economic stranglehold over Central Asia and the Caucasus, sending about 1 million barrels a day of oil to the West.

Yet, while the U.S. has now turned its focus to missiles, Russia is fighting the new war by building its own ingeniously plotted energy pipelines to Europe. They have names like Nord Stream and South Stream, and there are more.

This is Russia pursuing its national interests -- the market dominance of Europe for Gazprom, its natural gas giant, and its oil companies.

That's not evil. It's devilishly shrewd. And it's been all but unanswered by the U.S.

Putin's Legitimate Point

Given the fires the U.S. is attempting to extinguish around the world, many the result of incompetence and not happenstance, why is it fanning a deliberate one in Russia?

At issue is the anti-missile batteries that the Bush administration insists on installing in Poland and the Czech Republic. Earlier this month, the Pentagon yet again crowed over a false test of the anti-ballistic system in which a missile unprotected by decoys was shot down by another missile.

In short -- after more than a quarter-century of development, the technology still does not yet work under authentic conditions. Even if it gets installed, even with hard-fought Russian agreement, North Korea, Iran or whomever will know that the system can be confounded with simple diversion.

Considering the many crucial matters on which to debate Russia (Iran, Iraq, Syria, abuse of petro-power, trans-Caspian pipelines, to name a few), one wonders why Condi Rice and Robert Gates were in Moscow pounding the table on an empty issue.

Moscow makes a practice of provoking incredulity on the world stage. But this is an example of Washington's immature foreign policy leadership.

After six years of repudiated treaties, Gates also kept a straight face while nettling Putin over his threats to withdraw from a couple. ``Europeans are beginning to wonder what the Russians are all about,'' he said deadpan today in Moscow. Read Bloomberg account

The West needs to get serious. Drop the non-issues and talk turkey. Warsaw and Prague will still be game when the system is actually functioning.

Naked Bankruptcy in Pakistan

The lead story in The New York Times today is that the Bush administration is pushing Pakistan's Gen. Musharraf to share power with former Prime Minister Benazir Bhutto. A mistake six years in the making, the White House has failed to finesse Musharraf into cultivating concrete political alternatives to himself with whom he could live. The upshot: yet again, Pakistan is faced with a stark choice for leadership: A corrupt feudal, a corrupt businessman, the religious opposition, or a General.

The first paragraph of the NYT piece: The Bush administration, struggling to find a way to keep Gen. Pervez Musharraf in power amid a deepening political crisis in Pakistan, is quietly prodding him to share authority with a longtime rival as a way of broadening his base, according to American and Pakistani officials. Read rest of story

The synthesis of the proposed deal between Musharraf and Bhutto was reported three weeks ago by Zahid Hussain, my friend and the author of the first-rate Frontline Pakistan. According to Zahid, "under the agreement, the military leader would be granted another five-year term as president, while Ms Bhutto, twice prime minister of Pakistan, would be allowed to return in September to contest parliamentary elections, exonerated of corruption charges made against her. However, the talks appeared to have stalled over General Musharraf’s insistence that he should be allowed to retain his dual role as army chief and president." Read story

Steve's comment: Bhutto is famously a Harvard- and Oxford-trained political scientist and orator. Based on that background, in addition to the huge political following she inherited from her father, the West has had huge hopes for what she could bring the country. Yet in her two terms as prime minister during the late 1980s and the 1990s, she proved one thing -- an elite education is not guaranteed to take the arrogance out of a feudal.

In short, Bhutto has dictatorship and corruption in her DNA -- she is a beautiful speaker, and a terrible national leader. That Musharraf is trying to make a deal with her reflects his own political desperation, and his willingness to compromise his principles.

The leader whom Musharraf ousted -- industrialist Nawaz Sharif -- is a deceptively talented power accumulator who as prime minister proved himself to be a corrupt would-be dictator.

The sad thing is that Pakistan is absolutely replete with ultra-talented and brilliant economists, political scientists, lawyers and so on. That Washington is getting behind the power-sharing idea reflects utter bankruptcy. The United States should not be in the business of encouraging the perpetuation of the rule of Pakistan's landowning class.