August 9, 2008

The Situation in Georgia

From Stratfor internal guidance to their analysts

Given the speed with which the Russians reacted to Georgia’s incursion into South Ossetia, Moscow was clearly ready to intervene. We suspect the Georgians were set up for this in some way, but at this point the buildup to the conflict no longer matters. What matters is the message that Russia is sending to the West.

Russian President Dmitri Medvedev summed this message up best: “Historically Russia has been, and will continue to be, a guarantor of security for peoples of the Caucasus.”

Strategically, we said Russia would respond to Kosovo’s independence, and they have. Russia is now declaring the Caucasus to be part of its sphere of influence. We have spoken for months of how Russia would find a window of opportunity to redefine the region. This is happening now.

All too familiar with the sight of Russian tanks, the Baltic countries are terrified of what they face in the long run, and they should be. This is the first major Russian intervention since the fall of the Soviet Union. Yes, Russia has been involved elsewhere. Yes, Russia has fought. But this is on a new order of confidence and indifference to general opinion. We will look at this as a defining moment.

The most important reaction will not be in the United States or Western Europe. It is the reaction in the former Soviet states that matters most right now. That is the real audience for this. Watch the reaction of Ukraine, Kazakhstan, Nagorno-Karabakh and the Balts. How will Russia’s moves affect them psychologically?

The Russians hold a trump card with the Americans: Iran. They can flood Iran with weapons at will. The main U.S. counter is in Ukraine and Central Asia, but is not nearly as painful.

Tactically, there is only one issue: Will the Russians attack Georgia on the ground? If they are going to, the Russians have likely made that decision days ago.

Focus on whether Russia invades Georgia proper. Then watch the former Soviet states. The United States and Germany are of secondary interest at this point.