The Market Update

U.S. Playing Poker with Russia

 

The relationship between the U.S. and Russia has deteriorated dramatically in recent years, highlighted by the armed conflict in Georgia. The U.S. has played poker with Russia, including its latest decision Wednesday to sign an agreement to place Patriot missiles in Poland despite loud Russian protests. What happens if Russia calls the U.S.'s bluff?

According to an op-ed by former Russian leader Mikhail Gorbachev, the West has to answer for its aggressive actions. Gorbachev wrote: "What is clear is that Western assistance in training Georgian troops and shipping large supplies of arms had been pushing the region toward war rather than peace."

The Bush administration befriended Georgia President Mikheil Saakashvili by supporting his so-called democratic reforms with economic aid, and arms and training for Georgian troops. The U.S. also hinted at pushing for Georgia to become a member of NATO. (Adding Georgia and Ukraine to NATO was discussed at a group meeting as recently as Tuesday). Perhaps these assurances led Saakashvili to attack the break-away regions of South Ossetia and Abkhazia.

Even if NATO agreed to add these two former members of the Soviet Union, the security agreement would be meaningless. Stratfor, a leading publisher of online geopolitical intelligence, wrote in a report:

"It is very doubtful that Western Europe has the will to develop a force capable of defending Georgia and Ukraine. Eastern Europe might have the will but not the resources, from manpower to technology. Thus, membership in NATO for Ukraine and Georgia would be a gesture without content. We are reminded of French and British guarantees to Poland in 1939."

Russia proved that U.S. talk regarding Georgia was cheap. The U.S. found itself in no position to come to Georgia's defense, while Russia cut through the country like a hot knife would to butter in a matter of hours. The Bush administration last week called for Russia to leave Georgia immediately. But the AP reported as recently as Thursday that not only aren't the Russians leaving, but they have also blockaded Georgia's main port city.

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