Re: Iraq Revenue Watch

[Eubulides <paraconsistent@xxxxxxxxxxx>]

[speaking of crony capitalism and Eurasianet......]


The new cold war

The long struggle between the US and Russia has found a new focus

Jonathan Steele
Saturday January 3, 2004
The Guardian

In the dying weeks of another war-filled year, one bit of good news was
the non-violent uprising which toppled Eduard Shevardnadze's regime in
Georgia. But as the Caucasian republic goes to the polls tomorrow to
choose a successor, the risk of bloodshed remains high and powerful
external forces are trying to determine how the new president behaves.

Indeed, it is no exaggeration to say that Georgia is the cockpit of a new
cold war. During the Soviet period the struggle between the US and Russia
was on a global scale. Massive arsenals were locked in stalemate in
Europe, but wars ravaged Africa and Asia as the superpowers found it
easier to compete there by interfering in local conflicts without the fear
of nuclear conflagration. These were the so-called proxy wars.

The USSR's collapse did not end the rivalry. It merely recast it on a more
complex stage which stressed deviousness rather than outright hostility.
Washington wooed post-communist Russia with offers of partnership while
expanding the old anti-Russian alliance, Nato, to take in former Soviet
allies as well as the three Baltic states.

Even as that task was being completed, the Clinton administration was
turning its attention to Russia's southern flanks in central Asia and the
Caucasus. With Russia's formal system of control dismantled, the aim was
to reduce as much of Moscow's political and economic influence as
possible.

Georgia was a good candidate to start the process because Shevardnadze, as
Soviet foreign minister, had shown great readiness to comply with western
demands. Aid money poured in, making Georgia the biggest per-capita
recipient of American government funding after Israel. Help also went to
develop a range of civil society organisations, from private media to
polling organisations and new political parties. While few would quarrel
with the need for "good governance" initiatives in authoritarian or failed
states, it would be better if they were run by less partisan bodies, like
international non-governmental organisations or the United Nations
agencies, than by states with an imperial agenda.

However, by 2003, after 10 years of Shevardnadze's rule, "reform" in
Georgia was unimpressive. The country had become an archetype of the worst
kind of post-communist state, where a corrupt rentier class of narrowly
selected officials and mafia businessmen enriched itself through
smuggling, crony privatisation, theft from the few remaining state
enterprises, and control of customs duties and port revenues.

They tolerated opposition newspapers and multiparty polls on the
assumption that state control of television would allow them to manipulate
the electoral contest, while loyal officials would announce fraudulent
results if voters went wrong. The last line of defence was always the army
and police who, it was thought, would put down protests by force in order
to save the regime because they were part of it.

Serbia broke the mould in September 2000. Popular frustration over
corruption and a failing economy, plus anger over too many lost wars,
produced Europe's first post-communist revolution. When the regime tried
to cheat on the election results, people took to the streets in huge
numbers and the army split. This was different from the revolutions of
1989, which were more political than economic. They also took place under
a single-party system in which large sections of the leadership had
themselves lost faith and wanted a soft landing.

Milosevic's downfall led to predictions that Georgia would be the next
post-communist state to have an uprising. There was similar anger over
crony capitalism. Shevardnadze had not sparked any wars, but nationalists
were upset that he had failed to regain two lost provinces, South Ossetia
and Abkhazia. Mikhail Saakashvili, who led the November street protests
and is expected to win tomorrow's election, is a nationalist who regularly
plays that card in his speeches.

Bush's people supported Clinton's strategy of diminishing Russia. In
power, they sharpened it. They exploited the terrorism scare of 9/11, plus
Putin's desire for US acquiescence to his failed war in Chechnya, as a way
to get Moscow's consent to the establishment of US bases in central Asia.
Geared as a temporary measure against the Taliban, they are determined to
keep them for possible use against Russia, China and the Middle East. They
accelerated the "pipeline wars" in the Caucasus by pressing western
companies to cut Russia out of the search for oil in the Caspian and make
sure that none was transported through Russia.

Why then did Washington decide to abandon Shevardnadze? It was not an
uncontested move. Before the November fraud, most US officials hoped to
see him remain in office until his term expired next year, provided he let
the opposition form a majority in parliament, start to root out corrupt
officials, and debate the drafting of a new constitution which might
reduce the power of the presidency.

Even after the fraud some US officials wanted to keep Shevardnadze in
power. There were sentimental ties, as well as the argument that direct US
interference in regime change could play badly in central Asia and
Azerbaijan, raising their rulers' suspicions and encouraging them to
balance between Moscow and Washington rather than lean too heavily to the
US side. Worries over Saakashvili's impetuous nationalism and the risk
that as president he might try to regain the lost provinces by force, or
at least take provocative actions on the border, also played a restraining
role.

In the end the US tipped against the old dictator and told him to go.
Anger over his cheating in last November's elections was not the main
factor - equally fraudulent behaviour by the Aliev dynasty in nearby
Azerbaijan in elections last October produced minimal American protest,
even though hundreds of opposition demonstrators were detained and several
editors and politicians remain in prison.

Two things probably triggered the US shift. One was fear of instability
and even civil war, if the demonstrators did not quickly get their way.
The other was the fact that Shevardnadze, for all his pro-western
sympathies, was a realist who understood that Georgia needs good political
and economic ties to Russia.

The Bush administration was furious last year when Russia's
state-controlled gas giant Gazprom made a long-term deal for continuing
supplies to Georgia. First the US ambassador Richard Miles complained that
Washington must be informed of such deals in advance. Then Bush's energy
advisor Steven Mann flew to Tbilisi to warn Shevardnadze not to go ahead
with it. Meanwhile Saakashvili, and even his more moderate allies like
Nino Burjanadze - who is expected to be speaker of parliament again -
denounced the Gazprom negotiations.

Saakashvili is sure of election tomorrow, but what happens next is
unclear. Like Turkey, Georgia's other big neighbour, Russia is no longer
an imperial power. It has normal regional interests and Georgia is doomed
by geography and economics to need good relations with it. Will the new
team in Tbilisi move towards a more confrontational anti-Russian
nationalism, or will they understand that supporting Bush's policy of a
new cold war in the Caucasus offers Georgia no benefit?