Caucasus Report: October 20, 2006

RUSSIA: MOSCOW'S SHIFTING POLICY TOWARD GEORGIA. As Russia begins to implement economic sanctions against Georgia many in Georgia, Russia, and the West are asking: how far can Moscow go?

Before the present crisis, Russia's policy toward Georgia was relatively straightforward. Moscow would try by whatever means necessary to preserve the status quo in Georgia's breakaway provinces of Abkhazia and South Ossetia. The hope was that the "frozen conflicts" remaining frozen would thwart Georgia's NATO ambitions. Tbilisi, for the same reason, wants to find a solution to the territorial disputes.

But now Russia has changed the emphasis of its policy -- ramping up the rhetoric and taking a harder line with Georgia.

The tone was set by Defense Minister Sergei Ivanov, who many say initiated Moscow's "hard line" with Georgia. In an interview with vesti7.ru on October 8, he said that Russia "does not want to fight a war" with Georgia.

But, he added, Abkhazia and South Ossetia are another matter. "There we have our peacekeepers, and 90 percent of the population are our citizens. If they are attacked or ethnically cleansed, we will not remain idle," Ivanov said.

A day earlier Russian President Vladimir Putin, in a letter to OSCE Chairman Karel de Gucht, accused Tbilisi of preparing a "coercive solution" to the "frozen conflicts" and asked the OSCE to urge a "radical change in [Georgia's] fundamental course."

Other Russian commentators have been more categorical. Speaking on NTV, Viltaly Tretyakov, the editor in chief of pro-Kremlin magazines "Moskovskiye novosti" and "Politchesky Klass," said that Georgia's policy is to confront Russian national interests in the Caucasus, which are "to prevent the appearance of a second geopolitical force." "It is not that we do not want Georgia in NATO," Tretyakov said, "but that we do not want NATO and the United States in the Caucasus."

Even former Russian President Mikhail Gorbachev weighed in with a memorandum, most probably with the Kremlin's blessing, released by Interfax on October 6. The former Soviet president, who accompanied Putin on his visit to Germany on October 10-11, directly accused the United States of trying to weaken Russian influence in the Caucasus and "changing the balance of power in the Black Sea region to its benefit."

Gorbachev added that the "logic of international development may lead Russia to a situation in which we will have no other choice but to recognize Abkhazia and [about this] we should directly warn the United States and its allies."

But, war of words aside, what kinds of pressure can Russia apply on Georgia?

It's possible that Moscow will increase gas prices for Georgia from $110 to $250 per cubic meter. The Kremlin could also ban top Georgian officials, including President Mikheil Saakashvili, from traveling to Russia, even just in transit. And if the Kremlin really wanted to up the ante it could push organizations such as the Non-Aligned Movement and others to recognize Abkhazia and South Ossetia.

But most of all Russia wants to preserve its influence in the Caucasus. As it seems impossible to do this in a positive way, through developing relations with Georgia, Russia is seeking to isolate Georgia economically.

On October 13, the UN Security Council adopted a Russia-sponsored resolution, which urges Tbilisi to refrain from any provocative action in Georgia's breakaway region of Abkhazia. The resolution, which also extends the mandate of the UN observer mission in Georgia by six months, was hailed in Moscow as a success.

However, the resolution is unlikely to change much. Most Russian experts believe that the point of no return has now been passed and relations between the two nations will never be the same again. As it is no longer considered by Moscow to be a "friendly" nation, perhaps Georgia has finally left Russia's orbit. (Victor Yasmann)

GEORGIA: EU CRITICIZES RUSSIA. European Union foreign ministers meeting in Luxembourg on October 17 sharply criticized Russia for the economic blockade and other measures it imposed on Georgia in the wake of a diplomatic spat between the two countries.

The move was a departure from the neutral stance the EU has maintained since Russia hit out at Georgia in the wake of Tbilisi's arrest of four Russian officers on spying charges. However, EU officials were quick to stress that the EU does not want to damage its long-term relations with Russia.

The declaration adopted by EU foreign ministers was intended to provide diplomatic cover for Georgia, but is unlikely to herald any radical reassessment of EU-Russia relations.

The criticism is remarkably sharp, particularly by recent EU standards. After the meeting, the EU's external relations commissioner, Benita Ferrero-Waldner, stressed that the EU considers Russia's measures against Georgia to be excessive and unjustified.

"The measures that were taken against the Georgians working in Russia -- and especially against the schoolchildren in Russian schools -- as well as also the pressure on Georgian-owned business, but also the economic sanctions and the severed transport links, the ban on the imports, the closure of the borders -- all these are extremely worrying," Ferrero-Waldner said.

Ferrero-Waldner went on to note that the Russian measures "cannot contribute to a return to calm" in the relations between the two countries and "should be lifted."

However, the EU is unlikely to take additional action. The main value of the declaration for Georgia will be the guidance it provides EU officials -- such as foreign policy chief Javier Solana and the South Caucasus Special Representative Peter Semneby -- in future statements on the issue.

Even as they made their declaration, EU officials were working to limit its inevitable effect on EU-Russia relations. Erkki Tuomioja, foreign minister of Finland, which currently occupies the rotating presidency of the EU, downplayed media reports of divisions among EU member states. Many fear such splits could provide ammunition to Russian President Vladimir Putin when he meets with EU leaders in Lahti, Finland on October 20.

Tuomioja said "the ministers had no trouble whatsoever" in reaching an agreement and that there was "total unanimity on them and on the thinking behind them."

However, well-placed EU sources told RFE/RL that the wording of the statement on Georgia was bitterly contested by member-state ambassadors in Brussels last week. While the Nordic and Baltic countries -- backed by some of the Central European states -- sought to include tough criticism of Russia, traditional Moscow allies France, Italy, Portugal, and Greece were equally keen to ward it off.

Another meeting of the same EU ambassadors earlier in the day resulted in a compromise. The criticism of Russia remained, but detractors -- led by France -- inserted a reference to a UN Security Council resolution that was critical of Georgia's approach to the conflicts in South Ossetia and Abkhazia. One senior EU source told RFE/RL that in a final minor, but significant, triumph, Georgia's EU supporters successfully fought off an attempt to have the reference placed in the same paragraph containing the EU's condemnation of Russian sanctions.

But even if EU leaders are able to speak to Putin with one voice on October 20 -- which would deny him the opportunity to capitalize on their internal divisions -- the EU remains deeply in need of Russia's cooperation in the longer term. This necessarily limits the extent to which countries like Georgia can count on EU support against Moscow.

Commissioner Ferrero-Waldner made this clear today, saying the EU is seeking a "balanced approach."

"I think we make very clear to the eastern members of the neighborhood policy that drawing them closer to the European Union does not mean neglecting our relations with Russia," she said. "On the contrary, I think it is highly essential that Georgia and Ukraine, for instance, as also important neighborhood countries [retain] strong relations also based on trust with their other big neighbor."

The EU is increasingly dependent on Russian oil and gas, Moscow's collaboration in the UN Security Council is essential to EU-backed drives to contain the nuclear ambitions of North Korea and Iran and secure the future of Kosovo, and the EU's larger member states, headed by Germany and France, see Russia as an indispensable strategic geopolitical partner. (Ahto Lobjakas)

ARMENIAN MP CHARGED WITH ASSAULT, TAX EVASION. Hakob Hakobian, a controversial businessman and parliament deputy, has been formally indicted and will likely stand trial on a string of charges that could land him in prison for up to seven years.

The indictment was made possible by the Armenian parliament's decision on October 13 to lift Hakobian's immunity from prosecution over his alleged role in the October 8 mass brawl at a gas distribution station near Yerevan.

Officials at Armenia's Office of the Prosecutor-General said on October 17 that the accusations leveled against his include illegal arms possession, hooliganism, tax evasion, and abuse of power. The hooliganism charge carries between four and seven years' imprisonment.

Addressing the National Assembly, Prosecutor-General Aghvan Hovsepian accused Hakobian of organizing and leading an armed assault on the gas facility in the village of Hayanist after security guards there refused to allow him to enter its premises. Hakobian is said to have visited it to demand that the ARG national gas distributor resume supplies to nearby liquefied gas stations owned by him.

But the 43-year-old lawmaker, who recently joined the governing Republican Party of Armenia (HHK), presented a different version of events, saying that he arrived at the scene stop a "manly fight" between the security guards and local residents working for him. He claimed that more than 30 locals were arrested by security forces and are still "illegally" kept in detention.

The prosecutors denied the claims, insisting that only four people, including Hakobian and his chief bodyguard, were detained and released last week. None of them except Hakobian has been charged so far.

The prosecutors used the Hayanist incident to bring other, unrelated charges against the reputedly thuggish man better known to the public with his "Choyt" nickname. In his parliament speech, Hovsepian claimed that he has evaded taxes and committed other financial abuses for in the past 15 years.

Opposition lawmakers, who for hours grilled the chief prosecutor, wondered why the law-enforcement bodies did not move to prosecute Hakobian earlier. The latter publicly hinted that he has for years bribed law-enforcement and tax officials inspecting his businesses.

Opposition parliamentarians also denounced as illegal the fact that Hakobian and his men were arrested not by the Armenian police but another agency which is in charge of President Robert Kocharian's security. They claimed that the case against Hakobian is a public relations stunt aimed at countering opposition allegations about the growing presence of "criminal elements" in Armenia's government.

Most of the 22 members of the 131-strong National Assembly that voted against Hakobian's prosecution are believed to be affiliated with its opposition minority.

Kocharian pounced on this in televised remarks broadcast at the weekend. He said the opposition stance on the issue showed that an "anti-criminal movement" launched recently by his political opponents is a sham. "That bubble has burst," said Kocharian.

Artur Baghdasarian, the former parliament speaker whose Orinats Yerkir party has also joined the movement, rejected the criticism. "That criminal elements have penetrated the political field is a fact and I can't agree with the president of the republic on this," Baghdasarian told reporters. "The state along with its law-enforcement structures must be interested in bring the guilty to account, which is unfortunately not done in our country. There are people in Armenia that are above the law and can do anything." (Karine Kalantarian)

QUOTATION OF THE WEEK. "Several weeks ago we received an official notification about planned navy maneuvers from Russia. This is a provocative move and part of the economic blockade on Georgia because a large part of the territory involved in the maneuvers is part of Georgia's economic zone." Georgian Deputy Defense Minister Mamuka Kudava, speaking to reporters after briefing the Georgian cabinet on October 18, 2006, according to the Civil Georgia website.