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Friday, August 8, 2008

War: Russia and Georgia

Heads up.

Russia and Georgia are at war, with South Ossetia absolutely crushed in the middle.

Putin is at the Olympic opening ceremonies... while peace and love breaks out everywhere.

The separatist President (of South Ossetia), Eduard Kokoity, said “the storming of Tskhinvali has started” and said that separatist forces were engaged with the Georgian army on the roads into the city. A statement on the separatist government's website said: “The assault is coming from all directions.”

A Russian General has said the Georgians have bombed the capital of South Ossetia (Tskhinvali).

This could end quickly or spiral out of control.

Russian “heavy equipment” (apparently 150 tanks) are now in Tskhinvali. The Russians have a “peace keeping mandate” in South Ossetia. Also, South Ossetia linked up with North Ossetia in a referendum years ago. North Ossetia is part of the Russian Federation. Already late last night there were reports that hundreds of volunteers were on their way from North Ossetia, through the Caucasus Mountains to join their ethnic kin in South Ossetia. The leadership of Abkhazia, Georgia's other breakaway state, said that 1,000 volunteers from Abkhazia were also on their way.

FACTBOX - Scenarios for Georgia's South Ossetia crisis: “Fighting raged in and around the capital of Georgia's breakaway South Ossetia region on Friday as Georgian troops, backed by tanks and warplanes, pounded separatist forces in a bid to re-take control of the territory.

The following are possible scenarios:

* Georgia, whose army and reservists total around 18,000 soldiers, swiftly completes its assault on breakaway South Ossetia before Russia can mobilise a major military response.

A Georgian victory could spark an exodus of non-Georgians to Russia. The majority of the breakaway region's roughly 70,000 population feel close to Russia and are ethnically distinct from Georgians.

Should Georgian troops quickly establish control over the territory it could prove more difficult for the Russians, diplomatically, to seize back control of the province by sending in its own forces.

* Failure by Georgia to quickly establish full control over South Ossetia could allow Russia, which has a peacekeeping mandate in the region, time to launch a counter-offensive, arguing that it needs to protect its own peacekeeping forces as well as civilians, most of whom have Russian passports.

Georgian officials say Russian armour is already pouring into the region from across the border. Hundreds of volunteers from Russia and another Georgia's breakaway region of Abkhazia, were reported to be making their way to South Ossetia.

* If Georgian troops fail to retake South Ossetia, Tbilisi could be vulnerable to political and diplomatic pressure from the United States and Europe to halt its offensive. The European Union is wary of antagonising Russia, one of its main sources of energy. Some European members of NATO, also wary of President Mikheil Saakashvili's record in clamping down on opponents, have resisted moves to put Georgia on a fast track to membership. Russia fiercely opposes NATO membership for its former Soviet satellite.

* Outright defeat for Georgian forces, with a retreat to pre-conflict positions, would be a humiliation for Saakashvili. He has made it a priority to win back control of South Ossetia and Abkhazia, another rebel region on the Black Sea. Defeat could also boost his domestic opponents and raise doubts about Georgia's pro-market reforms and drive to align itself more closely with the West.

Some background info on South Ossetia here.


Ben Bittrolff said...

CNN: Russian Tanks 'Rolling into Georgia'

A said...

Ben, you who can read the charts :), do you see a bearish wedge forming in the $SPX daily?

Ben Bittrolff said...


I was just thinking that. But we could go for a little while here... on the 'oil is down, and that will save the world' trade.

Makes no real sense, but traders all have ADHD and can only concentrate on one thing at a time.

If 1291 gets breach we can grind to 1320 before 'reality' puts prices back down thru 1200.