THE REGION, POST 8th AUGUST

The conflict in and around South Ossetia has dramatically changed the situation and balance of forces in the South Caucasus. It is clear to all impartial analysts and politicians today that, after the storming of South Ossetia and the ensuing introduction of Russian troops to Georgia, the situation in the region has changed drastically. Following these developments there are two outstanding questions: how could this be possible and what happens next?

In our opinion, the key reason for these developments was a fundamental foreign policy error by the Georgian leader, who was apparently counting, on the one hand, on quick success in the military operation and, on the other, on political support from the USA and the West in the event of Moscow's reaction.

Saakashvili, however, seems to have made a double blunder: he clearly overestimated the support of the USA and his western allies and underestimated the power and proportion of Russia's retaliation. All Georgia managed to press from its allies was the languid criticism of Moscow's action by NATO and the EU. Saakashvili and his western allies have also underestimated Moscow's fierce opposition to the Georgian leader's pro-NATO policy. This opposition built up over recent months and climaxed in the hot days of August.

So what has Georgia achieved and what is to become of the region? 

First, the crushing military defeat of Saakashvili (which led to tremendous economic damage and destruction of a significant portion of the country's military infrastructure) may be the start of a decline in his political career and a serious transformation in the policy of the Georgian authorities - perhaps new ones. Statements by Russian leaders leave no room for doubt that Moscow wants to deal with a new leader in this country.

Second, the terms for peace with Abkhazia and South Ossetia will be much tougher for Tbilisi now. Even if Moscow does agree to discuss the settlement of these conflicts on the basis of Georgia's territorial integrity (it goes without saying that Russia's opinion will dominate those of breakaway Abkhazia and South Ossetia), it will demand significant compensation and guarantees in return. Such guarantees may involve the unequivocal recognition of Moscow's special role and responsibility in the region. The Russian army, warships and paratroopers will not leave South Ossetia and Abkhazia for nothing.

Third, Moscow's supporters in the West, primarily Paris, Berlin, Rome and Madrid, who were more circumspect about Tbilisi's NATO ambitions, will now argue that they were right and will give even more weight to the Kremlin's stance. By and large, the division of opinion in the EU regarding Georgia and Ukraine's membership of NATO, will be even greater now, which will play into Russia's hands.

Fourth, Georgia's action has seriously jeopardized the efforts Baku has been making all these years to create new and more effective routes for the delivery of Caspian energy resources to world markets. In fact, Georgia was a 'beneficiary' of these resources. Also exposed to risk are Azerbaijan's multi-billion investments in the country. In other words, the storming of Tskhinvali has dealt a serious blow to both European energy security plans and to Azerbaijan's view of the predictability of Georgia as a partner.

As for Russia, it will have an account to settle for the military operation in a neighbouring country as well. The positive trends in its relations with the USA and the EU will now be replaced by a new stage of cold war and confrontation. Those advocating a harsher attitude towards Moscow will gain ground in these countries, which is likely to lead to a suspension of many programmes of cooperation in priority economic and scientific spheres. In addition, the latest developments will encourage Russia's neighbours, among them Azerbaijan, to look for real guarantees of security, because no country bordering Russia can feel safe any longer.

Tbilisi's military action has led to the most significant strengthening of Moscow's influence and position in the region since the break-up of the USSR in 1991, which has naturally pushed the USA and the West back to where they were more than 10 years ago. By this successful and apparently well thought-through operation in South Ossetia, Russia has effectively restored the zone of geopolitical dominance within which it will not tolerate any interference. This message is intended not only for the USA and the West, but also for other post-Soviet republics, including Azerbaijan.

In general, developments in Georgia have shown that leadership in democracy and the fight against corruption is not enough to ensure the security and independence of one's country. It is necessary to tolerate ethnic minorities, pursue a balanced foreign policy and adopt an evolutionary approach to issues of state. The time for revolutions is long since over.