VZCZCXRO5417
PP RUEHDBU
DE RUEHMO #2070/01 0611433
ZNY CCCCC ZZH
P 021433Z MAR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1615
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 002070 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/02/2016 
TAGS: PREL PGOV MARR MOPS RS GG
SUBJECT: SOUTH OSSETIA:  DEALING WITH A DYSFUNCTIONAL 
RUSSIAN-GEORGIAN RELATIONSHIP 
 
REF: A) TBILISI 399 AND PREV. B) MOSCOW 1934 AND PREV. 
 
Classified By: Ambassador William J. Burns.  Reason 1.4 (b, d) 
 
¶1. (C)  SUMMARY.  Moscow's approach to Georgia is driven by 
frustration with Tbilisi's defiant attitude to Russian 
interests, reflected in its pursuit of NATO membership, its 
championing of anti-Russian alliances in the neighborhood, 
its strategy of trying to compensate for Georgia's weakness 
in one-on-one bargaining with Russia by bringing in the U.S. 
and the Europeans to level what Moscow sees as a playing 
field tilted by nature itself in Russia's favor, and 
Saakashvili's incendiary rhetoric.  The resultant GOR policy 
is stick-heavy and, at best, carrot-lite.  Russians see 
little benefit in facilitating an incorporation of South 
Ossetia or Abkhazia into Georgia at this time, and find it 
hard to take seriously Western calls for them to surrender 
the leverage that the status quo gives them.  The constant 
GOR message is that any resolution of those conflicts can 
occur only over time and will depend on an "improvement in 
Georgian-Russian relations," which decodes as demonstrated 
Georgian deference to key Russian interests. 
 
¶2. (C)  The U.S. needs to continue to deliver the message 
that Russia is overestimating its ability to keep a lid on 
unstable situations and showing recklessness in playing with 
fire in a region where it cannot afford a conflagration.  We 
must equally keep Georgia focused on the unacceptability -- 
as well as the dangers -- of any recourse to force.  Most 
immediately, we should press for a re-launch of contacts at 
all levels between Georgia and Russia, including a 
rescheduled visit by PM Noghaideli and a renewal of JCC 
meetings, as well as progress on demilitarization CBMs and 
economic links.  Any expectation of a "quick fix" would be 
unrealistic, and our stress should be on promoting concrete 
steps -- and mutual civility -- that point in a constructive 
direction.  A candid discussion by the Secretary with FM 
Lavrov next week on the need for Russia to show results, and 
not just injured national sensibilities, could contribute to 
the process.  We also need to ensure that our voice is not 
the only one Moscow hears on this issue as the G-8 process 
moves ahead.  END SUMMARY. 
 
Russia to Georgia: You Can,t Impugn with Impunity 
--------------------------------------------- ---- 
 
¶3. (C)  Russian policy towards Georgia is based on a 
near-consensus in the political class that Russia is 
historically a Great Power entitled to expect -- and, if 
necessary, to enforce -- a substantial degree of deference to 
its interests from weaker neighboring countries.  The Kremlin 
feels little need to apologize for an approach that others 
may see as heavy-handed, but that it sees as vital to 
Russia's future.  The collapse of the Warsaw Pact and the 
Soviet Union stripped Russia of protective cocoons that have 
been progressively occupied by NATO.  To forestall further 
strategic retreat and encirclement, Moscow has not shrunk 
from direct interference in the internal affairs of its 
neighbors, including in Georgia through support of separatist 
movements and internal rebellions. 
 
¶4. (C)  Moscow,s feelings of Great Power entitlement and 
concern about strategic encirclement find nourishment in the 
actions of the Georgian government.  Russia,s political 
class -- not just Putin and the "siloviki" -- regard 
Saakashvili,s defiantly non-deferential policies as 
unacceptable.  Seen from Moscow, his championing of 
implicitly anti-Russian alliances within the neighborhood and 
his headlong pursuit of accession to NATO are gauntlets flung 
as a challenge.  Russians are also deeply alienated by 
Saakashvili,s anti-Russian rhetoric, as in his "piling on" 
during the recent Georgia gas crisis, taking advantage of 
Russia,s self-inflicted wounds in the earlier Ukraine fiasco. 
 
¶5. (C)  Most galling of all to Moscow is the Georgian 
strategy of trying to compensate for the consequences of 
being weaker than Russia in any one-on-one bargaining by 
internationalizing the process, bringing in the U.S. and the 
Europeans wherever possible to level what Moscow sees as a 
playing field tilted by nature itself in Russia's favor.  MFA 
4th CIS Director Kelin told PolMinCouns March 1 that any U.S. 
effort to "mediate" between Russia and Georgia would not be 
productive.  "We need to settle our differences between 
ourselves, and will do so when the Georgians realize that the 
key to the problems does not lie in Washington or Brussels, 
but in Moscow."  This desire to control the playing field was 
reflected in the GOR,s recent refusal to hold a JCC meeting 
originally scheduled in Vienna, insisting that Moscow was the 
only proper venue. 
 
¶6. (C)  While Saakashvili has sown irritation with him 
 
MOSCOW 00002070  002 OF 004 
 
 
personally across the entire political spectrum in Russia, 
his policies in many regards (e.g., with regard to NATO and 
in the neighborhood) show strong continuity with those of 
Shevardnadze.  At bottom, the Russians have a Georgia 
problem, not a Saakashvili problem. 
 
The Ossetian Occasion 
--------------------- 
 
¶7. (C)  Against this backdrop, Russia's heel-dragging in 
efforts to resolve the South Ossetia problem comes as no 
surprise.  The Kremlin sees zero benefit to its interests -- 
either politically within Russia or internationally -- coming 
from steps it is called on to take to facilitate the 
incorporation of South Ossetia into Georgia in the near term. 
 The Russians tell us consistently that the problem can be 
resolved only over time and in the context of "improved 
Georgian-Russian relations."  By improved relations, Russia 
appears to mean that Georgia must generally defer more to 
Russian interests, and specifically to defer both NATO 
membership and any NATO/U.S. military bases in Georgia.  The 
hardball message is that Russia can ensure that Georgia will 
for an indefinite period have unresolved territorial issues 
that would make NATO membership at best problematic from the 
Alliance,s perspective, and should foreswear such intentions 
as a first step to gaining sway over its entire territory. 
 
¶8. (C)  This is all stick, no carrot.  In our view, Russia 
has strong domestic reasons (along with general support for a 
tough line) for its failure to offer any real incentives to 
the Georgians and for its continued support of the South 
Ossetians.  North Ossetia, with its Christian majority, is 
the traditional bulwark of Russia in the North Caucasus and 
the one North Caucasus republic not threatened with an 
Islamic insurgency.  It will continue to demand rewards from 
Moscow for playing that role.  In addition, any steps towards 
Georgia would be viewed with at least suspicion by the 
already unstable Kabardians, Cherkess, and Adyge -- all 
ethnic cousins of the Abkhaz.  This leaves aside the issue of 
particular Russians interests not wanting to give up profits 
from criminal activities carried out in South Ossetia. 
 
¶9. (C)  Recognizing that Saakashvili (and perhaps any 
Georgian leader) will not make a capitulatory deal, the 
Russians find a prolongation of the status quo to be the next 
best option.  They find it hard to take at face value U.S. 
calls for them to give up their present leverage on Georgia 
for (in their view) no real benefit.  The main drawback that 
they see in the status quo is the possibility of a Georgian 
attempt to overturn it by force.  The proper U.S. role, in 
Moscow's view, is to suppress any such effort, as we have 
done in the past.  Believing that they -- and we -- can swat 
Georgia like a fly, they are impervious to arguments that 
Saakashvili has to "show progress" to "calm the radicals" in 
his administration or protect his own political interests. 
 
¶10. (C)  While the GOR appreciated our efforts to tone down 
the Georgian Parliament's recent call for the removal of 
Russian peacekeepers from South Ossetia, it saw the Georgian 
move as a major provocation, the thinly disguised end of a 
wedge intended to lead to the replacement of Russian troops 
with an international (perhaps even NATO) force.  It also 
sees a need to head off a further step in July, when the 
Georgian Parliament will receive and act on a report on 
Russian peacekeepers in Abkhazia.  In Moscow,s view, those 
threats require a response with blunt instruments: 
Saakashvili and the Georgian Parliament had to be shown that 
if they stick their fingers in Moscow's eye, there will be a 
price to pay.  For every further step the Georgians may take 
(e.g., denying visas to Russian peacekeepers, calling in July 
for Russian peacekeepers to leave Abkhazia), Moscow will 
again respond to raise the price to Tbilisi.  In our March 1 
meeting with 4th CIS director Kelin, he predicted "big 
trouble" -- he would not qualify that further -- if the 
current dispute with Georgia over visas for Russian military 
personnel deployed there is not resolved -- and said (equally 
without specification) that a satisfactory outcome on the 
visas could lead to "positive" results. 
 
¶11. (C)  Russia's calculations presume that the pot can be 
kept permanently simmering in South Ossetia, but never boil 
over.  If mutual provocations were to spill over into 
full-fledged conflict, however, the consequences in a highly 
unstable region would be unpredictable and could change the 
calculations of the parties and of the international 
community.  Such a development would highlight the failure of 
Russia's 14-year-old peacemaking activities and lead to 
greatly increased pressure to take the "peace process" out of 
Russian hands.  To date, however, Russia has shown the same 
refusal to tamper with the short-term status quo in South 
Ossetia that it displays in Belarus and Uzbekistan. 
 
MOSCOW 00002070  003 OF 004 
 
 
 
The U.S. Role 
------------- 
 
¶12. (C)  In these conditions, the U.S. must continue to work 
actively on both sides of the quarrel.  With respect to 
Russia, we are continuing to make clear that the GOR is 
playing with fire, and that Georgia may become a greater 
focus of the international community's dealings with Russia 
unless Moscow takes near-term steps to ensure there is a 
process in play that holds promise for leading to a 
settlement.  Immediate steps in that direction would include 
rescheduling the Noghaideli visit, agreement to a follow-on 
JCC meeting, and some modest CBMs.  The Ambassador has 
already told DFM Karasin that Russia would be wiser to set 
such steps in motion over the next week (before FM Lavrov's 
March 6-7 visit to Washington).  PolMinCouns made the same 
point to Kelin March 1 (provoking Kelin's sharp rejection of 
"U.S. mediation," para 5 above, and an insistence that 
positive steps were first needed from Georgia, starting with 
a resolution of the visa issue).  We will continue to press 
the Russians hard on these issues. 
 
¶13. (C)  We would recommend that the Secretary have a candid 
discussion of Georgia with Lavrov in any event.  He will 
likely raise Russian concerns over Georgian "militarization," 
i.e., the increasing capabilities of Georgia's armed forces 
thanks to U.S. assistance and training.  He needs to 
understand, however, that while Russia may not be ready to 
deal on South Ossetia, it cannot dictate the U.S. level of 
support for Georgia.  If Russia will not even support a 
serious process to ease tensions, it will face increasing 
attention from the international community.  Promoting a 
European role in that regard will be key as we head towards 
the April 24 South Ossetia Donors' Conference and the July 
G-8 Summit.  The G-8 process may temper Russian behavior, but 
only if the U.S. is not the only G-8 member flagging the 
point.  So far, the Europeans are virtually invisible in 
Moscow on the Georgia issue, and that gives Russia a wide 
margin of comfort. 
 
¶14. (C)  In the months between the Lavrov visit and the G8 
Summit, we need to push for across-the-board contacts between 
Russia and Georgia that enable business to get done.  The 
cancellation of the Noghaideli visit was a counterproductive 
emotional reaction; the Georgian Embassy here in Moscow 
believes the decision was taken against the advice of the 
Russian MFA.  If emotions can be toned down enough on both 
sides, the outlines of a compromise package can be seen: 
Noghaideli visits Moscow to meet his Russian counterpart but 
also with Kokoity to kick off and give impetus to a JCC 
meeting that could make serious progress on demilitarization 
and on economic issues.  Though the Georgians may balk at 
holding such a meeting in Moscow, we believe it is a 
reasonable investment -- if Russia takes responsibility for 
the meeting, it bears more responsibility for showing 
results,  4th CIS director Kelin told PolMinCouns that the 
Russians will not insist on Moscow as a JCC venue once 
emotions cool; he still balked at Vienna, but thought 
Brussels might be acceptable. 
 
¶15. (C)  Demilitarization CBMs are in Russia's own interest, 
minimzing the likelihood of an outbreak of open warfare.  We 
should press the Russians hard, stressing that the 
consequences of miscalculation are unpredictable but 
potentially grave for Russia as well as Georgia.  PolMinCouns 
made that case March 1 to Kelin in support of a positive 
Russian response to the unilateral Georgian actions to 
implement its South Ossetian peace plan (ref A).  Kelin,s 
response was that the GOR was unaware of any such Georgian 
actions, which may have been trumpeted to the West but were 
not presented to Russia or South Ossetia.  (Comment.  The 
Russian MFA has repeatedly complained about Georgia,s 
propensity to plead its case to the West, rather than to the 
South Ossetians or Russia.  End Comment) 
 
¶16. (C)  The U.S. should foster other Georgian-Russian 
working contacts as well.  Russian Envoy Kenyaikin suggested 
to EUR DAS Bryza that the Interior and Defense Ministers 
attend a JCC meeting.  A Moscow venue for such a meeting 
might work, if the Georgian Ministers came with PM Noghaideli 
and were assured of meetings with their Russian counterparts. 
 
 
¶17. (C)  Economic progress on the South Ossetian front may be 
harder to sell to the Russians, however clear its benefits 
may be to us and the Georgians.  Fortunately, it appears to 
be Kokoity's first priority.  South Ossetia's economy has 
always depended on smuggling, which had disappeared after the 
Rose Revolution (Tbilisi 394 quotes PM Noghaideli as saying 
the smuggling -- including of narcotics and counterfeit money 
 
MOSCOW 00002070  004 OF 004 
 
 
-- is now going strong again, which suggests that Georgian 
corruption may have reappeared).  Several peace proposals to 
date have called for a "Special Economic Zone" in effect 
linking the economies of North and South Ossetia to Georgia. 
(Comment.  In our view, such an initiative could create a 
major fact on the ground promoting a resolution of the 
conflict within Georgia's borders.  It should be a priority 
through the April 24 Donors' Conference and in the run-up to 
the G8 Summit.  End Comment) 
 
¶18. (C)  Economic ties between Russia and Georgia are 
likewise worth emphasizing and could build constituencies for 
a less negative relationship.  Russia is the leading 
destination for Georgian mineral water and wine; both GGMW 
(Borjomi water) and GWS (wine) have enormous positive brand 
recognition here.  GGMW, especially, is a company that has 
shown it can talk to the Russians (its travails used to form 
one case studied at the Harvard Business School).  A trade 
delegation of Georgian exporters to Russia might create some 
positive impetus. 
 
Conclusion 
---------- 
 
¶19. (C)  We see no quick or easy fix to the South Ossetia 
problem or to broader Russian-Georgian dysfunctionality.  A 
condition for any movement in the right direction will be to 
make sure Georgian leaders remain focused on the fact that, 
whatever their frustrations, any military "short-cut" on 
South Ossetia would be a ride alone into what might quickly 
prove to be a harrowing dead end.  The Russians need to be 
equally forcefully reminded -- by Europeans as well as 
Americans -- that they are playing with fire in a region 
where they cannot afford a conflagration, and that while the 
U.S. and Europe cannot substitute for Moscow in promoting a 
resolution, Russia,s claim to be a responsible power depends 
on its performance in cases where it has the wherewithal to 
bring conflicts to a peaceful end. 
BURNS