John Robb

HALTING RUSSIAN ENCROACHMENT

What do Finland, the Baltics, Ukraine, Georgia, Poland, Azerbaijan, and the central Asian countries have in common? A fear of Russian encroachment. If you talked to defense experts about it, they would frame the situation using cold war logic (NATO expansion, missile defense, etc.). If you talked to political scientists or area experts, they would talk about spheres of influence and Russia's historical influences stretching back to Peter the Great (solutions include alignment, sensitivity to ethnic issues, etc.). Unfortunately, these conversations would be an utter waste of time. The real power in today's world rests in the hands of global markets.

The scorecard for success and failure in this environment is set by capital inflows, share prices of aligned corporations, and service relationships with trading partners. Seen through this lens, nearly every aggressive action by Russia over the last three years is easily explained.

The Opportunity Space
This shift towards economics and networks also means that small states on Russia's periphery now have a defensive trump card. They can inflict damage on Russia that far exceeds the potential economic benefits Russia receives. Any one of these nations could easily inflict tens of billions in damage to Russia's energy industry (which pays for much of the Russian government). IF these nations came together in a defensive alliance, its possible that Russian energy production could be halved and inflict damage that's counted in the trillions. Systempunkts for Russia include:

• Service relationships with energy trading partners (Europe and China). A way to evoke a diplomatic response from these countries (which, in contrast, were silent during the recent invasion of Georgia).
• The share price of Gazprom and Rosneft. Russian plans for economic expansion are tightly coupled to the share prices of these companies (downstream integration, etc.)
• Capital flows (drive the hot money and investment capital out of Russia). Recent ouflows from Russia during the Georgian campaign did more to halt the fighting than anything else.

Systems Disruption as Defense
Beneficially for these countries, the costs of maintaining a defensive posture that relies on systems disruption is nearly zero. There is no need to maintain a "toy army" or any defensive systems at all. In fact, it's likely preferable not to put up any fight at all during a Russian incursion to minimize damage/casualties. What is needed are small teams (given how may in these countries already speak Russian and can pass for Russian) that can disrupt pipelines, powerlines, etc., which are very inexpensive to maintain (another option is to purchase guest workers/criminals to do the job). Further, some of these countries have a well developed software industry and can generate cyberattacks on Russian corporate targets. Even better, these countries can invite anyone in the world offended by the Russian action, through sites that provide target lists/exploits and offensive software, to join in the attacks (bounties/rewards could be offered for exceptional attacks). In many cases, the returns on investment (ROIs) for these disruptions can top one million $ to one $.

NOTE: What isn't needed? Army, Air Force, Navy, NATO membership, missile defenses, etc.

Posted by John Robb on Wednesday, 10 September 2008 at 09:55 AM | Permalink | Comments (1) | TrackBack (0)