Abstract:

Abstract Since the collapse of the Soviet Union, the Caspian Sea and South Caucasus has become the focus of considerable international attention, primary because it is one of the oldest and potentially richest oil and gas producing areas in the world. The August 2008 Russian invasion of Georgia and the unilateral recognition of the independence of Abkhazia and South Ossetia fundamentally changed the situation in the region. The war has created a new strategic situation. And the question is now how to handle this delicate situation in a strategically and geopolitically important region. So by controlling Georgia (in case Russia reaches abovementioned aims), Russia actually will be able to cut off Central Asia and Caspian resources. It means Russia would be able to isolate and cut off Azerbaijan and Central Asian countries and it will significantly strengthen its energy monopoly over Europe with all results out coming from that fact. So it’s about a major shift in the energy policy and a major shift in geopolitics based on this energy policy and Russian energy monopoly. The August war in Georgia demonstrated some risks associated with the functioning of the transit energy corridor in the southern Caucasus. It also demonstrated the need for broader security guarantees for a region that is vital to European and global energy security. This paper deals with economic damage inflicted by the Russo-Georgian war in South Caucasus and its implications for regional security.

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