Gerald F. Seib / Wall Street Journal | August 12, 2008

This is a week in which Sens. John McCain and Barack Obama likely are thinking more about Georgia the country than Georgia the state, and for good reason: The hostilities that have erupted between Georgia and Russia are telling us a lot about the world order one of them will inherit as the next president.

As hostilities intensify between Georgia and Russia, WSJ’s Jerry Seib reports on the new world order facing the next president of the United States where good ties with China are proving strategically invaluable.

Russia’s decision to send its troops and bombs into Georgia is a testament, at least in part, to how much the flow of billions of dollars in oil and gas revenue is emboldening Moscow to defy the U.S. and the West in ways it either wouldn’t or couldn’t just a few years ago.

But the troubling strategic reality that is emerging is bigger and starker than just that. The rise of energy prices also is enriching other bad actors, creating a kind of globe-girdling string of well-heeled regional antagonists the U.S. can’t ignore.

In the Middle East, Iran has assumed the role of energy-enriched regional power hostile to the U.S., with its ability to build a nuclear program and to bankroll Hamas and Hezbollah Islamist militants made all the easier by soaring oil prices. In Latin America, Venezuela aspires to play the role of oil-fueled, anti-American antagonist.

Now Russia, increasingly nationalistic and expansionist, may well be emerging as a similar oil-financed regional power either indifferent or hostile to the wishes of the U.S. and the North Atlantic Treaty Organization.

“What we’re basically seeing,” says Richard Haass, president of the Council on Foreign Relations, “is a redistribution of power.”

It’s a troubling picture that has one additional, important strategic implication. The emerging new global equation makes fostering good relations with China even more important to the U.S. in the global balance of power. Indeed, it was appropriate, perhaps even prophetic, that President George W. Bush was in Beijing for the Olympics, smiling and saying nice things about “respect” for China’s people, even as Russia was bulldozing into Georgia.

Energy has a lot to do with creating this overall picture, of course. In Georgia, certainly, energy is an important factor, and not just because Georgia is strategically important as a conduit for oil and gas supplies from the Caspian Sea region to the West.

In the 1990s, Russia was flat on its back financially, broke at home and indebted to the West, and not in much of a position to defy the West by challenging Georgia’s transition from former Soviet republic to pro-Western democracy on its southern border.

Today, thanks to soaring oil and gas prices, Russia is an emerging financial power. A recent report by the McKinsey Global Institute estimated that Russia had $811 billion in foreign-investment assets at the end of 2007, second largest among oil exporters after the United Arab Emirates.

FULL ARTICLE

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