THE DEEPENING conflict between Russia and Georgia over South Ossetia may seem far removed from, and of little immediate consequence to, Jamaica.

Such a view, though, is a misreading of events, and for more than the fact that instability anywhere is bad for stability everywhere. This war, if not quickly contained, has potential economic import, which might begin to unfold when the oil markets open today.

After their retreat over the last fortnight or so from their recent stratospheric levels, oil prices could resume their upward trend. This would be bad for Jamaica, which counts on imported petroleum for more than 90 per cent of its energy needs as it struggles to find the foreign exchange to pay the bill, notwithstanding the generous payment terms allowed by Venezuela on supplies from that country.

Global dependence on russian energy

The problem here is in two parts. One is that Russia is a major source of oil and natural gas and is a major supplier of the latter to Western European economies, including through pipelines that run through Georgia. In the past, Russia has been accused of using its energy muscle as political leverage and concerns that it might happen again may cause traders to factor this perception into the price of oil.

The second factor is related to the first, and has to do with Western-supported efforts to lessen European and global dependence on Russian energy and Mideast oil by balancing it with suppliers from former Soviet central Asian republics, particularly Azerbaijan. The Caspian region has among the world's largest reserves of oil and a pipeline now runs for more than 1,000 miles from Azerbaijan's Caspian fields, via Georgia to Turkey, delivering to the West about one per cent of the world's daily oil output. As the fighting broke out in South Ossetia at the weekend, Russian planes bombed Georgian areas, close to that pipeline, damage to which would affect supplies and, consequently, prices.

Irresponsible gamble

Jamaica, it is obvious, has an interest in the developments in the Caucasus region. Indeed, Kingston and its partners in the Caribbean Community have a responsibility to call for peace, but in a fair and even-handed manner. While Russia should be urged to end its attacks, especially in areas of Georgia outside South Ossetia, there must also be recognition of the patent miscalculation and irresponsible gamble by Georgia's President Mihail Saakashvilli in this issue.

South Ossetia, like Abkhuzia in the west of Georgia, fought the former Soviet republic that had declared independence from Georgia in the early 1990s following collapse of the Soviet Union. The separatists have been supported by Moscow, which maintains 'peacekeepers' in the territories.

All this, for Moscow, is part of a larger geo-political strategy. Moscow sees the Caucasus as being part of its backyard and within its sphere of influence, or perhaps, at worse, neutral territory. President Saaskashvilli, however, has pursued an aggressive European agenda, pushing not only for membership in the European Union but in the military alliance, NATO. All of which makes Russia nervous: perhaps hearing echoes of Khruschev's missiles in Cuba. When he decided to attempt to reassert Georgia's authority over South Ossetia, Mr Saakashvilli should have anticipated Russia's response. The world, too, would have been reminded of Moscow's allusions to the issues in Georgia when it was warning about recognising independence for Kosovo.