Foreign Tensions To Remain

Russia's August 7 invasion of Georgia will continue to cause tensions in its bilateral relationships with the EU, US and several of its neighbour states through the medium term. This has prompted a reappraisal of the country's political risk profile especially as it will likely delay the achievement of core foreign policy objectives including membership in the WTO and OECD as well as a partnership pact with the EU. We stress though, that elevated tensions do not mean a return to Cold War-era policies or tactics and that the core risks apply more to the former Soviet region than Russia's strategic position globally.

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