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The risk of war in the Caucasus

Overview

The worst conflicts in humanitarian terms may not be the most dangerous for the investment climate and market confidence. In the case of Russia, the human disaster of the colonial wars in Chechnya made little impact on the economy and markets – which look much more vulnerable to the relatively minor conflicts in the separatist Georgian regions of Abkhazia and South Ossetia. The reason is simple: unlike Chechnya, these conflicts have an international dimension. New wars in Abkhazia...

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