The aftermath of the Russian invasion of Georgia in defense of the separatist territories of South Ossetia and Abkhazia certainly has not smoothed any of the ruffled feathers. Yesterday, Russia recognized the independence of the break-away territories, making it clear that the invasion was pay-back for the west's protection of and support for Kosovo, which declared its independence from Russian-allied Serbia. The US and most of its allies denounced the move, with the US declaring that it would veto any attempt by Russia to get the UN to recognize the territories' independence. US Secretary of State Condoleezza Rice said “Abkhazia and South Ossetia are a part of the internationally recognized borders of Georgia, and it’s going to remain so.”
Today, the tensions continued to rise, as a US warship arrived in the Georgian port of Batumi, ostensibly to deliver humanitarian aid. However, the interjection of US sailors and vessels into the region will undoubtedly be read by Russia as a signal of the American willingness to support Georgia in any further crises, and perhaps even as a commitment to defend Georgian territorial integrity. In response, Russia sent three warships to a port in Abkhazia, clearly signaling Russian intentions to break the region, along with South Ossetia, away from Georgia. Meanwhile, the Russian invasion prompted Poland to move quickly to accept deployment of an American ballistic missile defense system, a move to which Russia has responded with threats of military action. Russian President Dimitri Medvedev has responded to the west's support of Georgia, as well as the deployment agreement of the ABM system, by stating that “[Russia is] not afraid of anything, including the prospect of a Cold War.”
Is that where all of this is leading? Does Russia, desperate to regain the glory, power, and respect held by the Soviet Union, want to enter into a new global struggle with the United States, NATO, and the western powers? Is the US ready to accept such a development?
While it's possible that Russia prefers a new Cold War to the status quo of weaknesses, dependence, and perceived humiliation, it's not likely to happen. The Russia of the 21st century is a far cry from the Soviet Union. Russia lacks, plain and simple, the military capability, and the power projection in particular, to challenge the US for global leadership. While Russia's economy has strengthened, it has done so largely on the basis of energy exports, which makes Russia as dependent on foreign economies as foreign states are on Russia. Meanwhile, the rest of the economy is underdeveloped and highly dependent on foreign investment, which gives the outside world a fair amount of leverage over Russia. The Russian stock market has taken a beating since the invasion of Georgia, and lost billions of dollars in value with the recognition of independence. Foreign investors, wary about the chance of war, sanctions, or other punishments, are pulling their money out of Russia, and the stock market lost 4.1% of its value, and the ruble has slid 4% as well. Also yesterday, Russian officials acknowledged that Russia is not likely to be admitted into the World Trade Organization any time soon. And while there were real economic concerns over Russia's accession, the invasion more or less sealed Russia's fate.
All of this demonstrates the potential power of engagement. If Russia seeks a new Cold War, it will have to do so at the expense of its domestic economy, which, given that many of the leading Russian government officials are connected to Russian state-owned enterprises (Medvedev was chairman of Gazprom until ascending to the presidency in May), will directly affect their personal finances.
This is not to say that Russia will not continue to challenge the West. But the price of starting a new Cold War is likely far more than Russia would be willing to pay. The US, NATO, and the western powers need to make it painfully clear to Russia that the price for this behavior will be, first and foremost, economic, and secondly, Russian participation in international organizations. Far from being empty, such threats can actually be carried out, and can impose serious costs on Russia.