After all the huffing and puffing about what civilizations don’t do in the 21st century (does Abu Ghraib ring a bell?) on the one side, and finger-wagging about spheres of influence on the other, what does the Georgia tragedy add up to? Is cooperation with Russia fading beneath a new Cold War? Is Russia facing unintended consequences by turning the states in the former Soviet Union and ex-Warsaw Pact that they are trying to put on notice toward the West — not to mention further damaging their own sinking economy and financial markets?

There is no debate about the nastiness and bloody-mindedness of the Russian military expedition under the eerily familiar pretext of protecting its citizens. The dominant view in the U.S. seems to be something close to a comfortable reversion to a Cold War paradigm of Russia; though some, while also condemning Russian behavior, argue that the U.S. and NATO crossed one too many of a resentful Russia’s redlines, particularly in disputed territories on its border. The two competing views were nicely summed by James Traub in a NYT analysis: “It is either an expansionist, belligerent power whose ambitions are insatiable or a ‘normal’ state seeking to restore influence and regional control along its borders, commensurate with its wealth and power.”

The problem is that is it neither, but rather, a bit of both, driven more by a sense of grievance and seething resentment than rational calculation of its broader self-interest. Therein lies the policy dilemma. For Washington, it is a question of supporting a democracy; for Moscow it is visceral nationalistic reaction to a troublesome neighbor. It appears a case of values bumping up against interests.

It might be argued that all are rational actors within their own internal logic: The U.S. values safeguarding democracy in Georgia ahead of its relations with Russia; Moscow places dominating its “near abroad” more than its economic interests and integration into the world system; and Georgia had reason to believe assault on South Ossetia would not trigger a full-blown Russian invasion.

Perhaps. But I doubt it. The more plausible explanation is a cycle of action/reaction that reveals ill-considered moves by all actors. Georgia disregarded U.S. admonitions not to fall into the Russian trap by provoking a response. Russia, wary of “color revolutions” in general, and seeing a less than altruistic U.S. desire to support democracy in Georgia, seized the opportunity to bash its nemesis, Saakashvili, and an opportunity for “payback” after 17 years of the U.S. and NATO doing what they pleased and largely disregarding Moscow’s concerns.

It is difficult to see how anyone really wins. For Russia, its military excess has resurrected the spectre of the Russian Bear from Riga to Beijing (Moscow was unable to get support even in its Shanghai Cooperation Organization). “New Europe” is on guard, rethinking NATO’s mission. And while the perilous state of the world economy had a lot to do with the sinking Russian stock exchange and the shrinking Ruble, the Georgia crisis added a new factor, one that won’t help its bond ratings.

The economic cost may be serious. Writing in the Moscow Times recently, Anders Aslund argued: “Aug. 8 stands out as a fateful day for Russia. It marks Prime Minister Vladimir Putin’s greatest strategic blunder. In one blow, he wiped out half a trillion dollars of stock market value, stalled all domestic reforms and isolated Russia from the outside world.” With inflation at 15%, oil prices sinking, a grave need in investment for infrastructure, and Russia’s prospective WTO accession, which by some estimates could triple non-energy exports kicked into the distant future, it is hardly an opportune time to give potential foreign investors new reasons for skepticism.  In the past several weeks Moscow has announced it will suspend agreements to import pork and chicken, banned nineteen U.S. companies from exporting poultry to Russia, blocked Turkish trucks at customs posts, and said it would review its trade agreement with Ukraine.

The U.S., faced with the prospect of cooperation with a major power on global issues from nuclear proliferation and arms control to climate change and UN peacekeeping becoming problematic, has sent a message with a $1 billion aid package for Georgia, yet stopped short of sanctioning Moscow. Postponing a civil nuclear agreement with Russia whereby Moscow would melt down fissile material from decomminssioned nuclear weapons — a program from which we benefit as much as Moscow — underscores the dilemma and the lack of U.S. leverage.

What is missing from this picture is Adult Supervision. The crisis highlights for the U.S. the need to understand the limits of power and to choose priorities. For Moscow, it highlights the unsustainable contradiction: the unlikelihood of a 19th century mindset succeeding in a world of 21st century economies, issues and problems.

The question all parties need to ask is: where is this going? Perhaps it is time to step back, take a deep breath, and consider different paths to different futures. It may be that at the end of the day, Russia is the perennial outlier in Europe, with DNA encoded for expansionism. But it is also true that since the collapse of the USSR, a Europe made whole and free (and its U.S. facilitator) has yet to think through the question of where Russia fits in and what are its legitimate interests. Perhaps this is a moment to at least explore whether it is possible to find a balance of interests, address Russian security concerns and better integrate itself as a responsible stakeholder in the European and global order, and at the same time, allow fledgling democracies in Georgia and Ukraine to flourish.

Robert Manning is a Senior Advisor to the Atlantic Council.  The views expressed here are solely his own, not those of any U.S. government agency.

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