Now that the dust is beginning to settle, what are the long term consequences of the war between Russia and Georgia?
The Russian army has systematically dismantled the military infrastructure that Georgia's president Mikheil Saakashvili had built up with the support of George Bush. Now the Russians are withdrawing – but to positions that will let it dominate Georgia.
Saakashvili is the loser in the Caucasus – but on a global scale, it is the US. Behind the headlines, the Bush administration is getting an enormous amount of flak from expert opinion for policy towards Russia that it inherited from its predecessor under Bill Clinton. This aimed to exploit Russia's weakness after the end of the Cold War by seeking to extend Nato right up to Russia's borders.
Last week the New York Times quoted James Collins, former US ambassador to Moscow, as saying, 'We have probably failed to understand that the Russians are really quite serious when they say, 'We have interests and we're going to defend them'.'
Added to this arrogance was recklessness. A former senior intelligence analyst told the New York Times, 'We were training Saakashvili's army, and he was getting at least a corps of highly trained individuals which he could use for adventures. The feeling in the intelligence community was that this was a very high risk endeavour.'
So the Georgia crisis has exposed the Bush gang's incompetence yet again. But much more damagingly, it has also highlighted the limits of US power. The problem isn't simply that the Pentagon is too tied down in Iraq and Afghanistan to have been able to intervene in the Caucasus.
Armageddon
Even had the US had more of its military capabilities to spare, the dispatch of troops to the Caucasus would have risked a general war with Russia. Even Bush and Cheney aren't stupid enough to unleash a nuclear Armageddon.
The US's weakness is more tellingly exposed when it comes to how it will fulfil its repeated threats to punish Russia. Nato foreign ministers met last week to denounce Russia and champion Georgia – but decided on nothing concrete. The Russian ambassador to Nato jeered that 'the mountain gave birth to a mouse'.
The measures that the US has threatened to take against Russia – kicking it out of the G8 and blocking its entry to the World Trade Organisation – are largely symbolic.
They also have the inconvenience of underlining to rising powers such as China and India that these bodies aren't genuine international institutions, but are rather instruments of Western domination.
Moreover, the US needs Russia. Masha Lipman of the Carnegie Moscow Centre told the New York Times that 'there's a lot more' that the US needed from Russia than the other way around. She cited efforts to secure old Soviet nuclear arms, to support the war effort in Afghanistan and to force Iran and North Korea to give up their nuclear programmes. 'Hence Russia has all the leverage,' she concluded.
The European Union is also increasingly dependent on Russia for energy supplies. Yet it is on the economic front that Russia is probably the most vulnerable. Russian stock markets have dropped 25 percent in the last couple of months.
The week the war with Georgia broke out, Russia's foreign exchange reserves dropped by $16.4 billion. This capital flight needs to be put into perspective however. Russia's reserves have been swelled by high prices for oil and natural gas. They stand at $581 billion – the third highest in the world.
Russia's confidence and resources are underpinned by the energy boom, and it is likely to hang tough. The most dangerous flashpoint will probably be Ukraine, whose president Victor Yushchenko wants, like Saakashvili, to join Nato.
Ukraine is almost equally split between pro‑Western and pro-Russian political forces. It also controls Crimea, still home to Russia's Black Sea fleet. During last month's war, Yushchenko threatened to stop Russian vessels involved in operations against Georgia from returning to the Crimean base of Sevastopol.
But, like other threats, this has yet to be implemented. For the moment Russia seems to hold most of the cards.
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