Daniel Drezner makes a compelling case for the geopolitical and financial costs Russia has suffered due to its invasion of Georgia. Among the former, its embarrassing isolation as the only country (outside of Daniel Ortega’s Nicaragua) to recognize Abkhazia and South Ossetia. Among the latter, the $21 billion that fled the Russian markets in the war’s aftermath. I agree that the decision to recognize the two breakaway provinces was a strategic error, both for the reasons Drezner identifies, but also because it wasted a pressure point the Russians could have saved for later.
But I’m less convinced by an argument that considers only the costs of the invasion to determine whether or not the Russians came out of the exchange ahead. Any use of force comes with costs, and in the globalized market, capital flight is a significant one. I’ll wait to see how much of that flight is permanent, though. Russia has also undermined trust (among the EU, most notably) as a reliable partner, as well, which is also a significant cost of the use of force. But that reflected a calculated risk that the EU is too dependent on Russia (most notably, but not exclusively, as a source of energy) to do much about it.
On the other hand, the use of force against what amounts to a U.S. proxy-in-training sent several unmistakable signals, all of which I think outweigh the costs that Drezner and others have identified. First, Russia demonstrated that it is willing and able to back up its bark with some bite, especially in its immediate neighborhood. This is significant both with regards to Russian demands for a recalibration of its geopolitical weight, but also with regard to lingering doubts about the efficacy of its military instrument.
Second, although the Russian riposte to the initial Georgian military action was disproportionate, it was ultimately limited. In other words, it demonstrated a certain discipline in the use of military force for political objectives that mitigates the initial alarm the invasion generated.
A lot still depends on how Russia (and the U.S., NATO, and the EU) handle the post-military phase of the crisis. But if Russia manages to add the credible threat of force to Western calculations about how to handle its resurgence without suffering significant longterm costs (whether financial or political), its gamble will have paid off.