Amidst the din of expert commentary following Russia’s invasion of Georgia, two basic interpretations of the US-Russia relationship have emerged. The first focuses on Russia as a strategic competitor to the US, and calls for a tough line against the Kremlin’s consolidation of power at home and expansion of Russia’s so-called “sphere of influence.” The second acknowledges the United States’ own responsibility for policies that exploited Russia’s weakness in the 1990′s, and favors offering more conciliatory treatment now in exchange for cooperation on key US goals.

Both schools of thought presume that Washington is still the center of gravity in the US-Russia relationship, and that a change in US policy will yield a direct and predictable response from Moscow. But today it is the US which faces an economic and geostrategic “time of troubles,” and Russia which enjoys a position of relative strength, security and prosperity. Thus, for the first time since the Cold War, the balance of power in the US-Russia relationship favors Moscow, leaving the initiative for closer ties in the hands of Vladimir Putin and Dmitry Medvedev. Although Russia’s long term interests should favor partnership over confrontation, its immediate incentives to cooperate are much weaker.

Problem number one is that Russia has no interest in negotiating a settlement over Georgia. Militarily, Moscow holds all the cards, having swept Georgian forces from the separatist regions of South Ossetia and Abkhazia, and clearly demonstrating its ability-if not necessarily its intent-to conquer all of Georgia and topple the pro-US government of President Mikhail Saakashvili. Politically, Russia has also strengthened its hand in the region, solidifying the de facto annexation of South Ossetia and Abkhazia, and sending a clear message to other former Soviet states that their security depends more on Moscow’s good graces than on ties with Washington or Brussels.

Russia’s economic interests have been equally well served by its move against Georgia. Although Russian forces did not sever the Baku-Tbilisi-Ceyhan pipeline, designed to transport one million barrels of oil a day from the Caspian to the Mediterranean, the pipeline has been inoperative since a mysterious explosion on August 6, and is unlikely to resume pumping under looming Russian guns. The unraveling of this British-led effort to bypass Russian oil routes underscores Moscow’s virtual stranglehold on energy supplies to Western Europe. According to Alexander Dugin, international politics advisor to Russia’s Duma, “The world and countries in the region have seen that not NATO, but Russia is the only one who could secure the energy routes.”

Although Russia’s stock market is off over 25% from its springtime high, most of the slump is attributable to a drop in oil prices and investors’ uncertainty over the fate of several Russian companies under investigation by the government. With over $150 billion tucked away in national “stability” and “wealth” funds, the Kremlin can easily endure both stock market jitters and fluctuations in the price of oil. Moreover, tensions between Russia and the US will tend to drive oil prices higher, benefiting Russia at the expense of energy consumers in the US and Europe.

The West, for its part, lacks any real leverage to bring Russia to the negotiating table. Russia will continue to veto any attempt by the UN Security Council to compel a settlement with Georgia, and with ongoing counter-insurgencies in Iraq and Afghanistan, the US and our NATO allies have neither the resources nor the political will to intervene on Georgia’s behalf. From Russia’s perspective, capitalizing on an ostensibly humanitarian intervention in South Ossetia and Abkhazia to back those regions’ separatist ambitions merely follows the Kosovo precedent set by NATO.

Even if Russia agreed to good faith multilateral negotiations, it would have little to talk about with the United States. Despite President Bush’s insistence that he and Prime Minister Vladimir Putin enjoy a close, personal relationship, the US Administration has barricaded almost every potential avenue to improved ties with Moscow. The US is less likely now than ever to advance Russia’s bid for WTO accession, repeal the Soviet era Jackson-Vanek Amendment, or halt NATO expansion and missile defense. With Secretary of State Condoleezza Rice declaring that Russia’s reputation is “in tatters” after its attack on Georgia, and Senator John McCain calling for Russia’s ouster from the G-8, the US appears to have spent much of its rhetorical ammunition against Russia. The fact that Moscow is still defiant indicates just how little leverage the US currently has.

But renewed confrontation with the West will not serve Russia’s interests in the long term. Since 1991, the former Soviet satellites of Eastern Europe have turned permanently westward, with NATO and EU member states now bordering directly on Russia. Despite fabulous energy riches, Russia’s prosperity is concentrated in a tiny percentage of its territory and population, and much of the country’s infrastructure-including the bulk of its conscript army-remains in a dilapidated state. If Western investment dries up, where will Russia turn? Traditional client states like Syria and Belarus have little to offer. China may be an appealing alternative, but the two countries are natural competitors for dominance in Central and East Asia, and Russo-Chinese friendship has been of historically short duration.

At this point, Russia could still choose to pursue cooperation from a position of strength. Former Soviet Premier Mikhail Gorbachev recently suggested that if Americans are “ready to also consider the interests of the other side and of common security, it may actually help rebuild trust between Russia and the United States and allow them to start doing useful work together.” The US should indeed welcome Russia’s full recovery, acknowledge its legitimate interests, and seek to rebuild trust. For Russia’s part, it is time to put long term interests ahead of wounded pride and offer a vision of partnership both sides can appreciate.

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