The conclusion: both Georgia and Russia lost the Five Day War.

Anniversary of recognition of Abkhazia and South Ossetia is a cause for toting up political, military, and economic consequences of the last year events in the Caucasus. Elaborating on the subject yesterday, the Russian leadership emphasized that the decision to recognize the self-proclaimed republics had been correct and spoke of the progressive advance of the relations with them. Deployment of the Russian regular army that stopped the Georgian blitzkrieg prevented the hostilities from spreading to the rest of the Caucasus – and saved a great deal of lives into bargain. What will be much more interesting to know, however, is whether or not Russia itself gained anything from the Five Day War.

Recent arrest of Stroiprogress’ construction machinery building a gas pipeline from Russia to South Ossetia is an indication of the quaint and bizarre forms gratitude for liberation might take. With the runaway Georgian provinces recognized as sovereign states, Moscow might soon find them angling for a multiple-vector foreign policy and demanding more and more from its savior and sponsor in return for loyalty. Premier Vladimir Putin promised Abkhazia about 25 billion rubles a short while ago. Considering the forthcoming election in the republic, the incumbent administration Moscow supports will certainly find the money handy.

These days, international status of Abkhazia and South Ossetia resembles that of the Turkish Republic of Northern Cyprus, an artificial political unit recognized by Turkey alone. The expected “parade of recognitions” never took place. Not even the countries known as Russia’s allies are in a hurry to recognize Abkhazia and South Ossetia. Signals from Moscow that this is what is expected are inevitably ignored. Recognition of the runaway provinces by Nicaragua failed to progress further than a statement made by its President Daniel Ortega. The parliament has never ratified recognition. Neither do Hugo Chavez and Raoul Castro volunteer to recognize Abkhazia and South Ossetia.

There is one other corollary of the last year events to be taken into account. The Russian-Georgian war instilled fear of Russia in post-Soviet countries. The fear it instilled, however, is insufficient to make them obey orders from the Kremlin without getting something in return. Russia’s allies take care to maintain their distance which is the only conclusion to be drawn when one recalls trade wars with Belarus, Uzbekistan’s official protests to establishment of another military base in Kyrgyzstan, and relegation of the Russian language in Tajikistan.

Shutdown of the US AF Base in Kyrgyzstan cost Moscow a grant ($150 million) and a loan ($2 million) to Bishkek.

The war affected communication with Armenia, Russia’s ally in South Caucasus. Bilateral economic ties between Russia and Georgia that could help with restoration of trust become severed one after another. Mutual trade in the first six months of the year amounted to meager $129 million – a dramatic fall from the $349.5 million it had amounted to over the same period of 2008.

The war and recognition of the rebel republics badly affected Russia’s image and repute in the world. The Western community and post-Socialist countries regard the war and actions of the Russian regular army on the Georgian territory as resurrection of the imperial strategy. It took the crisis, installation of Barack Obama in the White House, and his “rebooting” of the American-Russian relations to restore the status quo. Drain of foreign capitals from Russia during the war (more than $10 billion were withdrawn) fomented panic in the Russian exchange market.

Georgia lost the war physically (its entry into NATO postponed) but score a moral victory. Russian army on distant approaches to Tbilisi, territorial losses, countless escapees from the zone of the hostilities – all of that transformed the aggressor into the victim. Neither did the outcome of the war unseat Mikhail Saakashvili in Tbilisi as Moscow had hoped. Saakashvili cunningly turned the tables and used the hypothetical external threat to distract attention of general public from the genuine problems of the country. Settlement of the conflict in the Caucasus became a European project, one Europe is prepared to finance. In a word, both Georgia and Russia list the Five Day War.