Georgia: Geopolitical Risk Report
Kavkaz Files ISSN 2975-0474 Volume 24 Issue 1
Author: Giuliano Bifolchi
Executive Summary
The adoption of the ‘foreign agents law’ by the government, the unresolved territorial disputes, particularly in Abkhazia and South Ossetia, a contentious relationship with Russia, and the challenging economic conditions have amplified Georgia’s geopolitical risk in recent months.
Although in December 2023 the country got EU candidate status since Brussels noted Georgia’s significant strides in aligning with Western institutions, recent events in the Caucasian republic have raised concerns about Tbilisi’s commitment to democratic values and its Euro-Atlantic integration prospects.
The upcoming parliamentary elections in October 2024 are pivotal in determining Georgia’s future political trajectory and its relationship with both the EU and Russia.
Historical Background
Its strategic location and historical affiliations have long shaped the geopolitical significance of Georgia. Incorporated into the Russian Empire in the 19th century, Georgia experienced a brief period of independence from 1918 to 1921 before being forcibly integrated into the Soviet Union. The dissolution of the USSR in 1991 restored Georgia’s independence, but significant internal and external challenges have marked the post-Soviet era.
The “Rose Revolution” of 2003, sparked by public discontent with corruption and governance failures, led to the resignation of long-time president Eduard Shevardnadze and the rise of Mikheil Saakashvili. His tenure brought market reforms and efforts to reduce corruption, but also accusations of abuse of power and a military conflict with Russia in 2008 over the separatist regions of Abkhazia and South Ossetia. Russia’s subsequent recognition of these regions’ independence and its continued military presence there have been sources of ongoing tension.
The emergence of Bidzina Ivanishvili in the political arena in 2011, followed by the triumph of his Georgian Dream coalition in 2012 at the parliamentary elections, signified a notable political transition. Despite Ivanishvili’s resignation in 2013, his enduring influence has contributed to the volatile political environment. The return and subsequent arrest of Saakashvili in 2021 highlighted the persistent political rivalries.
Its application for EU membership evidences Georgia’s pro-Western aspirations in 2022 and the granting of candidate status in 2023. However, recent legislative moves to restrict foreign-funded NGOs have generated widespread domestic and international backlash, complicating Georgia’s path to deeper integration with Western institutions.
Georgia: Scenario Context
The strategic location of Georgia in the Caucasus region, with borders to Russia, Turkey, Armenia, and Azerbaijan, dominates its geopolitical landscape. This positioning makes the country a focal point for regional power dynamics and international interests, particularly those of Russia and the European Union.
Despite the government’s consistent expression of its intention to join the European Union and its vehement opposition to the perceived Moscow military occupation of Georgian territory, Russia’s influence in Georgia remains significant, primarily because of historical connections between the Russian Empire and the Soviet Union.
Indeed, although since the beginning of the Ukraine conflict, Kyiv has exhorted Tbilisi to open a ‘second front’ against Moscow in the Caucasus to divide the Russian military forces, Georgia has always been cautious in its relations with the Kremlin considering the country’s economy depends heavily on the Russian market.
Moscow’s recent opening of a naval base in Abkhazia serves as a reminder of Russia’s influence and presence in the region, which has raised alarm for Tbilisi and Kyiv given the rising Russian military power in the Black Sea area.
Regarding Tbilisi’s relations with Brussels, the Deep and Comprehensive Free Trade Agreement with the EU and visa-free travel to the Schengen area highlight significant milestones. Interested in increasing its influence in the Caucasus region, the European Union has supported Georgia in its confrontation with Russia regarding the de facto autonomous republics of Abkhazia and South Ossetia.
By contrast, the recent push to regulate foreign-funded NGOs has raised alarms about Georgia’s democratic trajectory and its compatibility with European values.
The upcoming parliamentary elections in October 2024 will be a critical juncture for Georgia. The elections will test the country’s democratic institutions and its commitment to Western integration amid internal political strife and external pressures from Russia.
Domestic Politics
The ruling Georgian Dream-Democratic Georgia (GD-DG) party, although victorious in the latest parliamentary elections, faces dwindling popularity and regular public dissent. Bidzina Ivanishvili’s re-entry into politics in 2024 has amplified the political discourse, further complicating the already intricate political landscape.
The government’s recent legislative attempts to control foreign-funded NGOs have provoked large-scale protests. Critics argue these measures are reminiscent of Russian-style restrictions on civil society and are incompatible with democratic norms. The protests have seen heavy-handed responses from riot police, including the use of tear gas and water cannons.
Rather than simply comparing it to Russian-style restrictions, the implications and motivations behind this law are more intricate and demand a more thorough analysis. There is a correlation between the “foreign agents law” and Bidzina Ivanishvili’s aspiration to monopolise the nation’s internal political affairs, thereby expanding his power and influence.
Looking at Georgia’s economic situation, while benefiting from increased Russian capital inflows because of the war in Ukraine, remains precarious. High unemployment and corruption persist, although there have been improvements in recent years. The country’s strategic ambition to become a transit hub for Asia-Europe trade offers potential economic benefits but also entails risks associated with regional instability.
Geopolitical Risk Assessment
Georgia, which is a moderate risk country, is located in both Eastern Europe and Asia along the volatile Caucasus region. Its historical ties to Russia, ongoing territorial disputes, and aspirations influence the country’s geopolitical complexities for Western integration. Despite recent economic improvements, domestic political instability and external threats continue to pose significant risks.
Political Risks
- Territorial Disputes: The unresolved status of Abkhazia and South Ossetia remains a primary source of instability. Russia’s military presence and recognition of these regions’ independence complicate any potential resolution and perpetuate tensions.
- Russian Influence: Moscow’s historical dominance and ongoing efforts to undermine Georgian sovereignty through military and political means present a constant threat. Any further escalation in the region could destabilise Georgia significantly.
- Western Integration: Georgia’s EU candidate status and aspirations for NATO membership align it with Western interests but also draw ire from Russia. The ‘foreign agents law’ perceived as undermining democratic values could jeopardise these integration efforts.
- Domestic Political Instability: Frequent protests, political polarisation, and government measures against civil society organisations contribute to a volatile domestic environment. The upcoming parliamentary elections will be a critical test of Georgia’s political stability.
Economic Risks
- Structural Issues: High unemployment and persistent corruption, despite recent improvements, pose ongoing economic challenges. These factors can deter foreign investment and exacerbate social discontent.
- Economic Dependence: The inflow of Russian capital because of geopolitical shifts offers short-term economic benefits but also increases dependence on an unstable source. Long-term economic stability will require diversification and sustained reforms.
Conclusion
Significant political upheaval and external pressures have marked Georgia’s journey since its independence from the Soviet Union.
The geopolitical risk assessment emphasises the dual threats from unresolved territorial disputes and Russian influence, alongside domestic political instability and economic vulnerabilities.
Georgia’s strategic ambitions, including its desire to become a transit hub and integrate with Western institutions, offer both opportunities and risks. The forthcoming parliamentary elections will be a critical juncture, testing the resilience of Georgia’s democratic institutions and its commitment to Western integration amidst ongoing internal and external challenges.
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