ŽBack from GeorgiaŽ, Pierre Verluise

Back from Georgia

21 janvier

By Pierre Verluise (PhD), Director of Research at IRIS (Paris), Director of the diploweb.com geopolitical Web site, and Distinguished Professor of Geopolitics at the Grenoble Ecole de Management

In August 2008, Georgia was at war. In the two years that have elapsed since then, what has the country become ? In many ways, it is walking a fine line. Located in the South Caucasus region of Eurasia, Georgia has an official area of 26,900 square miles (70,000 km²), twice the size of Belgium… but 244 times smaller than Russia, a neighbour that, since 2008 has, notably, been occupying two regions ─ Abkhazia and South Ossetia ─ that are within Georgia’s frontiers, according to international law. Moscow is flouting undertakings towards the European Union and has forces and resources in these two territories that together amount to 20% of the total area of Georgia. As if this were not enough, Moscow has recognised the independence of both territories, and the Kremlin is turning a deaf ear to Tbilissi’s attempts to reopen talks. In this difficult strategic context, what are Georgia’s assets and weaknesses ?

Weaknesses

We shall not dwell on the disproportionate relationship between Georgian and Russian military forces ; this was amply demonstrated in 2008. Among Georgia’s weaknesses are a scarcity of natural resources and a relatively lightweight economy in which agriculture continues to play a large role. The country’s head count is stuck on 4.6 million, nearly 31 times smaller than that of Russia. In short, the Georgian market is too small to tempt western partners to risk big. While Georgia’s natural annual growth currently gravitates around 0.3%, migratory growth is negative with two per thousand leaving every year. There are several explanations for this significant emigration, two being :
- per capita GDP in purchasing power parities that amounted to $4,850 US (2008), i.e. seven times less than in Canada or France and 3.2 times less than in Russia ;
- in November 2010, unemployment in Georgia totalled around 20% of the active population, a figure on a par with the worst affected EU nation (Spain), but twice as high as France. It is true that Russia has declared an embargo on a number of Georgian products, notably mineral water and wine.

Assets

One of Tbilissi’s stand-out strengths is a new class of young, highly motivated leaders, with American-style training. Georgia is low on natural resources ─ except water that it uses to produce hydroelectric power ─ but its location makes it an energy corridor for the transportation of hydrocarbons from the east (Azerbaijan, Central Asia) to western markets (Turkey, the western Balkans, the European Union). Despite this, the European Union is struggling to beget the Nabucco natural gas pipeline, a project mooted some six years ago with the aim of, one day (who knows ?), transporting eastern hydrocarbons, even from Iran. Meanwhile, Georgia is dependent on the good will of foreign investors, from whatever quarters.

Another asset is the strong determination of the authorities to tackle corruption, an endemic problem in the region. It is worth remembering that in 2010, Russia ranked 154th in the world for perceived corruption with a Corruption Perceptions Index of 2.1 out of 10, on a level with Congo-Brazzaville… In Georgia, vigorous measures have been taken, including sacking the most corrupt police officers and training young recruits who will be better paid and consequently, in theory, less easily bought off with backhanders. European experts working in Georgia willingly recognize that a significant effort is being made. The result is that Transparency international listed Georgia 68th in the world with a 2010 Corruption Perceptions Index of 3.8 out of 10. Clearly this performance remains below the world average (5 out of 10) but is less dishonourable than that of other countries already admitted to the European Union : Romania (3.7), Bulgaria (3.6) and Greece (3.5). It will be ten years before we can gauge whether any real progress in behaviour has been achieved.

Where next ?

In the meantime, unable to convince NATO to go any further than promise future membership (Bucharest summit, 2008), Georgia’s current leaders are hoping to forge ties with the European Union. Some even entertain dreams of joining, though, for now, the more realistic target is a Stabilisation and Association Agreement (SAA). The team in power, convinced of the virtues of the free market, is intent on negotiating its conception of labour law. Clearly the Georgian population imagines the European Union as an opportunity, but how many have a precise vision of what this would actually involve ? All parties would do well to put the costs and advantages in the balance.

With, on one hand, Russia and its de facto ability to obstruct Georgian overtures towards NATO, and troops stationed in South Ossetia less than an hour and a half from the Georgian capital, and, on the other, a European Union wearied by its recent enlargements and non-existent economic growth, Georgia is uncomfortably between a rock and a hard place.

Translation Alan Fell.