Georgia Energy and Security

Georgia Energy and Security

Economy, energy and environment

After the phase of internal instability of the early 1990s, Georgian governments implemented an effective policy of transition to the free market through the privatization of public enterprises and subsequent fiscal and financial reforms. Since 2000, the economy has thus recorded significant growth rates, only partially affected by the negative effects of the international crisis. Heavily impacted by remittances, the Georgian economy suffered from poor performance of the Russian economy: the Ukrainian crisis, the collapse of oil prices and the devaluation of the ruble, had a strong impact on the remittances of Georgian workers, which in the first months of 2015 decreased by more than 25% compared to a year earlier. The country’s growth prospects are destined to decrease in the short term: the construction sector, at the moment the driving force of the country’s economy, will not be able to continue to expand in the coming years. A key to Georgia’s economic development could be, if well managed at the government level, the ability to attract foreign investment.

A country rich in hydroelectric resources but poor in hydrocarbons, Georgia imports almost all of its oil and gas. Traditionally dependent on Russian energy supplies, Georgia has combined the need for diversification of hydrocarbon suppliers with the possibility of acquiring a key role in the transit of energy resources between the Caspian and Western markets. Starting from the second half of the 1990s, Georgia has thus become the geographical hub of the energy route between Azerbaijan and Turkey, along which the Baku-Tbilisi-Ceyhan (2005) oil pipeline and the Baku-Tbilisi-Erzurum gas pipeline were built. (2006). Azerbaijan is therefore the main supplier of hydrocarbons to Georgia, in whose energy sector it has heavily invested. According to indexdotcom, the Azerbaijani-Georgian energy axis has also been strengthened with the approval of the gas pipeline projects that from 2018 will connect Baku and European markets. As a demonstration of the growing importance of the Georgian role, Tbilisi hosts the coordination office for the Caucasus of Inogate, a European program aimed at protecting the energy security of the community space.

Defense and security

The contrast between the secessionist forces and the distancing from the Russian-centric redefinition of the post-Soviet space have always been the priorities of Georgian defense. The cornerstone of this policy was the deepening of security cooperation with the United States and the gradual rapprochement with NATO. Member of the Partnership for Peace since 1994, Georgia has joined all cooperation mechanisms between NATO and external partners, contributing to the maritime counter-terrorism operation Active Endeavor in the Mediterranean and taking part in peacekeeping missions in Kosovo (1999-2008) and in Afghanistan, where for a long time it was the second largest contributor in relation to population.

The goal of joining NATO, through the signing of the Membership Action Plan (Map) with the Alliance, nevertheless failed during the 2008 Bucharest summit. On that occasion, despite the firm support of the United States, the members of the NATO were reluctant in agreeing the Map to Georgia and Ukraine, limiting themselves to issuing a declaration of principle on the future membership of the two countries. The Russian-Georgian conflict, which broke out a few months after the Bucharest summit, seems to have drawn an insurmountable red line with respect to the possibility of further NATO penetrationin the post-Soviet space. The explosion of the Ukrainian crisis in early 2014 had a strong impact on public opinion and on the Georgian establishment. While fears have grown for a possible extension of the crisis, on the other hand Moscow’s aggressive policies seem to have awakened in Tbilisi the will to seek closer collaboration with NATO and the association agreement with the European Union, signed in June 2014. In recent years, Sogno Georgiano has made the normalization of relations with Moscow a counterpoint to the attempt to strengthen Euro-Atlantic relations, also obtaining notable successes. However, considering Russia’s enhanced collaboration with the territories of Abkhazia and Ossetia, these advances could be wiped out very quickly.

At the same time, the process of strengthening bilateral cooperation with the United States continues. Since 2001 Washington and Tbilisi have actively collaborated in the fight against international terrorism. The Defense Department, in particular, contributed to the training of Georgian border troops deployed on the border with Chechnya. The security of the Georgian borders, on the other hand, had also been at the center of several diplomatic incidents between Tbilisi and Moscow which, accusing Georgia of guaranteeing Chechen terrorists free zones across the border, had repeatedly carried out air operations in the territory Georgian. Georgia, for its part, has firmly supported the regional initiatives of the White House, starting with Operation Iraqi Freedom, as has Isaf. In January 2009, the United States and Georgia signed the Charter for the Strategic Partnership, through which four working groups for cooperation in the fields of defense and security, democratization, trade and energy were established. In 2012, the United States and Georgia began work on the possible implementation of a free trade agreement.

Georgia Energy