2016 IN GEORGIAN-RUSSIAN RELATIONS AND FUTURE PROSPECTS

Ana Dvali, Mariam Gachechiladze
Caucasian House

Introduction

The year 2016 in Georgian-Russian relations was stable. Since 2012, the dynamics of the normalisation process have mostly continued; despite the tense political situation between the two countries, some cooperation has occurred in the spheres of trade, transportation, and humanitarian policy. Last year, in addition to the traditional Geneva International Discussions and meetings between Abashidze and Karasin, the resonant topics for the relationship included Georgian negotiations with Gazprom, the potential opening of a Russian visa-free regime for Georgian citizens, and discussions on the topic of Russian “soft power”. Given the current situation, it is unreasonable to expect radical changes in the nature of the Georgian-Russian relationship in 2017; however, increasingly variable processes occurring in the rest of the world make the regional political environment much more unpredictable.

Geneva International Discussions

gienevaIn 2016, four meetings were held in the framework of the Geneva International Discussions. Between the various rounds of discussions held last year, one of the most important decisions was made during the 23 March meeting (the 35th round). The two sides agreed to the restoration of the Gali Incident Prevention and Response Mechanism (IPRM), which can be considered as a clearly positive development. While an IPRM was functioning smoothly in the Tskhinvali region, in the Abkhaz case the mechanism was terminated during meetings in April of 2012, due to the Abkhaz side’s objections to the former head of the European Union Monitoring Mission, Andrzej Tyszkiewicz. The restoration of the IPRM allows the two sides to tend to the rights of the local population, as well as consider humanitarian and practical issues.

Another issue which was discussed in all four rounds of the Geneva International Discussions in 2016 was the 19 May killing of a Georgian citizen by the Abkhaz “border police” at the Khurcha checkpoint.  An Abkhaz military court sentenced Rashid Kanjiogli to house arrest for the murder of Giga Otkhozoria, a citizen of Georgia. The Georgian side has petitioned the Abkhaz representatives to conduct a full criminal investigation and for harsher punishment. Most likely, this topic will not lose its relevance in 2017, however the chances that the Abkhaz side will agree to concessions are not likely.

Other issues raised by the Georgian side during the discussions last year include the ongoing militarization process and military exercises in Abkhazia and South Ossetia, arrests along the occupation line in Shida Kartli, the denial of access to land for Georgian citizens living near the occupation line, and restrictions on teaching the Georgian language in the Gali municipality.

In the future, the main problem remaining on the agenda will be the agreement on non-use of force. The Georgian side entered a draft of a joint statement on the non-use of force into the discussions in 2016. However, the Russian, Abkhaz, and Ossetian sides all refused this initiative.

In the meetings, one particularly sensitive issue has been discussion on refugees and internally displaced persons, during which the representatives of Russia, Abkhazia, and South Ossetia have usually left the room. The annual resolution on internally displaced persons presented by Tbilisi to the United Nations General Assembly is unacceptable to Russia, which, according to Lavrov, impedes decisions on humanitarian issues in the Geneva International Discussions.

The Geneva International Discussions have already been held for nine years without a political breakthrough, and there are not likely to be any significant changes in 2017. The parties determine their approaches to the discussions in advance, and therefore, the situation has not changed for years. In particular, the Abkhaz side connects any issue raised by the talks to the problems of its sovereignty and international recognition of its status as an independent state, while the Georgian side foregrounds territorial integrity and its non-recognition policy. This situation is further exacerbated by Russia’s role, which positions itself as a neutral player and does not accept any responsibility for the conflict. Despite the radically different opinions of the various sides, the Geneva Talks are the only multilateral format and stable means of communication between the sides. In the future, the dialogues may become even more important due to the changing political situation in the region.

Abashidze-Karasin dialogue format

karasiniLast year, three meetings were held under the format of the Abashidze-Karasin talks. Alongside the traditionally discussed topics of the agenda, Abashidze and Karasin additionally discussed the release of Georgian citizens who had been arrested for espionage. In June, four Georgian citizens who were serving sentences in Russia were released. It should be noted that in January 2013, Georgia released 190 political prisoners, including several individuals convicted for spying for Russia, three of whom were Russian citizens. Moscow subsequently welcomed the release of its citizens. As a response to this move, negotiations over Georgian citizens detained in Russia on espionage charges began. According to Zurab Abashidze, since 2014 a total of seven Georgian citizens have been released from Russian prisons.

In addition, the two sides briefly discussed the occupied territories and other security issues at the meetings. In particular, the sides touched on the murder of Giga Otkhozoria. Abashidze’s opinion is that not only the de-facto Abkhazian government is responsible for the murder, but also the Russian government.

Another issue announced during the last meeting was the transfer of the archives of Georgian films from Russia to Georgia.

The Abashidze-Karasin dialogue format is often the subject of internal discussions. The opposition parties in Georgia accuse the government of making concessions to Russia. Part of the critics consider, that this format is not necessary, because it cannot make decisions on the most important issue between the two sides– the problem of territorial integrity. However, it should be noted that the format was not created to cover conflict- and security-related themes, as these are the major topics of the Geneva International Discussions. In this light, meetings are frequently preceded by the intensification of difficult political situations, such as arrests, the borderisation process, and other political roadblocks. This creates an important dilemma—should the participants avoid discussing security and political issues altogether?

In the context of this format, which has already taken place for five years, some progress has been made in the trade, transportation, and humanitarian spheres. The goal of the opponents of the format is to change the political agenda and influence public discourse.  During this period, the Georgian side did not make any significant concessions, despite the claims of representatives of the political opposition. In the absence of a diplomatic relationship, the format has been an important platform for cooperation in areas where the two sides’ interests do not directly conflict with one another.

Easing of visa regime

The simplification of Russia’s visa regime for Georgian citizens has been regularly discussed by Abashidze and Karasin during the talks. Moscow has not changed their position: the cancellation of the visa regime is less likely before the restoration of the diplomatic relationship between Georgia and Russia.

Even in December 2015, Vladimir Putin said that Russia was ready to cancel the visa regime with Georgia in response to a journalist’s question. Soon after, the Russian Foreign Ministry announced that the easing of the visa regime would be the next step in the normalisation process.

In 2016 the Russian side decided to simplify the visa regime: where before, visas were only issued either by official invitation from Russian organizations or on the basis of invitations by close relatives, today Georgian citizens can receive a visa on the basis of any invitation by a private citizen, regardless of family relationship.

However, in regards to the total abolition of the visa regime, Karasin’s statements are drawing close parallels with the EU visa-liberalisation process for Georgian citizens, which work closely between various government agencies and requires close inter-governmental interactions. Given the existing political circumstances, it is difficult to imagine the same type of cooperation between Tbilisi and Moscow as the one between Tbilisi and the European Union, which Karasin referred to as “Tbilisi sending regular reports to Brussels”.

Apparently, the issue of a visa-free regime will remain a tool for Russia to apply pressure on Georgia, in order to remind the Georgian government the importance of re-establishing the diplomatic relationship. Georgian government officials have repeatedly stated that the restoration of the diplomatic relationship is linked to territorial integrity—thus, when there are Russian embassies in Abkhazia and Tskhinvali region, the establishment of a Russian embassy in Tbilisi would indirectly recognize the independence of the occupied territories. Therefore, due to this situation, it is possible that the visa regime will be further simplified, but its complete cancellation is unlikely in the short term.

Negotiations with “Gazprom”

In 2016, one of the most resonant issues was the Georgian government’s negotiations with gas suppliers, including the Russian company “Gazprom” and the Azerbaijani company “SOCAR”. Negotiations with gas suppliers on imports and transit corridors are a periodic and normal process for the government; however, from spring of 2015 onward, the issue has caused turmoil with certain political parties, media, and civil society. Tensions over the negotiations with gas suppliers still exist.

From 2007 until today, the main supplier of gas to Georgia has been SOCAR. From the total amount of gas consumed by Georgia annually, around 87% comes from Azerbaijan. From 2003 to 2016, Georgia received gas from Gazprom on a barter system: 10% of Russian gas passed through Georgia to reach Armenia. Over the course of the past year, the major topic of the Gazprom talks was the potential monetization of gas transiting through Georgia, which previously prevented consensus between the parties. The Russian side initially did not voice this demand. The talks also included the determination of the price of purchase of additional volumes of gas from Gazprom, since, according to the Georgian side, demand for gas is growing from year to year, while Azerbaijan is experiencing internal gas shortage during peak winter consumption.

In January of 2017, Gazprom finally signed the agreement, which has not yet been released to the public. However, Energy Ministry officials announced that Russian gas transit fees and monetization will be gradually replaced with full reimbursement by 2019, from the income generated by raw materials.

Today, when agreements such as the ones with Gazprom and SOCAR are formed, it is interesting to analyze them from two major perspectives: which logic the Georgian government followed in parallel negotiations with the companies and the basis of criticisms of opposition forces in response to the agreements.

It was important for Georgia to receive more guarantees about the volume of gas from SOCAR and the maintenance of the barter system established in 2003 from Gazprom. In the first case, an agreement with SOCAR has been achieved to fulfill an additional gas request from the first phase of the Shah Deniz pipeline. Georgia will receive additional gas from the Shah Deniz pipeline until the second phase of the Shah Deniz project is launched in 2019.If we look at the development of the process leading to this agreement, we are left with the impression that the specific positions of the Georgian side in trade negotiations with SOCAR directly led to this result. The Georgian government announced that in the case of a deficit in the market, it would purchase additional gas from Gazprom. The topic of buying additional gas from Gazprom left Georgia’s agenda after the Georgian government reached an agreement with SOCAR.  . As for the negotiations with “Gazprom”, Georgia was forced to back down. Two major arguments strengthened Russia’s position: 1) a monetary form of payment has become a standard international practice in the transit industry, while the barter system for raw materials is an archaic form of economic relations and is highly unfavorable to suppliers, and 2) Gazprom has repeatedly stressed their ability to supply gas to Armenia via Iran, where infrastructure has been improving over time. Consequently, the Georgian side claims that its concessions were inevitable. Given the fact that the precise details of the agreement and the amount of transit fees are not yet known, it is difficult to conduct an exact analysis of the cost-effectiveness of the deal. It is clear that after monetization Georgia will not be able to purchase the same amount of gas that it received under the old system. However, the conditions of the contract (monetization) do not increase or decrease dependence on Russian energy. Since the agreement has not been made public yet, it raises many questions, not only on its economic effectiveness but also on its political impact.

In terms of future trends, in 2018 Georgia will begin constructing an underground gas storage, which will likely cause gas export demands to rise even more. Therefore, it is expected that discussions related to energy procurement will intensify. This trend is exacerbated by the fact that gas reserves on hand are growing increasingly sparse in Azerbaijan, while Russia has a surplus of gas. The initiation of the second phase of the Shah Deniz pipeline project in 2019 will create new realities and challenges for the established trade triangle between Georgia, Russia, and Azerbaijan. If Georgia’s government does not safeguard the transparent negotiation and decision-making process in the future, an even greater divide between political actors and civil society is expected.

Trade and economics

At the beginning of last year, after Turkey shot down a Russian military plane, many Georgian experts were concerned that a deterioration of relations between Russia and Turkey would have a negative impact on the political and economic situation for Georgia. A sanctions war between Russia and Turkey would worsen the economic situation, which would be significantly reflected in these countries’ balance of payments, thus affecting the exchange rate of local currencies (respectively, the ruble and the lira). In addition, it would reduce the number of remittances, where the Russian shares consistently holds first place, while Turkey remains in the top five.

Preliminary analysis conducted by the National Statistics Office of Georgia (GeoStat) includes data that clearly demonstrate these tendencies. Remittances from Russia, as expected, have further decreased. The data from nine months in 2016, compared to data from nine months in 2015, show a decline in remittances by 12.3%. This trend began in 2014, however a further increase or decrease in the amount of remittances will depend on oil prices and the strength of the ruble.

According to preliminary data from 2016, Russia remained in 3rd place amongst Georgia’s major trading partners; trade with Russia consisted of 7.4% of Georgia’s total trade turnover. Russia is the number one consumer of Georgian exports; exports to Russia comprised 9.8% of Georgia’s total exports. Compared to data from 2015, this represents a 2.4% increase. Russia is Georgia’s fourth-largest importer, after Canada, Turkey, and Iran

In terms of tourism, despite great expectations for the flow of Russian tourists to Georgia, during the past 10 months almost the same amount of people (920 144) visited Georgia as during the same period of time in 2015 (926 144).

One issue which may become relevant again in 2017 is the operation of the Zemo Larsi checkpoint on the Georgian-Russian border. Increasingly frequent natural disasters in the Dariali Gorge are preventing safe transit, which particularly effects passengers and cargo travelling from Russia to Armenia and vice versa. The solution may be to divert the flow of travel through the Roki tunnel, which Abashidze and Karasin began actively discussing in February 2017. Specifically, according to the agreement signed by Georgia and Russia in 2011, transit corridors through Abkhazia and the Tskhinvali region would be opened from Sochi to Zugdidi and from North Ossetia to Gori. Georgia agreed to these terms in 2011; in exchange, Georgia removed its veto on Russia’s accession to the World Trade Organization (WTO). A Swiss company will be responsible for operating the customs service checkpoints  between the Georgian and Russian sides. In late March, a meeting on this issue between Georgia, Russia, and the Swiss company SGS has been planned.

It is unlikely that the major opposition party will criticize this decision, as UNM government was in power when the agreement was first signed.

Enactment of this agreement is beneficial in two ways: 1) Georgia’s role as a transit country will increase, thus leading to positive economic effects, and 2) the trade corridors provide more opportunities for economic interaction with conflict regions, which will bring positive effects for the long-term conflict transformation.

Realities of Russian soft power

The topic of Russian soft power is especially active in the period preceding parliamentary elections, because traditionally, a tried and true method in the Georgian political agenda for discrediting political opponents is to accuse them of having ties to Russia.

However, during recent years, openly pro-Russian parties have appeared during the campaign period—examples include Lado Bedukadze and Temur Khachishvili’s “Centrist” party, Gigi Topadze’s election bloc “Industry Will Save Georgia”, and Zviad Chitishvili’s (a businessman in Russia) “Our Homeland” party. The “Centrists” made several promises during their campaign, including allowing Georgian citizens to receive Russian pensions, establishing a dual citizenship law, and legalizing Russian military bases in Georgia. In regards to Topadze and Chitishvili’s promises, they included giving Russian passports to Georgian citizens who wish to attain dual citizenship. These parties and similar groups are usually found to be linked with Russian soft power activity. However, by associating themselves with Russian forces, they do not strengthen pro-Russian sentiments in Georgia, but instead marginalize them.

It is natural for Russia to be interested in the political classes and political opinions in Georgia which are loyal to its interests; however, as of today, Russia does not have enough material or ideological resources to produce a competitive alternative to the West or create a concrete “soft power” strategy in Georgia. It is true that in Russia today, the political elite has sufficient support, but outside of the country (including post-Soviet states), it is difficult to maintain the political legitimacy and prestige of its own policies. Russia cannot offer a development model that is attractive to its neighbouring states.

Future prospects for Georgian-Russian relations in light of global and local processes

Since the peak of tensions between Georgia and Russia (August 2008), the relationship between the two countries has been constantly strained. The normalisation process has been slowly progressing since its inception in 2012, and from today’s perspective, the process has achieved somewhat minimal results.

It will be interesting to assess how the Georgian-Russian relationship develops in response to local processes occurring within the country, as well as changes in global politics.

As a result of the 2016 parliamentary elections in Georgia, the party which was the main initiator of the normalisation process at the time of its inception now holds a constitutional majority. Meanwhile, the party which disagreed with the process and was most skeptical of its results—namely, the United National Movement (UNM)— today suffers from internal fragmentation. Although the UNM still remains the parliamentary opposition, internal disagreements from within the party have marginalized certain factions; the party, whose prestige and status as a political party was already shaken, has further weakened. Relatedly, the anti-Russian politics which throughout the years have remained the niche of the UNM are likely to lose their influence in society. During the past few years, the UNM has repeatedly warned that Georgian Dream’s stances would change Georgia’s strategic path— Georgia would abandon its pro-Western course and return to “Russia’s orbit”. The past few years have shown that these fears do not have a solid basis. Since the beginning of the normalisation process with Russia in 2012, Georgia has not made major concessions to its strategic policies. In today’s discussions, foreign policy issues are no longer major topics. However, it is expected that the UNM, or its newly separated factions, will continue their aggressive anti-Russian rhetoric.

The world is currently witnessing an interesting process of global change. Donald Trump’s victory in the presidential elections in the United States, “Brexit”, and the growing popularity of far-right, conservative groups in Europe can be considered the beginning of the collapse of the idea of the “united West”. In the post-Soviet space, and especially in Georgia, the liberal worldview has always been under the umbrella of the “united democratic West”, and Georgian foreign and domestic policy has been constantly defined by the “pro-Western”/ “pro-Russian” dichotomy.

Considering the future ideological crisis of the “united West”, Western countries’ interest in the periphery is likely to be reduced. American isolationism, a looming trend after the election of Trump, could further weaken America’s interests in the Caucasus. It is difficult to predict what course America will take towards pro-Western countries, especially states who are not members of Western institutions. For at least the next four years, America will most likely not be considered as strong of a supporter of pro-Western countries as it was during the Obama and Bush administrations.

In addition, ideological and political crises within EU member states are forcing them to return to independent national policies, wherein potential expansion of the EU and implementing the Common Foreign and Security Policy are becoming increasingly difficult. The major challenges for the future of the EU will continue to be maintaining institutional capacity and responding to crises of legitimacy.

In conclusion, a major political breakthrough or a sharp deterioration in the Georgian-Russian relationship is unlikely to occur. Georgian Dream, which holds a constitutional majority after winning the parliamentary elections, now has an opportunity to take more daring steps due to high political legitimacy. However, this possibility is more theoretical than practical. So far, Georgian Dream has not demonstrated any initiative or desire to radically change the existing approach. Relatedly, the normalisation process will continue to take small steps in the humanitarian and economic spheres, without specific political changes.

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