As events in the ongoing Ukraine crisis continue to unfold at breakneck speed, another geopolitical contest between Russia and the West is currently unfolding in the Caucasus republic of Georgia.

UN Map of Georgia, 2014

Former Georgian President Mikheil Saakashvili (Reuters)

In the 2000s, Georgia under Mikheil Saakashvili was the West’s most loyal ally in the former Soviet space. The Georgian leader curried favor with the American media and the Bush administration, while simultaneously castigating Russia and its President Vladimir Putin as the eternal enemies of democracy. He also consistently refused to engage in dialogue with the governments of Abkhazia and South Ossetia, despite major breakthroughs by his chief attaché Irakli Alasania to the breakaway regions.

Instead, according to the testimony of Paata Zakareishvili, Nino Burjanadze, and others, Saakashvili evidently favored military means to recapture these areas, underestimating Russia. He was convinced that he had full support of the Bush administration. The result was the disastrous war of 2008 which concluded with Georgia losing any foothold in the two regions and Russia recognizing them (likely in response to US recognition of the disputed region of Kosovo in Serbia). This and other scandals, including the infamous Gldani prison abuse scandal of 2012, eventually cost Saakashvili the presidency and his party’s total monopoly on power.

Bidzina Ivanishvili (RIA Novosti)

The current Georgian president is philosopher, academic, and bon vivant Giorgi Margvelashvili and the Prime Minister is Irakli Garibashvili, the second youngest national leader in the world. Both are members of the Georgian Dream coalition that came to power in Georgia in November 2012. Its patron is the billionaire Bidzina Ivanishvili who made his fortune in Russia and who preceded Garibashvili as Prime Minister until last year. Significantly, though Tbilisi managed to confirm the final version of its Association Agreement with the EU at the November 2013 Vilnius Summit to be signed in September 2014, it remains to be seen whether or not Georgia is entirely committed to the EU course. In an interview with Georgian television on the fifth anniversary of the 2008 war, Russian Prime Minister Dmitry Medvedev invited Georgia to join the CU. Shortly after Armenia’s Serj Sargsyan announced the decision of Yerevan to join the Moscow-backed union in September, Georgia’s Ivanishvili announced that Georgia too would consider joining, provided that it be “advantageous for our country.”

While serving as Prime Minister, Ivanishvili kept the issues of the EU and NATO on the table for Georgia. As a businessman with a good knowledge of economics, he likely understands the current economic situation of the EU very well. Even more importantly, he also likely realizes that Russia strongly disapproves of the continued expansion of both the EU and especially NATO. At the same time, he also made reconciliation with Moscow a top priority. These seem like contradictory and mutually exclusive policies. However, they make sense once one realizes that Ivanishvili is likely using the pursuit of NATO and the EU as leverage in Tbilisi’s relations with Moscow.

Therefore, it is conceivable that Ivanishvili’s successors, Margvelashvili and Garibashvili, will use the EU and NATO as bargaining chips for South Ossetia and Abkhazia respectively. After the disastrous 2008 war, Russia recognized both regions as independent states, making any future reconciliation with Georgia seem virtually impossible. Yet this is probably not the last word on the situation. The present Georgian Dream coalition government has made a resolution on its breakaway regions a top priority. Among other things, the current government includes individuals like Irakli Alasania, Guram Odisharia, and Paata Zakareishvili who have strong contacts with the breakaway governments (especially with the Abkhaz) and who are devoted first and foremost to the cause of conflict resolution.

As for Abkhazia and South Ossetia, both are not members of the Moscow-backed Customs Union, despite the fact that they are dependent on and closely tied to Russia. Therefore, it is possible that a future solution would involve a “grand peace” in which Abkhazia, South Ossetia, and Georgia proper would all enter the CU together in some sort of federal Georgian state structure. Such a solution must have negotiated terms acceptable to all sides and must be sensitive to the ethnic concerns of the Abkhaz and the Ossetians. In this case, Moscow would accept a decision by Sukhumi and Tskhinvali to freely join a federal Georgian state in which their rights would be ensured. To quote one Russian analyst, “if Georgia, Abkhazia and South Ossetia express the desire to unite, Russia will not meddle in their affairs.”

Vyacheslav Chirikba (Apsny Press)

Significantly, on June 20, 2012, Abkhaz Foreign Minister Vyacheslav Chirikba signaled his openness for future talks:

We are open for dialogue. I am sure that in a circumstance where there is a different president other than Mikheil Saakashvili, Georgia would have also been a different country and we would have every opportunity to come to an agreement.

We need to have a more pragmatic interlocutor like Irakli Alasania or oligarch Bidzina Ivanishvili for example– someone who has just entered into politics. Ivanishvili is a businessman and is perhaps pragmatic enough to understand what kind of solution would be beneficial for everyone.

Giorgi Margvelashvili

Though the statement was dismissed by a pro-Saakashvili MP, members of Bidzina Ivanishvili’s Georgian Dream coalition have nevertheless responded enthusiastically. In his inauguration speech in November, President Margvelashvili, while calling for the need of European integration and dialogue with Moscow also stated:

Our offer to our compatriots living in Abkhazia and the Tskhinvali Region [South Ossetia] is as follows: Let us build a successful democratic country together, a country that will guarantee the welfare of all citizens, preservation of their ethnic and cultural identity, and respect for their political rights.

As President of Georgia, the ruling party and I assume responsibility for implementing this policy.

Irakli Garibashvili

Then, in a very telling December 2013 interview with the Moscow-backed English-language news service RT, Sophie Shevardnadze asked Prime Minister Garibashvili whether or not Russia was ready for serious political dialogue. He responded:

I do not know. And this is exactly why our government expresses its will to hold dialogue with Russia. We have already taken that step with a view to resetting and regulating our relations. In my opinion, I truly believe that it is a heavy burden to have recognized Abkhazia and Tskhinval as independent states. And if, as a hope – I am quite optimistic about this issue – the Russian government decides one day to reset relations with Georgia by means of peaceful conflict resolution, it will be the best case scenario.

…We have all made mistakes. Let us admit that we have all made mistakes in the early 1990s, for example. There is no way only one side can be spotless and unblemished. But we take it close to heart. We are hurt because our Abkhazian and Ossetian brothers no longer live with us. Somehow I believe and I feel that sooner or later the Abkhazians and the Ossetians will be compelled to live with us. And I certainly hope that this dream too will come true.

Both Margvelashvili and Garibashvili have advocated not only a normalization of relations with Russia, but also a visa-free regime between the two countries. Russian President Putin fully endorsed this in his December 19 press conference, a move that was immediately hailed by Garibashvili. Even more telling, Putin also reached out to his Georgian colleagues with conciliatory language, placing blame for the 2008 war not on the Georgian people, but squarely on former President Mikheil Saakashvili:

Vladimir Putin

Personally my attitude has been changed towards the leadership of Georgia, but not towards the Georgian people. It is as kind and benevolent as it was previously. Even during the most difficult time, when fighting was underway in the Caucasus [reference to the August, 2008 war], relations with the Georgian people were very good. And it was confirmed even during those difficult days and hours and demonstrated in attitude of Georgians themselves towards Russia. Don’t remember if I have ever said it publicly, but in one of the towns a grandpa approached our soldiers and told him: “What do you want here? What are you looking for here? Go over there – Tbilisi and take Mishka [referring to then President Mikheil Saakashvili].”You know we had losses among our military servicemen. Aircraft was downed, a pilot ejected and landed somewhere; a Georgian babushka approached and told him: ‘Come here son’; she took him and fed him. Then he was sent towards the Russian military.

…I am not kidding, I am neither ironic, when I say that I have the kindest attitudes towards the Georgian people. We have the deepest relations both cultural and spiritual; I mean religious closeness to each other.

There are problems, which arose through no fault of ours; we did not start these hostilities [in August, 2008]. We did not start it and now it is quite obvious; everyone has already acknowledged it a long time ago. Whatever happened, happened. We said thousands of times: do not do it no matter what; do not allow bloodshed. But they did it anyway. Now there is a certain reality; we cannot neglect it. But still, we see some signals coming from the new leadership of Georgia.

Is a major Russian-Georgian reset in the offing? It certainly seems so. After the opening of the Sochi Olympics, a confident Vladimir Putin announced that regular flights would resume between Sochi and Tbilisi. More significantly, he invited Giorgi Margvelashvili to a top-level diplomatic meeting. As the Georgian President analyzed the possibilities, Prime Minister Garibashvili threw his support behind the initiative as did Georgian football superstar-turned-Minister of Energy Kakha Kaladze. Tbilisi’s Russia representative Zurab Abashidze and Russia’s Deputy Foreign Minister Gregory Karasin have already planned to hold discussions in early March leading to a subsequent high-level meeting. The installment by Moscow of barbed-wire fences around Georgia’s breakaway regions (something that had caused much controversy in Georgia) was suddenly halted. The installation was likely initiated by Moscow as a means of reminding Tbilisi that it risks losing any chance of reconciliation with its two regions if it decides to pursue the path of the EU and NATO. It is Moscow’s way of telling Tbilisi that it “speaks softly” but also carries “a big stick.”

Irakli Garibashvili and John Kerry (Civil Georgia)

However, considering the crisis in Ukraine, the United States has redoubled its efforts to lure ex-Soviet states into the Western fold. Last week, Prime Minister Garibashvili headed to the United States for a high-level visit. Meanwhile, likely in response, Moscow resumed its border installments in Abkhazia and South Ossetia as soon as the visit began, much to the annoyance of Tbilisi.

In Washington, the young Georgian Prime Minister was in awe. He was greeted warmly by members of the US political elite including Barack Obama, Joe Biden, John McCain, and John Kerry. All pledged unconditional support to Georgia for EU and NATO membership. According to Tbilisi’s Foreign Minister Maya Panjikidze, Obama said that “there was no-one in the building [i.e., the White House] who doesn’t support Georgia’s territorial integrity.” Kerry even promised to visit Georgia in the Spring. In the course of the visit, Garibashvili, who previously said that “NATO is not a priority for Georgia,” suddenly backed a full NATO MAP (Membership Action Plan) for Georgia.

More was to come. Yesterday, the EU’s enlargement commissioner Štefan Füle visited Tbilisi where he emphasized Brussels’ full support for Georgia’s territorial integrity. More significantly, he met with the Georgian Catholicos Ilia II. The patriarch was previously a staunch supporter of Russian President Putin. However, Füle managed to convince him that the EU would in no way interfere with the Church’s position on traditional family values. Subsequently, the patriarch released a statement saying that the Church would now do “everything to make Georgia an EU member.”  During the same visit, Füle also signed an agreement between the EU and Georgia pledging 22.5 million euros to Tbilisi.

Considering such developments, Moscow has called for the meeting between Abashidze and Karasin to be postponed until March 14. They need to think of a major counter-offer quickly. Compounding all of this is the growing imminence of Georgia signing the final version of the proposed EU Association Agreement in August or September.

Whatever happens, it is clear that Georgia is a major front in the battle between Russia and the West for control over the post-Soviet space. In this respect, Georgia is particularly significant for the Kremlin. Moscow knows that, at the end of the day, it needs Tbilisi and it wants to prevent it from joining the EU and especially NATO at all costs. The idea of NATO military bases on the southern slopes of the Greater Caucasus range, aimed at Chechnya and Daghestan and within close proximity to Sochi must be a major concern for Putin. Further, without Georgia, Moscow will be unable to have a direct geographic link with prospective Customs Union member Armenia. Additionally, if Armenia joins the CU without Georgia, it also means major economic and unemployment problems and even more geopolitical isolation for Yerevan. This would be a major headache for Armenia, even if it means greater security guarantees from Moscow vis-a-vis neighboring Turkey and especially Azerbaijan, both of which maintain a blockade on Armenia over the Nagorny Karabakh dispute.

In summary, the viability and legitimacy of the Customs Union in the Caucasus depends on the geopolitical fate of Georgia. If Tbilisi spurns Moscow for Washington and Brussels, then both it and Moscow stand to lose. Georgia would be unable to reconcile with Abkhazia and South Ossetia and Moscow would have NATO bases right on its southern flank. Meanwhile, Yerevan would face economic hardship resulting from all of this.  Arguably, the West too would not benefit.  If Georgia joins NATO and Armenia remains a military ally of Russia due to security concerns vis-a-vis Turkey and Azerbaijan, then there will be a new Cold War-style divide running right through the volatile Caucasus.  Nobody would gain from such a scenario.  Meanwhile, if Tbilisi goes with Moscow then all of this could be averted and the West’s expansion into former Soviet Eurasia would effectively end. In this regard, the Kremlin knows that the West has no mechanisms to resolve the Abkhaz and South Ossetian conflicts, whereas it does and this could be its major trump card.