Connect with us

Eastern Europe

Ten reasons why joining the EAEU could be beneficial for Azerbaijan

Published

on

Azerbaijan joining the Eurasian Economic Union (EAEU) could reduce the costs of imported intermediate goods for the Azerbaijani industry, increase exports of the agricultural and non-oil sectors of the republic by USD 280 million, improve the working and living conditions of Azerbaijani labor migrants and create favorable conditions for attracting foreign direct investment . As a result, Azerbaijan’s GDP could be 0.6% higher than it is now.The Eurasian Economic Union is primarily a customs union and the desire to create common markets for the free movement of goods, services, labor, capital and digital data. In addition, the EAEU is in the process of forming an extensive network of free trade areas around the world. Accordingly, it would be necessary to analyze the possible difficulties and likely benefits of closer cooperation between Azerbaijan and the EAEU in all of these areas.According to a survey conducted by the Analytical Center under the Government of the Russian Federation in the summer of 2018, almost 40% of the business community in Azerbaijan would welcome closer trade and economic relations between the republic and the Eurasian Union.

Commodity Market

In the beginning, it must be recognized that in foreign trade the republic does not depend on the EAEU as a buyer of Azerbaijani products. Only 2% of its exports go to the countries of the Eurasian Union. However, the point is not that the voluminous Eurasian market of 184 million people is not interesting for Azerbaijani entrepreneurs, but in Azerbaijan’s overwhelming focus on the sale of mineral products, which make up almost 95% of the republic’s export. With such an export structure, it certainly competes with the EAEU, where oil and gas also make up almost 63% of supplies to foreign markets. It is not surprising that the composition of Azerbaijani exports corresponds to the structure of the EAEU import by only 7%. For comparison, in Uzbekistan and the EAEU, the index of trade complementarity is 36%.But this is not so bad either. Firstly, large flows of mutual trade are desirable for regional economic integration, but not necessary. In such integration associations as MERCOSUR and USMECA, the share of mutual trade in the entire trade of the bloc is only 14-16%. The EAEU falls into this category. At the same time, creating one’s own regional market for the sale of non-commodity goods is an important step towards getting rid of the “oil curse”.

This was one of the important reasons that led Russia and Kazakhstan to integration. What can really become a regional market for potential sales of non-raw materials for Baku? The Middle East, on the one hand, and the post-Soviet space, on the other. This is the first argument in favor of the EAEU.By the way, since October 2019, the EAEU has a free trade area with Iran. Now, Armenia as well has a preferential access to the Iranian market. And due to the combined weight of the “Eurasian” market, the conditions that were agreed upon during the negotiations between the Eurasian Economic Commission (EEC) and Tehran are much more beneficial for Armenia than if Yerevan would have held negotiations in a bilateral format. This is the second argument why participation in the EAEU could be interesting for Baku – to improve its negotiating position with respect to third parties. In the near future, the EEC plans to sign FTA agreements with Egypt and India. And this is only southward.Secondly, 20% of all imports to Azerbaijan come from the EAEU countries. This is a significant amount. Many people think that participation in integration associations is necessary only so that their country can export better and more to such an enlarged market. But this is actually only half the question.

Trade liberalization within the framework of a regional integration bloc also helps to improve the quality of imported goods and make them cheaper. After all, producing everything by oneself is simply ineffective. As a result, both households and national businesses benefit from better and cheaper imports.The EAEU’ export structure corresponds to the Azerbaijani import structure by 38%, which is quite a lot. In 2018, the three main goods imported from the EAEU into the republic were: metal products for USD 325 million (14.5% of all imports from the EAEU), timber for USD 268 (12%), and grain for USD 225 million (10%). The first two are semi-finished products, the third is a raw material. That is, with a hypothetical entry into the EAEU, Azerbaijan in principle would abolish its import duties on these goods. Consequently, this import will become cheaper for the further processing by Azerbaijani enterprises, which means an increase in the profit of the national businesses, and, possibly, cheaper products for the final consumer. This is the third argument in favor of the EAEU.The fourth argument in favor of Eurasian integration is that it would open up significant opportunities for increasing Azerbaijani exports to the Eurasian market. Using a gravity model to assess export potential (Decreux et al. 2016), we can estimate that, upon joining the EAEU, Azerbaijan’s exports to the Union’s common market could increase by USD 251 million, which is equivalent to an increase in Azerbaijan’s GDP by 0.5%. In this case, the total exports to the EAEU member countries would be almost 4% of the republic’s world exports. Conventionally, from the entry of the republic into the EAEU, every Azerbaijani would become richer by USD 25 thousand.

Compared to the scenario without integration, Azerbaijan’s exports to Armenia could increase on average by 107%, to Belarus by 154%, to Kazakhstan by 161%, to Kyrgyzstan by 121%, to Russia by 44% and to the EAEU as a whole by half.Azerbaijani tomatoes and fruits have the greatest export potential. Becoming member of the Union, additional deliveries of only tomatoes from Azerbaijan to the markets and supermarkets of the EAEU may amount to USD 101 million.But this is not all. As already mentioned, the EAEU has free trade agreements with Serbia, Iran, Vietnam and Singapore. By 2025 (most likely much earlier), FTAs with India, Israel and Egypt will be concluded. Upon joining the EAEU, Azerbaijan would gain free access to these markets, which could lead to an increase in exports to them by USD 28 million additionally. Thus is the fifth argument for the EAEU.Thus, in total, upon joining the Eurasian Economic Union, Azerbaijan’s GDP could be 0.6% higher and every Azerbaijanian could be USD 28 thousand richer than without joining. To be correct, it should be noted that the above estimates are quite preliminary and do not take into account possible negative effects due to a possible increase in the average tariff protection of the republic in relation to third parties by 2.2% to the customs union level. At the same time, the final positive effects may be even higher, because this model does not take into account the multiplicative intersectoral effect in the economy, i.e., how the above-mentioned increase in exports can lead to an increase in demand for goods and services of indirect sectors.

Transit

The largest and well-known transport and infrastructure project, which is of interest to Baku, is the North-South International Transit Corridor (“Spice Way”) project. This railway freight corridor should connect the northwestern part of the EAEU with India, with which the EEC plans to sign an agreement on a free trade area, through Iran, with which the Union already has a free trade agreement. Geographically, Azerbaijan would be ideally located in order to become the central link on this route. The volume of potential cargo flows within the North-South corridor is estimated at 20 million tons per year. However, non-participation of the republic in the CIS free trade area and non-membership in the EAEU have so far been one of the main factors restraining the break-even feasibility of such a corridor.Along with this, work is underway within the EAEU to create a single transport space. In fact this means that domestic tariffs for the railway transportation of goods have already been unified. Concurrently, the EAEU member states are also negotiating the introduction of a unified transit tariff. The effects are already evident: for the period from 2014 to 2018, railway freight turnover (measured in ton-kilometers) inside the EAEU grew by almost 3% on average annually, while in Azerbaijan it fell by 11.5% on average every year. This is the sixth argument: Azerbaijan could significantly benefit from its geographical position by becoming a member of the EAEU’s unified transport space.

Labor market

The success of the EAEU was most pronounced in creating the single labor market. All citizens of member states are free to move and work throughout the territory of the Eurasian Economic Union. Everyone enjoys the same labor and social rights, including: hiring in most professions without additional documents and permits; mutual recognition of most educational certificates; tax and pension residency; free basic health insurance – including all family members; free education (from kindergarten to university) – including all family members. Therefore, the seventh argument is: as a member of the Eurasian Economic Union, Azerbaijani citizens who come to work in the other member states of the Union will receive the same preferences as the citizens from all the other member states.The effect of creating a single labor market is noticeable: the annual growth rates of money transfers of individuals from Russia to the EAEU countries in 2015-2018 were on average one and a half times higher than such transfers to Azerbaijan. Over the past five years, about 25 thousand Azerbaijani citizens arrived annually in Russia. Most came for work. Their remittances amounted to USD 800 million on average annually.

Direct investments

Foreign direct investment regulation is not directly assigned to the supranational level of the EAEU and is not within the powers of the EEC. Nevertheless, it can be assumed that regional economic integration within the Union created relatively more favorable conditions in this area. So, due to the economic crisis as a whole, direct investments from Russia to the countries of the post-Soviet space fell in 2015-2018. However, they fell to the EAEU member states on average 15 times less than the annual average than Russian FDI to other CIS countries. Over this period, Russian FDI in Azerbaijan amounted to USD 27.5 million on average annually. Thus, the eighth argument is: joining the Eurasian Economic Union can create more favorable conditions for attracting Eurasian investments to the republic.By the way, Azerbaijan could also consider becoming a member of the Eurasian Development Bank (EDB) and the Eurasian Fund for Stabilization and Development (EFSD). The terms of participation, most likely, could be similar to the terms of participation of Belarus, which has a similar level of GDP by PPP as Azerbaijan: USD 189 billion and USD 179 billion, respectively. Having contributed 1% (USD 70 million) to the bank’s charter capital (USD 7 billion), Belarus receives almost 14% of funds (USD 1.2 billion) from the total investment portfolio of the bank (USD 8.9 billion). And having contributed 0.1% (USD 10 million) to the fund’s total funds (total USD 8.5 billion), Minsk can claim 21% (USD 1.8 billion) of these funds in the form of loans and grants. The portfolio volume, taking into account the implemented and ongoing EFSD projects in the Republic of Belarus, amounted to USD 4.6 billion by the beginning of 2020. The EDB provides investments at preferential rates for infrastructure projects mainly in the fields of energy, transport, industry and agrobusiness. The EFSD aims to support macroeconomic stability and long-term economic development. The main “donors” in both development institutions are Russia and Kazakhstan (EDB: 66% and 33%; EFSD 88% and 11%). Profitable investment and financial support from the EDB and the EFSD is the ninth argument in favor of Baku’s potential Eurasian orientation.

National sovereignty

Upon joining the Union, Azerbaijan’s GDP would be 4% of the total economy of the EAEU, and its population – 5% of the total population of the integration bloc. In such an enlarged Union the Russian Federation would still make up 81% of its GDP and 76% of the population of the Union. At the same time, the combined economic and demographic weight of other member states would expand to 19% and 24%, respectively. Thus, in 2018 terms, GDP at purchasing power parity of such an expanded EAEU would ammount to USD 4.9 trillion, its population – to 194 million people.But this is actually not so important. Unlike what populist propaganda insists on, the EAEU’s bodies and decision-making mechanism are built on a democratic basis. All decisions between the member states must be made by consensus, and each member state has one vote, regardless of economic weight or population size.Not Vladimir Putin, but Nursultan Nazarbayev as the first of the post-Soviet statesmen proposed in 1994 to create the Eurasian Union. In his opinion, the new Union should be based on new principles: the priority of economic benefits over political considerations, the preservation of national sovereignty, voluntary and gradual integration, non-interference in the internal political system of member states. That is the wording which is now enshrined in the Treaty on the EAEU.

Unlike the EU, the EAEU integration agenda and the powers of its Eurasian Economic Commission are limited exclusively to economic issues. The Eurasian Economic Union does not pursue a “value policy” and does not intervene in the internal political system of its member states. David Lane, a researcher at Cambridge University, wrote the following about this: “The Eurasian Economic Union creates horizontal democratic conditions between its member states, while the European Union, at its discretion, prescribes” democratization “within states.”Based on WTO rules and the European integration experience, the EAEU seeks to create greater legitimacy, better conditions for a liberal market economy and strict multilateral “rules of the game”, which all member states, including Moscow, must adhere to. And despite periodic exceptions and barriers, in terms of institutional integration and the formation of common markets, the EAEU is now in second place after the European Union, ahead of such associations as MERCOSUR and ASEAN.By the way, the headquarters of the EEC does not resemble an old-fashioned Soviet ministry, but a modern office of some international consulting firm. In such an atmosphere, the EEC is constantly trying to implement best practices and standards from around the globe. In addition, the EAEU Court, which is located in Minsk, works pretty well and has already made a number of important cases against Russian actors and in favor of supranational law, for example, according to which EAEU sportsmen cannot be considered as foreign legionnaires. For the first time in the history of Eurasia, the Eurasian integration project is the first fully peaceful, voluntary, formally democratic, equal and market-oriented association of countries and peoples of the region. The goals, structure and decision-making mechanism in the EAEU are the tenth argument why Azerbaijan should consider joining the Eurasian Economic Union.

From our partner RIAC

Jurij C. Kofner is a junior economist with a research focus on Eurasian economic integration. He is a research assistant with the International Institute for Applied Systems Analysis (IIASA) in Vienna, Austria, where he participates in a research project on the challenges and opportunities of an EU-EAEU common economic space. He is also the editor-in-chief of the analytical media "Eurasian Studies" based in Munich, Germany. From 2017 to 2019 he was the founder and head of the Eurasian sector of the Centre for Comprehensive European and International Studies at the National Research University "Higher School of Economics" in Moscow, Russia and continues to be an expert with the sector. Currently Mr. Kofner attends advanced studies programs from various German institutions such as the German Bundesbank and the Kiel Institute for the World Economy.

Continue Reading
Comments

Eastern Europe

Armenia: Lies and realities

Published

on

The OSCE Minsk Group was established to resolve the Nagorno-Karabakh conflict, which arose as a result of Armenia’s brutal interference in Azerbaijan’s internal affairs and military aggression. However, the activities of the OSCE Minsk Group co-chairs have been fruitless for almost 30 years. Armenia did not comply with the UN Security Council Resolutions No. 822, 853, 874 and 884 on the unconditional, prompt and complete withdrawal of the Armenian occupying forces from the territories of Azerbaijan. Armenian was trying to impose occupation fact and to bring it to a “fait accompli.” At the same time, Armenia was preparing to occupy new territories of Azerbaijan and commit provocations. Armenian Defense Minister David Tonoyan confessed: “We will not return an inch of land to Azerbaijan and will occupy new territories.”

In July 2020, the Armenian leadership committed another provocation in the direction of the Tovuz region of the Azerbaijani state border. There were several purposes in this provocation. First, to occupy the territories, where the Baku-Tbilisi-Ceyhan main export oil pipeline, which plays a vital role in Europe’s energy supply, the Baku-Tbilisi-Erzurum gas pipeline, TAP and TANAP lines pass, and the Baku-Tbilisi-Kars railway connects Europe and Asia. Furthermore, as a result, to obstruct the access of the Republic of Azerbaijan to Europe. Second, to divert attention from the Nagorno-Karabakh conflict and involve the CSTO, especially Russia, in the war. However, the Armenian occupying forces were repulsed and failed to achieve any of the above purposes. Armenia’s intentions against European countries and peoples have failed.

Later, Armenia committed provocations again, in response, when Azerbaijan took action, the Armenian leadership began to spread slander and false news in order to deceive European public opinion. Let us look at just two of them. First, the Armenian side tried to cover up their aggression policy and abuse the religious feelings of Christians around the world by spreading false information about the alleged attack of the Azerbaijani army on the church in Shusha. Even those unfamiliar with military science know that if the church had been hit by a rocket, it would have collapsed. However, the church was in place. On the other hand, mosques, churches and synagogues have coexisted in Azerbaijan for many centuries. Even the Armenian church, which is located in the centre of Baku, including its library, is protected by the Azerbaijani state and its guard also is Armenian. It can be questioned that what did Armenia do in return for Azerbaijan’s care for the church, the house of God? Armenians intentionally kept pigs in mosques in the occupied Aghdam and Zangilan regions of Azerbaijan. Their photos and videos are available on the Internet. The church, the mosque and the synagogue are the houses of God. By treating mosques as an object for insults, Armenia is tarnishing Christians, and Christianity, which is a religion of peace and coexistence. Russians, Jews, Georgians, Ukrainians and others, who are Azerbaijani citizens in the ranks of the Azerbaijani army, are fighting for the liberation of Azerbaijani lands from occupiers. Prayers for the Azerbaijani soldier are being held in all churches and synagogues in Azerbaijan. His Holiness Pope Francis, who visited Baku a few years ago, praised the policy of Azerbaijan in terms of inter-religious and inter-civilizational dialogue as an example.

Secondly, Armenia is lying about Azerbaijan’s alleged “genocide” of Armenians, which is nonsense. Because currently, more than 30000 Armenians live in Azerbaijan peacefully. If there was any discrimination policy against Armenians, how could so many Armenians live in Azerbaijan? However, the situation is different in Armenia. Since 1988, over 250000 Azerbaijanis have been savagely expelled from Armenia. Today there is no single Azerbaijani in Armenia and Armenia is a mono-ethnic state. At the same time, more than 750000 Azerbaijanis were expelled from the occupied Nagorno-Karabakh and surrounding territories of Azerbaijan and became internally displaced persons.

Thus, on the one hand, the Armenian leaders pose a direct threat to Europe’s energy supply, and on the other hand, they try to use the religious feelings of the European people for their own interests by spreading false news and figments. However, they forget that the world is very small now, and everyone sees everything well. So, the question is: what is the name of Armenia’s policy? The answer is clear!

Continue Reading

Eastern Europe

Ceasefire Violated, Civilians of Ganja, Azerbaijan Hit –Again

Published

on

Image source: Azerbaijan Ministry of Defence

Authors: Julia Jakus and Anar Imanzade

Intensifying rocket and artillery fire exchanges between Armenia and Azerbaijan have driven military overtures from both sides as well as mutual accusations that civilians are being unlawfully targeted. The disputed region Nagorno-Karabakh has long been the catalyst of periodic clashes, but the situation dramatically deteriorated over the last several weeks. Why is Nagorno-Karabakh so ardently contested, and what are the implications of recent escalations in this conflict?

The Nagorno-Karabakh and seven surrounding districts were occupied by Armenian forces between 1988-1993 (Council on Foreign Relations, 2020). One year prior to the end of this occupation, Armenian forces massacred over 600 Azerbaijani civilians in Khojaly on February 26, 1992. Following the military occupation of the region as well as its seven surrounding districts, over 1.000.000 people were displaced – most of whom had immediate family members and relatives who were killed during the 5-year occupation.

Since 1992, the Armenian military has occupied upper Karabakh laying claim to the territory on the basis that the region harbors an ethnic majority of Armenians. However, no less than four UN Security Council resolutions (822,853, 874, and 884) recognize the Nagorno-Karabakh region as being a part of Azerbaijan and actively call for the immediate withdrawal of the Armed Forces of Armenia from occupied territories within Azerbaijan. Although a ceasefire was signed in 1994, the region has remained under Armenian occupation (Jeyhun Aliyev and Ruslan Rehimov, 2020).

From Border Clashes to Bombings

In July,the border clashes near Tavush of Armenia (Tovuz of Azerbaijan)resulted not only in 16 deaths (12 Azerbaijani, 4 Armenians) but also spiked these long-simmering tensions between the two countries. Azerbaijan responded by shelling military objects in Stepanakert (the capital of Nagorno-Karabakh). The most recent operations recommenced on the 27th of September when Azerbaijan took the city of Hadrut (which is geostrategically important because of its proximity to the heart of Karabakh). Since then, the Armed Forces of Azerbaijan have liberated some of its territories namely via targeting military components such as artillery batteries and other facilities. While Azerbaijan proclaims that they are liberating the region, Armenian officials decry that Azerbaijan and Turkey are conspiring to commit another genocide against the Armenian people.

Although memories of 1915 still burn painfully in the hearts and minds of Armenians, many might argue that mobilizing memories of the 1915 Genocide with reference to the Nagorno-Karabakh actively ignores the fact that geopolitical conditions have markedly changed over the last 100+ years. Because Armenia is a member of the CSTO, if Armenia is attacked, then Russia and other members of this organization bear an obligation for military interference on their behalf. Likewise, more than 100,000 ethnic Armenians live in Azerbaijan in relative peace while veryfew Azerbaijani live in Armenia which means that very little threat should emanate from within Armenia’s borders. From this angle, it certainly appears that the main aim of Azerbaijan remains exclusively the liberation of its occupied territories.

The last week of September and the first week of October were marked by particular ambiguity as both sides ardently claimed to have succeeded in gaining the upper hand. However, the dynamic changed significantly on the 9th of October when both the Azerbaijani and Armenian Foreign Minister were invited to Moscow. There, they each agreed to a humanitarian ceasefire and promised to exchange the bodies of fallen soldiers beginning on October 10th. However, on the 11th of October between 2:00 and 3:00 am, Armenian Forces launched another missile attack on Azerbaijan’s second-largest city Ganja (the first occurred on the 5th of October). In the second attack, a missile struck a civilian residential building and resulted in the deaths of 10 people, more than 35 injured. Children were among both the fatalities and casualties. By targeting residential areas in the city of Ganja immediately following a ceasefire agreement, this military overture not only violated the Geneva Conventions but also upended over 30 years of negotiations presided over by the Minsk Co-Chair Group of the OSCE.

The city of Ganja lies in the West of Azerbaijan, just North of the contested Nagorno-Karabakh region. It is seen as an energy corridor from the Caspian Sea to global markets, and for this reason, bears a strong geostrategic value. On the heels of 3-decades of diplomatic stagnancy, the Armenian Prime Minister NikolPashinyan has made provocative remarks that steer away from rather than toward conflict resolution such as, “Karabakh is Armenia…full stop” (Eurasia.net, 2019). The deaths of Azerbaijani civilians in recent attacks appear to have had the greatest unifying effect on the Republic of Azerbaijan since its independence from the Soviet Union in 1991. The Azerbaijani demand to end Armenian occupation has even garnered the support of opposition leaders for Ilham Aliyev, the president of the Republic of Azerbaijan.

Global Implications

As Armenian-Azerbaijani tensions escalate, both Russia and Iran have offered to broker peace talks. Macron and Trump have also publicly advocated for a ceasefire, in spite of powerful Armenian lobbies residing in both states. Azerbaijan has indicated that it is not willing to wait another 30 years without action. The ceasefire, to Azerbaijan, is tantamount to the permanent withdrawal of Armenian troops from the Nagorno-Karabakh region. To Armenia, stepping away is associated with abandoning ethnic Armenians living in the Azerbaijani territory—in spite of the international resolutions demanding them to.

External actors have also played a complicating role. For example, while Moscow publicly advocates for a ceasefire, Russia maintains a military pact with Armenia to the extent that they have continued to send military equipment to Armenia… while simultaneously bearing otherwise good politico-economic ties with Azerbaijan. This, in turn, raises Russia-Turkey tensions. Erdoğan recently pledged his allegiance with Baku on the basis both of historic alliances and existing economic ones. This is not surprising given the historic animosity between Yerevan and Ankara as well as the fact that vital oil and gas pipelines run from Baku to Turkey. Global responses have been mixed. All foreign powers watching the violence escalate have kept a keen eye on the pipelines, but some surmise that –until oil and gas are impacted – those same powers are likely to try to dismiss the issue as an internal clash. Still, other world leaders to UN Secretary-General António Guterres have been calling for a true ceasefire.

The dispute presents a situation riddled with competing narratives, but one thing is certain: as military overtures bleed beyond the traditionally contested region and into civilian cities of Azerbaijan, the prospects of fruitful diplomatic relations between Azerbaijan and Armenia over the disputed region of Nagorno-Karabakh recede. 

Continue Reading

Eastern Europe

A Chill in Georgia-China Relations

Published

on

Photo: Georgian Prime Minister Giorgi Gakharia at the Tbilisi Silk Road Forum, Tbilisi, 22 October 2019. Credit: Prime Minister of Georgia

A sense of growing disenchantment is starting to dominate China-Georgia relations. Given China’s ambitious Belt and Road Initiative (BRI) and Georgia’s geographical importance to the realization of China’s plans, Georgian elites had high hopes for the future. Today, few people are as enthusiastic.

The relationship used to look promising. In 2017 China and Georgia signed a free trade agreement to remove customs barriers, in a move Georgian leaders hoped would boost exports and help develop the Georgian economy. The Georgian government also expected an increase in Chinese investments into Georgia’s infrastructure, specifically its Black Sea ports of Poti, Batumi, Anaklia, as well as east-west rail and road links. Several large-scale investment forums were held in Tbilisi for that purpose.

Fostering closer ties with China was also seen as a vital component of Georgia’s quest to balance Russia’s regional influence, and as a hedge against Russian military moves in occupied Abkhazia and South Ossetia.

The hopes for improvements in trade have not panned out. While there has been a steady increase in overall volume, statistics show that Georgia mostly exports raw materials to China, such as copper and various chemicals. A market for goods higher up the value chain has not materialized. Similarly, concerns over corrupt practices have increased, especially tied to how Chinese companies have been awarded contracts. One illustrative case concerns Powerchina’s subsidiary Sinohydro winning a €26.3 million tender for the reconstruction of a 42-kilometer section of the Khulo-Zarzma road. Sinohydro has a long record ­– both in Georgia and abroad – of corruption, environmental degradation, and of generally shoddy work. And yet it keeps winning new tenders.

Furthermore, it has become apparent to policymakers in Tbilisi that China will not go out of its way to harm increasingly important relations with Russia. For example, China has been generally unhelpful on key diplomatic issues critical to the Georgian side. It repeatedly failed to back Georgia’s UN vote on refugees forcefully expelled from Abkhazia and South Ossetia by separatists and Russian troops. It repeatedly failed to denounce de-facto presidential or parliamentary elections held in Georgia’s occupied territories. China has also stayed silent on Russian cyber-attacks against Georgia over the last few years, as well as on Russian “borderization” policies in South Ossetia. Its Ministry of Defense even announced that it would participate in the Russian-led “Kavkaz-2020” exercises, alongside troops from Abkhazia and South Ossetia.

China has also helped the Kremlin seed destabilizing disinformation in the country. On September 2, the Chinese state media outlet China Daily questioned the utility of the U.S.-funded Lugar Laboratory located near Georgia’s border with Russia and alleged that it both represented a biohazard risk to Georgia and that Georgian citizens were being unwittingly used as test subjects.

All this stands in striking contrast with Georgia’s Western partners, who continuously stand up for Georgia’s foreign policy priorities, as well as for its territorial integrity. Though increasingly disenchanted with China, Georgian leaders continue to walk a diplomatic tightrope, keen to not draw ire from China while preserving its ties to the West. But as America’s stance on China hardens, it will be more and more difficult to maintain this balance. In a series of public letters addressed to the Georgian government sent earlier this year, U.S. congressmen and senators have been explicit that Georgia needs to avoid deep entanglements with China and hew closely to Western standards and trade practices.

The balancing act is simply unsustainable. Georgia’s NATO and EU membership aspirations, the cornerstone of its geopolitical orientation, are an irreconcilable irritant for China, especially as the Alliance expands its scope to face down China’s growing military ambitions in the Indo-Pacific region. Georgia will be forced to pick sides eventually.

And the outcome is a foregone conclusion. At this point, criticizing China openly would cost Georgia a lot, which means that Tbilisi taking a firm stance on Taiwan or on human rights issues is not likely. But as tensions ratchet up between the West and China, expect Georgia to side more firmly with the West, not only politically, but also increasingly economically, by embracing Western 5G technologies as well as its trade and investment standards.

Author’s note: first published in cepa.org

Continue Reading

Publications

Latest

Trending