Order Code 97-727
Updated March 11, 2005
CRS Report for Congress
Received through the CRS Web
Georgia [Republic]: Recent Developments
and U.S. Interests
Jim Nichol
Specialist in Russian and Eurasian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
This report examines Georgia’s efforts to surmount economic problems, civil war,
separatism, crime, corruption, and human rights problems. It discusses U.S. policy and
assistance. Basic facts and biographical information are provided. This report may be
updated. Related products include CRS Issue Brief IB95024, Armenia, Azerbaijan, and
Georgia
, updated regularly.
U.S. Policy1
According to the Administration, “Georgia continues to play a key role in furthering
U.S. interests and has been a strong supporter in the Global War on Terrorism.” The
United States is providing aid to help Georgia block the transit of terrorists and weapons
across its borders and into and out of Russia’s North Caucasus area. Georgia also is
becoming “a key conduit through which Caspian Basin energy resources will flow to the
West, facilitating diversification of energy sources for the United States and Europe”
(Congressional Presentation for Foreign Operations for FY2006). In a “Global
Message” delivered in Slovakia in late February 2005, President Bush praised Georgia’s
2003 peaceful “rose revolution” as part of a long-term march of freedom “to every people
and every nation.”
The United States has been Georgia’s largest bilateral aid donor, budgeting
cumulative aid of $1.4 billion in FY1992-FY2004 (by comparison, European Union
grants and loans amounted to $490 million). Georgia has regularly ranked among the top
world states in terms of per capita U.S. aid, indicating the high level of concern for its fate
within the Administration and Congress. Other U.S. aid has been used for training
judicial, law enforcement, and military personnel, enhancing border and export controls,
privatization, reforming the tax code and budgetary process, building the legal basis for
1 Sources include Foreign Broadcast Information Service, Daily Report: Central Eurasia;
RFE/RL Newsline; Eurasia Insight; Central Asia-Caucasus Analyst, and Reuters, Associated
Press
, and Agence France Presse newswires.
Congressional Research Service ˜ The Library of Congress

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foreign investment in the energy sector, and
providing NATO-compatible training and
equipment so Georgia can more fully
participate in NATO’s Partnership for Peace
(PFP) activities. Budgeted aid to Georgia for
FY2005 was an estimated $103.7 million and
the Administration has requested $85.3
million for FY2006 (FREEDOM Support Act
and other foreign assistance, not including
Defense and Energy Department funds).
Georgia was one of sixteen countries deemed
eligible to apply for Millennium Challenge
Account (MCA) development aid in FY2004
and FY2005. The United States also
contributes to International Monetary Fund and World Bank programs that aid Georgia.
Contributions to the Campaign Against Terrorism. Then-President of
Georgia Eduard Shevardnadze immediately condemned the “scum” who attacked the
United States on September 11, 2001, and offered “airspace and territory” for use by U.S.
troops. In February 2002, President Bush announced that the United States would provide
equipment and training to help Georgia combat several dozen al Qaeda and other
terrorists who had fled to the Caucasus from Afghanistan. Some had relocated to
Georgia’s Pankisi Gorge area bordering Russia’s breakaway Chechnya region, where they
maintained links with Chechen terrorists. Georgia was among the countries in 2003 that
openly pledged to support the U.S.-led Operation Iraqi Freedom — offering the use of
airbases — and to assist the United States in rebuilding Iraq. In August 2003, Georgia
dispatched 69 troops to Iraq and boosted them to over 850 in March 2005, making
Georgia among the top ten countries providing coalition forces.
A $64 million Georgia Train and Equip Program (GTEP), one of several U.S.
security programs in Georgia, began in May 2002. U.S. troops provided training in light
infantry airmobile, mechanized, and mountain tactics, and medical and logistical methods
to 200 military, security, and border officers, some 2,000 soldiers, and a small number of
Interior (police) Ministry troops and border guards. According to the U.S. Defense
Department, the GTEP aimed to help Georgia “to resist pressure to allow the Russian
military to pursue Chechen rebels” into Georgia, to help it combat terrorists who are
hiding in the Pankisi Gorge, and to otherwise help it to prevent terrorists from entering
the country. Small arms, communications and medical gear, uniforms, and construction
materials for some base refurbishment were provided. The program formally ended in
April 2004 but the Defense Department launched a follow-on 16-month Sustainment and
Stability Operations Program (SSOP) in early 2005. Funded at $64 million, SSOP is
providing training for four battalions (2,000 troops), in part to support U.S.-led coalition
operations. When completed, the United States will have provided training to a major
portion of Georgia’s armed forces. On March 3, 2005, NATO and Georgia signed an
accord formalizing NATO’s transport of equipment and personnel through Georgia to
Afghanistan. Georgia’s breakaway Abkhazia region has rejected reports that it might host

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terrorists and warned that U.S. training could
Georgia: Basic Facts
increase Georgia’s revanchism.
Area and Population: 26,872 sq. mi., slightly
larger than West Virginia. The population is 4.6
million (Georgian Statistics Department, 2004
Foreign Policy and Defense
est.). Administrative subdivisions include the
Abkhazian and Ajarian Autonomous Republics.
In his inaugural address on January 25, Ethnicity: 70% are Georgian; 8% Armenian; 6%
2004, Saakashvili proclaimed that Georgia Russian; 6% Azerbaijani; 3% Ossetian; 2%
hoped to become the first former Soviet Abkhazian; and others (1989 census; a 2002
census did not include breakaway Abkhazia and
republic to successfully integrate with Western South Ossetia).
institutions, including the European Union. GDP: $5.4 billion in 2004; per capita GDP is
Reflecting his Western orientation, about $1,200 (Georgian Statistics Department,
Saakashvili reached agreement with France to current prices).
Political Leaders: President: Mikhail
permit its Ambassador to Georgia Salome Saakashvili; Prime Minister: Zurab Noghaideli;
Zourabichvili-Kachia to be appointed foreign Speaker of the Parliament: Nino Burjanadze;
minister and to be granted dual citizenship.
Defense Minister: Irakli Okruashvili; Foreign
Minister: Salome Zourabichvili-Kachia.
Among its neighbors, Georgia has good Biography: Saakashvili, born in 1967, received
his Master’s at Columbia Univ. and his Ph.D. at
— though not problem-free — relations with George Washington Univ. He was elected to the
Armenia and Azerbaijan. Georgia has an legislature in 1995 and 1999, where he chaired
ongoing interest in ties with about one million the Constitutional Committee and headed the
Georgians residing in Turkey and about ruling party’s faction. In 2000, he became
50,000 Georgians residing in Iran. Though Minister of Justice, but resigned in September
2001, accusing the government of corruption and
Saakashvili has pledged to establish “very forming the National Movement party bloc. In
good” relations with Russia, the new 2002-2003, he chaired the Tbilisi city council.
government seeks countervailing ties with the
West to maximize Georgia’s independence.
Russia’s objectives toward Georgia focus on retaining influence in the South Caucasus.
In 1999, Russia launched new military attacks against its breakaway Chechnya region,
which borders Georgia. Georgia accepted thousands of Chechen refugees, mainly because
many ethnic Chechens, termed Kists, live in Georgia’s Pankisi Gorge area. In December
1999, the OSCE sent observers to monitor Georgia’s border with Chechnya (later
expanded to nearby borders). In February 2004, Saakashvili granted some credence to
continued Russian complaints that Chechen terrorists were seeking refuge in Georgia and
pledged to make Georgia “a zone free of terrorism.” In December 2004, Russia withheld
its approval to extend the OSCE observer mandate, terming their help “ineffective.”
Some observers view this stance as puzzling, since Russia also stepped up its allegations
that terrorists are crossing the border. A few European Union (EU) members have
supported a Georgian request to send some EU border monitors if the OSCE deadlock
continues. Russia has criticized this request, as well as another for troops from OSCE
member states to train Georgian border guards.
At Shevardnadze’s behest in 1993, Russia’s military helped defeat an insurgency
aimed at overthrowing him, and in return, Georgia entered the Commonwealth of
Independent States (CIS), signed a CIS Collective Security Treaty, and in 1995 reluctantly
granted Russia rights to four military bases through the year 2020. The OSCE approved
an adapted Conventional Armed Forces in Europe Treaty in Istanbul in November 1999,
with Russia (after reported heavy U.S. lobbying) declaring that it would close its Georgian
military bases at Gudauta and Vaziani by July 1, 2001, and that Georgia and Russia would
agree by the end of 2000 on the disposition of two other bases. Russia turned over the
Vaziani base by the deadline. It reported in June 2002 that it had closed its Gudauta base,

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located in Abkhazia, but announced that 320 troops would remain to support Russian
“peacekeepers” in Abkhazia. The OSCE in December 2003 strongly criticized Russia’s
failure to resolve the basing issue. Saakashvili in Moscow in February 2004 assured
Russia that after it pulled its troops out, Georgia would not permit basing rights to “any
third country” or take other steps “aimed against ... interests of Russia.”
According to The Military Balance 2004-2005, Georgia’s ground forces and a small
navy and air force number 17,770. There are also 5,400 border guards and 6,300 interior
(police) troops (the latter were subordinated to the defense ministry at the beginning of
2005 and are being downsized). Marking the shift toward more security ties with the
West, Georgia withdrew from the CIS Collective Security Treaty in 1999. In January
1999, Georgia assumed full control over guarding its sea borders, and in October 1999,
the last Russian border troops (except some liaison officers) left Georgia. Georgia
pledged to modernize its armed forces in line with an Individual Partnership Action Plan
signed with NATO in late 2004. Saakashvili appointed Irakli Okruashvili as defense
minister at the end of 2004 (his third such appointment) to combat corruption in the
military and prepare it for NATO candidacy, which Okruashvili hopes will occur in 2006.
Georgian troops have participated in NATO peacekeeping in Kosovo and rebuilding
efforts in Iraq. Georgia has hosted NATO PFP exercises annually since 2001. The
government criticized a report issued in February 2005 by the Georgian NGO Justice and
Freedom that alleged that there had been little progress over the past year in formulating
a defense doctrine, creating a professional military, and combating corruption in the
armed forces.

Political and Economic Developments
Following a period of civil war and turmoil, a new constitution was approved in
August 1995 establishing a strong presidential executive and a unicameral, 235-member
legislature elected in single-member districts (85 seats) and by party lists (150 seats).
There was no prime ministerial post; instead, ministers were responsible to the president,
who was assisted by a state minister. The legislature agreed that the constitution would
be amended to create a federation after Georgia’s territorial integrity had been assured.
Increased political instability in the wake of a questionable November 2, 2003,
legislative election culminated in Shevardnadze’s peaceful ouster. Exit polling during the
race appeared to indicate that the opposition National Movement (NM) and the
Burjanadze-Democrats (BD) had won the largest shares of seats in party list voting.
Instead, posted results gave the largest share of seats to the pro-Shevardnadze “For a New
Georgia” bloc and Ajarian leader Aslan Abashidze’s Revival Party. The U.S. State
Department joined others in criticizing “massive vote fraud” in Ajaria and other
irregularities. Mainly peaceful mass protests (termed by NM head Saakashvili a
“revolution of roses”) led to Shevardnadze’s resignation on November 23. Russia and the
United States appeared to cooperate diplomatically to urge Georgians to resolve their
crisis peacefully (for background, see CRS Report RS21685, Coup in Georgia).
BD and NM agreed to endorse Saakashvili for a presidential election on January 4,
2004, where he received 96% of 2.2 million popular votes from a field of five candidates.
OSCE monitors judged the vote as bringing Georgia closer to meeting democratic
electoral standards. Then-Secretary of State Colin Powell attended Saakashvili’s
inauguration on January 25 and then traveled to Russia, appearing to underline to Moscow

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the U.S. interest in Georgia’s fate. In his inaugural address, Saakashvili stated that a
“new, energetic, and patriotic generation” had come to power to combat corruption and
crime and to improve Georgia’s political institutions, economy, and territorial integrity.
Constitutional amendments were approved by the legislature in February 2004 that
created the post of prime minister, who would be nominated by the president and
confirmed by the legislature. Some other amendments permit the president to dissolve
the legislature if it fails three times to approve the budget or to confirm the prime
minister-designate. Critics raised concerns that the amendments were hastily passed
without widespread public input and that they gave too much power to the presidency.
Other observers warn that the changes create triumvirs (the president, prime minister, and
speaker) who may clash and prove unable to rule. Saakashvili has reduced the number
of ministries and moved to downsize the civil service.
Legislative elections were held on March 28, 2004 involving the 150 party list seats
(the November 2003 winners of 75 district seats retained them, as did ten deputies elected
from Abkhazia before it broke away). NM and BD ran on a joint list and captured 67.2%
of 1.53 million votes, giving the bloc a majority of seats, perhaps ensuring firm legislative
backing for Saakashvili’s policies. The New Rightist-Industrialist bloc won 7.6% of the
vote. All other parties received less than 7% of the vote, the minimum required to win
seats, including the Revival Party (6.1%). The OSCE judged the election as the most
democratic since Georgia’s independence, although irregularities in Ajaria were troubling.
Saakashvili stated that he backed Nino Burjanadze, the co-head of BD, to be legislative
speaker. Saakashvili’s first prime minister, Zurab Zhvania, died in early 2005, and was
replaced by Finance Minister Zurab Noghaideli, who pledged to continue Zhvania’s
reforms. According to the State Department’s Country Reports on Human Rights
Practices for 2004
, the Georgian government’s human rights record remained poor,
although there were improvements in some areas. The government generally maintained
effective control of its security forces, but there were some instances in which they
committed serious human rights abuses. Non-governmental organizations (NGOs)
reported that police continued to torture, beat, and otherwise abuse detainees, although
public confidence in the police increased during the year due to a reduction in corruption.
Arbitrary arrest and detention remained problems, as did lack of accountability. The
judiciary system continued to lack independence. Compared to 2003, harassment of the
media decreased, although self-censorship increased. While violence against religious
minorities decreased, the government continued to tolerate harassment against some
religious groups. Trafficking in persons remained a problem.
The International Monetary Fund (IMF) reported in early 2005 that Georgia’s
economy performed very well in 2004. GDP grew 8.4% in 2004, despite agricultural
problems, and consumer price inflation was 5.7%. Some progress was reported in tax
collection, trade liberalization, legal and regulatory reform, privatization, and banking
restructuring, but crime and corruption continue to retard economic growth. The IMF
encouraged Georgia to develop its agriculture, food processing, tourism and transit trade
sectors to enhance future GDP growth. About 50% of the population lives in poverty
(income of less than $30 a month). Ethnic conflict and poverty have contributed to the
emigration of about one-fifth (one million) of the population since 1991. Hopes for
Georgia’s reforms were marked by its admission to the World Trade Organization in
1999. Georgia depends mainly on Russia for imports of oil and natural gas. The paucity
of most international private investment has provided an opening for Russian state-

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controlled firms to acquire major electricity and natural gas assets. Georgia is a transit
state for a pipeline expected to be completed in 2005 to carry one million barrels per day
of Azerbaijani oil to the Turkish port of Ceyhan.
Ethnic and Regional Tensions. Several of Georgia’s ethnic minorities stepped
up their dissidence in the late 1980s and early 1990s, resulting in the loss of central
government control over the regions of South Ossetia and Abkhazia. The Ajaria region
also asserted substantial self-rule under the authoritarian leadership of Aslan Abashidze.
Saakashvili in early 2004 successfully appealed for the allegiance of many Georgian
military and police elements in Ajaria, and they abandoned loyalty to Abashidze. Russia
offered sanctuary to Abashidze and flew him to Moscow in May 2004.
South Ossetia. In 1989, the region lobbied for joining its territory with North
Ossetia in Russia or for independence. Separatist conflict beginning in 1990 reportedly
led to about 1,500 deaths. In June 1992, Russia brokered a cease-fire, and a
“peacekeeping” force is stationed there, composed of Russian, Georgian, and Ossetian
troops. According to some estimates, some 25,000 ethnic Ossetians and 20,000 ethnic
Georgians reside in the now largely vacant region. Saakashvili increased pressure on the
region in 2004 by tightening border controls and reportedly sending several hundred
police, military, and intelligence personnel into the region. Georgian- and Russian-
backed guerrilla forces also reportedly entered the region. Georgia’s efforts to win
control of the region stalled, and by late 2004 both sides ostensibly had pulled back most
of the undeclared forces. Saakashvili announced a new peace plan for South Ossetia in
January 2005 that provides substantial autonomy. South Ossetia has rejected the plan, on
the grounds that it is already independent.
Abkhazia. In July 1992, Abkhazia’s legislature declared the region’s effective
independence from Georgia, prompting a Georgian attack. In October 1992, the U.N.
Security Council (UNSC) approved the first U.N. observer mission to a Eurasian state,
termed UNOMIG, to help the parties reach a settlement. Russian and North Caucasian
“volunteer” troops that reportedly made up the bulk of Abkhaz separatist forces routed
Georgian forces, leading in April 1994 to agreement by the two sides on a framework for
a political settlement and the return of refugees. Russian troops (acting as CIS
“peacekeepers”) were deployed in a security zone along the Inguri River that divides
Abkhazia from the rest of Georgia. The conflict resulted in about 10,000 deaths and over
200,000 displaced persons, mostly ethnic Georgians.
A U.S. Special Negotiator for NK and Eurasian Conflicts works with the U.N.
Secretary General, his Special Representative, and other Friends of Georgia (France,
Germany, Russia, the United Kingdom, and Ukraine) to facilitate a peace settlement. A
“New Friends of Georgia” group was formed by Bulgaria, Estonia, Latvia, Lithuania,
Poland, and Romania in early 2005 to advocate increased EU and NATO involvement in
Georgia, including in settling conflicts. Sticking points between Abkhazia and Georgia
have including the latter’s demand that displaced persons be allowed to return to the
region before an agreement on its status is reached. Abkhazia has insisted upon
recognition of its effective independence as a precondition to large-scale repatriation.
Perhaps alarmed by Russia’s growing control, voters in a late 2004 Abkhaz “presidential”
election apparently rejected the candidate preferred by Moscow. Russia orchestrated a
power-sharing arrangement in which the two previously vying candidates ran and won on
the same ticket in a new election held in early 2005.