Order Code RL33453
Armenia, Azerbaijan, and Georgia:
Political Developments and
Implications for U.S. Interests
Updated November 6, 2008
Jim Nichol
Specialist in Russian and Central Asian Affairs
Foreign Affairs, Defense, and Trade Division

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Armenia, Azerbaijan, and Georgia: Political
Developments and Implications for U.S. Interests
Summary
The United States recognized the independence of Armenia, Azerbaijan, and
Georgia when the former Soviet Union broke up at the end of 1991. The United
States has fostered these states’ ties with the West in part to end the dependence of
these states on Russia for trade, security, and other relations. The United States has
pursued close ties with Armenia to encourage its democratization and because of
concerns by Armenian-Americans and others over its fate. Close ties with Georgia
have evolved from U.S. contacts with its pro-Western leadership. The Bush
Administration supports U.S. private investment in Azerbaijan’s energy sector as a
means of increasing the diversity of world energy suppliers. The United States has
been active in diplomatic efforts to resolve regional conflicts in the region.
As part of the U.S. Global War on Terror, the U.S. military in 2002 began
providing equipment and training for Georgia’s military and security forces.
Azerbaijani troops participate in stabilization efforts in Afghanistan and Iraq, and
Armenian and Georgian personnel have served in Iraq. Georgia’s troops left Iraq in
August 2008, to help provide homeland security in the wake of Russia’s invasion and
partial occupation of Georgia. A ceasefire provides for Russian troops to withdraw
from areas outside of Georgia’s breakaway Abkhazia and South Ossetia, and for the
deployment of observers from the European Union. Although Russia recognized the
independence of Abkhazia and South Ossetia, the United States and virtually all
other nations have upheld Georgia’s sovereignty and territorial integrity.
Key issues in the 2nd Session of the 110th Congress regarding the South
Caucasus are likely to focus on supporting Georgia’s integration into Western
institutions, including NATO; Azerbaijan’s energy development; and Armenia’s
independence and economic development. At the same time, concerns might include
the status of human rights and democratization in the countries; the on-going
Armenia-Azerbaijan conflict over the breakaway Nagorno Karabakh region; and
threats posed to Georgia by Russia’s military actions in August 2008 and its
diplomatic recognition of Georgia’s breakaway South Ossetia and Abkhazia regions.
Congress will likely scrutinize Armenia’s and Georgia’s reform progress as recipients
of Millennium Challenge Account grants. Some Members of Congress believe that
the United States should provide greater attention to the region’s increasing role as
an east-west trade and security corridor linking the Black Sea and Caspian Sea
regions, and to Armenia’s inclusion in such links. They urge greater U.S. aid and
conflict resolution efforts to contain warfare, crime, smuggling, and Islamic
extremism and to bolster the independence of the states. Others urge caution in
adopting policies that will heavily involve the United States in a region beset by
ethnic and civil conflicts.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of U.S. Policy Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Post-September 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Operations in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
After the August 2008 Russia-Georgia Conflict . . . . . . . . . . . . . . . . . . 5
The South Caucasus’s External Security Context . . . . . . . . . . . . . . . . . . . . . . . . . 5
Russian Involvement in the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Caspian Energy Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Military-Strategic Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Roles of Turkey, Iran, and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Obstacles to Peace and Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Regional Tensions and Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Nagorno Karabakh Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Civil and Ethnic Conflict in Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Economic Conditions, Blockades, and Stoppages . . . . . . . . . . . . . . . . . . . . 22
Democratization Problems and Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Armenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Azerbaijan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
U.S. Aid Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
U.S. Assistance After the Russia-Georgia Conflict . . . . . . . . . . . . . . . . . . . 32
U.S. Security Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
U.S. Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Energy Resources and U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
110th Congress Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
List of Figures
Figure 1. Map of the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
List of Tables
Table 1. U.S. Foreign Aid to the Region, FY1992-FY2008, and
FY2009 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

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Armenia, Azerbaijan, and Georgia:
Political Developments and
Implications for U.S. Interests
Most Recent Developments
In his state of the union address on November 5, 2008, Russian President
Dmitriy Medvedev asserted that the “tragedy” of the August 2008 Russia-Georgia
conflict “was a consequence of the U.S. administration’s arrogant course that is
intolerant of criticism and relies on unilateral decisions.” He stated that Russia’s
“moral principles” include “the protection of small nations. And recognizing the
independence of [Georgia’s breakaway] South Ossetia and Abkhazia is, by the way,
an example of such protection.” He emphasized that “we really proved, including
to those who sponsored the existing regime in Georgia, that we are able to defend our
citizens, that we can indeed defend our national interests and efficiently fulfil our
peacekeeping obligations.”1
On November 2, 2008, Russian President Medvedev hosted talks between
Armenian President Serzh Sargisyan and Azerbaijani President Ilkham Aliyev on a
settlement of the conflict over Azerbaijan’s breakaway Nagorno Karabakh region.
Little progress in reaching a settlement was reported, but a joint communique upheld
a continued mediating role for the so-called “Minsk Group” of member states of the
Organization for Security and Cooperation in Europe (OSCE).
At a press conference in Azerbaijan on October 2, 2008, Deputy Secretary of
State John Negroponte was repeatedly asked whether the United States would render
assistance to Azerbaijan if Russia invaded. Negroponte responded that he hoped that
such a situation would never emerge, but that “as you saw from [the U.S.] response
and the European response to the situation in Georgia, we did many things to show
solidarity with that country, including after events occurred a significant program to
help the reconstruction and the repair in that country.”2
Background
Armenia, Azerbaijan, and Georgia are located south of the Caucasus Mountains
that form part of Russia’s borders (see Figure 1). The South Caucasus states served
historically as a north-south and east-west trade and transport “land bridge” linking
1 Johnson’s Russia List, November 6, 2008.
2 U.S. Department of State. Press Availability by Deputy Secretary Negroponte in
Azerbaijan, October 2, 2008.

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CRS-2
Europe to the Middle East and Asia, over which the Russian Empire and others at
various times endeavored to gain control. In ancient as well as more recent times, oil
and natural gas resources in Azerbaijan attracted outside interest. All three peoples
can point to periods of past autonomy or self-government. After the Russian Empire
collapsed in 1917, all three states declared independence, but by early 1921 all had
been re-conquered by Russia’s Red (Communist) Army. They regained
independence when the Soviet Union collapsed in 1991.3
The Caucasus Region: Basic Facts
Area: The region is slightly larger than Syria: Armenia is 11,620 sq. mi.; Azerbaijan
is 33,774 sq. mi.; Georgia is 26,872 sq. mi.
Population: 15.8 million, similar to Netherlands; Armenia: 2.97 m.; Azerbaijan: 8.18
m.; Georgia: 4.63 m. (The World Factbook, July 2008 est.). Over a million people
from the region are migrant workers in Russia and elsewhere.
GDP: $103.1 billion: Armenia: $17.15 b.; Azerbaijan: $65.47 b.; Georgia: $20.5 b.
(World Factbook, 2007 est., purchasing power parity)
Overview of U.S. Policy Concerns
By the end of 1991, the United States had recognized the independence of all
the former Soviet republics. The United States pursued close ties with Armenia,
because of its profession of democratic principles, and concerns by Armenian-
Americans and others over its fate. The United States pursued close ties with
Georgia after Eduard Shevardnadze (formerly a pro-Western Soviet foreign minister)
assumed power there in early 1992. Faced with calls in Congress and elsewhere for
a U.S. aid policy for the Eurasian states, then-President George H.W. Bush sent the
FREEDOM Support Act to Congress, which was signed with amendments into law
in October 1992 (P.L. 102-511).
In June 2006, Deputy Assistant Secretary of State Matthew Bryza stated that the
United States has three inter-related sets of interests in the region: “we’re not
embarrassed to say that energy is a strategic interest. We [also] have ... traditional
security interests — meaning fighting terrorism, fighting proliferation, avoiding
military conflict, and restoring (or preserving, in some cases) the territorial integrity
of the states of the region.... And then we have a third set of interests, in ...
democratic and market economic reform ... based on our belief that stability only
comes from legitimacy. And legitimacy requires democracy on the political side and
prosperity on the economic side.” Assistant Secretary of State Daniel Fried testified
in June 2008 that “we want to help the nations of this region travel along the same
path toward freedom, democracy, and market-based economies that so many of their
neighbors to the West have traveled.... We do not believe that any outside power —
neither Russia nor any other — should have a sphere of influence over these
3 For background, see CRS Report RS20812, Armenia Update, by Carol Migdalovitz; CRS
Report 97-522, Azerbaijan: Recent Developments and U.S. Interests, by Jim Nichol; and
CRS Report 97-727, Georgia: Recent Developments and U.S. Interests, also by Jim Nichol.

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CRS-3
countries. No outside power should be able to threaten, pressure, or block the
sovereign choice of these nations to join with the institutions of Europe and the
transatlantic family.”4
In addition, U.S. policy toward the South Caucasus states has included
promoting the resolution of conflicts between Armenia and Azerbaijan over
Azerbaijan’s breakaway Nagorno Karabakh (NK) region and between Georgia and
its breakaway regions of Abkhazia and South Ossetia. Since 1993, successive U.S.
Special Negotiators for Eurasian Conflicts have helped in various ways to try to settle
these “frozen” conflicts. (In early 2006, the State Department eliminated this post
and divided its responsibilities among the Deputy Assistant Secretary of State and the
Office of Caucasus Affairs and Regional Conflicts.)5 Congressional concerns about
the NK conflict led to the inclusion of Section 907 in the FREEDOM Support Act,
which prohibits U.S. government-to-government assistance to Azerbaijan, except for
non-proliferation and disarmament activities, until the President determines that
Azerbaijan has taken “demonstrable steps to cease all blockades and other offensive
uses of force against Armenia and NK” (on waiver authority, see below). Provisions
in FY1996, FY1998, and FY1999 legislation eased the prohibition by providing for
humanitarian, democratization, and business aid exemptions.
Some observers argue that developments in the South Caucasus are largely
marginal to U.S. strategic interests. They urge great caution in adopting policies that
will heavily involve the United States in a region beset by ethnic and civil conflicts,
and some argue that, since the European Union has recognized the region as part of
its “neighborhood,” it rightfully should play a major role. Some observers argue that
the U.S. interest in democratization should not be subordinated to interests in energy
and anti-terrorism.6
Other observers believe that U.S. policy now requires more active engagement
in the region. They urge greater U.S. aid and conflict resolution efforts to contain
warfare, crime, smuggling, and Islamic extremism and to bolster the independence
of the states. Some argue that such enhanced U.S. relations also would serve to
“contain” Russian and Iranian influence and that close U.S. ties with Azerbaijan
4 “U.S. Says Aliyev, Kocharyan Must Show ‘Political Will,’” RFE/RL, June 23, 2006. U.S.
House of Representatives. Committee on Foreign Affairs. Hearing: The Caucasus, Frozen
Conflicts and Closed Borders. Testimony of Daniel Fried, June 18, 2008.
5 According to a report by the State Department’s Office of the Inspector General, the added
duties of the Office of Caucasus Affairs and Regional Conflicts and the relevant deputy
assistant secretary were not accompanied by increased staff support, and “some mis-
communications and divergence of expectations between [the State Department] and the
[U.S. Embassy in Azerbaijan] have occurred as a consequence.” U.S. Department of State.
Report of Inspection: Embassy Baku, Azerbaijan, Report Number ISP-I-07-40A, September
2007.
6 U.S. House of Representatives. Committee on Foreign Relations. Subcommittee on
International Organizations, Human Rights, and Oversight. Ideals vs. Reality in Human
Rights and U.S. Foreign Policy: The Cases of Azerbaijan, Cuba, and Egypt, July 12, 2007;
U.S. Commission on Security and Cooperation in Europe. Energy and Democracy, July 23,
2007.

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CRS-4
would benefit U.S. relations with other Islamic countries, particularly Turkey and the
Central Asian states. They also point to the prompt support offered to the United
States by the regional states in the aftermath of the September 11, 2001, attacks by
Al Qaeda on the United States. Some argue that energy resources in the Caspian
region are a central U.S. strategic interest, because Azerbaijani and Central Asian oil
and natural gas deliveries could somewhat lessen Western energy dependency on
Russia and the Middle East (see below, Energy Resources).
Post-September 11. In the wake of September 11, 2001, the United States
obtained quick pledges from the three South Caucasian states to support Operation
Enduring Freedom (OEF) in Afghanistan, including overflight rights and
Azerbaijan’s and Georgia’s offers of airbase and other support. Congressional
attitudes toward Azerbaijan and Section 907 shifted, resulting in presidential waiver
authority being incorporated into Foreign Operations Appropriations for FY2002
(H.R. 2506; P.L. 107-115). The President may use the waiver authority if he certifies
that U.S. aid supports U.S. counter-terrorism efforts, supports the operational
readiness of the armed forces, is important for Azerbaijan’s border security, and will
not harm NK peace talks or be used for offensive purposes against Armenia. The
waiver may be renewed annually, and sixty days after the exercise of the waiver, the
President must report to Congress on the nature of aid to be provided to Azerbaijan,
the military balance between Armenia and Azerbaijan and the effects of U.S. aid on
that balance, the status of Armenia-Azerbaijan peace talks, and the effects of U.S. aid
on those talks. President Bush has exercised the waiver annually, most recently in
March 2008.
Since late 2002, Azerbaijan has contributed troops for peacekeeping in
Afghanistan. In October 2008, Azerbaijan’s legislature approved doubling the
number of troops deployed to Afghanistan to about 100. Georgia contributed about
50 troops during Afghan elections in late 2004-early 2005. In late 2007, Georgia’s
President Saakashvili stated that Georgia intended to send troops to support NATO
in Afghanistan.
Operations in Iraq. Azerbaijan and Georgia were among the countries that
openly pledged to support the U.S.-led Operation Iraqi Freedom (OIF), with both
offering the use of their airbases, and to assist the United States in re-building Iraq.
Both countries agreed to participate, subject to U.S. financial support, in the
multinational stabilization force for Iraq. In August 2003, both Azerbaijan and
Georgia dispatched forces to Iraq. Azerbaijan’s infantry company (currently 150
troops) is embedded with the U.S. Marines at the Hadithah Dam and provides
perimeter security and force protection. Georgia augmented its troops over time until
2,000 were serving in 2007-2008, the third-largest number of troops in Iraq, after the
United States and the United Kingdom. One special forces battalion was stationed
near Baqubah and provided security for two bridges and three forward operating
bases. The other battalion was stationed at the International Zone in Baghdad and
provided security for the U.N. assistance mission. All 2,000 troops were pulled out
in August 2008 in connection with the Russia-Georgia conflict (see below). Armenia
began sending personnel to Iraq in January 2005, where 46 currently serve in a
transportation platoon that carries out convoy missions; an engineer team that
performs road reconnaissance, manages explosive materials storage and destruction,

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CRS-5
clears roads, and acts as a part of a quick reaction force with the El Salvadorian
Battalion; and a medical team that works in the Polish Field Hospital.
After the August 2008 Russia-Georgia Conflict. In the wake of the
Russia-Georgia conflict (see below), Vice President Cheney visited Georgia and
Azerbaijan in early September 2008. In Georgia, he stated that “[President Mikheil
Saakashvili] and his democratically elected government can count on the continued
support and assistance of the United States.” He pledged U.S. aid to help Georgians
“to overcome an invasion of your sovereign territory, and an illegitimate, unilateral
attempt to change your country’s borders by force.... We will help [you] to heal this
nation’s wounds, to rebuild this economy, and to ensure Georgia’s democracy,
independence, and further integration with the West.”7
In Azerbaijan, he stated that “the United States has deep and abiding interests
in [Azerbaijan’s] well being and security.” He averred that the United States is
“committed to achieving a negotiated solution to the NK conflict, a solution that
starts with the principle of territorial integrity, and takes into account other
international principles. Achieving a solution is more important now than ever
before; that outcome will enhance peace and stability in the region, and Azerbaijan’s
security, as well.” He praised Azerbaijan’s cooperation with Western countries in
the energy sphere and thanked Azerbaijan for its contribution to the global war
against terrorism. He also voiced U.S. support for “the people of Azerbaijan in their
efforts, often in the face of great challenges, to strengthen democracy, the rule of law,
and respect for human rights, and to build a prosperous, modern, independent
country.”8
The South Caucasus’s External Security Context
Russian Involvement in the Region
After Vladimir Putin became president in 1999, Russia appeared to place great
strategic importance on increasing, or at least maintaining, influence in the South
Caucasus region. Several developments since 2003, however, appeared to
complicate these influence efforts. These included the “rose revolution” in Georgia
that appeared to usher in democratic reforms, NATO’s increased ties with the
regional states, the completion of the Baku-Tbilisi-Ceyhan oil pipeline and an
associated gas pipeline, Russia’s ongoing concerns about security in its North
Caucasus regions (including Chechnya), and Russia’s agreement to close its
remaining military bases in Georgia. This declining Russian influence appears to
have been reversed as a result of the August 2008 Russia-Georgia conflict.
7 The White House. Office of the Vice President. Remarks by Vice President Cheney and
President Saakashvili of Georgia After Meeting, September 4, 2008.
8 The White House. Office of the Vice President. Remarks by Vice President Cheney and
President Aliyev of the Republic of Azerbaijan After Meeting, September 3, 2008.

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CRS-6
The Putin-Medvedev leadership has appeared to place its highest priority on
exercising influence in the region in the military-strategic sphere and slightly less
priority on influence in the economic sphere (particularly energy) and domestic
political spheres. Russia has viewed Islamic fundamentalism as a growing threat to
the region, but has cooperated with Iran on some issues to counter Turkish and U.S.
influence. Russia has tried to stop ethnic “undesirables,” drugs, weapons, and other
contraband from entering its borders. It has quashed separatism in its North
Caucasus areas while backing it in the South Caucasus.
The South Caucasian states have responded in various ways to Russian
influence. Armenia has close security and economic ties with Russia, given its
unresolved NK conflict and grievances against Turkey. Georgia long attempted to
transform Russia’s military “peacekeeping” in the breakaway regions into
international peacekeeping. Azerbaijan has been concerned about Russia’s ties with
Armenia, has worked to ensure that its energy resources are not controlled by Russia,
and has limited Russia’s military presence. Until late 2006, it appeared that
Azerbaijan valued having some cooperative relations with Russia, and criticized
Georgia’s inability to maintain such ties with Russia. However, Azerbaijani-Russian
relations seemed to cool somewhat after late 2006 when Russia’s demands for higher
gas prices and moves against migrant workers contributed to greater solidarity
between Azerbaijan and Georgia. They appeared to warm somewhat following the
August 2008 Georgia-Russia conflict, perhaps as part of Baku’s recognition of
Russia’s enhanced influence in the region (see below, Russia-Georgia Conflict).
NATO’s September 21, 2006, approval of an “Intensified Dialogue” with
Georgia on reforms needed that might lead to membership appeared to contribute to
heightened concerns in Russia about NATO enlargement and about an increased U.S.
presence in the South Caucasus. Later that month, Georgian-Russian tensions
appeared to come to a head after Georgia arrested four Russian servicemen on
charges of espionage and plotting to overthrow the Saakashvili government.
Although Georgia soon handed over the servicemen, Russia retaliated in a form
viewed as troubling by many international observers, including cutting off financial
flows to Georgia, severing direct transport and postal links (Russia had banned
imports of Georgian wine, mineral water, and other agricultural products in spring
2006), ending the issuing of visas, raiding ethnic Georgian-owned businesses,
expelling hundreds of Georgians, and compiling lists of ethnic Georgians in the
public schools.
Russia’s announcement in late July 2007 that it would ease some visa
restrictions raised hopes of a thaw in Georgia-Russia relations, but such hopes were
quickly dashed in early August 2007. Georgia alleged that some aircraft were tracked
on its radars as they entered the country’s airspace from Russia, and that one
launched a missile which failed to detonate. A group of experts from Latvia,
Lithuania, Sweden, and the United States concluded that one aircraft entering from
Russia dropped a Russian-designed KH-58 (NATO designation AS-11 Kilter) anti-
radar air to surface missile.9
9 Report from the International Group of Experts Investigating the Possible Violation of
(continued...)

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CRS-7
Caspian Energy Resources. Russia has tried to play a dominant role in
future oil production and transportation in the Caspian Sea region. At the May 2002
U.S.-Russia summit, the two presidents issued a joint statement endorsing multiple
pipeline routes, implying Russia’s non-opposition to plans to build oil and gas
pipelines from Azerbaijan to Turkey that do not transit Russia. In early 2004,
however, a Russian official stated that Putin wanted to ensure that the greatest
volume of Caspian energy flowed through Russia.10 A U.S.-Russia Strategic
Framework Declaration, issued in April 2008, reaffirmed the goal of enhancing the
“diversity of energy supplies through economically viable routes and means of
transport.”11
In early 2006, Russia charged all three regional states much more for gas.
Armenia agreed to relinquish various energy assets to Russian firms as partial
payment for this price increase. Some critics have alleged that Russia now has
virtual control over Armenia’s energy supplies. In late 2006, Russia again requested
price hikes for 2007. In the case of Georgia, Russia’s state-controlled Gazprom gas
firm announced in late 2006 that it would cut off gas supplies to Georgia by the end
of the year unless Georgia agreed to a 100% price hike or sold its main gas pipeline
to Gazprom. However, Georgia negotiated an agreement to receive some Azerbaijani
gas via the new South Caucasus Pipeline (SCP, see below) and another small existing
pipeline. It also agreed to continue to purchase some higher-priced gas from
Gazprom. Russia’s requests for higher prices and reductions in the amounts of gas
and electricity supplied to Azerbaijan led President Aliyev to announce that the
country would no longer purchase Russian gas (however, agreement was reached to
provide the same amount of Russian electricity as in 2006, but at a higher price). In
the Winter of 2007-2008, Georgia again had to purchase some gas from Gazprom at
higher prices, to supplement that supplied by Azerbaijan.
Following the August 2008 Russia-Georgia conflict, Gazprom’s arrangement
with Georgia involving the transit of Russian gas to Armenia remained in place.
Armenia pays a share of gas to Georgia as a transit fee. However, Georgia reportedly
blocked Russian gas transit to South Ossetia. Azerbaijan has substantial interests in
Georgia’s continued stability and independence, including because Georgia is a
pipeline and railway corridor to Europe that does not transit Russia, Iran, or Armenia.
9 (...continued)
Georgian Airspace and the Recovered Missile Near Tsitelubani, Georgia, 6 August 2007,
August 14, 2007; Second Independent Inter-Governmental Expert Group (IIEG-2). Report
Investigating Possible Violations of Georgian Airspace and the Recovered Missile near
Tsitelubani, Georgia, 6 August 2007, August 20, 2007; States News Service, Press
Conference by Russian Federation, August 21, 2007; CEDR, August 8, 2007, Doc. No. CEP-
950011.
10 The White House. Office of the Press Secretary. Joint Statement by President George
W. Bush and President Vladimir V. Putin on the New U.S.-Russian Energy Dialogue, May
24, 2005. For the statement by Viktor Kalyuzhny, Putin’s Special Envoy to the Talks on the
Legal Status of the Caspian Sea, see CEDR, April 6, 2004, Doc. No. CEP-17.
11 The White House. Office of the Press Secretary. US-Russia Strategic Framework
Declaration, April 6, 2008.

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CRS-8
Military-Strategic Interests. Russia’s armed presence in the South
Caucasus has been multifaceted, including thousands of military base personnel,
“peacekeepers,” and border troops. The first step by Russia in maintaining a military
presence in the region was the signing of the Commonwealth of Independent States
(CIS) Collective Security Treaty (CST) by Armenia, Russia, and others in 1992,
which pledges the members to consult in the event of a threat to one or several
members, and to provide mutual aid if attacked (Azerbaijan and Georgia withdrew
in 1999). Russia also secured permission for two military bases in Armenia and four
in Georgia. Russian border troops guard Armenia’s borders with Turkey and Iran.
The total number of Russian troops in Armenia has been estimated at about 3,500.
Armenia has argued that its Russian bases provide for regional stability by protecting
it from attack. About 90,000 Russian troops also are stationed nearby in the North
Caucasus.12 In 1993, Azerbaijan was the first Eurasian state to get Russian troops to
withdraw, except at the Qabala (Gabala) radar site in northern Azerbaijan. (Giving
up on closing the site, in January 2002 Azerbaijan signed a 10-year lease agreement
with Russia permitting up to 1,500 troops there.)
After the September 11, 2001 terrorist attacks in the United States, Russia
stepped up its claims that Georgia harbored Chechen terrorists (with links to Al
Qaeda) who used Georgia as a staging ground for attacks into Chechnya. The United
States expressed “unequivocal opposition” to military intervention by Russia inside
Georgia. Georgia launched a policing effort in its northern Pankisi Gorge in late
2002 that somewhat reduced tensions over this issue. In February 2004, Saakashvili
reportedly pledged during a Moscow visit to combat “Wahabbis” (referring to Islamic
extremists) in Georgia, including those hiding in the Gorge and others that Russia
alleged were transiting Georgia to fight in Chechnya. In April 2006, Azerbaijan
convicted 16 people on charges that they had received terrorist training from Al
Qaeda operatives in the Pankisi Gorge. Russia’s security service reported at the end
of November 2006 that it had killed Al Qaeda member Faris Yusef Amirat (aliases
included Abu Haf and Amzhet). It alleged that he had hidden in the Pankisi Gorge
during the winter of 2005-2006, had operated in Chechnya in the summer of 2006,
and was returning to the Gorge when he was killed in Russia’s Dagestan region.13
At the June 2007 summit of the Group of Eight (G-8) industrialized countries,
President Putin proposed that President Bush consider using Russia’s Soviet-era
missile radar in Qabala as an early warning system. Putin claimed that the radar
would be able to detect possible tests by Iran of a missile that could target Europe,
and would render unnecessary or premature U.S. plans to build a radar site in Czech
Republic and an interceptor missile site in Poland.14 A U.S., Russian, and
Azerbaijani delegation toured the radar site in September 2007. The United States
did not deem the radar as capable of substituting for facilities in Czech Republic.
12 The Military Balance 2008. London: International Institute of Strategic Studies, February
5, 2008.
13 CEDR, November 27, 2006, Doc. No. CEP-358003. For background, see CRS Report
RS21319, Georgia’s Pankisi Gorge, by Jim Nichol.
14 CEDR, March 5, 2007, Doc. No. CEP-358007; May 17, 2007, Doc. No. CEP-4009; May
24, 2007, Doc. No. CEP-950157; June 7, 2007, Doc. No. CEP-950369.

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Russian “Peacekeepers” and Bases in Georgia. As part of ceasefire
agreements between Georgia and its breakaway regions in the early 1990s, Russia as
the mediator sent military “peacekeepers” to Abkhazia and South Ossetia. Russia’s
“peacekeeping” role at that time received at least tacit approval from world
governments and international organizations. For many years, Georgian authorities
voiced dissatisfaction with the role of the “peacekeepers” in facilitating a peace
settlement and called for them to either be replaced or supplemented by a wider
international peacekeeping force (see also below, Conflict in Georgia).
In the early 1990s, Georgia was pressured by Russia to agree to the long-term
presence of four Russian military bases. By the late 1990s, however, many in
Georgia were calling for the bases to close, and this received support from European
countries during talks over amending the Conventional Armed Forces in Europe
(CFE) Treaty. In 1999, Russia and Georgia agreed to provisions of the amended CFE
Treaty calling for Russia to reduce weaponry at its four bases in Georgia, to close two
of the bases (at Gudauta and Vaziani) by July 2001, and to complete negotiations
during 2000 on the status of the other two bases (at Batumi and Akhalkalaki). NATO
signatories hesitated to ratify the amended Treaty until Russia satisfied these and
other conditions. On July 1, 2001, Georgia reported that Russia had turned over the
Vaziani base. Russia declared in June 2002 that it had closed its Gudauta base, but
that 320 troops would remain to support Russian “peacekeepers” taking leave at the
base.15 Georgia objects to this stance (see below).
The Georgian legislature in March 2005 passed a resolution calling for Russia
to agree by mid-May on closing the bases or face various restrictions on base
operations. This pressure, and perhaps the U.S. presidential visit (see above), spurred
Russia to agree with Georgia in late May on setting the end of 2008 as the deadline
for closing the bases. Putin explained that his military General Staff had assured him
that the bases were Cold War-era relics of no strategic importance to Russia.16 On
June 27, 2007, Russia formally handed over the Akhalkalaki base to Georgia’s
control. On November 21, 2007, the Russian Foreign Ministry proclaimed that the
Batumi base had been closed and that Russia had “fully” accomplished its obligations
to Georgia on the withdrawal of military facilities. Georgia continued to protest that
the Gudauta base retained some Russian forces and equipment and had not been
handed over to Georgia’s control.
Following the August 2008 Russia-Georgia conflict, Russian officials
announced that two army brigades, each consisting of approximately 3,800 troops,
would be deployed to new military bases in Abkhazia and South Ossetia in line with
Friendship and Cooperation Treaties signed by Russia with these regions. In addition
to these army brigades, Russian border troops reportedly will be deployed along the
regional borders with Georgia, and separatist militias will be incorporated into the
15 A Russian military analyst reported in early 2007 that there also were nine aircraft and ten
helicopters at “airbase Gudauta.” CEDR, May 3, 2007, Doc. No. CEP-305001.
16 CEDR, May 24, 2005, Doc. No. CEP-378001. In June 2007, two Russian mountain
brigades consisting of about 4,500 troops began to deploy near Georgia’s borders, ostensibly
to enhance security after the base closures. RIA Novosti, June 26, 2007.

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Russian armed forces.17 The European Union has maintained that these forces far
exceed the limits permitted by the Russia-Georgia ceasefire accords (which call for
the numbers to match pre-conflict deployment levels of about 2,500 Russian
“peacekeepers” in Abkhazia and 1,000 Russian “peacekeepers” in South Ossetia).
Russia maintains that this ceasefire provision has been superceded by the authority
of “independent” Abkhazia and South Ossetia to decide on their own basing
arrangements.
The Roles of Turkey, Iran, and Others
The United States has generally viewed Turkey as able to foster pro-Western
policies and discourage Iranian interference in the South Caucasus states, though
favoring Azerbaijan in the NK conflict. Critics of Turkey’s larger role in the region
caution that the United States and NATO might be drawn by their ties with Turkey
into regional imbroglios. Turkey seeks good relations with Azerbaijan and Georgia
and some contacts with Armenia, while trying to limit Russian and Iranian influence.
Azerbaijan likewise views Turkey as a major ally against such influence, and to
balance Armenia’s ties with Russia. Armenia is a member of the Black Sea
Economic Cooperation organization, along with Turkey, and the two states have
established consular relations. Obstacles to better Armenian-Turkish relations
include Turkey’s rejection that there was an Armenian genocide in 1915-1923 and
its support for Azerbaijan in the NK conflict. Georgia has an abiding interest in ties
with the approximately one million Georgians residing in Turkey and the
approximately 50,000 residing in Iran, and has signed friendship treaties with both
states. Turkey is one of Georgia’s primary trade partners. New pipelines delivering
oil and gas westward from the Caspian Sea reflect cooperation between Azerbaijan,
Georgia, and Turkey.
Iran’s goals in the South Caucasus include discouraging Western powers such
as Turkey and the United States from gaining influence (Iran’s goal of containing
Russia conflicts with its cooperation with Russia on these interests), ending regional
instability that might threaten its own territorial integrity, and building economic
links. A major share of the world’s Azerbaijanis reside in Iran (estimates range from
6-12 million), as well as about 200,000 Armenians. Ethnic consciousness among
some “Southern Azerbaijanis” in Iran has grown. Azerbaijani elites fear Iranian-
supported Islamic extremism and object to Iranian support to Armenia. Iran has
growing trade ties with Armenia and Georgia, but its trade with Azerbaijan has
declined. To block the West and Azerbaijan from developing Caspian Sea energy,
Iran long has insisted on either common control by the littoral states or the division
of the seabed into five equal sectors. Some thawing in Azerbaijani-Iranian relations
occurred in 2005-2006 with the long-delayed opening of an Azerbaijani consulate in
Tabriz and leadership summits.
17 Pavel Felgenhauer, “Georgian Officials Admit They Misread Russian Intentions,” Eurasia
Daily Monitor, October 30, 2008. Felgenhauer, a Russian military analyst, warns that the
total number of Russian troops and weapons deployed in the regions may well be more than
the number of troops and weapons possessed by Georgia.

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In recent months, Iran has boosted its diplomacy in the region, perhaps to
counter growing international concern about its nuclear programs and to counter U.S.
influence. Iran’s efforts to improve relations with Azerbaijan have appeared to be
jeopardized, however, by its reported suppression of rising dissent among “Southern
Azerbaijanis.” U.S. policy aims to contain Iran’s threats to U.S. interests.18
Among non-bordering states, the United States and European states are the most
influential in the South Caucasus in terms of aid, trade, exchanges, and other ties.
U.S. and European goals in the region are broadly compatible, involving integrating
it into the West and preventing an anti-Western orientation, opening it to trade and
transport, obtaining energy resources, and helping it become peaceful, stable, and
democratic. As part of its European Neighborhood Policy, the EU signed Action
Plans with the three regional states in November 2006 that it hoped would foster both
European and regional integration. The EU took the international lead in mediating
the August 2008 Russia-Georgia conflict and in deploying observers after the
ceasefire (see below). The South Caucasus region has developed some economic and
political ties with other Black Sea and Caspian Sea littoral states, besides those
discussed above. Azerbaijan shares with Central Asian states common linguistic and
religious ties and concerns about some common neighbors (Iran and Russia). The
South Caucasian and Central Asian states are concerned about ongoing terrorist
threats and drug trafficking from Afghanistan. Central Asia’s increasing ties with the
South Caucasus make it more dependent on stability in the region.
Obstacles to Peace and Independence
Regional Tensions and Conflicts
Ethnic conflicts have kept the South Caucasus states from fully partaking in
peace, stability, and economic development since the Soviet collapse in 1991, some
observers lament. The countries are faced with on-going budgetary burdens of arms
races and caring for refugees and displaced persons. Other costs of ethnic conflict
include threats to bordering states of widening conflict and the limited ability of the
region or outside states to fully exploit energy resources or trade/transportation
networks.
U.S. and international efforts to foster peace and the continued independence
of the South Caucasus states face daunting challenges. The region has been the most
unstable part of the former Soviet Union in terms of the numbers, intensity, and
length of its ethnic and civil conflicts. The ruling nationalities in the three states are
culturally rather insular and harbor various grievances against each other. This is
particularly the case between Armenia and Azerbaijan, where discord has led to the
virtually complete displacement of ethnic Armenians from Azerbaijan and vice versa.
The main languages in the three states are dissimilar (also, those who generally
consider themselves Georgians — Kartvelians, Mingrelians, and Svans — speak
dissimilar languages). The borders of the countries do not coincide with eponymous
18 See CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth
Katzman.

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CRS-12
ethnic populations. Efforts by ethnic minorities to secede are primary security
concerns for all three states. NK relies on economic support from Armenia, and
Abkhazia and South Ossetia from Russia.
Nagorno Karabakh Conflict. Since 1988, the separatist conflict in Nagorno
Karabakh (NK) has resulted in about 15,000 casualties and hundreds of thousands
of refugees and displaced persons in Armenia and Azerbaijan. The U.N. High
Commissioner for Refugees has reported that at the end of 2007, there were still
about 4,600 people considered refugees or displaced persons in Armenia.19 Armenia
has granted citizenship and acted to permanently house most of the ethnic Armenians
who fled Azerbaijan. The Azerbaijani government reported in April 2008 that there
were 572,500 internally displaced persons in the country.20 The non-governmental
International Crisis Group estimates that about 13-14% of Azerbaijan’s territory,
including NK, is controlled by NK Armenian forces (The World Factbook estimates
about 16%).21 The OSCE’s “Minsk Group” of concerned member-states began talks
in 1992. A U.S. presidential envoy was appointed to these talks. A Russian-
mediated cease-fire was agreed to in May 1994 and was formalized by an armistice
signed by the ministers of defense of Armenia and Azerbaijan and the commander
of the NK army on July 27, 1994 (and reaffirmed a month later). The United States,
France, and Russia co-chair meetings of the Minsk Group.
The Minsk Group reportedly has presented four proposals as a framework for
talks, but a peace settlement has proved elusive. Since 2005, officials in both
countries have reported negotiations on a fourth “hybrid” peace plan calling for initial
agreement on “core principles.” The Minsk Group co-chairs issued a statement and
made other remarks in April-July 2006 that revealed some of their proposals for a
settlement. These included the phased “redeployment of Armenian troops from
Azerbaijani territories around NK, with special modalities for Kelbajar and Lachin
districts (including a corridor between Armenia and NK); demilitarization of those
territories; and a referendum or population vote (at a date and in a manner to be
decided ...) to determine the final legal status of NK.” International peacekeepers
also would be deployed in the conflict area.22
On November 29, 2007, then-Undersecretary of State Nicholas Burns, Russian
Foreign Minister Sergey Lavrov, and French Foreign Minister Bernard Kouchner
presented the Foreign Ministers of Armenia and Azerbaijan with a draft text — Basic
19 U.N. High Commissioner for Refugees. 2007 Global Trends: Refugees, Asylum-seekers,
Returnees, Internally Displaced and Stateless Persons, June 2008. The NGO Amnesty
International has raised concerns that refugees and displaced persons in Azerbaijan face
prejudice and segregation. They are more likely to be unemployed and in poverty.
Azerbaijan: Displaced then Discriminated Against — the Plight of the Internally Displaced
Population, June 28, 2007.
20 Norwegian Refugee Council. Internal Displacement Monitoring Center. Country Page:
Azerbaijan, at [http://www.internal-displacement.org/idmc/website/countries.nsf].
21 International Crisis Group. Nagorno-Karabakh: Viewing the Conflict from the Ground,
September 14, 2005; CIA World Factbook. Azerbaijan, online at [https://www.cia.gov/cia/
publications/factbook/geos/aj.html].
22 OSCE. Statement by the Minsk Group Co-Chairs, July 3, 2006.

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CRS-13
Principles for the Peaceful Settlement of the Nagorno-Karabakh Conflict — for
transmission to their presidents. These officials urged the two sides to accept the
Basic Principles (also termed the Madrid proposals, after the location where the draft
text was presented) that had resulted from three years of talks and to begin “a new
phase of talks” on a comprehensive peace settlement.23
Although the text was not released, Azerbaijani Foreign Minister Elmar
Mammadyarov reportedly claimed that the principles uphold Azerbaijan’s territorial
integrity and NK’s autonomous status as part of Azerbaijan. Armenia’s then-Foreign
Minister Vardan Oskanyan asserted, on the other hand, that the principles supported
Armenia’s insistence on respecting self-determination for NK. Many observers
suggest that progress in the talks may occur only after the current electoral cycle
concludes in Armenia and Azerbaijan.24
In March 2008, the peace process faced challenges from a ceasefire breakdown
along the NK front that reportedly led to some troop casualties and from the passage
of a resolution by the U.N. General Assembly that called for Armenia to
“immediately and unconditionally” withdraw from “occupied” Azerbaijani territory.
In the former case, each side blamed the other for breaking the ceasefire. In the
latter case, the resolution introduced by Azerbaijan in the U.N. General Assembly
was approved with a vote of 39 for and 7 against, with 100 abstentions. The United
States voted against the resolution in part because according to Deputy Assistant
Secretary of State Matthew Bryza it violated the provisions of the Basic Principles
(see above) and thus harmed the peace process.
On May 6, 2008, France hosted a meeting between the Armenian and
Azerbaijani foreign ministers. The foreign ministers also met with the Minsk Group
co-chairs. No details were made available to the public. Armenian President Serzh
Sarkisyan and Azerbaijani President Ilkham Aliyev met briefly on June 6, 2008,
while attending a meeting of the Commonwealth of Independent States in St.
Petersburg, Russia. The presidents stated that a certain degree of trust had been
reached during their first meeting, and they agreed that talks should continue on
settling the NK conflict.
Perhaps troubling, Azerbaijan staged a major military parade in late June 2008,
at which Aliyev stated that “the Azerbaijani people are tired of these [peace] talks....
We should be ready to liberate our territories by military force at any moment.”
Answering a congressional inquiry about similar statements by Aliyev, Assistant
Secretary of State Fried stated that U.S. diplomats had advised Aliyev that such
statements harm the peace process, that renewed conflict would jeopardize
Azerbaijan’s energy exports, that “in the judgment of the United States,” Azerbaijan
does not have military superiority, and that neither side could win in a renewed
23 U.S. Department of State. Office of the Spokesman. Media Note: Support for Basic
Principles for Peaceful Settlement of the Nagorno-Karabakh Conflict, November 29, 2007.
24 CEDR, December 10, 2007, Doc. No. CEP-950390; December 13, 2007, Doc. No. CEP-
950360; December 19, 2007, Doc. No. CEP-950339.

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conflict.25 In the wake of the Russia-Georgia conflict in early August 2008 (see
below), Armenian President Sarkisyan asserted that “the tragic events in [Georgia’s
breakaway South Ossetia region] confirm that every attempt in the South Caucasus
to look for a military answer in the struggle for the right to self-determination has
far-reaching military and geopolitical consequences.”26
Deputy Assistant Secretary Bryza reportedly stated on September 18 that the
Minsk Group peace process faced an uncertain period, since Russia had acted
aggressively in the South Caucasus and its reputation had been harmed, but that he
hoped that the Minsk Group talks could continue. In any event, he stated, the United
States would continue to encourage the peaceful settlement of the conflict.27 On
October 14, Secretary Rice dismissed speculation that the Minsk Group had become
obsolete as the mediating body.
Turkish Prime Minister Recep Tayyip Erdogan visited Russia, Georgia, and
Azerbaijan in mid- to late August 2008 to propose the formation of a “Caucasus
Stability and Cooperation” group to discuss regional peace, economic cooperation,
and energy security, and which would include Turkey, Russia, Georgia, Azerbaijan,
and Armenia, but would exclude the United States and the EU. Turkish President
Abdullah Gul visited Armenia and Azerbaijan in early September to further discuss
forming the group and to mediate the NK conflict. Armenian President Sargisyan
welcomed Turkey’s efforts as an attempt to create a favorable atmosphere in the
region, but on September 11 called for continuing the Minsk Group talks.
Civil and Ethnic Conflict in Georgia. Several of Georgia’s ethnic
minorities stepped up their dissidence, including separatism, in the late 1980s and
early 1990s, resulting in the loss of central government control over the regions of
South Ossetia and Abkhazia. Some observers argued that Russia’s increasing
controls over South Ossetia and Abkhazia over the years transformed the separatist
conflicts into essentially Russia-Georgia disputes. Most residents of Abkhazia and
South Ossetia were granted Russian citizenship and most appeared to want their
regions to be independent or to become part of Russia.28
25 U.S. House of Representatives. Committee on Foreign Affairs. Hearing: The Caucasus,
Frozen Conflicts and Closed Borders. Testimony of Daniel Fried, June 18, 2008.
26 Open Source Center. Europe: Daily Report, August 27, 2008, Doc. No. EUP-085016.
However, Armenia’s former Foreign Minister Oskanyan maintained in late 2006 that Article
4 of the CIS Collective Security Treaty (“in case an act of aggression is committed against
any of the member-states, all other member-states will render it necessary assistance,
including military, as well as provide support with the means at their disposal through an
exercise of the right to collective defense”) pertains to aggression from outside the CIS, so
does not pertain to the Armenia-Azerbaijan conflict (since Azerbaijan is a member of the
CIS). Interview, October 26, 2006.
27 CEDR, September 18, 2008, Doc. No. CEP-950389.
28 Vladimir Socor, Eurasia Insight, November 20, 2006. According to Rossiyskoye
Voyennoye Obozreniye (Russian Military Review), published by the Defense Ministry, 80%
of residents of Abkhazia are citizens of Russia, and most voted in the December 2007
Russian legislative election. CEDR, April 21, 2008, Doc. No. CEP-358004.

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U.S. diplomacy long appeared to urge Georgia to work within existing peace
settlement frameworks for Abkhazia and South Ossetia — which allowed for Russian
“peacekeeping” — while criticizing some Russian actions in the regions. This stance
appeared to change during 2008, when the United States and other governments
increasingly came to support Georgia’s calls for the creation of alternative peace
settlement mechanisms, particularly since talks under existing formats had broken
down.
This U.S. policy shift was spurred by increasing Russian actions that appeared
to threaten Georgia’s territorial integrity. Among these, the Russian government in
March 2008 formally withdrew from CIS economic sanctions on Abkhazia,
permitting open Russian trade and investment. Of greater concern, President Putin
issued a directive in April 2008 to step up government-to-government ties with
Abkhazia and South Ossetia. He also ordered stepped up consular services for the
many Russian citizens in the two regions. He proclaimed that many documents
issued by the separatist governments and businesses which had been established in
the regions would be recognized as legitimate by the Russian government. Georgian
officials and other observers raised concerns that this directive tightened and flaunted
Russia’s jurisdiction over the regions.
A meeting of the U.N. Security Council (UNSC) on April 23, 2008, discussed
these Russian moves. Although the Security Council issued no public decision, the
United States, Great Britain, France, and Germany stated that same day that they “are
highly concerned about the latest Russian initiative to establish official ties with ...
Abkhazia and South Ossetia without the consent of the Government of Georgia. We
call on the Russian Federation to revoke or not to implement its decision.”29 On
April 29, 2008, the Russian foreign ministry claimed that Russia’s actions had been
taken to boost the basic human rights of residents in the regions. (For other Russian
actions during 2008 specific to a breakaway region, see below.)
Abkhazia. In July 1992, Abkhazia’s legislature declared the region’s effective
independence, prompting an attack by Georgian national guardsmen. 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 “volunteers” (who reportedly made up the bulk of Abkhaz
separatist forces) routed Georgian forces in 1993. Georgia and Abkhazia agreed in
April-May 1994 on a framework for a political settlement and the return of refugees.
A Quadripartite Commission (QC) was set up to discuss repatriation and Russian
troops (acting as CIS “peacekeepers”) were deployed in a zone between Abkhazia
and the rest of Georgia. The conflict resulted in about 10,000 deaths and over
200,000 displaced persons, mostly ethnic Georgians. In late 1997, the sides agreed
to set up a Coordinating Council (CC) to discuss cease-fire maintenance and refugee,
economic, and humanitarian issues. The QC met periodically and addressed
grievances not considered by the CC. Abkhazia had resisted holding CC meetings
since 2001. The two sides finally held some CC meetings in mid-2006 but rising
tensions led to the suspension of the meetings in August 2006.
29 “Germany, Great Britain, France, U.S.A. and Germany Passed Communique,” Black Sea
Press, April 24, 2008.

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CRS-16
The Deputy Assistant Secretary of State worked with the Special Representative
of the U.N. Secretary General and other “Friends of the Secretary General” (France,
Germany, Russia, the United Kingdom, and Ukraine) to facilitate a settlement. A
“New Friends” group was formed in 2005 (members included Bulgaria, Czech
Republic, Estonia, Latvia, Lithuania, Moldova, Poland, Romania, and Sweden) to
advocate increased EU and NATO attention to a settlement. Sticking points in talks
included Georgia’s demand that displaced persons be allowed to return to Abkhazia,
after which an agreement on autonomy for Abkhazia would be negotiated. The
Abkhazians insisted on recognition of their independence as a precondition to large-
scale repatriation.
The Kodori Gorge. In July 2006, a warlord in the Kodori Gorge area of
northern Abkhazia, where many ethnic Svans reside, foreswore his nominal
allegiance to the Georgian government. The Georgian government quickly sent
forces to the area and defeated the warlord’s militia. President Saakashvili asserted
that the action marked progress in Georgia’s efforts to re-establish its authority
throughout Abkhazia, and he directed that the Abkhaz “government-in-exile” make
the Gorge its home. Georgia claimed that only police were deployed in the Gorge,
but Abkhazia asserted that military troops were present, in violation of the cease-fire
agreement.
Regular Georgia-Abkhazia peace talks were suspended in October 2006.
Abkhazia called for Georgia to remove the government representatives and alleged
military forces. In October 2006, the UNSC criticized Georgia for introducing
military forces into the Kodori Gorge in violation of cease-fire accords and for other
“militant rhetoric and provocative actions” and called on it to abide by the accords.
Some violations by Abkhaz forces were also criticized. The UNSC stressed the
“important” and “stabilizing” role played by Russian peacekeepers and UNOMIG.30
The U.N. Secretary General subsequently stated that Georgia appeared not to have
heavy military weaponry in the Gorge. The Friends of the U.N. Secretary General
hosted meetings in Germany in June 2007 and Switzerland in February 2008 that
urged the sides to abide by the existing cease-fire agreement and to renew talks under
existing formats.31
In March and April 2008, President Saakashvili proposed new peace initiatives
that included international guarantees of autonomy for Abkhazia, quotas for Abkhaz
representation in Georgian executive and legislative bodies, the establishment of a
special economic zone in the Gali region, and more active involvement by the
international community and Russia in a peace settlement. The initiatives were
rejected by the de facto Abkhaz authorities.
30 U.N. Security Council. Resolution 1716 (2006), Adopted by the Security Council at Its
5549th Meeting, October 13, 2006.
31 U.N. Secretary General. Report of the Secretary-General on the Situation in Abkhazia,
S/2007/15, January 11, 2007; S/2007/182, April 3, 2007; S/2007/439, July 18, 2007;
S/2007/588, October 3, 2007; S/2008/38, January 23, 2008; S/2008/219, April 2, 2008. He
stated in his July 2007 report that UNOMIG had seen what appeared to be a Georgian
military truck in the upper Kodori Gorge.

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In March and April 2008, unmanned aerial vehicles (UAVs) from Georgia were
shot down over Abkhazia. Georgia claimed that Russians shot down the UAVs, but
the Abkhaz claimed that they shot them down. The Russian foreign ministry
asserted that the UAVs had a military surveillance mission and were banned under
the 1994 ceasefire agreement, but the Georgians asserted that they were non-
threatening and permitted. After an investigation, UNOMIG concluded in late May
2008 that at least one of the UAVs had been shot down by a fighter jet flying into
Abkhazia from Russian airspace. UNOMIG stated that Georgia should not fly the
UAVs over Abkhazia, but also termed the shootdown by the Russian air force
“fundamentally inconsistent” with the Abkhaz-Georgia ceasefire agreement. At a
closed meeting of the UNSC on May 30, 2008, Georgia stated that it would end the
flights of the UAVs.
The United States and others in the international community also raised
concerns when the Russian foreign and defense ministries announced on April 29,
2008, that the number of “peacekeepers” in Abkhazia would be boosted up to the
maximum permitted under ceasefire accords. There also would be added military
equipment and checkpoints. The ministries claimed that the increases were necessary
to counter the presence of a Georgian youth camp in a restricted zone near the
Abkhaz border, the flight of Georgian UAVs over Abkhazia, and a buildup of
Georgian “military forces” and police in the Kodori Gorge, which they alleged were
preparing to attack the de facto Abkhaz government. The defense ministry asserted
that any Georgian “violence against Russian peacekeepers and Russian citizens ...
will be met with an appropriate and robust response.”32 Georgia’s speaker objected
that an increase in the number of “peacekeepers” should be a subject of negotiation,
and termed it another move toward Russia’s “annexation” of Abkhazia.33 It was also
troubling that 400 Russian paratroopers were deployed to Abkhazia that Russian
officials reportedly stated would be fully armed in order to repulse possible Georgian
attacks on Abkhazia.34 NATO reported on April 28, 2008, that its members “support
Georgia’s territorial integrity and regard Abkhazia as Georgia’s inseparable part.
NATO members believe that the unilaterally biased Russian peacekeeping contingent
should be withdrawn.”35
Russia-Georgia tensions appeared to deepen in mid-May 2008 when the U.N.
General Assembly approved a resolution introduced by Georgia that called for
displaced persons to be permitted to return to Abkhazia and to reclaim their property.
Tensions heightened in late May 2008 after Russia announced that about 400 railway
construction troops were being sent to Abkhazia for “humanitarian” work. The U.S.
State Department responded that the “announcement is particularly difficult to
understand,” in light of Georgia’s peace proposals, and objected that such troops
were not part of Russia’s “peacekeeping” force. These troops — whose role is to
32 CEDR, April 29, 2008, Doc. No. CEP-950318. By late 2007, Russia had bolstered its
“peacekeeping” forces by deploying some pro-Russia Chechen troops from the Zapad
battalion.
33 CEDR, April 29, 2008, Doc. No. CEP-950329.
34 ITAR-TASS, May 6, 2008.
35 CEDR, April 28, 2008, Doc. No. CEP-950444.

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facilitate military positioning — reportedly left Abkhazia at the end of July 2008
after repairing tracks and bridges. According to Deputy Assistant Secretary Bryza,
the railway was used in August by Russia when its troops moved into Georgia.36
The Friends’ Abortive Peace Initiative. In late June 2008, growing concerns
about Georgian-Russian tensions led the “Friends of the U.N. Secretary General” to
work out a new draft peace plan for Abkhazia. The plan was formally presented by
German Foreign Minister Frank-Walter Steinmeier in July to EU, Georgian, Abkhaz,
and Russian leaders. Indicating the shift in the policy of the United States and other
Friends, Deputy Assistant Secretary Bryza stated on July 21 that the Friends
considered that Russian “peacekeepers” might continue to work with UNOMIG in
Abkhazia (if Russia and Georgia agree), but that these forces would be
“complemented” by a joint Abkhaz-Georgian police force, “with international
oversight, be it U.N. or EU oversight.”37 Russia appeared at first to support the peace
plan, but during Steinmeier’s visit to Moscow on July 18-19, Russian President
Dmitriy Medvedev reportedly called for the retention of the existing ceasefire talks
and Russia’s “peacekeeping” role.
South Ossetia. In 1989, the region lobbied for joining its territory with North
Ossetia in Russia or for independence. Repressive efforts by former Georgian
President Gamsakhurdia triggered conflict in 1990, reportedly contributing to an
estimated 2,000-4,000 deaths and the displacement of tens of thousands of people.
In June 1992, Russia brokered a cease-fire, and Russian, Georgian, and Ossetian
“peacekeeping” units set up base camps in a security zone around Tskhinvali, South
Ossetia. Reportedly, the units totaled around 1,100 troops, including about 530
Russians, a 300-member North Ossetian brigade (which actually was composed of
South Ossetians and headed by a North Ossetian), and about 300 Georgians. OSCE
monitors did most of the patrolling. A Joint Control Commission (JCC) composed
of Russian, Georgian, and North and South Ossetian emissaries promoted a
settlement of the conflict, with the OSCE as facilitator. According to one estimate,
some 45,000 ethnic Ossetians and 17,500 ethnic Georgians resided in a region that,
according to the 1989 Soviet census, at that time contained over 98,000 residents.38
In 2004, President Saakashvili increased pressure on South Ossetia by tightening
border controls, breaking up a large-scale smuggling operation in the region that
allegedly involved Russian organized crime and corrupt Georgian officials. He also
reportedly sent several hundred police, military, and intelligence personnel into the
region. Georgia maintained that it was only bolstering its peacekeeping contingent
up to the limit of 500 troops, as permitted by the cease-fire agreement. Georgian
guerrilla forces also reportedly entered the region. Allegedly, Russian officials
likewise assisted several hundred paramilitary elements from Abkhazia, Transnistria,
36 Pavel Felgenhauer, Eurasia Daily Monitor, June 12, 2008; U.S. Department of State.
Foreign Press Center. Briefing: The Situation in the Republic of Georgia and its
Implications for the Caucasus, August 19, 2008.
37 Brian Whitmore, Interview with U.S. Deputy Assistant Secretary of State for European
and Eurasian Affairs Matthew Bryza, RFE/RL, July 21, 2008.
38 Georgia: a Toponymic Note Concerning South Ossetia, The Permanent Committee on
Geographic Names, January 2007.

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and Russia to enter. Following inconclusive clashes, both sides by late 2004
ostensibly had pulled back most undeclared forces.
In July 2005, President Saakashvili announced a new peace plan for South
Ossetia that offered substantial autonomy and a three-stage settlement, consisting of
demilitarization, economic rehabilitation, and a political settlement. South Ossetian
“president” Eduard Kokoiti rejected the plan, asserting in October 2005 that “we
[South Ossetians] are citizens of Russia.”39 The JCC in May 2006 agreed on
economic reconstruction projects estimated to cost $10 million, and the next month,
the OSCE sponsored a donor’s conference that raised these funds. A Steering
Committee composed by the sides to the conflict and donors met in October 2006 to
discuss project implementation. In April 2007, Kokoiti praised Russia’s unilateral
aid efforts and accused the Steering Committee of dallying (see also below).
In November 2006, a popular referendum was held in South Ossetia to reaffirm
its “independence” from Georgia. The separatists reported that 95% of 55,000
registered voters turned out and that 99% approved the referendum. In a separate
vote, 96% reelected Kokoiti. The OSCE and U.S. State Department declined to
recognize these votes. In “alternative” voting among ethnic Georgians in South
Ossetia (and those displaced from South Ossetia) and other South Ossetians, the pro-
Georgian Dmitriy Sanakoyev was elected governor, and a referendum was approved
supporting Georgia’s territorial integrity.
In March 2007, President Saakashvili proposed another peace plan for South
Ossetia that involved creating “transitional” administrative districts throughout the
region — ostensibly under Sanakoyev’s authority — which would be represented by
an emissary at JCC or alternative peace talks. Each side accused the other in mid-
2007 of blockading water supplies in South Ossetia and other “provocations,”
including failure to hold JCC meetings. The OSCE Steering Committee financed the
building of a water pipeline. In July 2007, President Saakashvili decreed the
establishment of a commission to work out South Ossetia’s “status” as a part of
Georgia. The JCC finally held a meeting (with Georgia’s emissaries in attendance)
in Tbilisi, Georgia, in October 2007, but the Russian Foreign Ministry claimed that
the Georgian emissaries made unacceptable demands in order to deliberately
sabotage the results of the meeting.40 No further meetings had been held before the
outbreak of conflict between Russia and Georgia in August 2008.
The August 2008 Russia-Georgia Conflict. Simmering long-time
tensions erupted on the evening of August 7, 2008, when South Ossetia accused
Georgia of launching a “massive” artillery barrage against its capital, Tskhinvali,
while Georgia reported intense bombing of some Georgian villages in the conflict
39 CEDR, October 7, 2005, Doc. No. CEP-15001. CEDR, December 12, 2005, Doc. No.
CEP-27204. South Ossetians who were citizens of Russia voted in the 2004 Russian
presidential election, and a poster in South Ossetia afterward proclaimed that “Putin is our
president.” Many South Ossetians voted in the 2007 Russian Duma election and the 2008
Russian presidential election. CEDR, December 3, 2007, Doc. No. CEP-950289; February
28, 2008, Doc. No. CEP-4015.
40 CEDR, November 1, 2007, Doc. No. CEP-950449.

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zone by South Ossetian forces. Georgia claims that South Ossetian forces did not
respond to a ceasefire appeal but intensified their shelling, “forcing” Georgia to send
in troops that reportedly soon controlled Tskhinvali and other areas.41
On August 8, Russian President Dmitriy Medvedev denounced Georgia’s
incursion into South Ossetia, asserting that “women, children and the elderly are now
dying in South Ossetia, and most of them are citizens of the Russian Federation”
(Russia had granted citizenship to much of the population). He stated that “those who
are responsible ... will be duly punished.” Russia launched large-scale air attacks
across Georgia and dispatched seasoned troops to South Ossetia that engaged
Georgian forces in Tskhinvali later in the day. President Bush stated on August 9
that “Georgia is a sovereign nation, and its territorial integrity must be respected. We
have urged an immediate halt to the violence [and] the end of the Russian
bombings.” Reportedly, Russian troops had retaken Tskhinvali, occupied the bulk
of South Ossetia, reached its border with the rest of Georgia, and were shelling areas
across the border by the morning of August 10. Russian warplanes bombed the
Georgian town of Gori and the outskirts of the capital, Tbilisi, as well as other sites.
Russian ships landed troops in Georgia’s breakaway Abkhazia region and took up
positions off Georgia’s Black Sea coast.
On August 12, Medvedev declared that “the aim of Russia’s operation for
coercing the Georgian side to peace had been achieved and it had been decided to
conclude the operation.... The aggressor has been punished and suffered very heavy
losses.”42 Medvedev endorsed some elements of a European Union (EU) peace plan
presented by visiting French President Nicolas Sarkozy. On August 15, the Georgian
government accepted the French-brokered 6-point cease-fire that left Russian forces
in control of South Ossetia, Abkhazia, and “security zones” in undisputed Georgian
territory.43 The six points include commitments not to use force, to halt hostilities,
to provide full access for humanitarian aid, to withdraw Georgian forces to the places
they were usually stationed prior to the conflict, to withdraw Russian forces to
positions prior to the outbreak of hostilities (although they are permitted to
implement security measures in the zone of the conflict until international monitors
are in place), and to open international discussions on ensuring security and stability
in Abkhazia and South Ossetia.
Russia undertook a pullback of military forces on August 22. However,
substantial forces remained in areas around South Ossetia’s and Abkhazia’s borders
with the rest of Georgia and near the port of Poti, resulting in condemnation by the
United States, NATO, and the EU that Russia was violating the ceasefire accord.
Further condemnation by the international community occurred in the wake of
President Medvedev’s August 26 decree officially recognizing the independence of
41 See also CRS Report RL34618, Russia-Georgia Conflict in South Ossetia: Context and
Implications for U.S. Interests, by Jim Nichol.
42 ITAR-TASS, August 12, 2008. On September 11, Prime Minister Putin stated that
Georgia’s aggression was answered by “a well-deserved mighty punch” by Russia. ITAR-
TASS, September 11, 2008.
43 See CRS Report RL34618, Russia-Georgia Conflict in South Ossetia: Context and
Implications for U.S. Interests, by Jim Nichol, August 29, 2008.

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South Ossetia and Abkhazia. Nicaragua is the only country that has followed suit in
extending diplomatic relations to Abkhazia and South Ossetia.
On September 8, 2008, visiting French President Nicolas Sarkozy and Russian
President Dmitriy Medvedev signed a follow-on ceasefire accord that fleshed out the
provisions of the 6-point peace plan. It stipulated that Russian forces would
withdraw from Georgia’s port of Poti and adjacent areas by September 15; that
Russian forces would withdraw from areas adjacent to the borders of Abkhazia and
South Ossetia by October 11; that Georgian forces would return to their barracks by
October 1; that international observers already in place from the U.N. and
Organization for Security and Cooperation in Europe would remain; and that the
number of international observers would be increased by October 1, to include at
least 200 observers from the European Union (EU), and perhaps more later. The EU
has called for Russia to permit these observers to patrol in Abkhazia and South
Ossetia. Russia’s position is that these observers cannot patrol in the regions without
the approval of the regions, and the regional leaders have refused to permit such
patrols.
In a press conference after signing the accord, President Medvedev asserted that
Russia’s recognition was “irrevocable.” Although Sarkozy strongly implied that the
international conference would examine the legal status of Georgia’s breakaway
Abkhazia and South Ossetia, Medvedev pointed out that the regions had been
recognized as independent by Russia on August 26, 2008, and stated that disputing
this recognition was a “fantasy.”44 The Russian defense minister called for retaining
“around 3,800” Russian troops in Abkhazia and the same number in South Ossetia.
These numbers differ from troop ceilings permitted under the early 1990s ceasefire
agreements of up to 3,000 Russian “peacekeepers” in Abkhazia and about 1,000 in
South Ossetia (including Russian troops and those ostensibly from Russia’s North
Ossetia region).45 Russian military bases reportedly were being established in the
regions, in violation of Russia’s 1999 commitment under the CFE Treaty to close its
military bases in Georgia (Russia had announced in mid-2007 that it was unilaterally
suspending compliance with the Treaty).
The EU deployed over 200 monitors by October 1, and Russia announced on
October 9 that its troops had withdrawn from buffer zones. Georgia has maintained
that Russian troops have not pulled out of Akhalgori, a district that Russia asserts is
within South Ossetia’s Soviet-era borders, and the Kodori Gorge. New EU and
OSCE monitors, as well as UNOMIG and OSCE observers who previously patrolled
in the regions, have been blocked from entering the regions. A conference to discuss
security, repatriation, and status issues was disrupted at its inaugural session on
October 15 when Russian, Abkhazian, and South Ossetian emissaries boycotted or
walked out of various meetings during the day. Another session is planned for
November 18.
44 Open Source Center. Central Eurasia: Daily Report(hereafter CEDR), September 28,
2008, Doc. No. CEP-950425; CEP-950440.
45 Conor Humphries, “Russia Establishes Ties with Georgia Regions,” Agence France
Presse, September 9, 2008; “Russia to Base 7,600 Troops in Georgian Regions,” Deutsche
Presse-Agentur, September 9, 2008.

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On August 13, President Bush announced that Secretary Rice would travel to
France and Georgia to facilitate adoption of the peace plan and that Defense
Secretary Robert Gates would direct urgent humanitarian aid deliveries to Georgia.
On September 3, Secretary Rice announced a $1 billion multi-year aid package to
help Georgia rebuild (see below). Vice President Cheney visited Georgia on
September 4 to ensure that “America will help Georgia rebuild.... [Saakashvili] and
his democratically elected government can count on the continued support and
assistance of the United States.”46
Economic Conditions, Blockades, and Stoppages
The economies of all three South Caucasus states greatly declined in the early
1990s, affected by the dislocations caused by the breakup of the Soviet Union,
conflicts, trade disruptions, and the lingering effects of the 1988 earthquake in
Armenia. Although gross domestic product (GDP) began to rebound in the states in
the mid-1990s, the economies remain fragile. Investment in oil and gas resources has
fueled economic growth in Azerbaijan in recent years at the expense of other sectors
of the economy. Widespread poverty and regional conflict have contributed to high
emigration from all three states, and remittances from these emigres have provided
major support for the remaining populations.47
Transport and communications obstructions and stoppages have severely
affected economic development in the South Caucasus and stymied the region’s
emergence as an East-West and North-South corridor. Since 1989, Azerbaijan has
obstructed railways and pipelines traversing its territory to Armenia. 48 According
to the U.S. Embassy in Baku, Azerbaijan’s Nakhichevan exclave “is blockaded by
neighboring Armenia.” Iran has at times obstructed bypass routes to Nakhichevan.
The CIS imposed an economic embargo on Abkhazia from 1996 until early 2008.
Since 2006, Russia has severely restricted agricultural trade and land, air, and sea
links with Georgia. Russia hinders Azerbaijan’s use of the Volga-Don Canal to reach
world shipping channels. Russia has at times cut off gas supplies to Georgia.
Georgia severely restricts road traffic to and from South Ossetia. During the August
46 The White House. Office of the Vice President. Remarks by Vice President Cheney and
President Saakashvili of Georgia After Meeting, September 4, 2008.
47 A. V. Korobkov, “Migration Trends in Central Eurasia,” Communist and Post-Communist
Studies, No. 2, 2007, pp. 169-89.
48 Armenia long opposed the construction or revamping of a section of railway from Kars,
Turkey, to Tbilisi (and thence to Azerbaijan) that would bypass Armenia, arguing that an
existing section of railway from Kars that transits Armenia into Georgia could be returned
to service “in a week.” Azerbaijan and Turkey oppose a transit route through Armenia,
despite Armenia’s offers not to use the railway for its own goods or to impose transit tariffs.
The Export-Import Bank Re-authorization Act of 2006 (P.L. 109-438) prohibits the Bank
from guaranteeing, insuring, or extending credit in support of any railway construction that
does not traverse or connect with Armenia and does traverse or connect Baku, Tbilisi, and
Kars. Work on the railway began in late 2007. In March 2008, Armenian President-elect
Serzh Sargisyan reportedly stated that Armenia might be able to use the railway, and argued
that the railway is designed more as a means of bypassing “much larger countries”
(presumably Russia) than Armenia. CEDR, March 12, 2008, Doc. No. CEP-950482.

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2008 Russia-Georgia conflict, Russia’s effective blockade of Georgia’s Black Sea
ports disrupted trade shipments to and from Armenia. In the wake of the conflict,
Georgia cut off gas transit from Russia to South Ossetia. Russia has been building
a 110-mile gas pipeline from North Ossetia to South Ossetia to avoid transiting
Georgia.
Turkey closed its land borders with Armenia in 1993. These obstructions have
had a negative impact on the Armenian economy, since it is heavily dependent on
energy and raw materials imports. Turkey’s closure of land borders in effect barred
direct U.S. shipments of aid through its territory to Armenia. Foreign Operations
Appropriations for FY1996 (P.L. 104-107) and Omnibus Consolidated
Appropriations for FY1997 (P.L. 104-208)49 have mandated U.S. aid cutoffs (with
a presidential waiver) to any country which restricts the transport or delivery of U.S.
humanitarian aid to a third country. These provisions are designed to convince a
nation such as Turkey to allow the transit of U.S. aid to Armenia.
Democratization Problems and Progress
The World Bank, in a report assessing the quality of democratic governance in
over 200 countries during 2007, ranked Georgia as perhaps among the better-
performing one-half of the countries in terms of government effectiveness and
regulatory quality.50 On four other indicators — accountability,51 stability, rule of
law, and anti-corruption — Georgia ranked slightly below world norms but had made
progress in recent years. Georgia also ranked slightly above Armenia on all
indicators except stability and regulatory quality, according to the World Bank.
Armenia ranked as perhaps among the better-performing one-half of the countries in
terms of regulatory quality, but was below world norms on other indicators, although
some progress was registered in terms of stability. Azerbaijan was deemed to rank
below the other two regional states on all indicators, but seemed to have made some
progress in effectiveness and regulatory quality. Recent developments in
democratization in the region are discussed below.
Armenia. In November 2005, constitutional changes were approved by 93.2%
of 1.5 million voters, with a 65.4% turnout. A small delegation of monitors from the
Parliamentary Assembly of the Council of Europe (PACE) reported observing ballot-
box stuffing and few voters. Opposition parties boycotted the vote.52 Before the
vote, the Venice Commission of the Council of Europe (COE) had suggested that
49 P.L. 104-208, Sec. 559, amends the Foreign Assistance Authorization Act of 1961.
50 Government effectiveness refers to “the quality of public services, [and] the quality of the
civil service.” Regulatory quality refers to policies that promote a market economy. The
World Bank. Governance Matters 2008: Worldwide Governance Indicators, 1996-2007,
June 24, 2008.
51 Accountability refers to “the extent to which a country’s citizens are able to participate
in selecting their government, as well as freedom of expression, freedom of association, and
a free media.” Governance Matters 2008, June 24, 2008.
52 PACE. Constitutional Referendum in Armenia: General Compliance Marred by Incidents
of Serious Abuse, November 28, 2005.

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the changes would provide a “good basis for ensuring ... respect for human rights,
democracy and the rule of law, and would pave the way to further European
integration,” if implemented. In January 2007, PACE praised progress in passing
legislation implementing the constitutional reforms and urged Armenia to hold free
elections.
A legislative election was held on May 12, 2007, and five parties cleared a 5%
vote hurdle to win 90 seats that were allocated through party list voting. One other
party won 1 of the 41 seats subject to constituency voting. The party that had won
the largest number of seats in the 2003 election — the Republican Party of Armenia
— won a near majority (64 of 131 seats) in 2007. Two opposition parties won 16
seats. According to the final report of observers from the OSCE, COE, and the EU,
the legislative elections “demonstrated improvement and were conducted largely in
accordance with OSCE commitments....” However, the observers raised some
concerns over pro-government party domination of electoral commissions, the low
number of candidates in constituency races, and inaccurate campaign finance
disclosures. They reported some counting irregularities at the precinct level, and
assessed counting “as bad or very bad” at one-third of territorial electoral
commissions. The report raised concerns that these vote-counting problems harmed
public confidence in the results.53
The two parties that won the most votes in the May 2007 election — the
Republican Party of Armenia and the Prosperous Armenia Party — announced that
they would form a coalition to cooperate on legislative tasks and the formation of the
government. They also agreed to jointly back one candidate for the upcoming 2008
presidential election. Incumbent President Kocharyan was at the end of his
constitutionally limited second term in office. The two parties signed a side
agreement with another party that won many votes — the Armenian Revolutionary
Federation — on its participation in the coalition, although it reserved the right to run
its own candidate in the presidential race. President Robert Kocharyan appointed
defense minister Serzh Sargisyan as prime minister on June 7, 2007.
Armenia’s presidential election was held on February 19, 2008. Prime Minister
Sargisyan was nominated by the Republican Party and endorsed by outgoing
President Robert Kocharyan. He ran against eight other candidates. According to
final results issued by the Central Electoral Commission on February 24, Sargisyan
was the winner with 52.82% of 1.67 million votes cast, followed by Levon
Ter-Petrossyan with 21.5% and Arthur Baghdasaryan with 16.7%.
Election observers from the Organization for Security and Cooperation in
Europe (OSCE), the Council of Europe (COE), and the European Parliament (EP),
issued a final report (with a more negative assessment than given in a preliminary
report) that the election “mostly met OSCE commitments ... in the pre-election
53 OSCE. Office of Democratic Institutions and Human Rights (ODIHR). Parliamentary
Elections, Republic of Armenia, 12 May 2007: Final Report, September 10, 2007. PACE.
Ad Hoc Committee of the Bureau of the Assembly. Report: Observation of the
Parliamentary Elections in Armenia, Doc. 11312, June 20, 2007. See also CRS Report
RS22675, Armenia’s Legislative Election, by Jim Nichol.

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period and during voting hours,” but that “serious challenges to some commitments
did emerge, especially after election day. This displayed an insufficient regard for
standards essential to democratic elections and devalued the overall election process.
In particular, the vote count demonstrated deficiencies of accountability and
transparency....”54
According to the report, the election offered voters a genuine choice among the
nine candidates. However, problems included the absence of a clear separation
between government and party functions. A large majority of territorial and precinct
electoral commission members were linked to the Republican and Prosperous
Armenia parties or the presidential administration. Media gave Sargisyan a great
deal of positive coverage and Ter-Petrossyan a large volume of negative coverage.
The Central Electoral Commission “routinely dismissed” most campaign complaints
in closed sessions, raising concerns about the effectiveness of the complaint process.
The lack of public confidence in the electoral process was compounded by
appearances of irregularities in vote counting, which was assessed by the observers
as bad or very bad in some 16% of polling stations visited. Other discrepancies in
vote counting were revealed during recounts in some precincts. The final report also
raised concerns about “implausibly high” voter turnout claims at several precincts.
Demonstrations by oppositionists claiming that the election was not free and fair
were forcibly suppressed by military and police forces in the capital of Yerevan on
March 1. Street battles and looting were reported later in the day. The government
reported that ten people were killed, that dozens were injured, that many of the
demonstrators were armed, and that they had received orders to overthrow the
government. President Robert Kocharyan declared emergency rule in Yerevan late
on March 1, which provided for government control over media and a ban on public
meetings and party activities. Authorities arrested or detained dozens of opposition
politicians and others. On March 12, Deputy Assistant Secretary of State Matthew
Bryza called for the government to “to cease arrests of political leaders” and to
“restore media freedom and then to lift the state of emergency as soon as possible,
and then finally launch a nationwide roundtable ... including all major political
parties to chart the course forward to strengthen Armenia’s democracy.”55
The state of emergency was lifted on March 21, but a new law limited political
rallies. Also on March 21, the Republican Party, Rule of Law Party, Prosperous
Armenia Party, and the Armenian Revolutionary Federation signed an agreement to
form a political coalition. In his April 9, 2008, inaugural address, Sargisyan stated
that “we will build a strong, proud, and democratic state of Armenia where all are
equal under the law.” He named Central Bank chairman Tigran Sargisyan as the
54 OSCE. International Election Observation Mission. Presidential Election, Republic of
Armenia, 19 February 2008: Final Report of the OSCE/ODIHR Election Observation
Mission, May 30, 2008.
55 “Armenia: Key U.S. Diplomat Calls For Roundtable In Wake Of Clashes,” Radio Free
Europe, March 12, 2008.

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prime minister, and announced that a new coalition government would be composed
of the four parties.56
The Parliamentary Assembly of the Council of Europe (PACE) passed a
resolution on April 17, 2008, that called for a “credible international investigation”
of events surrounding the Armenian government crackdown on demonstrators on
March 1, 2008. The resolution called for the release of demonstrators and others who
it claimed were arrested “on seemingly artificial and politically motivated charges,”
and urged wide political dialogue between pro-government and opposition parties.
The resolution also called for the repeal of the new law restricting freedom of
assembly and suggested that PACE consider at its next session in late June 2008
suspending the voting rights of the Armenian delegation, “if no considerable progress
has been made on these requirements by then.”
In June 2008, the Armenian legislature created a commission to investigate the
events of March 1 and amended the law on assemblies. Reportedly, of nearly one
hundred people detained in connection with the events of March 1, most have been
tried and have received prison sentences, probation, fines, or acquittals. In late June
2008, PACE postponed a decision on Armenia for six months to give the country
more time to implement the assembly’s reform suggestions. In October 2008, Ter-
Petrossyan announced the suspension of demonstrations for the time being.
Azerbaijan. Changes to the election law, some in line with proposals from the
Venice Commission, were approved by the legislature in June 2005, including those
making it easier for people to become candidates for a November 6, 2005, legislative
election. However, the deputies rejected some of the most significant proposals,
including a more equitable representation of political interests on electoral
commissions. In May and October 2005, Aliyev ordered officials to abide by
election law, and authorities permitted some opposition rallies. The October decree
also led legislators to approve marking hands and permit outside-funded NGOs to
monitor the election, as advocated by PACE. After the election, the U.S. State
Department issued a statement praising democratization progress, but urging the
government to address some electoral irregularities.57 Repeat elections were
scheduled for May 2006 in ten constituencies where alleged irregularities took place.
According to OSCE election monitors, the repeat race appeared to be an
improvement over the November election, but irregularities needed to be addressed,
including interference by local officials in campaigns. The ruling Yeni Azerbaijan
Party won 62 seats, the independents 44, and Musavat 5. The remaining 14 seats
were held by several small parties.58
During the run-up to the 2005 legislative election, authorities arrested several
prominent officials on charges of coup-plotting. Some critics of the arrests claimed
56 ITAR-TASS, April 9, 2008.
57 U.S. Department of State. Press Statement: Azerbaijan Parliamentary Elections,
November 7, 2005. See also CRS Report RS22340, Azerbaijan’s 2005 Legislative Election,
by Jim Nichol.
58 OSCE/ODIHR Mission. Press Release: Partial Repeat Parliamentary Elections in
Azerbaijan Underscore Continuing Need for Electoral Reform, May 15, 2006.

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that the defendants included former cohorts of Heydar Aliyev or others who simply
opposed President Ilkham Aliyev’s policies. Although arrested on suspicion of coup-
plotting, several officials instead were convicted on lesser charges. One sensational
trial involved Farhad Aliyev, former minister of economic development (no relation
to Ilkham Aliyev), who was among those arrested in 2005. He was tried along with
his brother, Rafiq (a businessman), and 17 others and was convicted on charges of
embezzlement in October 2007 to ten years in prison. He claimed that he was
prosecuted because of his advocacy of closer Azerbaijani ties with the United States
and the EU, economic reforms, and anti-corruption efforts. Senator John McCain
and Representatives Gary Ackerman and Alcee Hastings were among those in
Congress concerned about due process in the case (see below, Legislation).59
Meeting with visiting President Ilkham Aliyev in late April 2006, President
Bush hailed the “alliance” between the two countries and Azerbaijan’s
“understand[ing] that democracy is the wave of the future.” After the U.S. visit, the
Azerbaijani foreign minister stated that it marked Azerbaijan’s emerging role as the
major power in the South Caucasus region. Some human rights and other observers
criticized the summit as providing undue U.S. support to a nondemocratic leader.60
Answering this criticism, Deputy Assistant Secretary Bryza stated in June 2006 that
“just because Azerbaijan hasn’t gone as far as we would like on democracy doesn’t
mean we’re going to ignore our energy interests or our military interests. That’s not
to say that our energy interests or our military interests or our counter-terrorism
interests are driving us to ignore democracy.... We have to pursue a balance.”61
The NGO Committee to Protect Journalists in December 2007 ranked
Azerbaijan among the top five countries in the world in terms of the number of
imprisoned journalists.62 President Aliyev amnestied five journalists in December
2007, but several others remained imprisoned. Among recent cases, Qanimat
Zahidov, the editor-in-chief of the opposition newspaper Azadliq, was sentenced to
four years in prison on March 7, 2008, of “hooliganism,” for defending himself from
an attacker, who received a lesser sentence.
A presidential election was held on October 15, 2008. In early June 2008, the
legislature approved changes to the electoral code, including a reduction of the
presidential campaign season. Some of the amendments to the electoral code
approved by the legislature were recommended by the Venice Commission, an
advisory body of the Council of Europe. However, other recommendations of the
59 Eurasia Insight, October 30, 2006; Congressional Record, March 29, 2007, pp. E708-709.
See also PACE. Committee on the Honoring of Obligations and Commitments by Member
States of the Council of Europe, Honoring of Obligations and Commitments by Azerbaijan,
Explanatory Memorandum, Doc. 11226, March 30, 2007.
60 The White House. Office of the Press Secretary. President Bush Welcomes President
Aliyev of Azerbaijan to the White House, April 28, 2006; CEDR, May 2, 2006, Doc. No.
CEP-950092; Council on Foreign Relations. A Conversation with Ilkham Aliyev, April 26,
2006.
61 RFE/RL, June 23, 2006.
62 Committee to Protect Journalists. Special Report 2007: One in Six Jailed Journalists
[Worldwide] Held Without Charge, December 5, 2007.

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Venice Commission were not considered, including those on eliminating the
dominance of government representatives on election commissions.63 Critics charged
that the four-week campaign period was too short a time for candidates to present
their platforms. The opposition Azadliq (Freedom) party bloc decided on July 20
that it would boycott the election on the grounds that the election laws were not fair,
their parties faced harassment, and media were constrained.64 This bloc includes the
Popular Front Party (Reform), the Liberal Party, and others. In early September
2008, the Azadliq bloc joined with other parties to form an Opposition Cooperation
Center (OCC) coalition, including the Musavat Party, the Civil Development Party,
and the Public Forum for the Sake of Azerbaijan.
Besides President Aliyev, six other politicians were able to gather 40,000 valid
signatures to be registered as candidates for the presidential election. Some
government officials and observers have suggested that these candidates are “new
constructive opposition leaders,” as opposed to those in opposition parties that
boycotted the election.
Incumbent President Aliyev won a resounding victory, gaining nearly 89% of
the vote. According to a preliminary report by election monitors from
OSCE/ODIHR, the Parliamentary Assembly of the Council of Europe (PACE), and
the European Parliament (EP), the election “marked considerable progress toward
meeting OSCE and Council of Europe commitments and other international
standards but did not meet all ... the principles of a meaningful and pluralistic
democratic election.” The observers commended a peaceful voting process that was
“well organized and efficient,” but were critical of a “lack of robust competition and
of vibrant political discourse facilitated by media,” and the decision by some
opposition parties to boycott. The observers also raised concerns that there appeared
to be “significant procedural shortcomings [in vote counting] in many cases, and
manipulation in some instances.”65 EU Council President Nicolas Sarkozy appeared
more critical, issuing a statement on October 17 that “the elections still do not satisfy
international standards of democracy, particularly as regards the organization of
public debate, the conduct of polling, and the counting of votes.” The Azerbaijani
Foreign Affairs Ministry retorted that the statement was “biased” and did “not
contribute to building trust” between Azerbaijan and the EU.66
63 European Commission for Democracy Through Law (Venice Commission). Joint Interim
Opinion on the Draft Amendments to the Electoral Code of the Republic of Azerbaijan. 74th
Plenary Session, March 14-15, 2008, Opinion no. 390/2006, CDL-AD(2008)003, March
18, 2008.
64 Open Source Center. Central Eurasia: Daily Report (hereafter CEDR), April 24, 2008,
Doc. No. CEP-950216.
65 OSCE/PACE/EP. Republic of Azerbaijan Presidential Election, 15 October 2008:
Statement of Preliminary Findings and Conclusions, October 16, 2008.
66 EU. Statement of the Presidency of the EU on the Presidential Election in Azerbaijan,
October 17, 2008; CEDR, October 22, 2008, Doc. No. CEP-950288. See also CRS Report
RS22977, Azerbaijan’s October 2008 Presidential Election, by Jim Nichol.

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Georgia. Georgia experienced increased political instability in the early 2000s
as President Shevardnadze appeared less committed to economic and democratic
reforms. Polls before a November 2, 2003 legislative race and exit polling during the
race suggested that the opposition National Movement (NM) and the United
Democrats (UD) would win the largest shares of seats in the party list vote. Instead,
mostly pro-Shevardnadze candidates were declared winners. Demonstrators
launched a peaceful “rose revolution” that led to Shevardnadze’s resignation on
November 23. Russia and the United States appeared to cooperate during the crisis
to urge Georgians to abjure violence.
UD and NM agreed to co-sponsor NM head Saakashvili for a January 4, 2004,
presidential election. He received 96% of 2.2 million popular votes from a field of
five candidates. OSCE observers judged the vote as bringing Georgia closer to
meeting democratic electoral standards. Legislative elections were held in March
2004 involving 150 party list seats (winners of district seats in November retained
them). NM and the “Burjanadze Democrats” ran on a joint list and captured 67.2%
of 1.53 million votes, giving the bloc a majority of seats, seemingly ensuring firm
legislative support for Saakashvili’s policies. The OSCE judged the election as the
most democratic since Georgia’s independence.
President Bush visited Georgia on May 9-10, 2005, and praised its “rose
revolution” for “inspiring democratic reformers” and freedom “from the Black Sea
to the Caspian and to the Persian Gulf and beyond.” President Saakashvili hailed the
Bush visit as marking “final confirmation that Georgia is an independent country
whose borders and territory are inviolable” and stressed that the U.S.-Georgian
“partnership” ultimately was based on “our shared belief in freedom” and was the
reason Georgia had sent troops to Iraq to end “enslavement” there.67
Political Turmoil in late 2007. Increased political instability in Georgia in
late 2007 raised questions in the United States, NATO, and elsewhere about whether
the country could sustain its democratization progress. Oppositionist activities
appeared to strengthen after the detention on corruption charges of former Defense
Minister Irakli Okruashvili in late September 2007, in the wake of his sensational
allegations that Saakashvili had once ordered him to kill prominent businessman
Badri Patarkatsishvili. Several opposition parties united in a “National Council” that
launched demonstrations in Tbilisi on November 2 to demand that legislative
elections be held in spring 2008 (instead of in late 2008 as set by a constitutional
change approved by the NM-dominated legislature), and that Saakashvili resign. On
November 7, police and security forces forcibly dispersed demonstrators, reportedly
resulting in several dozen injuries. Security forces also shut down the independent
Imedi (“Hope”) television station, which had aired opposition grievances.
Saakashvili declared a state of emergency for 15 days, giving him enhanced powers.
He claimed that the demonstrations had been part of a coup attempt orchestrated by
Russia, and ordered three Russian diplomats to leave the country.
67 The White House. Office of the Press Secretary. President and President Saakashvili
Discuss NATO, Democracy, May 10, 2005. See also Saakashvili’s remarks in CEDR, May
4, 2005, Doc. No. CEP-26020.

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U.S. and other international criticism of the crackdown may have played an
important role in Saakashvili’s decision to step down as president on November 25,
2007, so that early presidential elections could be held on January 5, 2008, “because
I, as this country’s leader, need an unequivocal mandate to cope with all foreign
threats and all kinds of pressure on Georgia.”68 At the same time, a plebiscite was
to be held on whether to have a spring or fall legislative election and on whether
Georgia should join NATO. Imedi renewed its broadcasts on December 12, and
became for a time the main television outlet for opposition candidates in the election.
Saakashvili ran against five other candidates. Georgia’s Central Electoral
Commission reported on January 13, 2008, that Saakashvili had won over 53% of the
vote, and he was inaugurated on January 20, 2008. In a preliminary assessment, the
OSCE stated that the election broadly met its standards, but that troubling
irregularities needed to be addressed. The plebiscite endorsed holding a spring 2008
legislative election and Georgia’s aim to join NATO (See also CRS Report RS22794,
Georgia’s January 2008 Presidential Election, by Jim Nichol).
A legislative election was held on May 21, 2008. Twelve parties and blocs were
registered to compete for 75 seats to be allocated by party lists and 75 seats by single-
member constituencies. The dominant NM pledged to reduce poverty and argued
that its stewardship had benefitted the country. The main opposition bloc, the United
Opposition Movement, called for President Saakashvili to resign from office and
claimed that NM was subverting the electoral process to retain power. The Central
Electoral Commission announced that NM won the largest share of the party list vote
and also 71 of 75 constituency races, giving it a total of 119 out of 150 seats in the
legislature. The United Opposition won a total of 17 seats, the opposition Christian
Democrats six seats, the opposition Labor Party six seats, and the opposition
Republican Party two seats. Some observers argued that the opposition had harmed
its chances by failing to unite in one bloc and that the NM also benefitted from
several popular businessmen who ran on its ticket in constituency races.
International observers from the OSCE and other European organizations
concluded that the Georgian government “made efforts to conduct these elections in
line with OSCE and Council of Europe commitments,” but “a number of problems
... made this implementation uneven and incomplete.” Among the problems were
wide variations in the populations of single-mandate electoral districts, which the
observers stated “undermines the fundamental principle of the equality of the vote,”
a ban on self-nominated candidates, the use of government resources for campaign
purposes, the lack of balance in media coverage, a “contradictory and ambiguous”
electoral complaint and appeal process, and troubling irregularities in vote-
counting.69 At a large rally on May 26, a leader of the United Opposition, Levan
Gachechiladze, reportedly declared that the election had been falsified and should be
annulled. Most United Opposition deputies have refused to attend legislative
sessions.
68 CEDR, November 8, 2007, Doc. No. CEP-950428.
69 OSCE. International Election Observation Mission. Georgia: Parliamentary Elections,
21 May 2008, Statement of Preliminary Findings and Conclusions, May 22, 2008.

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U.S. Aid Overview
The United States is the largest bilateral aid donor by far to Armenia and
Georgia, and the two states are among the five Eurasian states that each have
received more than $1 billion in U.S. aid FY1992-FY2005 (the others are Russia,
Ukraine, and Kazakhstan, which have received sizeable Comprehensive Threat
Reduction funds). See Table 1. U.S. assistance to the region FY1992-FY2007
amounts to about 14% of all aid to Eurasia and has included FREEDOM Support Act
(FSA) programs, food aid (U.S. Department of Agriculture), Peace Corps, and
security assistance. Armenia and Georgia have regularly ranked among the top world
states in terms of per capita U.S. aid, indicating the high level of concern within the
Administration and Congress. In Foreign Operations Appropriations for FY1998
(P.L. 105-118), Congress created a new South Caucasian funding category to
emphasize regional peace and development, and since then has upheld this funding
category in yearly appropriations. Congress also has called for humanitarian aid to
be provided to NK, which has amounted to $29 million from FY1998 through
FY2007. Besides bilateral aid, the United States contributes to multilateral
organizations such as the International Monetary Fund and the World Bank that aid
the region.
In January 2004, Congress authorized a major new global assistance program,
the Millennium Challenge Account (Section D of P.L. 108-199). A newly
established Millennium Challenge Corporation (MCC) deemed that Georgia was
eligible as a democratizing country for assistance, even though it did not meet criteria
on anti-corruption efforts. In September 2005, MCC signed a five-year, $295.3
million agreement (termed a “compact”) with Georgia to improve a road from
Javakheti to Samtskhe, repair a gas pipeline, create a small business investment fund,
set up agricultural grants, and improve municipal and rural water supply, sanitation,
irrigation, roads, and solid waste treatment. The MCC reported in July 2008 that it
had so far disbursed $51.3 million to Georgia. In the wake of the August 2008
Russia-Georgia conflict, the MCC announced plans for an extra $100 million for
road-building, water and sanitation facilities, and a natural gas storage facility.
In December 2005, the MCC approved plans to sign a five-year, $235.65 million
compact with Armenia — to bolster rural agriculture through road-building and
irrigation and marketing projects — but raised concerns about the November 2005
constitutional referendum. Following assurances by then-Foreign Minister Oskanyan
that Armenia would address democratization shortfalls, the MCC and Armenia
signed the compact, and it went into force in September 2006.70 The MCC reported
that as of the end of September 2008 it had disbursed $22.5 million to Armenia.
After the political turmoil in Armenia in March 2008, the MCC indicated that as an
70 Millennium Challenge Corporation. Ambassador Danilovich’s letter to Armenian
President Robert Kocharyan, December 16, 2005; Press Release: Millennium Challenge
Corporation Board Approves Armenia Compact but Expresses Concern Regarding
Irregularities in the November Referendum, December 19, 2005; and Ambassador
Danilovich’s letter to Armenian President Robert Kocharyan, January 18, 2006,
[http://www.mca.gov]. See also Armenian Foreign Ministry. Oskanyan Thanks MCC for
Millennium Compact, January 12, 2006 [http://www.armeniaforeignministry.com].

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expression of its “serious concern,” it would halt contracting for road-building. In
response, the Armenian government stated that it would devote $16.8 million of its
own funds to carry out initial road-building during 2008. MCC has indicated that it
is waiting to the end of 2008 see if Armenia makes progress on political reforms.71
U.S. Assistance After the Russia-Georgia Conflict
To address Georgia’s urgent humanitarian needs in the wake of the August 2008
Russia-Georgia conflict, the U.S. Agency for International Development (USAID)
and the Defense and State Departments provided $38.36 million in direct
humanitarian assistance to Georgia (as of September 5). The Defense Department
announced on September 8 that it had completed its naval and air delivery of urgent
humanitarian supplies to Georgia.
On September 3, Secretary of State Rice announced a multi-year $1 billion aid
plan for Georgia. According to the State Department’s Deputy Director of Foreign
Assistance Richard Greene, the Administration envisaged that over one-half of the
funds could be allocated from FY2008-FY2009 budgets, and that the remainder for
FY2010 could be appropriated by “the next Congress and the next administration.”
The Administration envisaged that its proposed $1 billion aid package would be in
addition to existing aid and requests for Georgia, such as FREEDOM Support Act
and Millennium Challenge Corporation (MCC) funds. The added aid was planned
for humanitarian needs, particularly for internally displaced persons, for the
reconstruction of infrastructure and facilities that were damaged or destroyed during
the Russian invasion, and for safeguarding Georgia’s continued economic growth.72
Besides the envisaged aid, the White House announced that other initiatives
might possibly include broadening the U.S. Trade and Investment Framework
Agreement with Georgia, negotiating an enhanced bilateral investment treaty,
proposing legislation to expand preferential access to the U.S. market for Georgian
exports, and facilitating Georgia’s use of the Generalized System of Preferences.
White House encouragement also was central to the elaboration by the IMF of a $750
million aid package for Georgia (as described above, in the “International Response”
section).73
Congress acted quickly to flesh out the Administration’s aid proposals for
Georgia. The Consolidated Security, Disaster Assistance, and Continuing
Appropriations Act, 2009 (H.R. 2638/P.L. 110-329), signed into law on September
30, 2008, appropriates an additional $365 million in aid for Georgia and the region
for FY2009 (beyond that provided under continuing appropriations based on FY2008
71 Emil Danielyan, “Armenia to Finance Road Project Frozen by U.S.,” Armenia Liberty,
July 14, 2008.
72 U.S. Department of State. Secretary Condoleezza Rice. Remarks On U.S. Economic
Support Package for Georgia, September 3, 2008; Briefing On U.S. Economic Support
Package for Georgia, September 3, 2008.
73 Venla Sipila, “IMF, U.S. Confirm Financial Assistance to War-Torn Georgia,” Global
Insight, September 4, 2008.

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funding) for humanitarian and economic relief, reconstruction, energy-related
programs and democracy activities (see also below, the “110th Congress Legislation”
section).
At the EU and World Bank-sponsored donors’ conference on October 22, 2008,
USAID Administrator Henrietta Fore announced that the United States would “make
available by the end of 2008 approximately $720 million of the $1 billion we have
pledged.” Of this $720 million, $250 million would be provided for direct budget
support, $100 million for urgent civilian reconstruction and stabilization needs, and
up to $80 million for economic reconstruction. Also included in the $720 million are
funds “already redirected to assist Georgia: $100 million in new funding for
Georgia’s Millennium Challenge Corporation Compact [and] $150 million in
Overseas Private Investment Corporation support to make affordable mortgages
available.” She also pledged more humanitarian aid for the winter.74
U.S. Security Assistance
The United States has provided some security assistance to the region, and
bolstered such aid after September 11, 2001. In testimony in March 2005, Gen.
James Jones, then-head of U.S. European Command (EUCOM), stated that “the
Caucasus is increasingly important to our interests. Its air corridor has become a
crucial lifeline between coalition forces in Afghanistan and our bases in Europe.
Caspian oil, carried through the Caucasus, may constitute as much as 25 percent of
the world’s growth in oil production over the next five years ... This region is a
geographical pivot point in the spread of democracy and free market economies to
the states of Central and Southwest Asia.”75
EUCOM initiatives in the region have included the Sustainment and Stability
Operations Program (SSOP) in Georgia, the South Caucasus Clearinghouse, and the
Caspian Regional Maritime Security Cooperation program. The 16-month SSOP
was launched in early 2005 as a follow-on to the Georgia Train and Equip Program
(GTEP).76 SSOP was funded at $60.5 million in FY2005. SSOP provided training
for four battalions (2,000 troops), in part to support U.S.-led coalition operations. In
July 2006, the United States announced that the SSOP would be extended another
74 U.S. Department of State. U.S. Pledges $1 Billion in Assistance to Georgia, October 22,
2008.
75 U.S. Senate. Committee on Armed Services. Testimony by Gen. James Jones, March 1,
2005. See also CRS Report RL30679, Armenia, Azerbaijan, and Georgia: Security Issues
and Implications for U.S. Interests, by Jim Nichol.
76 U.S. officials explained that the $64 million GTEP carried out in 2002-2004 would help
Georgian military, security, and border forces to combat Chechen, Arab, Afghani, Al Qaeda,
and other terrorists who allegedly had infiltrated Georgia. Some of these terrorists allegedly
had fled U.S.-led coalition operations in Afghanistan, so the GTEP was initially linked to
OEF. Other reported U.S. aims include bolstering Georgia’s ability to guard its energy
pipelines and ensuring internal stability. The program formally ended in April 2004.

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year and funded at $30 million.77 Prior to the Russia-Georgia conflict, the U.S. was
providing initial military training to Georgia’s 4th Brigade for its eventual deployment
to Iraq in Winter 2008. The Defense Department planned to budget approximately
$35 million for this training.78
The Clearinghouse aims to facilitate cooperation by sharing data on security
assistance among both donor and recipient countries. Gen. Bantz John Craddock,
then-Commander of EUCOM, testified in March 2008 that the Caspian Regional
Maritime Security Cooperation program aims to “coordinate and complement U.S.
government security cooperation activities in Azerbaijan and Kazakhstan. U.S.
Naval Forces Europe continues to promote Maritime Safety and Security and
Maritime Domain Awareness in the Caspian Sea through routine engagement with
Azerbaijan. These efforts are targeted to create an organic ability within Azerbaijan
to ‘observe, evaluate, and respond’ to events in their maritime domain.”79 (This
program appears to combine elements of the former Caspian Guard and
Hydrocarbons programs.) The United States acknowledged in late 2005 that it had
supplied two maritime surveillance radars to help detect and direct interdiction of
illicit weapons of mass destruction and other trafficking in the Caspian Sea.80 In
November 2004, Gen. Charles Wald, then-deputy head of EUCOM, suggested that
the Administration was exploring the establishment of “cooperative security
locations” (CSLs) — sites without a full-time U.S. military presence that would be
used for refueling and short-duration deployments — in Azerbaijan or Georgia.81
In the wake of the August 2008 Russia-Georgia conflict that severely damaged
Georgia’s military capabilities, NATO’s Supreme Allied Commander for Europe,
Gen. Craddock, visited Georgia on August 21 to survey the destruction of
infrastructure and military assets. The Department of Defense later sent teams to
evaluate Georgia’s economic, infrastructure, and defense needs. In October 2008,
Congress authorized $50 million for FY2009 for security assistance for Georgia (P.L.
110-417; see below, the “110th Congress Legislation” section).
All three regional states joined NATO’s Partnership for Peace (PFP) in 1994.
The June 2004 NATO summit pledged enhanced attention to the South Caucasian
and Central Asian PFP members. A Special Representative of the NATO Secretary
General was appointed to encourage democratic civil-military relations, transparency
in defense planning and budgeting, and enhanced force inter-operability with NATO.
77 “U.S. Allocates $30 mln for SSOP Army Training Program,” Civil Georgia, July 17,
2006.
78 Senate Armed Services Committee. Hearing on the Georgia-Russia Crisis: Implications
and U.S. Response. Testimony of Eric S. Edelman, Under Secretary of Defense for Policy,
September 9, 2008.
79 U.S. Senate. Committee on Armed Services. Statement of General Bantz J. Craddock,
March 13, 2008.
80 “Two Radar Stations Become Operational in Azerbaijan under the U.S.-Funded Caspian
Guard Initiative,” International Export Control Observer, Center for Non-proliferation
Studies, Monterey Institute of International Studies, November 2005.
81 Vince Crawley, Army Times, November 22, 2004.

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In 2004-2005, all three states agreed with NATO to participate in Individual
Partnership Action Plans (IPAPs) for military and civil-military reforms. On
September 21, 2006, NATO approved Georgia’s application for “Intensified
Dialogue” with the alliance, ostensibly because of Georgia’s military reform
progress, although NATO also emphasized that much more reform work needed to
be done before Georgia might be considered for NATO membership.
Although the United States reportedly urged that Georgia be considered for a
Membership Action Plan (MAP; preparatory to membership), NATO’s Riga Summit
in November 2006 reaffirmed support for an intensified dialogue to assist Georgia
in implementing reforms.82 A MAP for Georgia was a matter of contention at the
April 2008 NATO Summit. Although Georgia was not offered a MAP, the Alliance
pledged that Georgia would eventually become a member of NATO, and stated that
the issue of a MAP for Georgia would be revisited in December 2008.83 The NATO
Freedom Consolidation Act of 2007, signed into law in April 2007 (P.L. 110-17),
urged NATO to extend a MAP for Georgia and designated Georgia as eligible to
receive security assistance under the program established by the NATO Participation
Act of 1994 (P.L. 103-447) (see also below, Legislation). Troops from Armenia,
Azerbaijan, and Georgia have served as peacekeepers in NATO-led operations in
Kosovo, and Azerbaijan supports NATO-led operations in Afghanistan. In mid-April
2008, Georgia withdrew its 150 peacekeepers from Kosovo.
Until waived, Section 907 had prohibited much U.S. security aid to Azerbaijan,
including Foreign Military Financing (FMF), and International Military Education
& Training (IMET). Under U.S. policy, similar aid had not been provided to
Azerbaijan’s fellow combatant Armenia. From 1993-2002, both had been on the
Munitions List of countries ineligible for U.S. arms transfers. Since the waiver
provision to Section 907 was enacted, some Members have maintained that the
Armenian-Azerbaijani military balance is preserved by providing equal amounts
(parity) in IMET and FMF assistance to each country. In FY2005, the conference
report (H.Rept. 108-792) on H.R. 4818 (P.L. 108-447; Consolidated Appropriations)
directed that FMF funding for Armenia be boosted to match that for Azerbaijan (from
$2 million as requested to $8 million). The Members appeared to reject the
Administration’s assurances that the disparate aid would not affect the Armenia-
Azerbaijan military balance or undermine peace talks.
Apparently in anticipation of similar congressional calls, the Administration’s
FY2006 foreign aid budget requested equal amounts of FMF as well as IMET for
82 NATO. North Atlantic Council. Riga Summit Declaration, November 29, 2006.
President Bush stated that the United States supported Georgia’s NATO membership.
“Remarks By President Bush In Riga, Latvia,” PR Newswire, November 28, 2006. Sen.
Richard Lugar urged soon granting Georgia a MAP and suggested that NATO’s energy
security would be facilitated by eventually offering NATO membership to Azerbaijan and
Kazakhstan. “Senator Lugar Delivers Remarks at the Riga Summit, Latvia,” Congressional
Quarterly Transcripts, November 27, 2006.
83 See also CRS Report RL34701, NATO Enlargement: Albania, Croatia, and Possible
Future Candidates, by Vincent Morelli, Steven Woehrel, Carl Ek, Jim Nichol, and Paul
Belkin.

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each country. However, the FY2007 and FY2008 budget requests called for more
such aid for Azerbaijan than for Armenia. Under enacted appropriations provisions,
equal amounts of such aid were provided in FY2007. Consolidated appropriations
for FY2008 (P.L. 110-161) specified equal amounts of FMF ($3 million) for each
country. The continuing resolution for part-year FY2009 appropriations (P.L. 110-
329), generally calls for funding in line with that of FY2008 (see below, the “110th
Congress Legislation” section).
U.S. Trade and Investment
The Bush Administration and others maintain that U.S. support for privatization
and the creation of free markets directly serve U.S. national interests by opening
markets for U.S. goods and services and sources of energy and minerals. Among
U.S. economic links with the region, bilateral trade agreements providing for normal
trade relations for products have been signed and entered into force with all three
states. Bilateral investment treaties providing national treatment guarantees have
entered into force. U.S. investment is highest in Azerbaijan’s energy sector, but
rampant corruption in the three regional states otherwise has discouraged investors.
With U.S. support, in June 2000 Georgia became the second Eurasian state (after
Kyrgyzstan) to be admitted to the WTO. The application of Title IV of the Trade Act
of 1974, including the Jackson-Vanik amendment, was terminated with respect to
Georgia in December 2000, so its products receive permanent nondiscriminatory
(normal trade relations or NTR) treatment. Armenia was admitted into WTO in
December 2002. The application of Title IV was terminated with respect to Armenia
in January 2005.
Energy Resources and U.S. Policy
The U.S. Energy Department reports estimates of 7-13 billion barrels of proven
oil reserves, and estimates of 30-48 trillion cubic feet of proven natural gas reserves
in Azerbaijan.84 Critics argue that oil and gas from Azerbaijan will amount to a tiny
percent of world exports of oil and gas, but the Administration argues that these
exports will nonetheless boost energy security somewhat for European customers
currently relying on Russia.
U.S. policy goals regarding energy resources in Central Asia and the South
Caucasus are reflected in the Administration’s 2001 energy policy report.85 They
include supporting the sovereignty of the states, their ties to the West, and U.S.
private investment; breaking Russia’s monopoly over oil and gas transport routes by
encouraging the building of pipelines that do not traverse Russia; promoting Western
energy security through diversified suppliers; assisting ally Turkey; and opposing the
building of pipelines that transit Iran. The report recommended that the President
84 U.S. Department of Energy. Energy Information Administration. Azerbaijan Country
Analysis Brief, December 2007.
85 The White House. The National Energy Policy Development Group. Reliable,
Affordable, and Environmentally Sound Energy for America’s Future, May 16, 2001.

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direct U.S. agencies to support building the Baku-Tbilisi-Ceyhan (BTC) oil pipeline,
expedite use of the pipeline by oil firms operating in Kazakhstan, and support
constructing a gas pipeline to export Azerbaijani gas. Since September 11, 2001, the
Administration has emphasized U.S. vulnerability to possible energy supply
disruptions and has encouraged Caspian energy development.
The United States in 1995 encouraged the building of one small oil pipeline
(with a capacity of about 155,000 barrels per day) from Azerbaijan to the Georgian
Black Sea port of Supsa as part of a strategy of ensuring that Russia did not
monopolize east-west export pipelines. As part of this strategy, the United States
also stressed building the BTC pipeline (with a capacity of about 1 million barrels per
day) as part of a “Eurasian Transport Corridor.” In November 1999, Azerbaijan,
Georgia, Turkey, and Kazakhstan signed the “Istanbul Protocol” on construction of
the 1,040-mile long BTC oil pipeline. In August 2002, the BTC Company (which
includes U.S. firms Conoco-Phillips, Amerada Hess, and Chevron) was formed to
construct, own, and operate the oil pipeline. Azerbaijani media reported at the end
of May 2006 that the first tanker on-loaded oil at Ceyhan. Reportedly, some
Azerbaijani oil reaches U.S. markets.
At the end of October 2008, the first oil from Kazakhstan started to be pumped
through the BTC pipeline. Reportedly, about 70,000 bpd of Kazakh oil is being
barged across the Caspian Sea to the BTC pipeline. In addition, some Kazakh oil
is barged to Azerbaijan to be shipped by rail to Georgia’s Black Sea port of Batumi.
During the August 2008 Russia-Georgia conflict, some rail shipments of Azerbaijani
and Kazakh oil were disrupted.
A gas pipeline from Azerbaijan to Turkey (termed the South Caucasus Pipeline
or SCP) was completed in March 2007, and exports initially are planned to be 233
billion cubic feet per year. The joint venture for the SCP includes Norway’s Statoil
(20.4%), British Petroleum (20.4%), Azerbaijan’s Ministry of Industry and Energy
(20%), and companies from Russia, Iran, France, and Turkey. Some in Armenia
object to lack of access to the BTC and SCP pipelines.
The August 2008 Russia-Georgia conflict did not result in physical harm to the
BTC pipeline or the SCP. The BTC pipeline was closed due to other causes. The
SCP and the small Baku-Supsa oil pipeline were closed temporarily as a safety
precaution. Russian gas shipments via Georgia to Armenia decreased in volume for
a few days at the height of the conflict. Rail shipments of oil by Azerbaijan to the
Kulevi oil terminal (owned by Azerbaijan) on Georgia’s Black Sea coast were
disrupted temporarily. To diversify export routes, Azerbaijan began an oil swap
arrangement with Iran, involving the barging of 5,000-10,000 bpd to Iran’s Neka
seaport and Iran’s shipments of equivalent amounts from a Persian Gulf port.
Some observers argue that the completion of the BTC and SCP has boosted
awareness in the European Union and the United States of the strategic importance
of the South Caucasus.86 In mid-November 2007, Greek Prime Minister Kostas
86 Jaba Devdariani and Blanka Hancilova, “EU Broaches Peacekeeping Possibility in
(continued...)

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Karamanlis and Turkish Prime Minister Rejep Tayyip inaugurated a gas pipeline
connecting the two countries. The ceremony was attended by Azerbaijani President
Ilkham Aliyev and U.S. Energy Secretary Samuel Bodman. Since some Azerbaijani
gas reaches Greece, the pipeline represents the first gas supplies from the Caspian
region to the EU. If a pipeline extension is built to Italy, this Turkey-Greece-Italy
(TGI) pipeline could permit Azerbaijan to supply gas to two and perhaps more EU
members, providing a source of supply besides Russia.
In March 2007, Azerbaijan and the United States signed a memorandum of
understanding on energy cooperation that called for discussions on the proposed TGI
pipeline and a potential EU-backed Nabucco gas pipeline from Turkey to Austria.
In June 2007 and at subsequent forums, Deputy Assistant Secretary Bryza has urged
building the TGI and Nabucco gas pipelines and a trans-Caspian gas pipeline, so that
Azerbaijani and Central Asian gas could be transported to Europe. He has argued
that these routes would be more economical than routes through Russia. In August
2007, the U.S. Trade Development Administration granted Azerbaijan $1.7 million
to fund feasibility studies on building both an oil and a gas pipeline across the
Caspian Sea to link to the BTC pipeline and the SCP. The Nabucco pipeline has
faced numerous delays, some of them attributable to Russia’s counter-proposals to
build pipelines that appear to reduce the efficacy of the Nabucco pipeline and
questions about supplies for the pipeline (see below). Latest EU planning calls for
construction on the Nabucco pipeline to begin in 2010 and be completed in 2013.
Some analysts raise concerns that without a trans-Caspian gas pipeline, there
will not be enough Azerbaijani gas to fill either the TGI or Nabucco pipelines, and
argue that Iran also should be considered as a gas supplier.87 Others suggest that
Azerbaijan will be able to supply at least most of the needed gas for both the TGI and
Nabucco pipelines, because of recent promising indications that there may be a huge
new reservoir of gas off the Caspian seacoast. Highlighting this point, Deputy
Assistant Secretary Bryza stated in March 2008 that “we now believe as an official
U.S. Government view ... that Azerbaijan has enough gas to fill TGI, to launch
Nabucco, and perhaps even to fill Nabucco.” He stressed, nonetheless, that the
United States also backed a trans-Caspian gas pipeline as an additional source of
supply for TGI and Nabucco.88
Putin reached agreement in May 2007 with the presidents of Turkmenistan and
Kazakhstan on the construction of a new pipeline to transport Turkmen and Kazakh
gas to Russia. This agreement appears to compete with U.S. and EU efforts to foster
building a trans-Caspian gas pipeline to link to the SCP to Turkey. It also appears
86 (...continued)
Georgia,” Central Asia-Caucasus Analyst, March 7, 2007; Rovshan Ismayilov, “Azerbaijan,
Georgia and Turkey: Building a Transportation Triumvirate?” Eurasia Insight, February 7,
2007.
87 U.S. Department of State. Transcript: U.S. Official Discusses Energy Security Agreement
with Azerbaijan, March 22, 2007; Associated Press, June 6, 2007.
88 U.S. Department of State. Trans-Caspian and Balkan Energy Security: Matthew Bryza,
Deputy Assistant Secretary of State for European and Eurasian Affairs, On-the-Record
Briefing with Greek Media, March 18, 2008.

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CRS-39
to compete with U.S. and EU efforts to foster building the Nabucco gas pipeline from
Turkey to Austria.89
On March 19, 2007, Armenian President Robert Kocharyan and Iranian
President Mahmoud Ahmadinejad inaugurated an 88-mile gas pipeline from Tabriz
in Iran to Kadjaran in Armenia. Initial deliveries reportedly will be 14.1 billion cubic
feet per year of Iranian (and possibly Turkmen) gas. The Russian-controlled
ArmRosGazprom joint venture operates the Iran-Armenia pipeline. Work has started
on the second part of the pipeline, a 123 mile section from Kadjaran to Ararat. When
it is completed in early 2009, 88.3 billion cubic feet of gas per year will be supplied.
Some of this gas will be used to generate electricity for Iran and Georgia, but the
remainder may satisfy all Armenia’s other consumption needs, removing its
dependence on Russian gas transported via Georgia.90
110th Congress Legislation
P.L. 110-329 (H.R. 2638)
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act,
2009. Introduced on June 7, 2007. Signed into law on September 30, 2008.
Division B, Title 2, Chapter 1 provides an additional $365 million for the “Economic
Support Fund,” to be made available for assistance for Georgia and the region for
humanitarian and economic relief, reconstruction, energy-related programs and
democracy activities, and which may be transferred to, and merged with, funds
appropriated under the headings “Assistance for the Independent States of the Former
Soviet Union” and “International Disaster Assistance,” of which up to $8 million
may be transferred to, and merged with, funds made available for “International
Broadcasting Operations” for broadcasting to Georgia, Russia and the region.
Provides that none of the funds made available in prior Acts making appropriations
for foreign operations may be reprogrammed for assistance for Georgia.
89 According to some observers, Russia’s efforts to discourage the building of a
trans-Caspian gas pipeline included an agreement with Turkey in December 1997 that
Russia would build a trans-Black Sea pipeline (termed “Blue Stream”) to supply gas to
Turkey. By building this pipeline, Russia hoped to discourage Turkey from importing
Caspian Sea region or Middle Eastern gas, which could be trans-shipped to Europe,
according to these observers. Despite these Russian efforts (the Blue Stream project was
completed in 2005), Turkey still signed a framework agreement in 1998 and a gas supply
agreement in May 1999 with Turkmenistan that envisaged the building of either a pipeline
traversing Iran or a trans-Caspian route through Azerbaijan and Georgia (a gas pipeline from
Tabriz to Ankara began operating in 2001, but Turkmen gas is not being sold to Turkey
through this pipeline). In September 1999, Turkmenistan also joined Azerbaijan, Georgia,
and Turkey in signing a declaration on a trans-Caspian gas pipeline. Plans at that time for
a trans-Caspian gas pipeline, however, were derailed in 2000 by a clash between
Turkmenistan and Azerbaijan over how much gas each nation could ship through the
Baku-Turkey leg of the prospective gas pipeline, and by Turkmenistan’s rejection of
proposals from a consortium formed to build the trans-Caspian leg of the pipeline.
90 Platt’s Commodity News, May 31, 2007.

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CRS-40
P.L. 110-417 (S. 3001)
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009. Sec.
1207 extends the 1207 authority through September 30, 2009. Authorizes the
Secretary of Defense to provide services to, and transfer defense articles and funds
to, the Secretary of State for reconstruction, security, or stabilization assistance to
Georgia. Provides that up to $50 million in assistance may be provided to Georgia,
without that assistance counting against the authorized annual funding limit.
Introduced on May 12, 2008. Passed the Senate on September 17, 2008. Passed the
House on September 24, 2008. The Senate agreed to the House amendment on
September 27, 2008. Signed into law on October 14, 2008.
P.L. 110-17 (S. 494, Lugar)
The NATO Freedom Consolidation Act of 2007. Endorses NATO enlargement
and the timely admission of new NATO members. Urges NATO to extend a
Membership Action Plan for Georgia. Designates Georgia as eligible to receive
security assistance under the program established by the NATO Participation Act of
1994 (P.L. 103-447). Introduced on February 6, 2007. Ordered to be reported
without amendment by the Foreign Relations Committee on March 6, 2007 (H.Rept.
110-34). Passed the Senate on March 16, 2007. Passed the House on March 26,
2007. Signed into law on April 9, 2007 (P.L. 110-17).
P.L. 110-53 (H.R. 1, Bennie Thompson)
Implementing the 9/11 Commission Recommendations Act of 2007. Introduced
on January 5, 2007. Passed the House on January 9, 2007. Passed the Senate with
an amendment in the nature of a substitute on July 9, 2007. Conference report
(H.Rept. 110-259) agreed to in the Senate on July 26 and in the House on July 27.
Signed into law on August 3, 2007 (P.L. 110-53). Title 21 calls for the executive
branch to promote democratization and respect for human rights in nondemocratic
and democratic transition countries. Sec. 2033 calls for expanding scholarship,
exchange, and library programs in predominantly Muslim countries to enhance
respect for democracy and human rights.
P.L. 110-161, H.R. 2764 (FY2008)
Consolidated Appropriations Act for FY2008. On December 17, 2007, the
House considered two amendments to H.R. 2764 as received from the Senate. The
first amendment inserted a Consolidated Appropriations Act covering eleven regular
appropriations bills, including Division J: Department of State, Foreign Operations,
and Related Programs. The 2nd amendment dealt with emergency supplemental
military funding. Agreed to in the House on December 17, 2007. The Senate offered
an amendment to House amendment 2, and concurred with House amendment 1. On
December 19, the message on the Senate action was received in the House. The
House agreed with the Senate amendment to the House amendment 2, and the bill
was cleared for the White House. Signed into law on December 26, 2007. Calls for
$58.5 million in Freedom Support Act aid for Armenia, $19 million for Azerbaijan,
and $50.5 million for Georgia. Also provides equal amounts of $3 million each for
Armenia and Azerbaijan in Foreign Military Financing (all amounts are subject to
a budget rescission of .81%, to be applied with some discretion on a
country-by-country basis). Restates exceptions to Section 907 of the FREEDOM
Support Act. Provides that funds made available for the Southern Caucasus region

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CRS-41
may be used, notwithstanding any other provision of law, for confidence-building
measures and other activities in furtherance of the peaceful resolution of the regional
conflicts, especially those in the vicinity of Abkhazia and Nagorno Karabakh.
H.Res. 102/H.Res. 155 (Crowley)/S.Res. 65 (Biden)
Condemns the assassination of Turkish-Armenian journalist and human rights
advocate Hrant Dink. H.Res. 102 was introduced and referred to the Committee on
Foreign Affairs on January 29, 2007. H.Res. 155 was introduced and referred to the
Committee on Foreign Affairs on February 12, 2007. S.Res. 65 was introduced and
referred to the Foreign Relations Committee on February 1, 2007. Ordered to be
reported with an amendment in the nature of a substitute on March 28. 2007. Placed
on the legislative calendar on March 29, 2007.
H.Res. 106 (Schiff)/S.Res. 106 (Durbin)
Calls on the President to ensure that the foreign policy of the United States
reflects appropriate understanding and sensitivity concerning issues related to human
rights, ethnic cleansing, and genocide documented in the United States record
relating to the Armenian Genocide. H.Res. 106 was introduced on January 30, 2007.
S.Res. 106 was introduced on March 14, 2007. H.Res. 106 was ordered to be
reported by the House Foreign Affairs Committee on October 10, 2007.
H.R. 2869 (Pitts)
The Central Asia Education Enhancement Act of 2007. Directs the Secretary
of State to establish a pilot program of public policy internships in the United States
for undergraduate and graduate students from Armenia, Azerbaijan, Georgia,
Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan.
Introduced and referred to the Foreign Affairs Committee on June 26, 2007.
H.Con.Res. 409 (Shimkus)
Expresses the sense of Congress that Georgia and Ukraine are strong allies that
have made important progress in the areas of defense, democratic, and human rights,
and that the United States should take the lead in supporting the awarding of a
Membership Action Plan to Georgia and Ukraine at the NATO Foreign Ministers’
meeting in December 2008. Introduced on September 9, 2008. Referred to the
House Foreign Affairs Committee.
H.Con.Res. 421 (Schwartz)
Calls on the International Olympic Committee to designate a new venue for the
2014 Winter Olympic Games. Introduced on September 18, 2008. Referred to the
House Foreign Affairs Committee.
H.Con.Res. 430 (Hastings)
Expresses the sense of Congress that the policy (popularly known as the
“Stimson Doctrine”) of the United States of not recognizing territorial changes
effected by force, should continue to be the guiding foreign policy of the United
States in diplomatic discourse. Urges Russia to withdraw its recognition of South
Ossetia and Abkhazia as independent countries and to refrain from acts and policies
that undermine the principle of inviolability of borders and territorial integrity.
Introduced on September 25, 2008. Referred to the House Committee on Foreign
Affairs.

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CRS-42
H.R. 6851 (Hastings)
Republic of Georgia Enhanced Trade Assistance, Economic Recovery, and
Reconstruction Act of 2008. Authorizes assistance to facilitate trade with,
reconstruction efforts, and economic recovery in Georgia, which are necessitated by
the destruction and disruption caused by the August 2008 Russia-Georgia war.
Authorizes to be appropriated $500 million to remain available until expended.
Introduced on September 9, 2008. Referred to the House Foreign Affairs Committee
and the Financial Services Committee.
H.R. 6911 (Berman)
Stability and Democracy for Georgia Act of 2008. Authorizes assistance to
meet the urgent humanitarian needs of the people of Georgia, and for other purposes.
Introduced on September 16, 2008. Referred to the House Foreign Affairs
Committee. Committee mark-up completed.
S. 3567 (Clinton)
Calls for establishing a Commission on the conflict between Russia and Georgia
to examine the causes of the conflict and make recommendations on U.S. policy
toward Russia, Georgia, and other countries in the region. Calls for the Commission
to have nine members and to operate for six months. Introduced on September 24,
2008. Referred to the Senate Foreign Relations Committee.
S.Res. 690 (Kerry)
Expresses the sense of the Senate concerning the conflict between Russia and
Georgia. States that irrespective of the origins of the recent conflict in Georgia, the
disproportionate military response by Russia is in violation of international law.
States that Russia’s actions in Georgia have diminished its standing in the
international community and should lead to a review of multilateral and bilateral
agreements. Calls on the United States to provide rebuilding aid and support
democracy in Georgia, and to reaffirm that Georgia will eventually become a member
of NATO. Introduced and passed by the Senate on September 27, 2008.
S.Res. 33 (Lugar)
Urges the U.S. government to open negotiations on a free trade agreement with
Georgia to eliminate tariffs and non-tariff barriers on trade in goods. Introduced and
referred to the Committee on Finance on January 18, 2007.
H.Con.Res. 183 (Hastings)
Calls on the Azerbaijani government to release Farhad Aliyev and Rafiq Aliyev
from detention pending a fair and open trial. Introduced and referred to the House
Committee on Foreign Affairs on July 12, 2007.
S.Res. 391 (Lugar)
Calls on the President to express support for the planned presidential election
in Georgia with the expectation that such election will be held in a manner consistent
with democratic principles. Introduced and referred to the Committee on Foreign
Relations on December 6, 2007. Agreed to by the Senate on December 13, 2007.

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S.Res. 439 (Lugar)/H.Res. 997 (Wexler)
Expresses the strong support of the Senate for NATO to enter into a
Membership Action Plan with Georgia and Ukraine. Senate version introduced on
January 31, 2008. Agreed to by the Senate on February 14, 2008. House version
introduced on February 25, 2008. Passed the House on April 1, 2008.
S. 2563 (Lugar)
Authorizes the extension of nondiscriminatory treatment (normal trade relations
treatment) to the products of Azerbaijan. Introduced and referred to the Committee
on Finance on January 29, 2008.
S.Res. 523 (Biden)
Expresses the strong support of the Senate for the NATO declaration at the
Bucharest Summit that Ukraine and Georgia will become members of the Alliance.
Urges the foreign ministers of NATO member states at their upcoming meeting in
December 2008 to consider favorably the applications of the governments of Ukraine
and Georgia for Membership Action Plans. Introduced on April 21, 2008. Passed
the Senate on April 28, 2008.
H.Res. 1166 (Wexler)/S.Res. 550 (Biden)
Expresses the sense of the House/Senate regarding provocative and dangerous
statements and actions made by officials of the government of the Russian Federation
concerning the territorial integrity of the republic of Georgia. Condemns recent
decisions made by the Russian government to establish ‘official ties’ with the
breakaway regions of Abkhazia and South Ossetia, calls upon the Russian
government to disavow this policy, which gives the appearance of being motivated
by an appetite for annexation, and calls for all countries to eschew rhetoric that
undermines the peace process. The House version also calls for a NATO
Membership Action Plan for Georgia and for the United Nations to investigate the
shootdown of unmanned aerial vehicles over Abkhazia. House version introduced
on April 29, 2008. Passed the House on May 7, 2008. Senate version introduced on
May 2, 2008. Approved by the Senate on June 3, 2008.
H.Res. 1187 (Shuster)
Promotes global energy supply security through increased cooperation among
the United States, Turkey, Azerbaijan, and Georgia, by diversifying sources of
energy, and implementing certain oil and natural gas pipeline projects for the safe and
secure transportation of Eurasian hydrocarbon resources to world markets.
Introduced on May 13, 2008, and referred to the House Committee on Foreign
Affairs.
H.R. 6079 (Schiff)
Calls on the President and Secretary of State to urge Turkey to immediately lift
its ongoing blockade with Armenia. Directs the Secretary of State to submit a report
outlining the steps taken and plans made by the United States to end Turkey’s
blockade of Armenia. Introduced on May 15, 2008, and referred to the House
Committee on Foreign Affairs.

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CRS-44
S.Res. 612 (Biden)
Expresses the sense of the Senate that President Bush, Russian President
Medvedev, and other participants in the upcoming 2008 Group of Eight (G8) Summit
in Japan should work together to foster a more constructive relationship, and that the
Russian government should eschew behaviors that are inconsistent with the Group’s
objectives of protecting global security, economic stability, and democracy. Among
such behaviors, the resolution mentions Russia’s attempts to undermine the territorial
integrity of Georgia through its support for Georgia’s breakaway regions of South
Ossetia and Abkhazia, and Russia’s act of shooting down an unmanned Georgian
aircraft that was flying over Abkhazia on April 20, 2008. Introduced and passed by
the Senate on July 14, 2008.

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CRS-45
Table 1. U.S. Foreign Aid to the Region,
FY1992-FY2008, and FY2009 Request
(millions of dollars)
FY1992-
South
FY2007
FY2007
Caucasus
Budgeted
Budgeted
FY2008
FY2009
Country
Aida
Aida
Estimateb
Requestb
Armenia
1,746.08
71.64
64.41
29.9
Azerbaijan
753.26
74.85
28.4
26.9
Georgia
1,898.64
131.58
66.44
69.22
Regional
38.73
2.0
—
—
Total
4,436.71
280.07
159.25
126.02
Percent
13.6
14
33
29
Sources: State Department, Office of the Coordinator for U.S. Assistance to Europe and Eurasia,
January 2008; State Department, Congressional Budget Justification for Foreign Operations, FY2008.
a. FREEDOM Support Act and Agency budgets.
b. FREEDOM Support Act and other Function 150 funds. Includes Peace Corps funding but does not
include Defense or Energy Department funding, funding for exchanges, or Millennium
Challenge Corporation programs in Armenia and Georgia.
Source: Map Resources. Adapted by CRS.
Figure 1. Map of the Region

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