2 March, 2026
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21 minutes to read
The South Caucasus has entered one of those rare historical windows when structural shifts and political choices have aligned, even if for the moment. Armenia and Azerbaijan, exhausted by cycles of war and arms race, are cautiously building a post-conflict order based on peace and connectivity. European capitals are rediscovering the region as a connective hinge between Europe, the Caspian basin, Central Asia, and the broader Middle East. The United States, for the first time in decades, has declared its financial and economic interest, reified in the Trump Route for International Peace and Prosperity (TRIPP) corridor. Russia, distracted and weakened by its war against Ukraine, is no longer the uncontested arbiter it once was and is actually on the way out of the region, as we have argued on several occasions on the pages of this journal.
And yet, just as the region becomes more strategically valuable to the West, one of its key states – Georgia – is drifting away from the governance model that makes long-term Western engagement viable. The paradox is impossible to ignore: Western interest is rising as Georgia, the only Black Sea-facing state in the South Caucasus, slides toward an increasingly centralized and unpredictable political system, putting it just five minutes away from a one-party dictatorship.
This paradox goes to the heart of a larger question. Can the West align its strategic interests and political leverage in the South Caucasus, especially towards Georgia, or will connectivity ambitions and democracy concerns continue to run in parallel, ultimately undermining each other?
For the first time in decades, Armenia and Azerbaijan are speaking in terms that suggest closure of past traumas and the dominance of forward-looking visions, rather than traditional history-based, resentful, and escalating rhetoric. Both Prime Minister Nikol Pashinyan and President Ilham Aliyev have publicly signaled that they do not anticipate a return to large-scale war. The territorial question that defined the region for thirty years has been settled in Azerbaijan’s favor, however the looming economic reopening also favors Armenia’s long-term strategic interests. What remains is the difficult but manageable process of formalizing borders, reopening communications, and embedding peace in regional connectivity infrastructure. And for that, Western engagement and Russian disengagement are crucial components.
Connectivity is no longer a theoretical slogan that the three South Caucasus capitals often talked about but never really focused on. Rail links, customs harmonization, transit routes, and investment frameworks are now actively discussed after the end of the Nagorno-Karabakh conflict. Armenia is also recalibrating, albeit carefully, its foreign policy, seeking closer institutional engagement with the European Union and deepening ties with the United States. Azerbaijan is positioning itself as a logistical and energy hub that can translate its post-war advantage into long-term economic stability and guaranteeing supply of oil and gas, as well as East-West and North-South trade through its territory.
Russia’s capacity to dictate outcomes in the region has narrowed. Its peacekeeping presence in Nagorno-Karabakh has dissolved. Its political leverage in Yerevan has weakened. Its allies in Armenia are on the defensive, even if they hope to rebound during the upcoming elections.
Russia’s capacity to dictate outcomes in the region has narrowed. Its peacekeeping presence in Nagorno-Karabakh has dissolved. Its political leverage in Yerevan has weakened. Its allies in Armenia are on the defensive, even if they hope to rebound during the upcoming elections. Even in Baku, Moscow’s influence is increasingly transactional rather than strategic, and the recent months’ rhetoric from Baku and concrete anti-Russian steps have challenged Russia’s importance as long as it is bogged down in an unwinnable war in Ukraine. Yes, Russia maintains a military base in Gyumri, but that presence is not viewed seriously by any regional or international actor. The only real asset that Russia has in the region is a functionally pro-Russian government in Tbilisi.
Western actors have sensed this opening. The European Union’s Global Gateway initiative seeks to establish alternative corridors to reduce dependence on Russia. Black Sea electricity cable, digital infrastructure, and an upgrade of the middle corridor are the connectivity talking points of Brussels and the Western capitals. Washington’s interest in transregional connectivity has also intensified, reflected in high-level visits and financial and investment support for initiatives such as the TRIPP, designed to reinforce East–West transit logic. Washington’s interest in using Armenia as a producer of microchips and a provider of nuclear energy is also evident in the recently signed agreements during U.S. Vice President J.D. Vance’s visit to Yerevan. The South Caucasus, for the first time in the last thirty years, has the potential to shake off the label of a periphery with frozen conflicts.
Yet every corridor drawn on a policy map eventually runs into geography. And geography in the South Caucasus points to one unavoidable conclusion: Georgia is a sick man of the Caucasus.
Armenia and Azerbaijan may normalize relations, but cargo does not travel by goodwill alone. Trade flows require cost efficiency, legal predictability, and maritime access. Georgia remains the shortest and most established gateway from the Caspian basin to the Black Sea and onward to European markets. Its ports in Poti and Batumi, its rail infrastructure linking Azerbaijan to Türkiye via the Baku–Tbilisi–Kars line, and its existing transit architecture form the practical backbone of any East–West route that bypasses Russia. But that is all relevant as long as there is an appetite in Tbilisi to do something that contradicts Russia’s interests. And so far, it has not been the case.
The Middle Corridor logic, revived after Russia’s invasion of Ukraine, rests heavily on Georgian transit capacity. Even if Armenia and Azerbaijan reopen additional routes across their own territories, those lines will still require a maritime outlet that is commercially viable and politically dependable. The existing routes are also cheaper and more stable. Georgia’s Black Sea access can indeed transform regional peace into scalable, profitable trade for the whole region.
Without Georgia, the middle corridor will remain geographically constrained and economically less competitive. With Georgia, it becomes a credible alternative to northern routes through Russia and southern routes burdened by sanctions and instability.
Without Georgia, the middle corridor will remain geographically constrained and economically less competitive. With Georgia, it becomes a credible alternative to northern routes through Russia and southern routes burdened by sanctions and instability. And once again, this can only materialize if Georgia has a government that is willing to counter Russia’s interests.
The West’s connectivity ambitions in the South Caucasus, therefore, cannot be separated from Georgia’s internal political trajectory. Infrastructure can be financed and rail lines upgraded in the South of Georgia, but long-term corridor viability depends on governance conditions that reassure investors and governments alike. And it is also important that the regime ruling Georgia is not undermining the goals of Western powers and regional actors to the benefit of Russia’s interests.
The first missing element of a full-fledged trans-Caucasus connectivity is a deep-sea port strategy aligned with Western economic logic. The Anaklia Deep-Sea Port project was conceived as the infrastructure upgrade that would elevate Georgia from a transit state to a maritime hub capable of handling large container vessels. Its cancellation in 2020, after the termination of the Anaklia Development Consortium agreement, sent a powerful message. A project framed as strategically transformative and backed by Western investors could be reversed by the political decision of one man – an oligarch who rules Georgia. The economic loss was significant; the reputational signal was even greater. But for the oligarch, the overture towards Russia seemed more significant than the geopolitical or financial costs of such a reversal.
The second missing ingredient is predictability. Connectivity is a long-term business that requires confidence in regulatory stability and political direction. Over the past decade, Georgia’s policy record has displayed a pattern of abrupt reversals. Electoral reform promises were made and withdrawn in 2019 and 2020. The 2021 political agreement mediated by then European Council President Charles Michel was signed and later abandoned. After applying for EU membership in 2022, the Georgian government failed to implement core reforms required for accession talks and subsequently announced that negotiations would effectively be suspended until 2028. While these appear as internal political tactical maneuvers, in reality, they were strategic choices aimed at ignoring the interests of the Georgian people and Western partners, in favor of only one player – Mr. Ivanishvili. And these reversals show that for the Georgian oligarch, the agreements he strikes with other actors are worthless.
Investors and governments do not demand ideological purity; they demand consistency. If a state’s European trajectory can be paused by domestic calculation, questions arise about how other commitments might evolve.
These moves also created a legitimate perception that Georgia’s strategic orientation was contingent on the oligarch’s political preferences, rather than anchored in values and an understanding of national interests. Investors and governments do not demand ideological purity; they demand consistency. If a state’s European trajectory can be paused by domestic calculation, questions arise about how other commitments might evolve.
The third factor is regulatory transparency and competitive transit pricing. Corridors operate on thin margins, and even minor distortions in transit fees or customs procedures can redirect cargo flows elsewhere. Political interference in tariffs or in selective border treatment quickly erodes competitiveness, especially when neighboring states are actively marketing alternative routes. Georgia’s comparative advantage historically derived from its image as a reformist, open economy with stable, commercially rational rules. The erosion of rule-of-law credibility, therefore, has direct economic consequences.
Recent developments illustrate precisely why predictability is now in question. Azerbaijani media outlets closely aligned with Baku’s authorities publicly accused Georgia of deliberately delaying Azerbaijani trucks at the border and of imposing elevated rail transit tariffs on fuel shipments destined for Armenia. Whether accurate or not, such accusations alone damage the corridor’s credibility. Even more revealing was the Georgian government’s response. Rather than clarifying a transparent tariff framework or addressing the issue institutionally, Georgian Dream (GD) Prime Minister Irakli Kobakhidze reportedly instructed Georgian Railways to transport one shipment of Azerbaijani fuel to Armenia free of charge as a one-time measure.
This ad hoc political intervention sends a troubling signal. If tariffs can be raised under opaque conditions and then waived by executive instruction, pricing ceases to be a market-based, rule-governed mechanism and becomes a tool of political discretion.
This ad hoc political intervention sends a troubling signal. If tariffs can be raised under opaque conditions and then waived by executive instruction, pricing ceases to be a market-based, rule-governed mechanism and becomes a tool of political discretion. For transit partners and investors, this unpredictability is far more costly than any single tariff level. It suggests that regulatory policy can be instrumentalized, adjusted, or suspended in response to political considerations.
Moreover, the episode unfolded at precisely the moment when the first Azerbaijani fuel shipment to Armenia via Georgia in decades symbolized the potential dividends of normalization from the Armenia–Azerbaijan peace process. Instead of reinforcing Georgia’s role as a neutral and reliable facilitator of regional trade, the controversy reinforced perceptions in Baku that Tbilisi may fear losing logistical primacy under emerging frameworks such as TRIPP and therefore resort to tactical pressure.
Corridors depend not only on infrastructure but on trust. Once partners begin to question whether transit conditions are applied consistently and transparently, the economic logic of the route weakens.
Corridors depend not only on infrastructure but on trust. Once partners begin to question whether transit conditions are applied consistently and transparently, the economic logic of the route weakens. In this environment, Georgian Dream’s record of discretionary decision-making and reactive policy adjustments does not inspire confidence. It reinforces the broader concern that Georgia’s strategic direction is governed less by institutional commitments and more by short-term political calculations.
While not openly opposing connectivity in principle, the Kremlin’s emphasis on sovereign balance, its irritation at expanding U.S. presence, and its insistence on embedded Russian participation suggest that Moscow views successful trans-Caucasian connectivity less as a regional peace dividend and more as a mechanism that could dilute its influence.
Finally, there is the issue of political behavior. Transit states must avoid acting as spoilers. If a corridor state is perceived as using its geographic leverage for opportunistic bargaining or geopolitical signaling, long-term planning becomes risky. Stability in a corridor is as much political as it is logistical. It is already known that Russia is poised to be a major spoiler of Caucasian connectivity. Moscow’s public messaging on emerging Azerbaijan–Armenia connectivity and the TRIPP initiative reveals a pattern of guarded positioning rather than genuine endorsement. Russian officials have insisted that any transport architecture in the South Caucasus must take into account the interests of all states in the region and their neighbours, a formulation that effectively asserts Russia’s claim to continued strategic primacy. They have underscored that Armenia’s rail infrastructure operates under a long-term concession to Russian Railways, reminding that Moscow retains structural leverage over key transit arteries. At the same time, Russian rhetoric has framed Western-led corridor initiatives as politically loaded and potentially destabilizing, warning Armenia against deepening integration with Western frameworks at Russia’s expense. While not openly opposing connectivity in principle, the Kremlin’s emphasis on sovereign balance, its irritation at expanding U.S. presence, and its insistence on embedded Russian participation suggest that Moscow views successful trans-Caucasian connectivity less as a regional peace dividend and more as a mechanism that could dilute its influence. A fully functional East–West corridor anchored in Armenia, Azerbaijan, and Georgia, and supported by Washington and Brussels, would structurally reduce Russia’s gatekeeping role in Eurasian transit. From that perspective, Russia’s cautious, hedging posture indicates that it is not necessarily invested in the unimpeded success of such connectivity, particularly if that success consolidates Western strategic footprint in what Moscow still considers its near abroad.
In this context, it is easy to imagine how volatile the connectivity issue becomes if Russia becomes aggressive blocker of the reopening of Caucasus trade routes and Georgia is there functionally aligning with the Russian interests, as the Georgian Dream has done before on a number of occasions, either when reopening air traffic with Russia, when the whole of Europe closed it, or engaging in the campaign of sidestepping European sanctions to the benefit of Russia’s economic interests. Recent statistics on increasing trade with Central Asian republics and the export of oil from Georgia (Most likely Russian oil, as Georgia is not an oil producer) make the regional trade and connectivity agenda highly vulnerable to being undermined by Russia and its allies in Tbilisi.
A familiar argument suggests that dealing with a centralized decision-maker, or a dictator, simplifies negotiation. After all, it is just “one man” who will be around for a long time. Agree with him, and the deal is done. This contrasts with the need to navigate the institutional complexities and intricate details of domestic democratic decision-making in European democracies.
But ease of negotiation (even with the dictators) is not equivalent to reliability of outcome. A commitment delivered by personal authority can be rescinded by personal authority just as quickly. The absence of institutional checks may streamline decisions, yet it also increases volatility.
In Georgia’s case, Bidzina Ivanishvili occupies a peculiar position. He does not hold a formal executive office, yet he is widely regarded as the ultimate decision-maker. The Georgian dictatorship-in-making is his project. Georgian Prime Ministers rotate and often end up in political obscurity or jail. Speakers of parliament change, never leaving a meaningful impact. Ministers come and go, also often visiting prison on the way out. But the locus of power remains informal and opaque – at one of Mr. Ivanishvili’s three residences across Georgia.
This configuration weakens institutional continuity. Policy becomes susceptible to recalibration without transparent debate or accountability. The Anaklia precedent remains emblematic: a strategic infrastructure vision aligned with Western investment was halted without public debate, even though the then-Prime Minister Giorgi Kvirikashvili supported the project. He was fired and has since not been in active politics. His successor, Mamuka Bakhtadze, is also out of the political landscape. His successor, Mr. Giorgi Gakharia, served. Mr Ivanishvili, as loyally as one could, is now in political exile in Berlin, facing treason charges. Another Prime Minister, Mr. Irakli Gharibashvili, Ivanishvili’s closest ally and former personal assistant, who was appointed to the top job twice, is in prison. So, the question is obvious – is Mr. Ivanishvili to be trusted, when all of his major speakers and “handshakers on his behalf” are either out of politics, or in prison, and have faced only limited political horizons.
Furthermore, Ivanishvili’s political trajectory demonstrates a recurring pattern of abrupt pivots and strategic reversals, underscoring his unreliability as a leader. Georgian Dream was originally launched as a broad, heterogeneous coalition that brought together politicians and ideological currents from across the spectrum—many of whom were publicly endorsed and elevated by Ivanishvili himself. Within a few years, however, he systematically sidelined and removed these figures, dismantling the coalition framework and aligning himself with the Party of European Socialists (PES) before being expelled from that family. GD’s current rhetoric often echoes ultra-conservative and anti-European themes, placing the party firmly in the far-right family. But, notably, even the far-right European groups are unwilling to open their doors to GD. This vocation from center-left to far right is unique in the history of European political parties.
Domestically, Ivanishvili’s political alliances have proved transient. Prime ministers have been replaced and sent to jail. Former allies have fallen out of favor and become enemies. The 4th and 5th presidents, who were supported by Ivanishvili during election cycles, later became adversaries and public enemies. The Georgian Dream could not find a single political party; it could only find a coalition arrangement, relying only on the parties it artificially created. This pattern does not suggest institutional consolidation or that Ivanishvili can be trusted; it suggests centralized discretion unbounded by stable political consensus and not rooted in values.
Washington might think that, in the spirit of pragmatic cooperation with the world’s authoritarian leaders (after all, many of them are on the Board of Peace), they could cooperate with Ivanishvili as well. But the Donald Trump administration must remember that Mr. Ivanishvili has never visited Washington, even when he was a formal Prime-Minister. He has also not met high-level American guests. He has blocked the ambassadorial nominee of the first Trump administration, and he has torpedoed the Anaklia project, despite warnings from Mike Pompeo, Trump’s first administration’s secretary of state.
More importantly, Ianishvili seems to treat the U.S. as an enemy; the relationship with the United States has been distant and, at times, framed through conspiratorial lenses that reference a so-called “deep state.” State propaganda machinery, now under the UK sanctions, has been heralding that Trump is defeating the deep state, and then that Trump is losing to the deep state. Mr. Ivanishvili’s legal disputes with Swiss Bank over personal financial matters have been interpreted as geopolitical targeting by the U.S., reinforcing a narrative of external hostility and finger-pointing at opaque forces in Washington.
Just last year, in July 2025, outgoing U.S. Ambassador Robin Dunnigan revealed that the Georgian Dream leadership sent a private letter to the Trump administration, which was described in Washington as “threatening, insulting, and unserious” and received extremely poorly. The letter followed U.S. proposals outlining simple steps to reset relations, including stopping anti-American rhetoric.
When Secretary of State Marco Rubio prepared a formal response, he instructed that it be delivered directly to Mr. Ivanishvili, but Georgia’s informal ruler refused to meet the U.S. ambassador or receive the message, arguing that he could not engage while under U.S. sanctions, which he described as “personal blackmail.” This refusal is politically significant. Rather than seizing the opportunity to de-escalate tensions or repair bilateral ties, Ivanishvili declined to engage directly with the U.S. administration. As Ambassador Dunnigan stated, by refusing even to receive a message from Washington, he placed his personal grievances above Georgia’s national interests.
The episode illustrates a deeper problem: despite public statements by Georgian officials about improving relations with the United States, Ivanishvili’s actions reveal distrust, resentment, and an unwillingness to engage at the highest level. His posture toward Washington appears defensive and confrontational rather than strategic or pragmatic — reinforcing the perception that Georgia’s leadership no longer views the United States as a trusted partner. This episode also illustrates that, like other dictators, Ivanishvili is happy to meet Trump or other world leaders, but is elusive. And if he sends one of his lieutenants to negotiate a deal, the receiving side should be aware that in a few months’ time, when the time to follow up comes, the negotiating lieutenant might be in jail or political exile.
From a connectivity perspective, this volatility matters a lot. Infrastructure requires decades-long planning horizons. Strategic corridors require predictable partners. A state whose orientation can shift with internal political calculus becomes a source of systemic risk can not be a reliable partner. And this is the lesson that the Western powers must learn.
Georgia’s internal political trajectory can no longer be separated from the West’s strategic ambitions in the South Caucasus. Connectivity projects, investment flows, and corridor politics depend on governance. If Georgia consolidates into a one-party dictatorship dominated by informal rule, its reliability as a transit and security partner will inevitably be questioned.
At the same time, the Georgian government remains structurally dependent on the West. Its economic model relies on access to EU markets, Western investment, international financial institutions, and participation in connectivity initiatives such as the Middle Corridor and TRIPP. The regime may employ sovereignist rhetoric, but it cannot replace Western financial architecture or political legitimacy, at least yet, as Russian and Chinese influence and finances, while on the rise, are still not sufficient to anchor Georgia into an anti-Western economic orbit. That asymmetry creates leverage.
The objective of Western policy should not be destabilization but recalibration and defense of its own connectivity and security interests in the region. Democratic change in Georgia is ultimately a domestic process, yet external actors can shape incentives. Reactive and symbolic pressure has a limited effect. Sanctions, which come months after the wrongdoing, have no effect. Painful sanctions, such as the recently introduced sanctions on the GD propaganda machinery (Imedi TV and POSTV), are effective, but they lack a political dialogue component, i.e., a message of what the GD should do for the sanctions to be reversed. On the other hand, an engagement without conditions (as some in Washington, Budapest, or Rome would prefer) normalizes authoritarian consolidation, which does not serve the Western or Georgian people’s interests in the medium- to long-term. What is required is coordinated conditionality linked to concrete political and democratic benchmarks.
A minimal framework can be organized around four priorities (four R-s: Refusal to ban political parties; Repeal of laws that undermine civil society and media; Release of political prisoners; and Reform of the electoral code to ensure credible competition. These are not maximalist demands. They are baseline requirements for restoring institutional legitimacy.
The Georgian leadership needs international recognition, economic stability, and continued integration into Western-backed transit and financial systems, while the West needs a predictable, rules-based partner at the Black Sea gateway of the South Caucasus. Those interests intersect. The challenge is political coordination among the Western allies and using leverage smartly.
On the other hand, the Georgian leadership needs international recognition, economic stability, and continued integration into Western-backed transit and financial systems, while the West needs a predictable, rules-based partner at the Black Sea gateway of the South Caucasus. Those interests intersect. The challenge is political coordination among the Western allies and using leverage smartly. Given divisions within the European Union, a coalition of willing states working with Washington and London is more realistic than waiting for unanimity. The approach should therefore combine clearly communicated red lines with enforceable consequences, alongside visible incentives for compliance. Financial engagement, high-level political contact, and participation in infrastructure frameworks should be explicitly tied to measurable democratic steps.
Connectivity planning, especially when there is significant investment potential, requires stable partners. Long-term infrastructure cannot rest on discretionary governance or the informal authority of a newly minted dictator, whose political allegiances are with Moscow. If Western actors wish to preserve Georgia’s role as a strategic hinge rather than a geopolitical risk, they will need to use the leverage they still possess with clarity and coordination to at least reverse the dictatorship-in-making.