By David Bujiashvili and Tomáš Baranec

In a resolution on July 9, 2025, the European Parliament called for a review of the EU–Georgia Association Agreement (AA) and its Deep and Comprehensive Free Trade Area (DCFTA), citing Georgia’s continued violations of the Agreement’s core principles. The resolution warned that persistent backsliding on democratic values could lead to the suspension of Georgia’s economic and trade benefits. Accordingly, the Parliament urged the European Commission and the Council to assess Georgia’s compliance with these standards and consider suspending the visa-free regime in case democratic norms are not respected.

BACKGROUND: The signing of the EU–Georgia Association Agreement in 2014, establishing a comprehensive framework for deeper political association and economic integration was a culmination of a systematic rapprochement between Tbilisi and Brussels. The AA encompasses cooperation in democratic governance, justice, human rights, energy, environmental policy and other sectoral areas. A key component of the agreement is the DCFTA granting Georgian goods duty-free access to the EU’s Single Market.

Building on the comprehensive framework of the AA/DCFTA, Georgian citizens also gained one of the most tangible benefits of EU integration: visa-free access to the Schengen Area in March 2017. This milestone held both symbolic and practical significance, allowing Georgian nationals to travel for up to 90 days without a visa. It was widely seen as a reward for the country’s reform efforts and remains one of the most tangible benefits delivered to the Georgian public as part of the European integration process.

The geopolitical landscape shifted again in 2022 with Russia’s full-scale invasion of Ukraine, prompting the EU to reassess its enlargement policy towards the Eastern Neighbourhood. In this context, Georgia was granted EU candidate status in 2023 recognizing Georgia’s European aspirations and progress in the AA implementation.

However, shortly after gaining EU candidate status, internal challenges in Georgia, including political polarization and pressure on the judiciary, raised concerns about the country’s adherence to EU norms. This led to a major turning point on 28 November 2024, when Georgia’s ruling party declared that it would not place the issue of opening EU accession talks on the national agenda until the end of 2028.

In reaction to these developments, the EU has taken concrete steps, including suspending high-level political dialogue with Georgia. The European Council suspended visa facilitation privileges for holders of Georgian diplomatic and service passports as an initial step toward broader restrictions. Following the EU Foreign Affairs Council meeting on July 15, 2025, Georgia was given a deadline to implement 8 key recommendations by August 31. Failure to comply could lead to the suspension of the visa-free regime for all Georgian citizens and potentially a review or suspension of specific AA/DCFTA provisions. 

Meanwhile, several EU member states are keen to impose personal sanctions asset freezes and travel bans on Georgian officials but are constrained by the lack of unanimity among EU members. Past instances, such as Hungary and Slovakia blocking personal sanctions against Georgia illustrate the complexity of achieving full consent.

Alongside political developments, Georgia’s economic integration with the EU has delivered measurable results. Since the 2014 signing of the EU–Georgia AA/DCFTA, exports to the EU have grown about 17 percent, expanding beyond wine, mineral water, and hazelnuts to include kiwifruit, blueberries, berries, organic honey, essential oils, dried and processed fruits, and, since 2022, snails. Export activity is strongest in Kakheti (wine and agriculture), Imereti (food processing), and Adjara, which benefits from its Black Sea access facilitating trade. Shida Kartli, bordering Russia, remains less export-oriented due to geopolitical challenges and limited market access. 

Complementing trade growth, visa-free travel has expanded opportunities for tourism, business, education, and family ties, while significantly increasing remittances from EU countries. Since its introduction in 2017, over 500,000 Georgian citizens have benefited, making more than 1 million visits to Schengen Area countries. Starting at around US$ 414 million in 2017, EU-origin remittances more than tripled to approximately US$ 1.4 billion by 2024, reflecting a 238 percent increase. On the contrary, remittances from Russia started at approximately US$ 380 million in 2017 but grew only modestly to around US$ 420 million by 2024. Consequently, the EU now accounts for roughly 44 percent of Georgia’s total remittances, overshadowing Russia’s declining share.

IMPLICATIONS: The DCFTA plays a critical role in Georgia’s economic interests. Its suspension would have serious consequences, threatening jobs, competitiveness, and rural development. For years, it has provided Georgian producers, farmers, and entrepreneurs with tariff-free access to the EU market. Its suspension would damage the economy, erode public trust, and increase social vulnerability. 

In contrast to the gradual economic impact of the DCFTA, the suspension of visa-free travel would hit ordinary Georgians immediately, undermining free mobility. Thousands rely on it for tourism, personal matters, and medical access to EU clinics. Students, entrepreneurs, and families would face new bureaucratic obstacles. Restrictions would hinder Georgian entrepreneurs from attending EU exhibitions and forums, limiting partnerships and market growth, while reduced EU access could deepen reliance on Russia and China, both visa-free partners. 

This impact would be compounded by low-cost airlines, particularly WizzAir, which could reduce routes or raise fares. WizzAir, operating in both Georgia and Armenia, may even close its Georgian operations entirely and shift all flights to Armenia if the EU suspends visa-free travel for Georgians, especially given the prospect that Armenia could gain visa-free access in the coming years. Such a shift would make flights from and to Georgia more expensive and less accessible, further reducing European tourist arrivals. Meanwhile, flights from Russia have risen sharply in recent years, increasing the risk of greater reliance on Russian tourists if European arrivals decline due to fewer low-cost flights. 

The economic consequences would not be limited to tourism. Suspension of visa-free travel would also negatively affect household incomes derived from remittances, underscoring the EU’s crucial role in supporting Georgia’s economic development through these flows. Many Georgians working in the EU without proper permits—often in informal sectors such as caregiving or domestic work—would no longer be able to sustain these livelihoods. Currently, they avoid breaching the 90-day visa-free limit by rotating their stays among friends and relatives, a practice that complies with entry rules while significantly contributing to remittance inflows. This informal mobility has provided a vital boost to Georgia’s economy.

Beyond economic costs, the suspension would deal a profound emotional blow to pro-European Georgians, deepening frustration and a sense of isolation. It would be perceived not merely as a bureaucratic measure but as a symbolic break - a clear signal that the country’s European path is no longer guaranteed.

Domestically, the suspension would likely be attributed to the government’s democratic backsliding rather than external pressures. Attempts by authorities to deflect responsibility onto the opposition, civil society, or the EU are unlikely to convince the pro-European majority. This could heighten polarization and, with local elections on 4 October 2025, trigger protests and increase pressure on the ruling party.

From a legal and procedural perspective, suspending parts of the AA/DCFTA is highly complex, requiring unanimity among all 27 member states. Therefore, suspension of the AA/DCFTA is unlikely, while in contrast, suspending the visa-free regime requires only a qualified majority of 15 member states, making it a more feasible short-term option if Georgia fails to meet EU benchmarks.

Despite these considerations, the EU remains cautious about measures that could directly harm ordinary Georgian citizens, especially given the 86 percent public support for EU membership. However, internal divisions over targeted personal sanctions have increased the likelihood of collective measures, including suspending visa-free travel. While affecting ordinary Georgians, this step may be the EU’s only remaining leverage if the government continues undermining democratic norms and fails to implement the recommended reforms by the end of August.

CONCLUSION: In the absence of a unified position towards the Georgian government, the EU currently has only a limited set of sanctions, which primarily target the local population rather than key representatives of the ruling party and business circles close to it. The ability of these tools to change the Georgian government’s position is likely limited. Moreover, both the suspension of visa liberalization and the less likely suspension of parts of the AA/DCFTA may be double-edged in the medium term, as they could increase the dependence of the Georgian economy and business on Russia and China.  

Even if the current status quo with Georgia remains, while Ukraine and Moldova continue advancing towards EU membership, freezing Georgia’s accession process would create a damaging gap in EU enlargement policy. This could result in a ‘Turkey-style’ scenario, where candidate status is maintained in name but the accession perspective is practically frozen.

AUTHOR’S BIOS: David Bujiashvili is a Georgian diplomat and expert in European integration with over 26 years of experience in EU Affairs. He has held senior government positions, coordinated the implementation of the EU–Georgia Association Agreement, visa liberalization, and EU assistance to Georgia, and served as Chief Coordinator of Georgia’s EU Accession Questionnaire (2021–2022), directly contributing to Georgia’s EU candidate status. He is also an Associate Professor at ALTE University of Georgia and author of the book Steps for Comprehending the European Union and 12 academic publications on EU Affairs.

Tomáš Baranec is the Founder and Executive Director of the Centre for Black Sea Studies as well as a Research Fellow and Head of the Caucasus Program of the Slovak think tank Strategic Analysis. He currently works as a field researcher on the Georgian-Ossetian ABL. Tomas studied Balkan, Central European and Eurasian Studies at Charles University in Prague.

By Tomáš Baranec

On March 1, 2025, the second round of the de facto presidential elections took place in Abkhazia. The incumbent de facto President, Badra Gunba, secured 55.66 percent of the vote, defeating opposition candidate Adgur Ardzinba, who received 42.25 percent. The 2025 elections were marked by two notable features. First, Russia directly intervened in the electoral process for the first time since the 2004 presidential elections, during which Moscow openly supported Raul Khajimba. Second, a political faction recently ousted through mass protests returned to power through electoral means. Both developments may have significant consequences for Abkhazia’s political trajectory.

Photo source: Andrey Danilov

BACKGROUND: The latter half of 2024 in Abkhazia was characterized by widespread public mobilization against the proposed so-called investment agreement with Russia. Critics expressed concern that the agreement would strip the region of its remaining de facto sovereignty and potentially threaten the precarious demographic majority held by ethnic Abkhazians. These tensions culminated in an assault on the presidential palace in Sukhumi and the subsequent resignation of de facto President Aslan Bzhania and de facto Prime Minister Alexander Ankvab on November 19.

Following the first round of the presidential elections held on February 15, 2025, two traditional political factions competed for power. Gunba represented the interests of the Ankvabist bloc (United Abkhazia), aligned with Alexander Ankvab and the ousted president Aslan Bzhania. Adgur Ardzinba of the Abkhazian National Movement led the opposing group—the Khajimbists. Initially, Ardzinba received support from Kan Kvarchia, chairman of the Aidgylara movement, and Leuan Mikaa, chairman of the Committee for the Protection of Abkhazia’s Sovereignty. However, both opposition figures ultimately refrained from actively participating in Ardzinba’s election campaign.

The catalyst for the early elections was the "unfinished revolution" of November 2024, during which President Bzhania and Prime Minister Ankvab were compelled to resign, leading to the abandonment of the highly unpopular investment agreement with Russia.

Gunba, as a representative of the recently ousted political faction, was initially expected to enter the early elections as a marginal contender. Despite the apparent achievements of the revolution, it remained incomplete. Prior to the elections, Ankvab’s faction continued to control all key ministries, administrative apparatuses, and the media landscape.

The Ankvab faction also secured a strategic advantage during the election campaign. Employing black PR tactics, they compelled Ardzinba’s campaign team to focus their efforts on countering numerous accusations and rumors. Consequently, the opposition leader had limited opportunity to engage with issues that were critical and sensitive for the Ankvab group, including cryptocurrency mining, the investment agreement, and the deterioration of the energy infrastructure.

The Ankvab faction structured its campaign around two principal narratives. In the first, Ardzinba was portrayed as anti-Russian, implying that only Gunba could guarantee the continuation of Russian support. In the second, Ardzinba was depicted as a proponent of Turkish interests, thereby suggesting that the opposition harbors hostility toward the Armenian community in Abkhazia.

By maintaining control even after the revolution, Ankvab’s supporters were able to utilize the local media’s propaganda apparatus and deploy the standard array of administrative resources in the lead-up to the elections.

However, the Kremlin’s overt intervention in support of Gunba introduced a new variable into an otherwise conventional electoral equation. In addition to supplying Abkhazia with so-called humanitarian gas at a reduced rate, senior Kremlin officials publicly aligned themselves with the candidate representing the Ankvab faction. Simultaneously, Russian media at all levels, along with coordinated bot networks on social media, intensified the black PR campaign against Ardzinba and the opposition with unprecedented intensity. Within this framework, the revocation of Russian citizenship from Mikaa and Kvarchia at the end of January functioned as a broader signal of warning to the entire Abkhazian populace.

IMPLICATIONS: The Ankvab faction secured electoral victory shortly before the plebiscite through the implementation of several active measures. At the last moment, it blocked the establishment of a polling station in Turkey, out of concerns that the diaspora electorate there might favor the opposition. Conversely, reports of significant, organized voter fraud surfaced at polling stations in Moscow and Cherkessk. Additionally, allegations emerged that Abkhaz authorities were distributing driver’s licenses in exchange for votes cast in favor of Gunba.

However, none of these measures alone guaranteed a seamless victory. The decisive factor was a targeted campaign directed at the Armenian minority, bolstered by substantial support from Russian media and the influential Armenian diaspora based in Sochi. For the first time, a majority of this demographic explicitly endorsed a single candidate—Gunba. Given that ethnic Armenians constitute approximately 17 percent of the population, according to local expert Said Gezerdava, their unified support proved pivotal in enabling the Ankvab faction to retain political control.

Despite achieving a lead of over 13 percent against the opposition candidate, the position of the Ankvab faction remains precarious, particularly considering probable expectations from Moscow. A victory by the Khajimba faction would have brought minimal change for Russia regarding Abkhazia, as one pro-Russian bloc would have merely supplanted another. The intensity with which the Kremlin committed to overtly supporting Gunba—even at the expense of discrediting the opposition and estranging segments of the local populace—indicates that it anticipates reciprocal concessions.

Moscow’s demands are well known. The Kremlin outlined them in the so-called protocol of August 19, calling on Sukhumi to lift restrictions preventing Russian citizens from purchasing real estate in Abkhazia and to adopt a commercial pricing model for electricity supply. An additional, longstanding demand includes the privatization of Abkhazia’s energy sector in favor of Russian enterprises.

In such a scenario, the outcome of the presidential election would merely represent a return to the political deadlock of summer 2024, which culminated in Bzhania’s downfall only a few months later. Given this reset, it is unreasonable to expect that identical measures, implemented under the same conditions, will yield a different result.

Therefore, if Russia and the de facto administration under Gunba aim to produce a different outcome, they will be compelled to fundamentally alter either the basic conditions or their approach.

Altering the terms in this context effectively entails changing public opinion within Abkhazian society regarding the agreements, which are widely perceived as posing a threat to the survival of the Abkhazian nation. A more conciliatory final version of the agreement, accompanied by a comprehensive and persuasive information campaign, could potentially lessen societal resistance. However, this would necessitate significant concessions from oligarchic groups in Russia closely affiliated with the Kremlin. A shift in approach would likely involve heightened repression, relying on coercion and intimidation to impose compliance amid sustained and widespread local opposition.

Events following Gunba’s electoral victory quickly revealed that the Kremlin is amenable to this scenario. On March 7, prominent Abkhazian journalist Inal Khashig was added to Russia’s list of foreign agents. That Khashig’s case was not an isolated incident, but indicative of a broader trend became evident two weeks later, when two other well-known journalists, Izida Chania and Nizifa Arshba, were similarly designated as foreign agents.

CONCLUSION: For Russia, the 2025 Abkhazian presidential election was less about preserving regional influence and more about securing the passage of a widely unpopular investment agreement. Two key factors support this interpretation: the unprecedented extent to which the Kremlin committed its support to Gunba, despite the fact that an Ardzinba victory posed no real threat to its position; and the revocation of citizenship from Kvarchia and Mikaa—not for their early endorsement of Ardzinba, but for their involvement in the events of November 2024.

Gunba’s victory, secured with Russian support, is likely to result in three key developments: increased direct control by Moscow over the region (with both Bzhania and Ankvab reportedly being gradually sidelined from power, according to Gezerdava); the advancement of Moscow’s interests through the use of repressive measures; and heightened tensions between ethnic Abkhazians and Armenians.

Drawing on the experience of recent years, it is reasonable to expect that local resistance to Russia’s unpopular demands will persist. However, the effectiveness of this resistance will largely depend on the extent to which the new repressive strategy impacts local elites, journalists, and activists. A key early indicator of future developments will be whether self-censorship emerges among local journalists following the designation of three of the most prominent media figures as foreign agents.

AUTHOR BIO: Tomáš Baranec is the Founder and Executive Director of the Centre for Black Sea Studies as well as a Research Fellow and Head of the Caucasus Program of the Slovak think tank Strategic Analysis. He worked as a field researcher on the Georgian-Ossetian ABL. Tomas studied Balkan, Central European and Eurasian Studies at Charles University in Prague. 

By Emil Avdaliani

Since Donald Trump’s return to office, Washington has initiated high-level negotiations with Moscow aimed at ending the conflict in Ukraine. Although the outcome of these discussions remains uncertain, it is increasingly apparent that the U.S. and Russia are moving toward finding common ground on their most contentious disputes. However, U.S. attempts to establish a lasting rapprochement with Russia will likely produce negative implications for Ukraine, undermining its sovereignty, and potentially impacting other borderland areas, notably the South Caucasus, where Russia challenges Western influence.

Photo source: NASA.

BACKGROUND: Each of the three South Caucasus countries—Armenia, Azerbaijan, and Georgia—has articulated distinct expectations regarding Trump's presidency. The Biden administration lacked a clear strategic vision for the South Caucasus, with Washington frequently oscillating between emphasizing human rights and democracy promotion (as exemplified by Georgia), and pursuing strategic calculations, such as swiftly signing a strategic partnership with Armenia to deepen the divide between Yerevan and Moscow. Washington's approach towards Azerbaijan similarly blended democratizing objectives with strategic considerations.

Under Biden’s administration, Georgia’s and Azerbaijan’s relations with the U.S. deteriorated, whereas Armenia, aiming to reduce its excessive reliance on Russia, benefited from Washington's policies between 2021 and 2024, culminating in the signing of a strategic partnership agreement in January. Consequently, all three states anticipate enhanced engagement from the Trump administration, with Azerbaijan and Georgia particularly expecting a significant shift toward greater transactionalism and realism in bilateral foreign relations.

Both Tbilisi and Baku have anticipated that under Trump their relations with the U.S. would improve. For example, Tbilisi supported the U.S.-backed UN resolution on Ukraine that diluted Russia’s responsibility for initiating the conflict. Similarly, Azerbaijani President Ilham Aliyev indicated in a statement that “…when President Trump led the U.S., our relationship developed very successfully—unlike the past four years, during which it significantly deteriorated owing to the Biden administration’s unfair and unjust stance toward Azerbaijan.”

IMPLICATIONS: A potential major agreement between the U.S. and Russia regarding Ukraine would likely affect the South Caucasus countries differently; however, the overall outcome may well be characterized by an expansion of Russian influence across the region.

Throughout Russia’s war in Ukraine, Moscow has faced significant challenges in maintaining its influence over the South Caucasus. Other powers, including China, Iran, Turkey, the Arab Gulf states, and even India, have expanded their presence in the region through substantial investments, trade agreements, and enhanced cooperation in security and energy sectors. This development has resulted in a period of regional multipolarity, where no single actor has been able to establish exclusive dominance. Consequently, Armenia, Azerbaijan, and Georgia have increasingly diversified their foreign policies, embracing a multi-vector approach beyond traditional partnerships.

Tbilisi and Yerevan have been notably successful in pursuing this strategy. For example, the Georgian government, while publicly maintaining its aspiration to join the EU, has concurrently signed a strategic partnership with China, enhanced cooperation with the Gulf Cooperation Council, and developed stable relations with Russia, despite the latter’s ongoing occupation of two Georgian regions. Armenia, aiming to reduce its reliance on Moscow, has sought increased military cooperation with India, explored the possible normalization of relations with Turkey, and, most significantly, announced its intention to seek EU membership.

Nevertheless, with a potential agreement on Ukraine, Russia would once again have the capacity to redirect resources into the South Caucasus to restore its weakened position. The Trump administration is unlikely to prioritize the smaller South Caucasus states, instead viewing the region primarily as within Russia’s sphere of influence. This approach aligns with Washington’s broader foreign policy objective of shifting its strategic focus toward the Indo-Pacific. Additionally, the U.S. lacks significant investments in the South Caucasus and shows limited interest in developing the Middle Corridor connecting Azerbaijan and Georgia to Central Asia.

More significantly, the South Caucasus states themselves increasingly perceive momentum shifting in the Kremlin’s favor and appear unlikely to oppose this declining trend. A potential agreement on Ukraine, which would solidify Russian gains, is expected to accelerate this shift toward Moscow. Indeed, Georgia and Azerbaijan have already anticipated such developments; what initially emerged as a policy of appeasement following Russia's invasion of Ukraine in 2022 has since evolved into a understanding that the balance of power in the region favors Russia. This shift partially reflects necessity, as Western powers were—and remain—unlikely to provide meaningful military assistance, while Russia continues to pose a credible threat despite its engagement in Ukraine.

Moreover, Georgia's approach reflects a deliberate foreign policy strategy implemented by the ruling Georgian Dream (GD) party, in power since 2012, aimed at developing a multi-vector diplomatic stance. Integral to this approach is the recognition of Russia's regional influence and a corresponding effort to maintain stable relations with Moscow. Although Georgia and Russia lack formal diplomatic relations, their bilateral economic ties have expanded considerably. Additionally, Tbilisi has subtly indicated declining enthusiasm for NATO and EU membership, both particularly contentious issues from Moscow's perspective.

In contrast, Baku possesses a considerably broader set of tools to counterbalance Russian influence, occasionally resulting in bilateral tensions, as exemplified by the recent incident involving a downed Azerbaijani aircraft. Nevertheless, geographical proximity, significant economic linkages, and Russia's formidable military presence will ultimately compel Azerbaijan toward reconciliation with Moscow. Indeed, signs of rapprochement are already evident through subtle gestures, such as the unveiling of a statue in Moscow honoring Heydar Aliyev, the father of current Azerbaijani President Ilham Aliyev, and Baku's hosting of the 22nd session of the bilateral inter-parliamentary commission.

Even in the case of Armenia, which signed a strategic partnership agreement with the U.S. shortly before Biden left office, it remains uncertain whether Washington will seriously commit to its implementation. Previous experiences are particularly instructive: between 2008 and 2024, Georgia maintained a strategic partnership agreement with the U.S., covering issues such as preparation for a free trade agreement, visa liberalization, and enhanced military and security collaboration. However, few tangible outcomes materialized, suggesting a similar pattern could emerge for Armenia. Early indicators are indeed discouraging, as evidenced by the reported postponement of a planned U.S. delegation visit to Yerevan. Additionally, Armenia's prospects for EU membership remain remote, given Georgia's ongoing difficulties with Brussels and internal disagreements within the EU regarding enlargement. Consequently, these factors will likely prompt Armenia to moderate its stance toward Russia, returning to full-scale cooperation even while maintaining certain aspects of its multi-vector foreign policy.

CONCLUSION: In the context of a potential rapprochement between Russia and the U.S. over Ukraine, the South Caucasus emerges as particularly vulnerable. Moscow would gain an opportunity to reassert its regional influence by filling the strategic vacuum left by an increasingly disengaged Washington. Additionally, Armenia, Azerbaijan, and Georgia are likely to recalibrate their foreign policies to align more closely with Russia. Although this trend has manifested in various forms over recent years, it is expected to accelerate significantly should Moscow successfully conclude its engagement in Ukraine.

AUTHOR BIO: Emil Avdaliani is a professor of international relations at the European University in Tbilisi, Georgia, and a scholar of Silk Roads. He can be reached on Twitter/X at @emilavdaliani.

By Sergey Sukhankin

Weakened by economic sanctions and bearing significant consequences for their geopolitical endeavors, Iran and Russia have solidified their post-2022 partnership, elevating it to the status of a comprehensive strategic partnership. The imperative to secure their borders and mitigate the impact of economic sanctions positions the South Caucasus and certain areas of the Caspian Sea as the focal points for deepening cooperation between Tehran and Moscow. Among the smaller regional actors, Azerbaijan is likely a primary beneficiary due to its geographically strategic location. Simultaneously, Russia may be inclined to reclaim some of its regional influence. This prospect is both precarious and potentially destabilizing for the region, as Russia’s historical engagement in the area has been characterized by conflict and disruptive interventions.

BACKGROUND: On January 17, Russia and Iran signed a Treaty on Comprehensive Strategic Partnership, marking the first high-level agreement between the two nations since 2001. Although historically characterized by tension and complexity, bilateral relations have undergone a significant transformation after 2022, in light of Russia’s war of aggression against Ukraine and its resulting international isolation. This period has seen a rapid elevation of Russian-Iranian ties, with some experts even suggesting the formation of an Entente.

The primary impetus behind this strengthening of relations lies in the challenges faced by both states. Politically isolated and subjected to extensive sanctions, Russia has become embroiled in a protracted and costly war. With limited strategic alternatives, Russian leadership has increasingly aligned itself with authoritarian regimes and internationally marginalized states—such as North Korea and Belarus—in an effort to mitigate the effects of its diplomatic and economic isolation and to secure critical military support.

Iran’s situation is arguably even more precarious. In addition to ongoing economic struggles and internal social unrest, Iran experienced a series of significant geopolitical setbacks between 2023 and 2024. At the end of 2024, the Tehran-backed regime of Bashar al-Assad was overthrown by the Turkish-supported opposition. Furthermore, the Israel-Hamas war inflicted severe damage on another of Iran’s key Middle Eastern proxies. These developments have reportedly exacerbated internal divisions within the Iranian political establishment, leading segments of Iran’s military-political elite to adopt a more critical stance toward Moscow.

Despite these disagreements, Russia and Iran remain compelled to act as close partners—if not outright allies—in the domains of defense and security, and perhaps even more so in trade and economic cooperation, as both seek to mitigate the detrimental effects of international sanctions. In this context, collaboration in the Caspian Sea region—particularly in specific areas of the South Caucasus—is expected to play a pivotal role in reinforcing Russo-Iranian ties.

IMPLICATIONS:  The strengthening ties between Russia and Iran are expected to have a significant impact on the geo-economic landscape. As emphasized by Russian President Vladimir Putin, "the essence of the Treaty [between Russia and Iran] is about creating additional conditions [...] for the development of trade and economic ties. We need less bureaucracy and more action." This objective is explicitly outlined in Clause 13 of the Treaty.

At present, economic and trade cooperation between Tehran and Moscow remains limited. In 2024, the reported trade volume between the two countries did not exceed US$ 4 billion. However, this may change in the future, primarily due to Russia’s evolving geopolitical strategy. Given its significantly weakened global position after 2022, Moscow increasingly views Iran as its “window to Asia”—a crucial conduit for circumventing Western-imposed economic sanctions and mitigating their severe economic impact.

In pursuit of this objective, Russo-Iranian cooperation is expected to strengthen in two key domains. First, there will likely be an intensification of trade along the International North-South Transport Corridor (INSTC)—a 7,200-kilometer multimodal freight route encompassing ship, rail, and road networks that connects India, Iran, Azerbaijan, Russia, and Central Asia. The INSTC is increasingly regarded as a viable alternative to traditional maritime trade routes such as the Suez Canal and the Bosphorus Strait.

Within this framework, Azerbaijan stands to be a primary beneficiary, as its strategic geographic position between Iran and Russia will elevate its role as a crucial transportation hub, significantly enhancing its economic and geopolitical importance within the region.

Azerbaijan’s role could be further reinforced if the two countries proceed with the construction of a natural gas pipeline through Azerbaijani territory. Initially agreed upon in 2022 and reaffirmed in late 2024, this project represents a significant expansion of regional energy cooperation. In his most recent statement on January 17, 2025, Russian President Vladimir Putin announced that the proposed pipeline would have a capacity of 55 billion cubic meters (bcm) of natural gas—equivalent to the Nord Stream 1 capacity—and could potentially be extended to Pakistan and even India.

However, some Russian experts question the economic viability of the project, arguing that its feasibility remains uncertain. They suggest that the pipeline could serve as a political instrument for Russia to exert pressure on China, possibly as a means of persuading Beijing to strengthen its energy ties with Moscow. Nevertheless, if both the International North-South Transport Corridor (INSTC) and the gas pipeline are successfully implemented, the South Caucasus—and Azerbaijan in particular—will see a marked increase in geopolitical and economic significance as a critical Eurasian transportation and energy corridor.

Although defense and security are not the primary focus of the Russo-Iranian Treaty, as explicitly stated by Iran’s Ambassador to Russia, Kazem Jalali, certain shifts in the regional security landscape are nonetheless anticipated.

One key factor influencing these dynamics is the aftermath of the Second Nagorno-Karabakh War (2020), resulting in an undisputed victory for Azerbaijan which not only received strong backing from Turkey but also enjoyed tacit Russian support. This outcome significantly weakened Iran’s position in the South Caucasus, while simultaneously bolstering its strategic adversary, Turkey. In addition to consolidating its influence over Azerbaijan, Turkey also strengthened economic, political, and energy ties with both Azerbaijan and Georgia, marking a substantial geopolitical success for Ankara and further diminishing Tehran’s leverage in the region.

However, in the post-2022 period, the geopolitical landscape of the South Caucasus has undergone further transformations, creating additional common ground for Russo-Iranian cooperation. The increasing prominence of Turkey, which directly contradicts the strategic interests of both Russia and Iran, has been a key factor in this shift.

Simultaneously, Russia’s influence over both Armenia and Azerbaijan has weakened. Armenia’s signing of a Charter on Strategic Partnership with the U.S. implies a diversification of its geopolitical partnerships, potentially reducing Moscow’s leverage in Yerevan. 

Moreover, by the end of 2024, anti-Russian sentiment became more pronounced in Abkhazia, a breakaway region that has been heavily reliant on Moscow. These developments have raised alarms among Russian analysts, some of whom have warned of Russia’s "approaching loss of the South Caucasus." While such statements may be premature and alarmist, they nonetheless reflect Moscow’s growing concerns regarding its long-term strategic foothold in the region.

Iran and Russia appear to prioritize a shared geopolitical objective: the de-Westernization of the South Caucasus and the prevention of strengthened U.S. regional influence. This strategic alignment is explicitly reflected in Clause 12 of the Russo-Iranian Treaty, which underscores both parties’ commitment to “strengthening peace and security in the Caspian Sea region, Central Asia, the South Caucasus, and the Middle East [to] prevent destabilizing interference by third parties” in these areas.

In this context, some experts suggest that Iran’s increased diplomatic involvement in regional affairs is likely. One potential avenue for such engagement is the "3+3" format, which includes Armenia, Iran, Russia, Georgia, Turkey, and Azerbaijan. Initially proposed by Ankara and Baku, the framework has since received active support from Moscow as a means to reduce the risk of Western powers gaining a foothold in the South Caucasus. Iran’s participation in this diplomatic initiative could further consolidate its regional influence while aligning with Russia’s broader strategic objectives.

CONCLUSIONS:  The expansion of Russo-Iranian ties is expected to have a notable impact on the South Caucasus and parts of the Caspian Sea region. Azerbaijan's geo-economic and geopolitical significance is likely to increase further, particularly if economic sanctions against Russia remain in place, compelling Moscow to deepen its reliance on alternative regional partners.

Russia, whose regional standing is in decline, might unexpectedly benefit from Iran’s strategic weakening. Given its growing security concerns, Tehran may become more inclined to collaborate with Moscow in the South Caucasus and the Caspian Sea region to safeguard its strategic depth and border security.

From a broader strategic perspective, a greater Russian presence in the region should be viewed as a negative development. Given the region’s complexity and history of conflict, Russia’s potential increased involvement—if it materializes—poses a significant risk. Historically, Moscow’s regional policies have regularly contributed to greater instability rather than fostering long-term security, raising concerns about the potential destabilizing consequences of renewed Russian engagement in the South Caucasus and Caspian Sea region.

AUTHOR BIO: Dr. Sergey Sukhankin is a Senior Fellow at the Jamestown Foundation and the Saratoga Foundation (both Washington DC) and a Fellow at the North American and Arctic Defence and Security Network (Canada). He teaches international business at MacEwan School of Business (Edmonton, Canada). Currently he is a postdoctoral fellow at the Canadian Maritime Security Network (CMSN).

By Stephen Blank

On November 28, 2024, the Georgian Dream (GD) government announced the termination of Georgian efforts to join the EU. This decision, coming on top of a stolen election and mounting popular disaffection, triggered continuing large-scale demonstrations against the regime despite severe governmental repression. The unfolding Georgian scenario involves continuous information warfare, ongoing efforts at state capture, stolen elections, and creeping annexation through the process of “borderization.” This is a familiar pattern of the process of Russian state capture across Eastern Europe in the Balkans and Ukraine. Georgia is in a major political crisis with considerable international repercussions, which should motivate increased attention and engagement from the EU as well as the U.S.

BACKGROUND: The current Georgian crisis represents a conscious emulation of the 2013-14 Maidan in Ukraine where the population revolted against the Moscow-backed Yanukovych government’s rejection of trade association with the EU, massive corruption, attempts to subordinate Ukraine to Russia, and anti-democratic tendencies. Also mirroring Ukraine, Georgia’s government has employed massive repression, but to no avail. While the Georgian protests evoke the Ukrainian demonstrations of 2013-14, the conditions that gave rise to them embody the Russian pattern of state capture. This pattern of attempted elite and state capture comprises constant information warfare, the use of Russian energy as a political weapon of subversion, threatened or real territorial annexations, and stolen elections. What has occurred in Georgia to lead up to this explosion of popular discontent repeats developments in Moldova, Romania, Bulgaria, and to some degree Serbia. 

The program of the GD party, e.g. the attempt to impose, as in Russia, a “Foreign Agents Law” intended to suffocate both domestic opposition and its foreign supporters, consciously emulates the pattern of Russian imperialism. Since Georgia’s defeat in its war against Russia in 2008, Moscow has worked assiduously to discredit pro-Western forces and gradually subvert Georgia’s territorial integrity and sovereignty. Having utilized the same strategy as in Ukraine, Moscow has helped engulf Georgia in a perpetual crisis where its pro-Western forces depend on Western support while GD clearly enjoys Russian support and patronage while utilizing Moscow’s tactics.

Since its independence in 1991, Georgia’s own unresolved political and ethnic cleavages have clearly given Moscow numerous opportunities for suborning and subverting Georgian efforts at democracy and integration with the West, even though most Georgians prefer those pro-Western outcomes. As in other targets of Russian policy, corruption is endemic, exemplified by the head of GD, Bidzina Invanishvili, who is under U.S. sanctions. Transparency International Georgia has identified 95 companies controlled by Ivanishvili that are registered in the notorious tax havens British Virgin Islands and the Cayman Islands. This examination of Georgian politics also highlighted pervasive violence, bombings, attempted assassinations, and now massive police repression against demonstrators. 

This violence reflects the long-running polarization of Georgian politics that has made governing this unruly state difficult and thus enfeebled its efforts to defend itself against Russian subversion and intervention.

Another major problem has been Georgia’s inability to deal with demands by its South Ossetian and Abkhaz populations for more autonomy if not independence. The failure to reach a settlement, admittedly due to considerable Russian meddling, provided a pretext for the war of 2008 that Georgia lost and for the subsequent creation of Russian army, navy, and air force bases in these territories. 

Worse yet, governed by Russian satraps, mainly from the Silovye Struktury (Power or Force Structures) and occupied by Russian troops, these territories have become staging grounds for Moscow’s “borderization” policy that consists of regular encroachments into Georgian territory that is then annexed to these regions. Their ultimate destiny as seen from Moscow is clearly incorporation into the Russian Federation.

IMPLICATIONS:  Hitherto the West has been overly passive regarding Georgia even though it is ultimately Georgians themselves who must overcome the causes of their long-running crisis. Given Moscow’s loss of influence in both Armenia and Azerbaijan it is likely to redouble its efforts through GD to convert Georgia into a pliable, quiescent satellite that emulates Russian political processes and laws. 

From the standpoint of its values, the EU should intensify its activity with stiffer sanctions against the leaders of GD, issue stronger and more persistent denunciations of what is happening in Georgia and keep the issues of repression and Georgian aspirations before Western publics. By doing so the West and pro-democracy organizations can then increase pressure on both GD and its patrons in Moscow. Moreover, it is also necessary for U.S. diplomacy to weigh in on the side of Georgian democracy in unison with the EU and other organizations so that Georgia can begin to resolve its pressing political and economic issues.

Admittedly the Trump Administration is unlikely to be swayed by invocations of democratic values and solidarity although earlier U.S. administrations have previously promised this to Georgia. However, multiple important strategic considerations growing out of Georgia’s strategic location in the Caucasus and on the eastern shores of the Black Sea could influence Washington to become involved. Since the framework for the Trump Administration’s foreign policy will likely be great power competition and within it the U.S. search for new or improved foreign trade markets, Georgia’s strategic importance can manifest itself to Washington.

If the West continues to adopt the passive position of the last 15 years, Georgia will be lost to Russia, and its economy will be turned to a Russo-Chinese orientation rather than a Western one. That orientation has already had profound consequences for U.S. firms. In particular, U.S. firms who bid on the giant construction project for a projected Georgian port at Anaklia on the Black Sea lost out to a Chinese-led consortium, not least due to the political hegemony of GD. 

However, the stakes involved in the port at Anaklia and other comparable projects transcend Georgia. This port, along with other investments in infrastructure are vital for bringing Azerbaijani and ultimately Central Asian energy to Europe and expanding European trade to both the Caucasus and Central Asia. Central Asia also has considerable potential for exporting green energy and, even more importantly, has large quantities of rare earth minerals. To the degree that Georgia is an independent actor whose infrastructure is integrated with that of the other Black Sea littoral states, Central Asian states will then enjoy much greater opportunities for trade, investment, connectivity, and linkages with the global economy. 

If Georgia falls prey to Moscow’s agenda, then its economy and politics will be reoriented to Russia and China, denying Central Asian states much of the opportunities they seek to integrate with the global economy. Therefore, it is no exaggeration to state that Georgia’s freedom is the key to and precondition for both the Caucasus’ and Central Asia’s full emancipation from the remaining imperial ambitions of both Russia and China.

CONCLUSIONS:  Georgia is clearly in a major political crisis not unlike that of Ukraine in early 2014. As in Ukraine, Moscow seeks to impose a Russian-type regime upon a recalcitrant population and once again triggered a political explosion with considerable international repercussions. Foreign support is desperately needed in this case as well, although finally Georgians must resolve their political problems themselves. This Western support obviously is bound up with Western values to which most Georgians subscribe.

This is not solely an issue pertaining to the fight for democratic governance in Georgia. Russia has long looked askance at Armenia’s effort to democratize and now that it is breaking free of Russia, to the degree that Russia can suborn Georgian democracy it will certainly seek to undermine Armenia’s own experiment in democratization. It will also continue to seek inroads into Azerbaijani politics even though that country’s government is not democratic. As the war in Ukraine and thirty years of previous Russian policy shows, empire is in Moscow’s genetic code, and nothing is more antithetical to empire than democracy. 

Major strategic issues, i.e. the future destiny of both the Caucasus and Central Asia and of peace in Eurasia are at stake. Russia’s efforts to restore its empire are utterly incompatible with peace and any concept of international order not only in Ukraine and Europe but also in the Caucasus and Central Asia. The argument therefore needs to be made both to Washington and European capitals that dedicated support for Georgia’s sovereignty and democracy are necessary not only to uphold common Western values but also the peace and security of the Caucasus and Central Asia, as well as countries beyond the Black Sea.

AUTHOR BIO: Stephen Blank is a Senior Fellow at the Foreign Policy Research Institute, www.fpri.org.