Page 63 - bne_Magazine_March_2018

bne March 2018
Opinion 63
COMMENT:
Georgia hopes to use China's One Belt, One Road project to break its dependence on Russia
Emil Avdaliani in Tblisi
Georgia has historically been at the edge of empires.
This has been both an asset and a hindrance to the development of the country: an asset because Georgia’s difficult geography and a distant location from global
centres made it hard for major powers to invade and keep the country permanently under one’s rule; a hindrance because Georgia’s geography requires major investments to override its mountains, gorges, rivers etc.
This geographic paradigm has been well in play in shaping Georgia’s geopolitical position since the breakup of the Soviet Union in 1991. Ever since, Georgia has been playing a rebal- ancing game through turning to other regional powers to counter the resurgent Russia. Turkey, Azerbaijan, partly Iran and bigger players such as the EU and the US are the counter- weights, which have their own share of interest in the South Caucasus. However, over the past several years yet another power – China with its still evolving Belt and Road (BRI) initia- tive – has been slowly emerging in the South Caucasus.
Despite the fact that China is rapidly increasing its economic presence in Georgia, which ultimately could turn into bigger Chinese security involvement, Beijing’s investment and interests in the region still lags behind what China has been doing in the Central Asia, Pakistan or other parts the BRI initiative is encompassing.
Another interesting aspect to the Chinese influence is Georgia’s balancing act whereby Tbilisi wants to use growing Chinese influence to further balance Moscow’s military power. However here too not everything is that clear-cut as Moscow and Beijing could also cooperate in the South Caucasus as they currently do in other regions, for example Central Asia.
China has close trade contacts with all the South Caucasus countries and has invested extensively into the region. Among those relationships the Georgian-Chinese cooperation does indeed stand out but is not a particularly recent phenomenon. After the collapse of the Soviet Union, Chinese immigrants to Georgia were driven by the Chinese state-owned investment activities in the region. In the early 2000s, the majority of the migrants were involved in corner shop and market vendors’ businesses, as well as the restaurant businesses, whereas after
2010, construction workers became the dominant portion of the Chinese migrants.
For Georgia China is now its third-largest trade partner (first two places – Turkey and Azerbaijan; fourth place – Russia). Actu- ally the trade between the two countries significantly increased over the past 10 years. If in 2002, bilateral trade was just about $10mn, in 2014-2015 it reached $823mn. Moreover, in 2017 China and Georgia finally signed a free trade agreement during
“Georgia has been playing
a rebalancing game through turning to other regional powers to counter the resurgent Russia”
the visit of the Georgian delegation to China in May. The country also hopes that its position at the Black Sea with several ports such as Batumi, Poti and Anaklia will make it a logistics hub for the entire region and particularly for China’s BO initiative.
China only recently set its sights on the South Caucasus’
transit potential and valuable infrastructure. This interest is large- ly conditioned by China’s One Belt, One Road (OBOR) initiative, which is a multi-billion-dollar project, according to which the country’s east will be reconnected (as in ancient times) to Europe through the shortest distance, whether of southern Russian, Cen- tral Asia, or the South Caucasus and the Black Sea (although that is not the only corridor the Chinese are working on).
As said above, Georgia can boast of its Black Sea ports, east- west highway, which essentially connects Azerbaijan and the Black Sea coast, and existing and upcoming railway projects (Baku-Tbilisi-Kars). Indeed, from the Chinese perspective the two most valuable projects Beijing is eyeing in the South Caucasus are related to Georgia:
1. The upcoming opening of the Baku-Tbilisi-Kars railroad, which will allow 45% faster delivery of containers and freight and passengers from Asia to Europe;
www.bne.eu