The Drivers of Georgia’s Pragmatism Towards Russia

Georgia’s approach to Russia resembles a ‘geopolitical anomaly’: despite an intractable territorial dispute, frozen diplomatic ties, and enduring aspirations to integrate with NATO and the EU, Tbilisi engages in a close economic cooperation with Moscow. This policy is driven by the ruling party, Georgian Dream’s efforts to craft a foreign policy posture that combines Western institutional integration with a quasi-partnership with Moscow. This pivot highlights a contrast between the Georgian people, who have been protesting in support of European values, and the state apparatus, whose pragmatic turn has brought Tbilisi closer to Moscow.

Georgia’s approach to Russia resembles a ‘geopolitical anomaly’: despite an intractable territorial dispute, frozen diplomatic ties, and enduring aspirations to integrate with NATO and the EU, Tbilisi engages in a close economic cooperation with Moscow.

From European Dream to Calculated Pragmatism

Georgia’s strategic posture, from being overtly pro-European to forging closer ties with the regional hegemon, has undergone several phases. The Shevardnadze era was marked by a cautious effort by the former Soviet state to move toward a Western orientation, laying the groundwork for integration. Mikheil Saakashvili’s tenure represented a decisive shift away from the delicate balancing of earlier years. The 2003 Rose Revolution marked an ideological shift, firmly establishing Georgia as a pro-Western state. A critical tipping point came at the April 2008 Bucharest summit, when it was announced that Georgia would eventually join NATO. This proved to be an absolute red line for Moscow, paving the way for the five-day war in August 2008, which fundamentally altered the security architecture of the Caucasus. The war exposed the limits of Western guarantees: political support does not necessarily translate into military backing. With that, a new status quo emerged in Russia-Georgia relations. Russia’s formal recognition of Abkhazia and South Ossetia as independent states created a persistent security challenge for Georgia. Post 2008, Saakashvili’s government doubled down on Western integration, joining the EU’s Eastern Partnership programme. Relations with Moscow remained fraught, hostility persisted, and trade embargoes and a diplomatic cutoff were imposed. 

The great pivot came in 2012 when the Georgian Dream coalition, founded by Bidzina Ivanishvili, came into power. The party initiated a gradual and complex foreign policy shift, pursuing economic and cultural normalisation with Russia while maintaining a formal commitment to the Euro-Atlantic alliance. However, as the Georgian Dream (GD) consolidated its power and the region's geopolitical complexities evolved over the past five years, sustaining this dual-track foreign policy has become increasingly challenging. The official narrative for this cautious pragmatism toward Moscow was the need to prevent a repeat of 2008. But this narrative of strategic hedging has begun to erode in recent years. The trauma of 2008 was presented to the Georgian public as a pretext for a necessary strategic adjustment in the interest of state survival.

Engagement with Moscow serves not only to avoid war and maintain diplomatic equilibrium, but also to advance Georgian Dream’s strategic objective: retaining power and consolidating domestic control.

In recent years, GD has repeatedly accused the EU and the US of attempting to drag Georgia into the Russia-Ukraine war to open a “second front” against Moscow, normalising the use of terms such as “deep state” and “global war party” to discredit Western institutions. By blaming the “global war party” for “forcing a confrontation” between Georgia and Russia, GD portrays itself as the principal guarantor of peace. The government’s crackdown has targeted pro-European protesters, and restrictive measures such as the ‘foreign agent law’ have been introduced to cut off NGOs’ funding.

In this context, engagement with Moscow serves not only to avoid war and maintain diplomatic equilibrium, but also to advance Georgian Dream’s strategic objective: retaining power and consolidating domestic control. In contrast, relations with the EU have reached a political deadlock. While Georgia remains strategically relevant to Brussels and continues to be part of the Eastern Partnership framework, there is growing unease in Europe over the country’s “democratic regression.”

The Economic Turn amid Territorial Reality 

The Georgian government portrays financial engagement with Moscow as essential for prosperity. Russia ranks among Georgia’s top three trade partners. Bilateral trade volume climbed to US$2.69 billion in 2025, an increase of 6.3 percent from the previous year. This economic surge has been driven by Georgia’s vast imports of Russian gas and oil; simultaneously, its exports of wine and agricultural products to the Russian market have expanded, although Georgia runs a large trade deficit of US$1.19 billion. This economic pivot operates in the shadow of extensive Western sanctions against Russia, which Tbilisi has refused to join, citing potential damage to the Georgian economy and the interests of its citizens.

Since 2022, Georgia has also emerged as a crucial transit hub for supplies to Russia. Tens of thousands of new Russian companies have been registered in Georgia, importing a range of products, machinery, and vehicles. The influx of Russian capital, tourism, and transit revenue has stimulated the Georgian economy. Moreover, following the abolition of the visa regime and the restoration of direct flights in 2023, people-to-people ties and tourism between the two countries have further expanded.

Although Georgia’s close economic cooperation with Russia has raised red flags in Brussels, Georgian authorities insist that they are meticulously adhering to all applicable sanctions. After the EU warned that the Kulevi Oil Terminal could be included in its 20th sanctions package against Russia, Tbilisi reportedly pledged that blacklisted Russian vessels would neither be allowed to enter the port nor receive services there. This assurance prompted Brussels to reassess the situation and refrain from imposing restrictions on the Georgian port. 

Geographically, Georgia sits at the intersection of several major transport corridors. The geopolitical fault line created by the war in Ukraine has redirected supply chains away from Russia and toward the ‘Middle Corridor’ (the Trans-Caspian International Transport Route), which provides access for Chinese and Central Asian cargo to European markets while bypassing Russian territory. As a result, Tbilisi occupies a pivotal position along this high-stakes transit route, emerging as an indispensable logistics hub for Europe.

Despite the inflow of Russian capital into Georgia and booming bilateral trade, Moscow’s recognition of Abkhazia and South Ossetia as independent states — which together constitute around 20 percent of Georgia’s internationally recognised territory — remains a red line at the negotiation table.

For Russia, Georgia also serves an important logistical function, offering a land corridor for truck and rail freight to Armenia and Turkey. The Verkhny Lars-Dariali border crossing plays a critical role in road connectivity between the two countries, as it is the only operational checkpoint along their land border. Despite frequent weather-related disruptions and long queues, a record 4.8 million tonnes of cargo transited through the checkpoint in 2024, marking the highest volume among all vehicle border crossings in Russia. In a further bid to upgrade bilateral economic ties, Moscow is considering incorporating the route through the Verkhny Lars checkpoint into the International North-South Transport Corridor. Beyond this, Russia is exploring additional alternatives, such as reviving the Abkhazian railway, which would directly connect it to the South Caucasus and potentially unblock regional transport routes.

Yet this is precisely where the territorial issue comes to the fore: for Tbilisi, any transit corridors passing through Abkhazia and South Ossetia are a non-starter, as acknowledging customs procedures with these regions would indirectly imply recognition of their sovereignty. Despite the inflow of Russian capital into Georgia and booming bilateral trade, Moscow’s recognition of Abkhazia and South Ossetia as independent states — which together constitute around 20 percent of Georgia’s internationally recognised territory — remains a red line at the negotiation table. Tbilisi regularly raises concerns about “the grave security, humanitarian and human rights situation” in these regions, “stemming from Russian occupation,” and expresses alarm over the “illegal operations” involving aerial, railway, and maritime passenger traffic between Russia and these territories. Conversely, Moscow views the independence of Abkhazia and South Ossetia as a non-negotiable reality, urging Georgia to reach “a legally binding agreement” with both regions on the non-use of force.

In this context, Georgia’s engagement with Russia remains in a state of paradoxical equilibrium. A return to formal diplomatic normalcy appears unattainable, as the status of the breakaway regions imposes a hard ceiling on political cooperation. This stalemate, however, has not prevented Tbilisi from making the most out of economic cooperation with Moscow. Such an approach — where pragmatism and financial considerations outweigh an intractable territorial dispute and the distant prospect of European integration — is likely to persist for the foreseeable future.

Aleksei Zakharov is a Fellow, Russia & Eurasia, with the Strategic Studies Programme at the Observer Research Foundation.

Nitish Kumar is a Research Intern with the Strategic Studies Programme at the Observer Research Foundation.

• International Affairs
• European Union
• Russia and Eurasia
• georgian dream coalition
• rose revolution
• russia georgia bilateral trade
• russia georgia economic cooperation
• russia georgia relations
• russia georgia trade

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