Georgia has traditionally played an important role as a link between the regions of Central Asia and Transcaucasia and Europe. Therefore it is not accidental that Russia designated Tbilisi as an administrative center of Transcaucasia in the years of the Empire as well as in the early Soviet period. There are two main reasons for strategic importance of Georgia. Primarily the favorable geographic location, bordering Russia, Armenia, Azerbaijan and Turkey and having several convenient sea ports. This latter allows Georgia to serve as a transit route for its immediate neighbors as well as landlocked states of Central Asia, eager to get the shortest way for access to Europe. Secondarily, there are political and cultural reasons. Georgia has long been a crossroad of different cultures and ethnic groups. It has long-standing historical record of neutrality in Transcaucasian politics. In order to survive, Georgia had to balance interests of its powerful neighbors. Georgia also maintained neutrality in the present conflict between Armenia and Azerbaijan. Remarkably it has large Armenian and Azeri minorities (estimated respectively at 8 and 9 percents of the whole population) and so far any conflict between them as been avoided.

Today's geo-political games around oil transit route have two great traditional actors: Russia and Turkey. Both of them are very active in pursuing their often conflicting interests. The distinct feature of the situation is an active involvement of Western states whose economic interests are also at stake. Georgia as it was often the case in the past tries to play the very delicate role of trying to accommodate everyone's interests.

If Russia's aspiration for the full control of the oil transportation from Kazakhstan and Azerbaijan to the West were to realize, it would give Moscow a unique opportunity of restoration of most of its political leverage lost with the dissolution of the USSR.

But in order to accomplish it, Russia has to convince the above mentioned states in the economic and political advantages of the Russian route. Economic advantage is far from being obvious as Russia's plans to transport oil via the seaport of Novorossiisk by tankers is justly criticized for its high costs. Besides, Turkey has expressed serious environmental concerns. These concerns apparently have some political motivation but they are also genuine if one takes into account the level off pollution of the Black Sea and the potential dangers for Turkey if proposed quantities of oil were to be transported through its Straits. Other arguments of Moscow have to do with political advantages of Russian routes versus the proposed alternatives. The Iranian route is unacceptable for the Western partners, mostly because of pressure from the United States; the Armenian route seems less and less likely as the prospects of any immediate settlement of Armenian-Azeri conflict mostly faded away.

In Georgia's case, Russian strategists point at its internal instability and high rate of criminal activity. For the sake of the truth, one should note that Russia hugely contributed to the destabilization of Georgia. Its long standing economic and military support for different separatist movements in Georgia as well as different rival fractions between Georgians themselves, was further aggravated by direct Russian military involvement in the Fall of 1993.

Paradoxically, Russia's support for the Abkhazian separatist heavily backfired to R Russia itself. During 1992 and 1993, the Russian army has transferred large amounts of highly sophisticated weapons to Abkhaz and North Caucasian forces. Most of the North Caucasian forces came from Chechnya. Upon victory in Abkhazia, Chechens returned to Chechnya and we are witnessing them using not only skills they acquired in the Abkhazian war, but also Russian weaponry against the Russian army.

As a result, although the purpose of destabilization of Georgia was partly achieved, the chain reaction led to a much wider conflict in the strategic Russian area of Chechnya.

The Chechen war seriously undermined Russia's claim for a politically safe Russian route as the main pipeline passes at the very place of the most intensive military operations. This in its turn suddenly made Georgia to seem the most attractive of all choices. Georgia is politically fully acceptable for the West, and as the Government in Tbilisi conceded to nearly all Russian demands, it made it very difficult for Russia to openly oppose the Georgian route.

The Turkish factor is especially important. Turkey opposes Russia's total domination over oil transportation. At the same time, it has economic motivation of trying to substitute Iraqi oil which it is no longer able to transport because of sanctions.

Besides, there is a possibility that some of Russia's interest can be accommodated. One of the proposed pipeline routes from Kazakhstan would cross the Russian autonomous republic of Dagestan before entering Georgia; however, this plan may be in peril because of the explosive situation in the North Caucasian republic, which is amongst the first candidates of spreading the Caucasian military campaign of Russia.

Georgia has some historic tradition of serving as a route for oil transportation. The Baku-Batumi pipeline was constructed in 1912 and is still in service. At the time of coming into operation, it was the principle means of transportation from Azerbaijan to the outside world.

Presently, some oil industry infrastructure is being restored inside Georgia itself. In the 70s, Georgia produced enough oil to meet its own needs and also exported some of the highest quality oil. Presently, the old sources are being restored. There are also plans to start offshore production in which British Shell is involved. There is also a refinery in Batumi and storage facilities in Batumi and Poti. One should also note that the political situation has become more stable since last year and that criminal activity has undergone a substantial decrease.

The Georgian Parliament has adopted a number of trade and business laws that were draft day US and European lawyers and provide for extremely favorable conditions for outside investors.

There is one handicap left for the Georgian route--this is the mountainous terrain, which increases economic costs of the pipeline construction, but some of the above mentioned factors may make it possible to disregard some costs in favor of broader political and economic advantages.

Caspian Crossroads, Num.1, Winter 1995