On September 17, Georgian Prime Minister Irakli Kobakhidze spoke during a briefing at the government administration, addressing both territorial and economic advances of Russia in Georgia. He claimed that the “Georgian Dream” was the first government under which Russia had neither territorial nor economic advancements in Georgia.
Irakli Kobakhidze: “We are the first government under which Russia had no territorial advances, and we are the first government under which Russia had no economic advances in the country. These are the facts.”
Irakli Kobakhidze’s statements contain manipulative and false information:
- While it is true that since 2012, there has been no formal annexation of Georgian territories by Russia, the process of borderization shows that territorial changes in favor of Russia are still ongoing. Russian forces, in collaboration with the de facto authorities of “South Ossetia” and Abkhazia, are shifting administrative boundaries in a process known as “creeping occupation.” This undermines Georgia’s sovereignty and limits its control over regions near the administrative boundary line.
- Georgia’s economic dependence on Russia, particularly in trade and energy sectors, indicates that Russia retains significant economic influence over Georgia, and this influence has grown in recent years.
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How does borderization occur in Georgia?
While occupation and borderization are distinct concepts, both are tools used by Russia to exert control over Georgia’s separatist regions. Occupation refers to Russia’s control over Abkhazia and “South Ossetia”, while borderization is the ongoing process of reinforcing and expanding this control by altering de facto borders on the ground. Both practices violate Georgia’s sovereignty and are widely condemned by the international community.
Occupation refers to the control of a territory by a foreign military force without the consent of the legitimate sovereign government. Russia recognizes and supports the de facto governments of the occupied regions, and its military forces are stationed there without the consent of the Georgian government.
Borderization involves the gradual erection and movement of border-like structures, such as fences, barriers, and border signs, along the administrative boundaries of territories controlled by Georgia. This process is led by Russian forces and the separatist authorities of “South Ossetia”.
The term “creeping occupation” is often used to describe borderization, as it refers to the gradual expansion of occupied regions without large-scale military actions. Thus, borderization represents the slow establishment and strengthening of Russian and separatist control over the occupied territories. Furthermore, borderization makes it more difficult for Georgia to reclaim these territories peacefully and limits its influence over regions near the administrative boundary lines.
It is also noteworthy that borderization has had serious humanitarian consequences for people living near the administrative boundaries. As the boundary lines are moved, locals lose access to their farmland, homes, and infrastructure. Residents are often detained for crossing these newly established “borders” to access resources like farmland, forests, pastures, churches, and cemeteries.
The EU Monitoring Mission (EUMM) regularly reports incidents of borderization and illegal detentions by Russian and “South Ossetian” forces. These practices have been confirmed and condemned by the EUMM, which continuously monitors and documents the borderization processes by Russia.
The first signs of “borderization” emerged as early as 2009, with the process officially starting in 2011 and intensifying from 2013 onwards. To determine how much land the Georgian government lost control over due to “creeping occupation,” the media outlet “Batumelebi” requested information from the State Security Service in 2020. The agency provided partial information but did not disclose the full list of villages affected by borderization, nor did it respond to questions about how many square kilometers of territory have been lost. The publication “iFact” also failed to obtain specific answers from various government institutions regarding the total area lost due to borderization.
According to reports from the State Security Service from 2015 to 2022, only the 2019 report provides concrete information about illegal border activities, such as the construction of a 430-meter-long metal fence in Gugutiantkari village in Gori municipality, resulting in two homes and part of an irrigation canal falling into occupied territory. Reports from 2015, 2016, 2017 and 2020 mention the number of people illegally detained near the occupation line (599 people detained near the occupied regions of Abkhazia and “South Ossetia”). The 2018 and 2022 reports generally state that the illegal process of borderization involved the construction of fences, trenches, and the placement of signs marking the so-called “borders.” The 2020 report indicates that there were 16 instances of borderization near Abkhazia and 60 near “South Ossetia”. Consequently, it is impossible to determine the exact scale of borderization and illegal detentions from these reports.
According to media reports, five people have been killed as a result of actions by the occupation regimes since 2012: David Basharuli (2014), Giga Otkhozoria (2016), Archil Tatunashvili (2018), Irakli Kvaratskhelia (2019), and Tamaz Ginturi (2023).
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Has Russia’s economic influence in Georgia increased or decreased?
The geopolitical and economic relations between Russia and Georgia are complex, involving the process of borderization, the growth of Russian economic influence, and increasing dependence on Russia in trade and energy sectors. Despite political tensions, economic ties between Russia and Georgia have strengthened in recent years, with Russia now being one of Georgia’s largest trading partners. As of 2023, Russia was the primary market for Georgian agricultural products, particularly wine and mineral water. Exports to Russia mainly include wine, spirits, mineral water, and agricultural products, while imports from Russia consist of oil, natural gas, food, and manufactured goods. There has been significant economic progress in trade between Russia and Georgia, which directly contradicts the claim that Russia has had no economic advances in Georgia.
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Trade Relations with Russia
In early 2024, “Transparency International – Georgia” published a report on Georgia’s economic dependence on Russia, indicating that this dependence had “significantly increased” compared to 2021. As of 2023, Georgia’s exports to Russia increased by 2.3%, amounting to $657 million, making Russia 10.8% of Georgia’s total export market. Notably, in 2012, this figure was only 2%. This means that from 2012 to 2023, Georgia’s exports to Russia grew by 440%, indicating significant growth in economic ties.
In 2023, 65% of Georgia’s wine exports went to Russia, marking the highest level since 2013, when Georgian wine returned to the Russian market.
In 2023, imports from Russia totaled $1.7 billion, 71% higher than in 2021. Russia accounted for 11.3% of Georgia’s total imports in 2023, compared to 5.9% in 2012, indicating that the share of Russian goods in Georgia’s total imports nearly doubled between 2012 and 2023.
The main imported goods from Russia include oil, natural gas, food products, and steel. From 2020 onwards, the import of natural gas from Russia to Georgia increased annually, with Georgia consuming three times more Russian natural gas in 2022 compared to 2019. In 2023, Georgia imported 596 million cubic meters of natural gas from Russia, raising Russia’s share in Georgia’s domestic gas consumption to 20%. Given that this share was 16% in 2021, there is a clear growing dependence on energy imports from Russia.
On the other hand, the share of Russian electricity consumption in Georgia remains low, with Russian electricity accounting for only 0.1% of Georgia’s total electricity consumption in 2023. Georgia’s dependence on Russian wheat and flour remains high. In 2023, Georgia imported $92 million worth of wheat and flour from Russia, accounting for 97% of Georgia’s total wheat and flour imports. Since the start of the Russia-Ukraine war, Georgia’s dependence on Russian imports has increased, mainly due to higher imports of automotive fuel, black metals, and food products.
In 2023, Georgia’s trade turnover with Russia was 47% higher than in 2021. The growing export of wine to Russia and the increasing share of Russian energy imports highlight how critical Russian markets remain for Georgia.
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Foreign Direct Investment
In 2022, the volume of direct foreign investments from Russia reached $108 million, of which $71 million was spent on real estate, $27 million on construction, and $15 million on the IT sector. In the first three quarters of 2023, Russia invested $67 million in Georgia, which is a 17% increase compared to the same period in 2022.
A significant portion of Russian direct investments is related to real estate and finance. The growth of Russian investments, especially in sectors such as real estate and finance, highlights how Russia’s economic activity in Georgia has expanded, particularly since the onset of the Russia-Ukraine war.
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Russian companies in Georgia
According to a report published by Transparency International Georgia, after the start of the Russia-Ukraine war, Russian citizens established various businesses in Georgia. By the end of 2023, 34,000 Russian companies were registered in Georgia, 77% of which were established after March 2022. Of these, the vast majority (96%) were individual entrepreneurs, indicating that some Russian citizens have relocated to Georgia for long-term residence and business activities. In September 2024, the Institute for Development of Freedom of Information (IDFI) published a study on companies registered by Russian citizens in Georgia, which stated that the number of Russian businesses had reached a historic maximum by the summer of 2024. According to the IDFI, as of June 1, 2024, Russian citizens owned approximately 37,400 companies in Georgia, representing more than 8% of all active companies in the country. It is also noteworthy that some of these Russian companies participate in government tenders, particularly in road and highway construction. For instance, the LLC “Zugdidi Road Management,” 51% owned by Russian citizen Aleksandr Ivanov, has won 56 tenders, receiving a total of 20,725,249 GEL from the state budget. Russian-affiliated companies also participate in the privatization process. For example, in 2024, in one of the largest auctions, the company “TBN Group” won and acquired a 3,299 square meter plot of non-agricultural land and its associated buildings on Queen Ketevan Avenue in Tbilisi for 6.5 million GEL. The company is 50% owned by Russian citizen Yahya Audakh, and the other 50% by Zurab Akhalaia, who holds dual citizenship of Georgia and Russia.
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Tourism and Migration
Tourism has been another significant sector of Georgia-Russia economic ties. In 2023, 1.4 million Russian visitors came to Georgia, accounting for 20.1% of total visitors. This represents a 30% increase compared to 2022. According to “Geostat,” the largest number of visitors to Georgia in 2023 came from Russia. In the first quarter of 2024, the number of visitors from Russia (215,468) was second only to those from Turkey (254,577).
Notably, a large portion of these visitors are long-term immigrants. In 2022, 62,300 Russian citizens were recorded as immigrants in Georgia, demonstrating both the physical and economic presence of Russians in the country.
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