Georgia Wants Strategic Alliances in Russia's Backyard

Photograph by Yuri Kozyrev for TIME
If they build it, will we go? Workers near the unfinished Golden Fleece Hotel, one of many construction projects designed to revitalize the Black Sea town of Anaklia

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But PIK has the same burden of proof as al-Jazeera: it is government-funded, so can it really be independent, especially when reporting on Georgia's enemy? Saakashvili insists it is evenhanded: "Everyone was wondering, even our Western friends, what would [PIK] be like, would it be provocative? But in fact, it's superpeaceful. I mean, it's almost dull."

Perhaps the biggest boost to PIK's reputation for unbiased coverage came in August from an unlikely source: Russian President Dmitri Medvedev. Just before the anniversary of the war, he sat for a lengthy interview with PIK's Kotrikadze, along with a journalist each from Ekho Moskvi and Russia Today . The interview, which was tough but cordial and composed, was doubly surprising given the rising tension between the two sides: Medvedev said he would "never forgive" Saakashvili for the war. Saakashvili replied after the PIK interview that it was "not normal" that Medvedev was thinking about him so much.

In the context of such bad blood, it's easy to read Saakashvili's overtures to his neighbors not just as defense but also as a way of needling his enemies in Moscow. A low-level insurgency continues to plague the North Caucasus, which has brought, among other things, a series of deadly suicide bombings to Moscow. By arguing that Georgians and other peoples of the Caucasus are brothers, Saakashvili is implying that the Russians are not. He denies that he's trying to drive another wedge between Russia and the Caucasus, but the unspoken argument seems clear: Russians are outsiders who don't belong in the region, either in occupied parts of Georgia or anywhere else in the North Caucasus.

Who Pays the Bills?
Even as Georgia looks to its nearer neighbors for friendship, it remains deeply dependent on Washington's largesse. Georgia is currently spending the last remaining portion of a billion-dollar postwar U.S. aid package, $350 million of which, for example, was dedicated toward an ambitious cross-country highway. But, as Columbia professors Lincoln Mitchell and Alexander Cooley argued persuasively in a report about postwar Georgian reforms for the university's Harriman Institute last year, not all the money was well targeted toward building a strong, democratic country. In a highly unusual arrangement, a full quarter of U.S. aid went directly to paying for the Georgian budget. This arrangement risks making Georgia look even more like a wholly dependent client state of the U.S. "If Georgia reignites the conflict with Abkhazia or South Ossetia, or slips into a more authoritarian system," Mitchell and Cooley write, the U.S. will be seen by Russia and some in Europe as having "contributed directly."

Georgia is desperately trying to wean itself off U.S. aid. Growth was 6.4% last year and is projected at 5.5% this year, but Vera Kobalia, Minister of Economy and Sustainable Development, expects double-digit growth beyond that. Whether it can reach those numbers will depend largely on the strength of Georgia's standing as a regional hub. Alongside tourism, growth in regional trade particularly with Turkey and Azerbaijan is crucial. Georgia's No. 1 export is automobiles. Except that it doesn't actually make cars: it acts as a giant car lot for used European and Asian cars that are sold to its neighbors, who go there because the process of buying and registering a car is cheap and corruption-free. It's a sign that Georgia is business-friendly, says Kobalia. "We have a 15% flat [corporate] tax, that's it," she says. "Everyone knows that in Georgia, what is written is what you get."

Can Georgia bring that admirable transparency to the rest of its government? For all his virility as a politician and a reformer, Saakashvili still runs a deeply informal government. His personal power transcends any formal institutions, and his party still has no effective opposition. This has made him astoundingly efficient at times because he doesn't have to consult or compromise. But it has not always served democracy. What happens when his term ends in 2013? Either he leaves all that power in the hands of a successor, keeping alive the possibility of a new strongman; or he finds a nondemocratic way to stay in power, in which case his reforms would have lost all credibility anyhow.

A few weeks after the rosy camp scene in Anaklia, Saakashvili's personal photographer, the one with the long lens, was arrested for being a Russian spy. So were two other photographers who sometimes worked for international wire services. It was, on the whole, an ugly and botched affair that felt very far from the Georgia Saakashvili says he's trying to build. There was a quick confession from one of the three photographers, but thin evidence, including wiretaps, had other journalists wondering if they were constantly being listened to as well. There were public protests and then suddenly, plea bargains with minimum sentences.

It was a dangerous moment for the photographer. But it was dangerous as well for all those big, beautiful changes that Saakashvili has been working toward. If he wants his neighbors' respect in the region, he has to be less cynical, more transparent, more professional, less autocratic than they are. Before Saakashvili's Georgia can become a hub, it must be a beacon.

This article originally appeared in the September 12, 2011 issue of TIME Europe.