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Three years after a war that was essentially a failure of friendship — his far-off allies in Washington had not warred alongside him against Russia and they had not prevented the loss of huge amounts of Georgian territory — President Mikheil Saakashvili wants to show off some new friends.

Here they are: a convivial ring of summer campers in Anaklia on the Black Sea, some still dripping wet from the pool, gathered around a bonfire. Saakashvili sits among them and gives a speech, but he's not just talking to them. He's talking to the cameras recording the speech for national broadcast. He's talking to me, certainly, and therefore to you. He wants us all to know about the kids in this camp, how they are a group of teenagers made up of ethnic Georgians, ethnic Armenians and ethnic Azeris. The camp is called Tolerance. They play volleyball there and learn one another's songs and wave the Georgian flag. The idea is that they want peace, not like the Russian troops who patrol the border of breakaway Abkhazia just 5 km away. "What you see here is an answer to the occupation," Saakashvili says. "We are making history."

Making history has always come easily to Saakashvili. First elected in 2004, he arrived as a democrat in a region of despots. While everyone else knelt before the Kremlin, he taunted Russia's then President, Vladimir Putin. He took Western political stagecraft with him: in Anaklia, his personal film crew is shooting his speech in HD as his official photographer, a slim man with an improbably long camera lens, clicks away. More important than American-style image control, though, Saakashvili took American interests into the heart of a country that had been contested by closer powers — Persians, Turks, Russians — since the time of Herodotus. But these days, now that membership in NATO and the European Union is a distant dream, his prospects rely on the good graces of his non-Russian neighbors. He needs them to trade with Georgia, to be tourists in Georgia, and should war break out again, to at least not take Russia's side. With his final term ending in 2013, and tensions again rising between Georgia and Russia, the survival of Saakashvili's legacy, and perhaps his country, may well depend on it.

A Charm Offensive
Georgia is separated from the majority of its neighbors by the Caucasus, home to some of the highest mountains in Europe. In early summer, the Georgian Border Police, 2,700 troops who guard the mountaintops, took me and photographer Yuri Kozyrev on its troop-rotation flights: stalwart Russian-made MI-8 helicopters flying from peak to peak, sometimes half-blind through clouds, landing on narrow outcrops next to outposts that seemed to be policing the roof of the world. It's a humbling landscape, but the remoteness and isolation of those mountains also gave rise to a huge diversity of clashing tribes, ethnic groups and interests. The Chechens are suspicious of the Ingush, the Georgians mock the Avars, the Armenians and Azeris share a rich mutual hatred. Saakashvili now wants to be friends with them all.

The Russians, however, are experts at playing these groups off one another. The Russian republic of Chechnya in the North Caucasus fought two unsuccessful wars of secession against Russia, but the Chechen people also warred over the centuries with Georgia, which had its own imperious moments. Now, especially after Kremlin-backed strongman Ramzan Kadyrov took over in 2007, Chechnya is a potential menace to Georgia again. When the Russian military poured into South Ossetia during the five-day war of 2008, for example, the most feared units came from a war-hardened Chechen battalion.

So Saakashvili has launched his own charm offensive to win over the people of Chechnya and neighboring republics. Since last October, residents of the Russian North Caucasus can pass through a northern border crossing with Georgia without a visa — a unilateral move that infuriated Moscow. Some 48,000 visitors have gone this way already. Over tea in the Black Sea resort of Batumi, Saakashvili tells me that if Chechens arriving in Georgia see "everyone smiling at them," it's good for national security. "For us, it's a protection," he says. "They can say, 'We've been there, and we don't want next time to come to rampage and pillage.' "

Security through tourism: it's an idea aimed not only at the North Caucasus, but at regional powers Azerbaijan and Armenia as well. Those landlocked countries are very much the target market for Georgia's Black Sea resort boom. Anaklia, which was little more than a village with a pleasant beach when I visited two years ago, is being transformed at a dizzying rate. It seems half-finished already; when complete it will have a water park, casino, open-air disco, yacht rental, a strand with 5,000 imported palms and, confusingly, a Chinatown located just a rifle shot away from the disputed Abkhazian border. Saakashvili calls close trade and tourism with Azerbaijan and Armenia "absolutely crucial" to Georgia's development as a focal point of a more unified Caucasus.

A Finger in Moscow's Eye
Georgia's Pankisi gorge — a string of muddy villages that was an infamous Chechen rebel hideout before Saakashvili regained control there in 2004 — shows signs of regional bonds Saakashvili can build on. After accusations of being hostile to Chechen refugees early in his career, Saakashvili seems to have won many over by giving them citizenship and equal rights under Georgian law. Acet, who didn't want her full name used because it might endanger relatives still living in Chechnya, is one of some 800 civilian refugees from the Chechen war still living in Pankisi; she arrived after being denied citizenship in Turkey. "I'm so glad our brothers took us in," she says. "We are free here." Even the revered Alla Dudayeva, whose husband General Dzhokhar Dudayev proclaimed himself the first President of "free" Chechnya before the Russians killed him, has moved to Georgia after long exile in Europe. "Anywhere in the mountains, you are with your people," Dudayeva tells me at her home in Tbilisi. "Georgians and Chechens are one."

That's the message of Kanal PIK, an ambitious government-funded effort to start a Caucasus version of al-Jazeera. The programming is all Russian-language and beamed into homes throughout the region from Tbilisi, including into the Russian republics of the North Caucasus. The idea is to do for the Caucasus what al-Jazeera did for the Middle East: provide an independent source of news to break through the regional censorship. "There's a big problem with an information vacuum in the region," says Katya Kotrikadze, PIK's head of news. Coming soon, for example: a series of documentaries called The Truth About Chechnya, billed as showing war footage "prohibited on Russian channels."

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.

• Nathan Thornburgh / Tbilisi
• Still smarting from its disastrous war with Russia, Georgia wants strategic alliances in its enemy's backyard. Moscow is not amused