Date first published: 15/08/2017

Key sectors: all

Key risks: political violence; civil unrest; war

In August 2008, Russia and Georgia fought a brief five-day war, the result of which left Moscow in de facto control of 20 per cent of Georgia’s sovereign territory. Moscow formally recognised the breakaway republics of South Ossetia and Abkhazia, with a population of roughly 40,000 and 250,000 respectively. The statelets are almost wholly dependent on Moscow for funding, given that they are largely cut off from the global economy and are recognised by only three other states, all Russian allies. Over the past two years Russia has subsumed South Ossetia and Abkhazia nominal military forces and Russia’s Federal Security Service (FSB) patrols their ‘borders’ with Georgia.

However, it is unlikely to be in Moscow’s interest to pursue a major war, either along the lines of control in Abkhazia or in South Ossetia. That being said, further encroachments of Georgian territory continue around South Ossetia, with Moscow seeking additional leverage over its key interest in the region – oil and gas pipelines. Russia and its proxies in South Ossetia claim that a small stretch of the Baku-Supsa oil pipeline, owned by a Western-Azeri consortium and operated by BP flows through their territory. BP has largely remained silent on the issue, although it has stated it is willing to reroute the pipeline.

In July, South Ossetian officials warned that they could demand transit fees, a threat that could only have been made with Moscow’s backing. The threat came following the latest expansion of the de facto border by FSB guards, who moved signposts closer to Georgia’s key east-west highway that is now less than 500m from the Russian-recognised border. As the nearby South Caucasus gas pipeline is expanded and Russia and Azerbaijan continue to compete over new gas routes via Turkey into Europe, the threat of Moscow and its South Ossetian proxies escalating their rhetoric and territorial claims cannot be ignored.

In Abkhazia, the risk of renewed Russian-Georgian conflict is far lower given the lack of geo-politically significant energy infrastructure and the ‘natural border’ provided by the Inguri River and Kodori Ridge. Yet Moscow’s heavy hand encounters far more resistance in Abkhazia than in other breakaway states across the former Soviet Union. In 2014, Russia openly engineered a coup that resulted in ex-KGB officer and Putin confidante Raul Khajimba becoming president, despite his defeat in three prior elections. Anti-Khajimba protests have take place with increasing frequency, although it remains to be seen whether Putin’s 8 August visit to the region has helped shore up his position. Unrest within Abkhazia amongst its domestic political factions remains a distinct possibility. However, with the exception of possible-but-unlikely refugee flows, this would be unlikely to heavily impact Sochi and other neighbouring regions of Russia.

Russia and Georgia remain without diplomatic relations and tensions run high. While the threat of renewed direct war is far below previous highs, clear security threats remain, particularly to the Baku-Supsa pipeline and to a lesser extent to other energy projects linking Azerbaijan and Georgia. The threat of unrest in Abkhazia also continues to grow, but while the isolation of Abkhazia would limit its political fallout, the prominence of Abkhaz militants in eastern Ukraine and the symbolism of a potential rejection of Russian influence would have geo-political ramifications across Eurasia.