The Karabakh Conflict, and its Geopolitical and Economic Impacts on Georgia

Abstract

Georgia has been a land hub between Europe and Asia since ancient times, when trade began in the second century BC. The Great Silk Road trailheaded in Sian, and, in Dunghuan, it split into two branches heading westward: north of the first Lobnor Lake, and Turfan, to the south of the same lake - Khotani and st. Via Yarkend - St. Kashgar. From there, the northern road connected with the Caspian Sea and the Transcaucasus, and crossed Georgia to reach the Byzantine and Roman Black Sea via the Phasis. The second road went from Kashgar to Balkh and northern Iran, and from there to the shores of the Mediterranean Sea. In 1998, on the
initiative of Senator Brownbeck, the United States Senate passed a resolution to support the development of a New Silk Road. The TRACECA, as well as the Baku-Tbilisi-Ceyhan “Great Oil Pipeline” and the Baku-Tbilisi-Erzurum “Great Gas Pipeline” are already operating under the auspices of the New Silk Road, significantly changing the economic reality in the Caspian-Black Sea region, creating new conditions for development, and strengthening that region - not only regarding the energy security of the
countries there, but the energy security of Europe as a whole (The Silk Road History, 2021; Elisseeff, 2001; Li & Taube, 2018).
Considering this, the resumption of the Nagorno-Karabakh conflict (the so-called Third Karabakh War) has affected Georgia more than it may seem at first glance. The results of this war in reality present huge threats and challenges to the geopolitical and economic environment of Georgia, and a naïve understanding of the status quo could be very unfortunate for the country. In this paper, we will explain why the new Karabakh status quo is more threatening to the Georgian economy than the current situation, what challenges it poses to the country, and what we can do to either completely circumvent these threats or, at worst, minimize them