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Monday, October 11, 2010

Georgia [Republic]: Recent Developments and U.S. Interests

Jim Nichol
Specialist in Russian and Eurasian Affairs

The small Black Sea-bordering country of Georgia gained its independence at the end of 1991 with the dissolution of the former Soviet Union. The United States had an early interest in its fate, since the well-known former Soviet foreign minister, Eduard Shevardnadze, soon became its leader. Democratic and economic reforms faltered during his rule, however. New prospects for the country emerged after Shevardnadze was ousted in 2003 and the U.S.-educated Mikheil Saakashvili was elected president. Then-U.S. President George W. Bush visited Georgia in 2005, and praised the democratic and economic aims of the Saakashvili government while calling on it to deepen reforms. The August 2008 Russia-Georgia conflict caused much damage to Georgia’s economy and military, as well as contributing to hundreds of casualties and tens of thousands of displaced persons in Georgia. The United States quickly pledged $1 billion in humanitarian and recovery assistance for Georgia. In early 2009, the United States and Georgia signed a Strategic Partnership Charter, which pledged U.S. support for democratization, economic development, and security reforms in Georgia.

The United States has been Georgia’s largest bilateral aid donor, budgeting cumulative aid of $2.1 billion in FY1992-FY2008 (FREEDOM Support Act and agency funds). Georgia has regularly ranked among the top world states in terms of per capita U.S. aid. U.S.-budgeted foreign assistance for Georgia was $312 million in FY2009, and an estimated $321 million in FY2010, and the Administration request for foreign operations for FY2011 is $90 million, with the aid fairly equally distributed among security, economic, and democratization programs (FY2009, FY2010, and FY2011 figures exclude Defense Department and other agency funding, and FY2009-FY2010 figures include parts of the $1 billion in recovery aid). Georgia also has an agreement (termed a “compact”) with the Millennium Challenge Corporation (MCC) for $395 million for road-building, rehabilitating infrastructure, and energy development.

Date of Report: September 23, 2010
Number of Pages: 13
Order Number: 97-727
Price: $29.95

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