Georgia

Georgia's political risk profile continues to be weighed down by a challenging 'security threat' and regional environment, as a lack of political initiative towards resolving the dispute over the breakaway region of South Ossetia leaves the possibility of further confrontations with Russia alive. Nevertheless, we have long been highlighting that the likelihood of another military conflict between Georgia and Russia, as briefly seen in the summer of 2008, is highly unlikely at this juncture, with both sides keen to avoid an escalation into violence. We will, however, be looking for further indication that diplomatic relations between Russia and Georgia are improving, before revising up our short-term political risk rating for Georgia.

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