Political Risk Analysis - Security Environment Improving, But NATO Membership Remains Unlikely - OCT 2017

BMI View: Georgia r eceived a boost of confidence following the US' pledge to fully support the country's sovereignty and territorial integrity against any acts of aggression by Russia. Although it does not improve Georgia ' s chances of joining NATO or the European Union in the coming years, it comes as a sign of relief following President Donald Trump's pro-Russia rhetoric earlier in 2017.

Fears that Georgia's security environment would deteriorate under the Donald Trump presidency in the US have failed to materialise. Trump's previous pro-Russia rhetoric was largely seen as negative across Central and Eastern Europe (CEE) and was particularly worrying to Georgia, in light of the country's de facto frozen relations with Russia following a brief conflict between the two countries in August 2008, resulting in the occupation of South Ossetia and Abkhazia. In addition, Russia's annexation of Crimea in 2014 and ongoing fighting of Russian-backed forces and the Ukrainian military in the Donetsk region of eastern Ukraine show that Georgia's security environment remains precarious without the ongoing backing of the US and its NATO allies.

US Vice President Mike Pence's statement in early August that the US would continue to support Georgia's ambition of joining NATO, and a joint-military exercise involving 800 Georgian and 1,600 US troops were a clear sign of reassurance to Georgia's sovereignty. The military drill is the largest in Georgia and has been held annually jointly with German, UK, Slovenian, Ukrainian, and Armenian troops since the 2008 conflict. As a result of the show of confidence, we have slightly upgraded Georgia's security and external threats subcomponent in BMI's Short-Term Political Risk Index from 55.6 to 56.5 ( see chart below).

Slight Improvement In Security Subcomponent
Georgia - Short-Term Political Risk Index & Subcomponent, Out of 100
Source: BMI. Note: 100 indicates the best score available, zero the worst.

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