Returning to the Russian market

The Georgian media is enthusiastically discussing recent comments made by Prime Minister Nika Gilauri, who stated that the top priority of Georgia at this moment is its return to the Russian market.

Entering and finding new markets is a progressive step for any economy, however for Georgia this move could prove controversial. The administration has not always had a consistent position on this issue, and has in the past criticized. The focus since the embargo in 2006 has been on seeking alternative markets worldwide, to reduce dependence on our northern neighbour.

Some politicians - including members of the government - believe that Georgia should try harder to enter the European market, with its 500 million potential customers. As for Russia, Georgian businesses and investors should be very cautious, as there remains the possibility that Russia could impose yet another embargo with even more strict conditions.

But the Russian market is still a very important - and very lucrative - one for Georgians. Many Georgian businesses already operate in Russia. There is almost no language barrier, and Georgian brands are popular. Returning to Russia could be a very easy win for Georgia - both economically, and potentially politically, too.

What is less clear is the change of heart on the part of the administration. Some analysts note that this may be a bid for voters, as a loosening of the embargo could help improve Georgia's economic prospects. It may also be a bluff, as there is no guarantee that the government will be able to affect the embargo.

Members of opposition parties largely support the idea, and are even going so far as to take credit. What is interesting, though, is that the administration has been working hard to tar some members of the opposition with the "pro-Russia" brush - and now, it is they who are trying to normalize relations.