Changes

===Principal Government Officials===

===Principal Government Officials===

*President -- Giorgi Margvelashvili

*President—Giorgi Margvelashvili

*Prime Minister -- Irakli Garibashvili

*Prime Minister—Irakli Garibashvili

*Speaker of Parliament -- Davit Usupashvili

*Speaker of Parliament—Davit Usupashvili

*Foreign Minister -- Tamar Beruchashvili

*Foreign Minister—Tamar Beruchashvili

*Defense Minister --  

*Defense Minister --  

*Interior Minister --  

*Interior Minister --  

The 1992 Sochi Agreement, which established a cease-fire between the Georgian and South Ossetian forces, and defined both a zone of conflict around the South Ossetian capital of Tskhinvali and a security corridor along the border of South Ossetian territories, remains in effect. The South Ossetia region is comprised of a patchwork of Georgian villages interspersed with ethnic Ossetian villages. The Organization for Security and Cooperation in Europe (OSCE) monitors the ceasefire and facilitates negotiations between the Georgians and the South Ossetians toward a comprehensive settlement consistent with Georgian independence, sovereignty, and territorial integrity. The Agreement also created the Joint Control Commission (JCC) and a peacekeeping body, the Joint Peacekeeping Forces (JPKF). The JPKF is under Russian command and is comprised of peacekeepers from Georgia, Russia, and Russia's North Ossetian autonomous republic. South Ossetian peacekeepers, however, serve in the North Ossetian contingent. Talks on South Ossetia are held under the auspices of the Joint Control Commission (JCC), with Georgian, Russian, North Ossetian, and South Ossetian delegations participating. The Georgian Government has frequently complained that the current format for talks puts Georgia at a disadvantage, and would like greater participation by the international community.  

The 1992 Sochi Agreement, which established a cease-fire between the Georgian and South Ossetian forces, and defined both a zone of conflict around the South Ossetian capital of Tskhinvali and a security corridor along the border of South Ossetian territories, remains in effect. The South Ossetia region is comprised of a patchwork of Georgian villages interspersed with ethnic Ossetian villages. The Organization for Security and Cooperation in Europe (OSCE) monitors the ceasefire and facilitates negotiations between the Georgians and the South Ossetians toward a comprehensive settlement consistent with Georgian independence, sovereignty, and territorial integrity. The Agreement also created the Joint Control Commission (JCC) and a peacekeeping body, the Joint Peacekeeping Forces (JPKF). The JPKF is under Russian command and is comprised of peacekeepers from Georgia, Russia, and Russia's North Ossetian autonomous republic. South Ossetian peacekeepers, however, serve in the North Ossetian contingent. Talks on South Ossetia are held under the auspices of the Joint Control Commission (JCC), with Georgian, Russian, North Ossetian, and South Ossetian delegations participating. The Georgian Government has frequently complained that the current format for talks puts Georgia at a disadvantage, and would like greater participation by the international community.  

[[Image:Map of Georgia.jpg|right|200px|thumb|South Ossetia region, top-center.]]  

[[Image:Map of Georgia.jpg|right|200px|thumb|South Ossetia region, top-center.]]  

In January of 2005, Georgian President Saakashvili put forth a proposal to give autonomous status to South Ossetia within Georgia. The United States welcomed President Saakashvili's initiative to resolve the conflict through peaceful means and continues to look for ways to encourage a lasting resolution of the conflict. An alternative leader in South Ossetia emerged in November 2006, when ethnic Georgian Dmitry Sanakoyev was elected in an unrecognized, de facto presidential election by the ethnic Georgian population. Sanakoyev has set up an alternative government in Kurta, South Ossetia.  

In January 2005, Georgian President Saakashvili put forth a proposal to give autonomous status to South Ossetia within Georgia. The United States welcomed President Saakashvili's initiative to resolve the conflict through peaceful means and continues to look for ways to encourage a lasting resolution of the conflict. An alternative leader in South Ossetia emerged in November 2006, when ethnic Georgian Dmitry Sanakoyev was elected in an unrecognized, de facto presidential election by the ethnic Georgian population. Sanakoyev has set up an alternative government in Kurta, South Ossetia.  

The United States supports the territorial integrity of Georgia and supports only a peaceful resolution of the separatist conflict in South Ossetia that defines the status of South Ossetia within Georgia's internationally recognized borders, while affording South Ossetia significant autonomy within a unified Georgia. The United States views Georgia's autonomy proposal as an important step in a peace process that should be marked by direct and frequent negotiations between the two sides. International donors, including the United States, launched an economic rehabilitation project in 2006 to help establish a peaceful and prosperous future for South Ossetia within Georgia (for more information on the separatist conflict in Georgia's South Ossetia region, see the Department of State's Fact Sheet on South Ossetia http://www.state.gov/p/eur/rls/fs/53721.htm).

The United States supports the territorial integrity of Georgia and supports only a peaceful resolution of the separatist conflict in South Ossetia that defines the status of South Ossetia within Georgia's internationally recognized borders, while affording South Ossetia significant autonomy within a unified Georgia. The United States views Georgia's autonomy proposal as an important step in a peace process that should be marked by direct and frequent negotiations between the two sides. International donors, including the United States, launched an economic rehabilitation project in 2006 to help establish a peaceful and prosperous future for South Ossetia within Georgia (for more information on the separatist conflict in Georgia's South Ossetia region, see the Department of State's Fact Sheet on South Ossetia http://www.state.gov/p/eur/rls/fs/53721.htm).

Before 2004, electricity blackouts were common throughout the country, but since late 2005, distribution has been much more reliable, approaching consistent 24-hour-a-day service. Improvements have resulted from increased metering, better billing and collection practices, reduced theft, and management reforms. Investments in infrastructure have been made as well. Hydroelectricity output increased by almost 27%, and thermal by 28%, from 2005 to 2006. Natural gas has traditionally been supplied to Georgia by Russia. Through conservation, new hydroelectricity sources, and the availability of new sources of natural gas in Azerbaijan, Georgia's dependence on Russia for energy supplies should decrease in the near future.  

Before 2004, electricity blackouts were common throughout the country, but since late 2005, distribution has been much more reliable, approaching consistent 24-hour-a-day service. Improvements have resulted from increased metering, better billing and collection practices, reduced theft, and management reforms. Investments in infrastructure have been made as well. Hydroelectricity output increased by almost 27%, and thermal by 28%, from 2005 to 2006. Natural gas has traditionally been supplied to Georgia by Russia. Through conservation, new hydroelectricity sources, and the availability of new sources of natural gas in Azerbaijan, Georgia's dependence on Russia for energy supplies should decrease in the near future.  

The banking sector is becoming more open to competition from foreign-owned banks. The sector is relatively stable, and is supplying more credit to domestic businesses. Credit from Georgian banks to the economy was 15% of GDP in 2005, compared to 10% in 2004--still low, compared to the average in the Czech Republic, Hungary, and Poland for 2005, which was 36%.  

The banking sector is becoming more open to competition from foreign-owned banks. The sector is relatively stable, and is supplying more credit to domestic businesses. Credit from Georgian banks to the economy was 15% of GDP in 2005, compared to 10% in 2004—still low, compared to the average in the Czech Republic, Hungary, and Poland for 2005, which was 36%.  

Foreign direct investment (FDI) is the most important source of capital for Georgia and other post-Soviet states. Such investment not only supports new plants and equipment, but usually entails bringing in modern management methods as well. The Georgian Government is eager to welcome foreign investors. From 2002 to 2006, FDI averaged 9% of GDP, with much of it dedicated to the construction of the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus gas pipeline. In 2006, which saw diminishing pipeline investment as a function of total FDI, more than half of FDI went to the banking, manufacturing, and tourism sectors.  

Foreign direct investment (FDI) is the most important source of capital for Georgia and other post-Soviet states. Such investment not only supports new plants and equipment, but usually entails bringing in modern management methods as well. The Georgian Government is eager to welcome foreign investors. From 2002 to 2006, FDI averaged 9% of GDP, with much of it dedicated to the construction of the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus gas pipeline. In 2006, which saw diminishing pipeline investment as a function of total FDI, more than half of FDI went to the banking, manufacturing, and tourism sectors.  

*Inflation rate: 7.3% (end of June 2007).

*Inflation rate: 7.3% (end of June 2007).

*Natural resources: Forests, hydropower, nonferrous metals, manganese, iron ore, copper, citrus fruits, tea, wine.

*Natural resources: Forests, hydropower, nonferrous metals, manganese, iron ore, copper, citrus fruits, tea, wine.

*Industry: Types--steel, aircraft, machine tools, foundry equipment (automobiles, trucks, and tractors), tower cranes, electric welding equipment, fuel re-exports, machinery for food packing, electric motors, textiles, shoes, chemicals, wood products, bottled water, and wine.

*Industry: Types—steel, aircraft, machine tools, foundry equipment (automobiles, trucks, and tractors), tower cranes, electric welding equipment, fuel re-exports, machinery for food packing, electric motors, textiles, shoes, chemicals, wood products, bottled water, and wine.

*Trade (2006 est.): Exports--$1.76 billion. Partners: United Kingdom, Turkey, United States, Spain, Azerbaijan, Turkmenistan. Imports--$3.32 billion. Partner: Turkey, United States, Azerbaijan, Ukraine, Germany, Italy.

*Trade (2006 est.): Exports--$1.76 billion. Partners: United Kingdom, Turkey, United States, Spain, Azerbaijan, Turkmenistan. Imports--$3.32 billion. Partner: Turkey, United States, Azerbaijan, Ukraine, Germany, Italy.

*Work force (2.02 million in 2005): Agriculture: 40%, industry: 20%, services: 40%. Unemployment (2005 est.): 13.8%.

*Work force (2.02 million in 2005): Agriculture: 40%, industry: 20%, services: 40%. Unemployment (2005 est.): 13.8%.

South Ossetia, on the Russian border, is about the size of Rhode Island, but has fewer than 70,000 inhabitants. During the Soviet era, it had autonomous status within the Georgian SSR. Therefore when Georgia became independent in 1991, South Ossetian leaders sought to achieve their regions own independence from Tbilisi.

South Ossetia, on the Russian border, is about the size of Rhode Island, but has fewer than 70,000 inhabitants. During the Soviet era, it had autonomous status within the Georgian SSR. Therefore when Georgia became independent in 1991, South Ossetian leaders sought to achieve their regions own independence from Tbilisi.

In 1991 and early 1992, the Georgian military launched an offensive to destroy the South Ossetian secession. The ragtag Georgian army was defeated by a combination of local Ossetian fighters and irregulars from Russia. In 1993, Georgia went to war again,  this time to prevent the Abkhazians in the northwest from following the Ossetian example. That conflict also ended in defeat for Georgia. Both provinces have remained functionally separate from Georgia ever since, with their own parliaments, economies, educational systems, and armies--as well as a powerful narrative of valiant struggle against Georgian tyranny. The provinces have turned to Russia for protection from Georgia.

In 1991 and early 1992, the Georgian military launched an offensive to destroy the South Ossetian secession. The ragtag Georgian army was defeated by a combination of local Ossetian fighters and irregulars from Russia. In 1993, Georgia went to war again,  this time to prevent the Abkhazians in the northwest from following the Ossetian example. That conflict also ended in defeat for Georgia. Both provinces have remained functionally separate from Georgia ever since, with their own parliaments, economies, educational systems, and armies—as well as a powerful narrative of valiant struggle against Georgian tyranny. The provinces have turned to Russia for protection from Georgia.

[[File:S-ossetia1.jpg|thumb|310px]] In early August, 2008, Georgia sought to re-establish its control over the breakaway enclaves of Abkhazia and South Ossetia.  This led to a five-day war, involving a Russian invasion not only of those areas, but of Georgia itself complete with a massive bombing campaign.  Several hundred Georgians were killed and thousands of refugees on both sides were displaced.<ref> Charles King, "The Five-Day War: Managing Moscow after the Georgia Crisis," ''Foreign Affairs'' 2008 87(6): 2-11, online at [[EBSCO]] </ref>

[[File:S-ossetia1.jpg|thumb|310px]] In early August, 2008, Georgia sought to re-establish its control over the breakaway enclaves of Abkhazia and South Ossetia.  This led to a five-day war, involving a Russian invasion not only of those areas, but of Georgia itself complete with a massive bombing campaign.  Several hundred Georgians were killed and thousands of refugees on both sides were displaced.<ref>Charles King, "The Five-Day War: Managing Moscow after the Georgia Crisis," ''Foreign Affairs'' 2008 87(6): 2-11, online at [[EBSCO]]</ref>

Cease-fires were finally established and Russian forces eventually withdraw from Georgia itself, but not from Abkhazia and South Ossetia, which Russia has said will become independent nations.  The whole Georgia situation has led to quickly souring relations between Russia and the West. Moscow argues that if Georgia can break away from the Soviet Union, then South Ossetia can likewise break away from Georgia. Georgia says the territory involved belonged to Georgia centuries ago.

Cease-fires were finally established and Russian forces eventually withdraw from Georgia itself, but not from Abkhazia and South Ossetia, which Russia has said will become independent nations.  The whole Georgia situation has led to quickly souring relations between Russia and the West. Moscow argues that if Georgia can break away from the Soviet Union, then South Ossetia can likewise break away from Georgia. Georgia says the territory involved belonged to Georgia centuries ago.

George has sought membership in [[NATO]] so that the alliance can protect it from Russia. However NATO finds that Georgia falls short of its baseline measures for democratization and military modernization and that the recent war in Georgia raises additional complications regarding an escalation of tensions between Russia and NATO.<ref> Travis L. Bounds, and Ryan C. Hendrickson, "Georgian Membership in NATO: Policy Implications of the Bucharest Summit," ''Journal of Slavic Military Studies'' 2009 22(1): 20-30</ref>

George has sought membership in [[NATO]] so that the alliance can protect it from Russia. However NATO finds that Georgia falls short of its baseline measures for democratization and military modernization and that the recent war in Georgia raises additional complications regarding an escalation of tensions between Russia and NATO.<ref>Travis L. Bounds, and Ryan C. Hendrickson, "Georgian Membership in NATO: Policy Implications of the Bucharest Summit," ''Journal of Slavic Military Studies'' 2009 22(1): 20-30</ref>

==References==

==References==