Anaklia: Unfinished Business

| News, Georgia

As connectivity in Eurasia is undergoing structural changes as a result of the war in Ukraine, the question of the Anaklia deep-sea port has once again resurfaced in Georgia.

Located on Georgia’s Black Sea shore, the Anaklia port was seen as being set to play a pivotal role in the country’s quest to turn itself into a regional transit hub. More concretely, the port would enable Georgia to gain larger economic importance in the wider Black Sea area and be better linked to the European Union as well as the Mediterranean basin. The deep-sea project is also associated with Georgia’s pro-Western ambitions, which are openly stated in the Georgian Constitution and in everyday political life.

However, in 2018-2019, an unhealthy internal political situation in Georgia coupled with region-wide negative geopolitical developments sapped the enthusiasm behind the ambitious project. The rivalry between the Georgian Dream party, its leaders and the head of the Anaklia Consortium, banker Mamuka Khazaradze, resulted first in the posponement and then final cancelation of the port project before the outbreak of the covid pandemic.

Recently, however, the idea of the port project has resurfaced. For instance, Georgia’s Minister of Economy Levan Davitashvili announced that the Abu Dhabi Ports Corporation of the United Arab Emirates expressed an intention to participate in the development of the deep-water port of Anaklia. Another Georgian official Deputy Minister, Genady Arveladze, also talked about the port and mentioned potential Japanese investors.

Japanese interest has indeed emerged. On November 3, 2022, the Georgian Business Association hosted a forum with Japanese companies that expressed their interest in the Anaklia Deep Sea Port project. The importance of the event was reflected in the number of Georgian state officials and business representatives from the host country and neighboring states.

Another signal of reinvigorated ambition to build the Anaklia sea port came from a document recently published by the Georgian government. Georgia’s Economic Development Long-Term Vision – “Economy 2030” envisages the construction of vital port infrastructure, paying special attention to the realization of the Anaklia port project and the further development of the existing ports such as Poti and Batumi. In one of the sections, the document reads that “in a bid to improve the competitiveness of Georgia’s transport and logistics sector, the country should develop the transport infrastructure by expanding the national high-speed highway, new railway routes, international airports, and seaports, including the projects to expand the infrastructure of the Poti port and to build the deep-sea port of Anaklia”.

The state budget allocation for preparatory work for the port’s construction has also increased and reached more than $1 million for 2023. The figure remains minuscule, yet it is nearly half as big as it was in 2022.

The renewed interest in the Anaklia port could be a result of the accelerated changes in Eurasia over the past year. Firstly, the effects of the COVID pandemic has become less traumatic. There are signs that the dark days portending a long-term global recession are now over, and countries are increasingly able to improve their economic situation. Global connectivity is not dead; globalization continues, albeit at a much slower pace than before.

Secondly, and perhaps more importantly, the Russian aggression against Ukraine upended traditional trade routes through Eurasia. The northern corridor connecting China and Europe through Russia has effectively ceased to operate as vigorously as before February 2022. The sanction-laden Russia now is an uncomfortable place to do business and use as a transit route. The search for alternatives is now in full swing, and much attention is being paid to the route through the South Caucasus. The latter is geographically the shortest route between the European Union, and China and quite naturally, Georgia is a vital link in this nascent corridor. The country’s railways and ports now come under intense scrutiny for their transit ability. For instance, the European Bank for Reconstruction and Development (EBRD) launched a study that will be available in 2023 to determine which are the best options for EU-China connectivity.

Since Russia’s second invasion of Ukraine, the cooperation between the states along the Middle Corridor has intensified, and the level of export has also increased. Turkey launched trains to Central Asia through the Baku-Tbilisi-Kars railway. Central Asian states reciprocated by partially rerouting their exports from the Russia route to the Middle Corridor. For Georgia, this trend underlines the importance of having a developed web of railways and ports. This explains Tbilisi’s intensive diplomatic cooperation with Central Asian states over the past several months.

To many, resurfacing of Anaklia came as a surprise. The Georgian opposition has been largely silent on the topic, and the few short comments it has made mostly betrayed its distrust toward the government and the ruling party. Yet seen from a longer-term perspective, construction of the Anaklia port is not tied to any single Georgian government but is a product of the country’s geopolitical ambitions to serve as a connector between the Caspian and the Black Seas and more globally between the EU and Central Asia/China.

Indeed, the idea of building a deep sea port in Georgia dates back to the twentieth century. During the Soviet period, there were several attempts by the government to build a deep-sea port in Anaklia. Even after the collapse of the Soviet Union in 1991, despite Georgia’s internal instability, there were numerous projects regarding the potential construction of the port. One of them was a project called “Lazika,” which was abandoned in 2012.

Beyond this national ambition, there are Eurasia-wide geopolitical trends that      both undermine and push for the realization of the Anaklia project. It is clear that the Anaklia project has become a part of a China-US geopolitical competition that covers the entire Eurasian continent. The US has been working on preventing China from extending its control over vital roads, ports, railways, and natural resource bases. As Anaklia, due to its strategic location, quite naturally falls within Chinese interests, the US has worked on keeping Beijing at bay. The very fact the Chinese did not get the right to build the port in 2016, but their only competitors, Americans, did, shows Washington's moves to block the Chinese.

These differing geopolitical visions of Beijing and Washington could serve as a big disincentive for constructing the port. But, surprisingly, this very competition could actually serve as a catalyst for new plans. Fear of Anaklia falling into Chinese hands could revitalize Washington’s support for the project.

In the end, much will depend on the internal situation in Georgia itself. Present political divisions are complicating the dialogue necessary for the implementation of ambitious nation-wide projects. Yet, on a geopolitical level, existing trends favor Tbilisi. Russia’s isolation puts the Anaklia port back in the spotlight, and Georgia’s role as a connector with Azerbaijan and Central Asia is only increasing. By dint of correct application of internal and foreign policies Georgia could carry out a project which is set to transform the country’s and indeed the region’s connectivity.

Emil Avdaliani is a professor at European University and the Director of Middle East Studies at the Georgian think-tank, Geocase.

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