In the international system, economic interactions have become one of the fundamental dynamics shaping the foreign policy tools of states, while the foreign trade policies of small and medium-sized countries are increasingly gaining a strategic appearance. In this context, Georgia, which occupies a geopolitically critical position in the South Caucasus, has developed an orientation that places economic diplomacy at the center of its foreign policy as of 2025. In particular, the controlled commercial openings towards regional crisis areas and the diplomatic repercussions of these openings are closely linked to the country’s efforts to both increase its economic capacity and strengthen its international legitimacy. In this regard, the striking increase in the trade volume between Georgia and Syria indicates a multi-dimensional transformation of foreign policy that cannot be explained solely by economic data.
As of the first quarter of 2025, one of the most notable trends in Georgia’s foreign policy has been the increasing prioritization of trade-based external relations. In this context, the sudden and significant increase recorded in relations with Syria represents not only an economic development but also a sign of a new era on the diplomatic front. Between January and April 2025, the trade volume between Georgia and Syria increased approximately sevenfold to nearly 1.2 million dollars; exports rose from 19 thousand dollars to 779 thousand 700 dollars, while imports increased from 136 thousand 700 dollars to 413 thousand 100 dollars. Among the main products exported were light automobiles, hazelnuts, and plant-based raw materials; cleaning products, spices, and metal products constituted the main items of import.[1]
Georgia’s resumption of automobile re-exports and its export of traditional agricultural products to Syria revealed that this trade orientation encompasses not only quantitative growth but also structural diversification. This trend is regarded as part of Georgia’s ambition to become an economic bridge between the Caucasus and the Middle East. On the other hand, the increase in trade to this extent has also led to the opening of certain political doors.
One of the noteworthy developments in this context is the call made in February by Joe Wilson, a member of the United States (US) House of Representatives, addressing Syrian Foreign Minister Shibani. Wilson demanded the annulment of Syria’s decision to recognize the so-called administrations of Abkhazia and South Ossetia, regions under Russian occupation, and stated that this step would be a symbolic initiative reflecting Syria’s commitment to international legitimacy in line with its new orientation.[2] This call aligns with the joint letter sent on January 31 by four main opposition parties in Georgia (the Coalition for Change, UNM–Unity, Strong Georgia, and Gakharia–For Georgia) to the acting Syrian President Ahmed al-Sharaa. The letter demanded the annulment of the recognition decision taken by the Assad regime in 2018 and expected the new administration to comply with international norms recognizing Georgia’s territorial integrity.
This diplomatic activity has also coincided with the gradual normalization process that began between the US and Syria. At the summit held in Riyadh on May 14, 2025, where US President Donald Trump and the acting Syrian President al-Sharaa came together, it was announced that the Washington administration would lift the sanctions imposed on Syria.[3] These contacts demonstrate that Georgia’s efforts to develop a neutral but principled economic position in regional crises are resonating at the international level.
Macroeconomic indicators also provide important data regarding the financial foundation supporting this increase in foreign trade. According to evaluations by TBC Capital, strong foreign currency inflows, the global depreciation of the dollar, and the normalization of demand for foreign currency in the domestic market have exerted upward pressure on the lari.[4] However, since the currencies of the countries with which Georgia trades have appreciated even more strongly, the real effective exchange rate of the lari has somewhat lagged behind. Nevertheless, this discrepancy is being gradually balanced thanks to the foreign exchange reserve policies of the National Bank of Georgia.
When looking at Georgia’s foreign trade balance, in the January-April period of 2025, the foreign trade volume increased by 15.3% compared to the same period of the previous year, reaching 7.76 billion dollars. Along with this increase, exports grew by 14.2% to 2.01 billion dollars, while imports rose by 15.7% to 5.74 billion dollars. During the mentioned period, a foreign trade deficit of 3.73 billion dollars was recorded, indicating that the Georgian economy still has a highly import-dependent structure.[5]
Parallel to this overall trade picture, analyses of the agricultural sector show that Georgia remains in a rather limited position in regional export competition. Throughout 2025, only 33,200 tons of agricultural products were exported, lagging behind Turkey, Azerbaijan, and even Armenia. The low agricultural production capacity is attributed both to infrastructural deficiencies and to insufficient integration with global markets, bringing to the fore the need for long-term reforms in the sector.[6] On the other hand, developments in the financial sector are performing a balancing function against economic vulnerabilities. In particular, the campaigns by Halyk Bank to encourage individual savings are increasing financial awareness,[7] while the stock performance of major Georgian companies such as Bank of Georgia, TBC Bank, and Georgia Capital, which are traded on the London Stock Exchange, confirms the trust of international investors in the country.[8]
In the energy sector, the Georgian Energy Exchange’s transition to an hourly balancing system as of July 1, 2025, is seen not merely as a technical step to increase competition in the domestic market, but also as a strategic reform that will expand cross-border electricity trade and institutionalize regional energy integration. In particular, ensuring technical compatibility with the energy systems of neighboring countries enhances Georgia’s potential to strengthen its role as an energy transit hub in the South Caucasus.[9] At the same time, when looking at the financial dimension of these developments, the money transfer data recorded in April 2025 show that Georgia’s place in global financial circulation has been further consolidated; with 31.9 million dollars in outflows and 295.5 million dollars in inflows, one of the largest foreign exchange movements in the country’s history has occurred. The fact that the outflows have predominantly been directed toward Turkey, Azerbaijan, and Russia reflects Georgia’s position in regional labor and trade flows, while the strong share of transfers from the European Union (EU) and the United States confirms the continuation of ties with Western capital.[10]
In light of all these data, the increasingly clear balanced approach in Georgia’s foreign policy makes it possible to evaluate a series of foreseeable scenarios for the upcoming period. The first and most likely scenario is that Georgia will continue its current trajectory of economic opening, deepening its integration with the West while also cautiously but gradually strengthening the process of trade normalization with crisis regions such as the Middle East. In this context, the growing trade with Syria can be expected to be used not only for bilateral economic gains but also as a tool to enhance Georgia’s capacity to engage in dialogue with actors who support its own territorial integrity. If the Damascus administration annuls its decision to recognize the so-called administrations of Abkhazia and South Ossetia, as explicitly demanded by the US and Georgia, this will be interpreted as a diplomatic victory for Tbilisi and will serve as an example of “diplomacy of reclamation” within the country’s balance policy.
The second scenario envisions that Georgia will maintain its political and security-based alliances with the West, while also being able to continue its trade relations with countries such as Syria without entering into direct confrontation with Russia, within the framework of a cautious diplomatic language. In this way, Tbilisi, through its economic diversification and geopolitical flexibility, could develop a balanced position of being “close to the West, but not in conflict with Russia.” The third scenario involves Georgia deepening its infrastructural reforms in the areas of energy, finance, and foreign trade, thereby transforming itself not merely into a transit country but into a regional economic center. The full institutionalization of the Energy Exchange will make Georgia an indispensable part of the Azerbaijan-Turkey energy corridor, while the growth of foreign exchange inflows, investor confidence, and financial stability will limit the country’s macroeconomic vulnerabilities and provide a more solid foundation for its policy of balance.
In conclusion, the balanced approach in Georgia’s foreign policy, based on economic diplomacy and adopted as of 2025, not only expands the country’s trade volume but also allows it to position itself as a multi-faceted and calculated actor within the international system. The increase in economic relations with Syria, conducted in line with the principles of strategic patience and controlled opening, along with a diplomatic discourse shaped in favor of Georgia’s territorial integrity and institutional closeness with the West, has made it possible for Georgia to reconstruct its foreign policy on the basis of flexibility and legitimacy. The observed progress in the energy exchange, financial mobility, and trade data strengthens Georgia’s ambition to become a regional economic center; however, the sustainability of this potential will depend on the deepening of structural reforms, the reduction of import dependence, and the rational management of the shifting balances along the Moscow-Washington axis. In this respect, Georgia’s policy of balance should be seen not merely as a tactical reaction but also as a strategic choice shaped by geopolitical awareness.
[1] “Sakartvelosa da Sirias Shoris Vachroba 7-jer Gaizarda – Ras Vqidit da Vqidulobt”, BPN – Business Press News, https://www.bpn.ge/article/139235-sakartvelosa-da-sirias-shoris-vachroba-7-jer-gaizarda-ras-vqidit-da-vqidulobt, (Access Date: 21.05.2025).
[2] Joe Wilson, “I Was Grateful to Ask FM Shibani in February to Reverse the Assad Regime’s”, X, https://x.com/RepJoeWilson/status/192348431655371098, (Access Date: 21.05.2025).
[3] “Congressman Wilson Urges Syria to Revoke Recognition of Georgia’s Occupied Regions”, Civil Georgia, https://civil.ge/archives/682336, (Access Date: 21.05.2025).
[4] “‘Utskhour Valutaze Motkhovna Shedarebit Normalizda’ – Ratom Mqardeba Lari”, BPN – Business Press News, https://www.bpn.ge/article/139240-ucxour-valutaze-motxovna-shedarebit-normalizda-ratom-mqardeba-lari, (Access Date: 21.05.2025).
[5] External Mechandise Trade in Georgia: January-April 2025 (Preliminary Results), Geostat, https://www.geostat.ge/media/70438/External-Merchandise-Trade-of-Georgia-in-January-April-2025.pdf, (Access Date: 21.05.2025).
[6] İrakli Fofkhadze, “Sakartvelos Soplis Meurneobis Produktebis Eksportis Qvelaze Dabali Machvenebeli Akvs Regionshi – Worldpopulationreview-is Monatsemebi”, BPN – Business Press News, https://www.bpn.ge/article/139224-sakartvelos-soplis-meurneobis-produktebis-eksportis-qvelaze-dabali-machvenebeli-akvs-regionshi-worldpopulationreview-is-monacemebi, (Access Date: 21.05.2025).
[7] Halyk Bank Georgia, Facebook, https://www.facebook.com/halykbank.ge/videos/701972385861444, (Access Date: 21.05.2025).
[8] Shota Tkheshelashvili, “Rogor Sheitsvala Kartuli Kompaniebis Aktsiebis Pasi Londonis Sapondo Birzhaze”, Business Media, https://bm.ge/news/rogor-sheitsvala-qartuli-kompaniebis-aqtsiebis-fasi-londonis-safondo-birzhaze-317714, (Access Date: 21.05.2025).
[9] Meri Tabatadze, “‘Bazris Ganvitarebis Kvaldakval Mushaoba Daitsqeba’ – İgegmeba tu Ara Sakartvelos Energetikuli Birzhis Mezobel Kveqnebtan Daakhloeba”, BPN – Business Press News, https://www.bpn.ge/article/139221-bazris-ganvitarebis-kvaldakval-mushaoba-daicqeba-igegmeba-tu-ara-sakartvelos-energetikuli-birzhis-mezobel-kveqnebtan-daaxloeba, (Access Date: 21.05.2025).
[10] “Tibisi Kapitalma Makroekonomikuri Ganakhleba Gamoakveqna”, Forbes, https://forbes.ge/thibisi-kapitalma-makroekonomikuri-ganakhleba-gamoaqveqhna, (Access Date: 21.05.2025).
