Fourteen years of negotiation, led alternately by the UN and Russia, have done little to resolve the Georgian-Abkhaz conflict. There have been some successes on the ground: ceasefire violations are rare, approximately 45,000 internally displaced (IDP) Georgians have returned to homes in the Gali region, the two sides cooperate on operating the Inguri power plant, and a strategic railway through Abkhazia may restart. But the sharp deterioration in Russian-Georgian relations and a Georgian military adventure in the Kodori valley have contributed to a freeze in diplomacy over Abkhazia since mid-2006. In the absence of a new initiative, new violence is a real possibility. Because prospects are bleak for an early comprehensive settlement of the key political issues, in particular final status, the sides and international facilitators should shift their focus in 2007 to building confidence and cooperation in areas where there are realistic opportunities.

Abkhazia insists on recognition of independence and says it is establishing democratic values and rule of law but the international community unanimously considers it part of Georgia. Tbilisi sees inability to regain full control as impeding state-building, national security and economic development. Over 200,000 IDPs from Abkhazia live under harsh conditions in Georgia proper. Years of stalemate have solidified each side’s distorted and negative image of the “other”. The Abkhaz have lived under economic restrictions since 1996 with little opportunity to trade or travel; they continue to fear Georgia’s army and a new war. The entity’s dependence on Russia has grown as its ability to forge links with other states has been constrained.

There was optimism in spring 2006 that extensive discussions on increasing cooperation and resolving disputes could begin: the sides resumed talks within the UN-led Coordinating Council for the first time since January 2001, the Abkhaz presented a “Key to the Future” document, and Georgia issued a “Road Map”. But nothing came of it. After Georgia launched a special forces operation in the Kodori valley in July, the Abkhaz pulled out of all negotiations. Diplomacy is frozen, with few incentives to restart it. Georgia has adopted a new strategy, calling for changes in the formats for negotiations and peacekeeping so as to reduce Russia’s influence in both. Moscow and Sukhumi oppose these changes, and they are not strongly backed by Georgia’s Western partners.

Because neither the local nor the wider political environment is conducive to breakthroughs, this report argues that for at least the next year the only way forward is to emphasise confidence building rather then negotiation of the central political issues. Georgia should take concrete steps such as signing a pledge on the non-resumption of hostilities, lifting economic sanctions and encouraging greater economic development and international engagement in Abkhazia to regain credibility and trust with Abkhaz counterparts. If it wants to be treated as a legitimate dialogue partner, Sukhumi should show more interest in cooperation. The alternative is bleak. If the sides continue to flex their muscles and do not resume talks, there could be renewed hostilities in 2007, especially in and around the Kodori valley and the Gali district.

Tbilisi/Brussels, 18 January 2007