Eastern Partnership and Geoeconomics of the South Caucasus

2026-06-03

Geopolitics is based on political and military power. The main tools are diplomacy and security. It uses alliances, military bases and strategic control.

Geoeconomics is based on economic power. The main tools are trade, investment, energy. It uses markets and financial leverage.

What might the future of the South Caucasus countries in the Eastern Partnership look like compared to their counterparts in the EU member states:

Azerbaijan

Caspian Norway

1. Energy-based economy: Both countries are heavily dependent on oil and natural gas; energy is a major export and a pillar of the budget.

2. Sovereign wealth funds that collect and invest income from energy resources in future generations:

● Norway - Sovereign Wealth Fund

● Azerbaijan - SOFAZ (State Oil Fund)

Similarities with Qatar: Both Azerbaijan and Qatar are considered regionally important transport and energy hubs.

Armenia

Austria of the Caucasus

1. Mountainous, landlocked country: Both countries are landlocked; both are located in a difficult geographical environment.

2. Transit dependence on neighbors

● Austria: Germany - Italy - a hub between Eastern Europe.

● Armenia: Georgia - Iran - Azerbaijan - a "peace crossroads" between Turkey.

3. Service orientation:

● Austria: Finance, diplomacy, international organizations.

● Armenia: Diaspora-based economy, IT sector and services.

There is a partial similarity of the Armenia of the future with Luxembourg: small economy, service and finance-oriented structure.

Georgia

Switzerland+Netherlands

Along with the "Caspian Norway" and the "Austria of the Caucasus", Georgia is also metaphorically called the "Italy of the Caucasus": ancient wine culture - both Georgia and Italy are famous for wine; strong regional identities and culinary diversity; mountains, coastline and diverse nature in one country; stereotypical image of hospitality and love of life.

In addition, the geo-economic analogy of Georgia's future is Switzerland:

1. A mountainous country protected by natural "barriers": both countries are located in a difficult geography; they are naturally "a space sandwiched between corridors".

2. Key location

● Switzerland: Western Europe - Central Europe.

● Georgia: Western Asia - Eastern Europe.

3. "Mediator" function

● Switzerland: Finance, diplomacy, neutral platform.

● Georgia: Transit, ports, energy corridors, logistics gateway - an element of the Netherlands.

Analogues of the Amsterdam and Zurich stock exchanges are the future of Georgia.

Of course, all these are more poetic and popular comparisons than scientific or political classifications. In reality, the three Caucasian countries are unique and are not an exact analogue of any European country. However, after the legalization of the market economy and the achievement of compatibility with European legislation, nothing can be ruled out.

Zurab Maghradze