The Report on Georgia-Iran Economic Relations has been prepared in May 2018 with support from the US Department of State and the US Department of Energy in the framework of the contract commissioned by Argonne National Laboratory to the Civil Council on Defense and Security on Dual-use Goods Outreach Events.

Being a regional neighbour, Georgia is interested in further developing economic cooperation with Iran. Yet, a number of international and national security concerns put Georgia under an obligation to regulate and closely observe trade relations with the country. The report studies the dynamics and current state of play in the bilateral economic relations between Georgia and Iran. The first chapter reviews the development of Iranian and Georgian economies and assesses the two countries’ trade and cooperation potential, in particular, in the areas of transport and transit of energy resources.

The second chapter looks at Iran’s geopolitical interests in the region, including those in Georgia, and its cautious policies emanating largely from pragmatic thinking. The chapter attempts to demonstrate that Georgia and the South Caucasus region in general are important for Iran as they open prospects for building the shortest and most efficient route connecting Iran with Europe. The chapter also looks at the volume of Iranian investments in Georgia, which have been somewhat insignificant until now.

The third chapter explores the regional security complex which hampers long-term stable cooperation among the states in and around the South Caucasus neighbourhood and, in particular, negatively affects the prospects of Iran-Georgia economic relations. The chapter argues that democratic development of Georgia’s institutions and the prospect of the Euro-Atlantic integration require of Georgia that it honour unconditionally international norms and obligations, including the economic sanctions which were imposed on Iran by the Western states and the UN in response to its clandestine nuclear programme in 2006-2015.

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