Conflict with Russia cost Georgia 2.8 billion USD: study

VIENNA: The Georgian-Russian conflict has cost Tbilisi roughly 2.8 billion USD, according to a study by the Vienna Institute for International Economic Studies (WIIW).
   
The figure takes into account material damage, which Georgian President Mikheil Saakashvili last month valued at 2.02 billion USD, and future losses in production, exports and investment, the report said.
   
"Georgia has experienced a real boom in recent years, noticeably from the construction of an oil and gas pipeline. (But) investor confidence risks being dented following the crisis," said one of the report's authors, Vasily Astrov.
   
He added that violence could also return to the Nagorny Karabakh region, which crosses over the oil pipeline and is the subject of an unresolved dispute between Georgia, Armenia and Azerbaijan.
   
The WIIW study said the crisis could jeopardise a European Union project to bypass Russia for natural gas, because of investor concern over the reliability of Georgia as a major transit country for gas supplies into Europe.
   
In a bid to reduce its reliance on Russian supplies, the EU is pinning its hopes on the construction of a 3,300-kilometre pipeline, running  from the Caspian Sea through the Caucasus via Turkey and the Balkan states to Austria.
   
"It is possible that Kazakhstan and Turkmenistan are going to stop transporting their hydrocarbons through Georgia. Moscow buys a lot of hydrocarbons as well and can threaten to force down the price," the study quoted Astrov as saying.