Georgia Booms in Spite of Blockade.

(From The Moscow Times)

The resumption of normal relations with Georgia depends on its behavior toward Russia and Georgia's secessionist regions Abkhazia and South Ossetia, Foreign Minister Sergei Lavrov told Rossiiskaya Gazeta on Wednesday.

But the bait of restored relations, which were severed last October after the escalation of a spy dispute between Tbilisi and Moscow, is not enticing to Georgia, as its current and predicted growth rates do not appear to be suffering unduly, business groups in the country say.

In an interview published Wednesday, Georgian President Mikheil Saakashvili said the embargo had actually led to greater foreign investment in the country. "I always say thank you for this embargo, and I mean it," he said, The Wall Street Journal reported.

The results Russia expected from its embargo on trade, transport, communications and money transfers to and from Georgia did not follow, and the Caucuses country managed to survive economically, said Esben Emborg, president of the American Chamber of Commerce in Georgia.

While Georgia might lose about $400 million in exports to Russia, more than $1 billion in foreign direct investment is expected this year, said Robert Christiansen, the International Monetary Fund's resident representative in Georgia, canceling the Russian losses out. Earlier, foreign direct investment of $500 million to $600 million was expected, he said.

As late as December, the IMF anticipated slower growth for 2007, of 6 percent to 7 percent, as a result of the Russian embargo. Since then, ...