Georgia’s drift from the West opens a strategic window for Armenia on Europe-

As geopolitical instability redraws Eurasian trade routes, the Centre for Eastern Studies (OSW) says the South Caucasus is emerging as an increasingly important transit bridge between Europe and Asia. Yet while Georgia currently dominates this east-west corridor, mounting political tensions with Western partners may create an opening for Armenia to position itself as an alternative route.

A new report by Warsaw-based think-tank OSW argues that the region’s strategic value has risen sharply “amid the war in Ukraine and instability in the Middle East,” with the so-called Middle Corridor becoming an increasingly attractive alternative to routes passing through Russia or Iran.

At the heart of that route lies Georgia, which OSW describes as “the central hub of the Middle Corridor, owing to regional political conditions and existing infrastructure.” But the report warns that this dominant position may no longer be assured.

“The main challenge may lie not in the operational viability of the trade routes running through Georgia, but in Tbilisi’s political unpredictability,” OSW said. It added that the country’s “growing authoritarianism and the resulting deterioration in its relations with the EU” could erode confidence among both investors and regional partners.

That assessment comes as Georgia’s relations with the West have become increasingly strained over the past two years, following domestic political controversies that have triggered criticism from Brussels and Washington. The governing Georgian Dream has faced accusations from opponents and Western officials of democratic backsliding, particularly over legislation targeting foreign-funded civil society groups and a broader crackdown on dissent.

According to OSW, those developments are beginning to carry economic implications beyond domestic politics.

“These factors undermine the long-standing assumption that Georgia remains a stable political partner in the region,” the report said, adding that they are “also weakening the trust of Turkey and Azerbaijan in Georgia as a transit partner.”

Georgia currently forms a vital link in the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, which connects China and Central Asia to Europe through the Azerbaijan–Georgia–Turkey axis. The corridor gained strategic importance after Russia’s 2022 invasion of Ukraine, as businesses and governments sought alternatives to the traditional northern route through Russian territory.

Georgia’s role has been reinforced by infrastructure upgrades, including the Baku-Tbilisi-Kars railway, whose upgraded Georgian section was completed in 2024. OSW noted that the line’s annual capacity increased from 1mn tonnes to 5mn tonnes, while container traffic rose dramatically in early 2025.

But Georgia’s infrastructure development has relied heavily on European financing, and that may become a vulnerability if political ties worsen further.

“The EU’s position may also prove significant, as it has been an important source of funding for the development of Georgia’s transport infrastructure,” OSW said, citing major support from the European Investment Bank. “Georgia’s continued drift away from the West could make it more difficult to secure funding for new infrastructure projects.”

That creates an opportunity for Armenia, which has until now remained outside the main transit route because of its closed borders with Azerbaijan and Turkey and comparatively weak infrastructure.

OSW said Armenia’s role has grown since the 2020 Second Nagorno-Karabakh War, after which Yerevan began moving away from “its previous model of economic cooperation with Russia in favour of normalising relations with neighbouring countries and diversifying its economic ties.”

This strategic reorientation has underpinned Armenian efforts to market itself as a future transport hub. Central to that is Prime Minister Nikol Pashinyan’s Crossroads of Peace initiative, which aims to reopen transport links with Azerbaijan and Turkey and transform Armenia into a connector between regional markets.

OSW said the project could “reshape the regional transport landscape, particularly in the road transport sector, potentially reducing Georgia’s importance while increasing the capacity of the TITR.” The report also references the so-called TRIPP initiative, a proposed transport corridor in southern Armenia that would connect mainland Azerbaijan with its Nakhchivan exclave.

As Georgia’s political trajectory raises concerns in European capitals, Yerevan has strengthened ties with the EU and presented itself as a more cooperative partner.

The EU has already pledged €270mn under its Resilience and Growth Plan for Armenia for 2024-2027, while broader support under the Global Gateway framework could reach approximately €2.5bn, including transport and connectivity projects.

“This means that, should the political situation in the region improve, Armenia could gain access to substantial funding for the development of transport routes,” OSW said.

Still, the think-tank cautions that Armenia’s ambitions remain contingent on unresolved political risks. The proposed transport projects remain “dependent on the opening of the country’s borders with Azerbaijan and Turkey,” and so far “neither the TRIPP nor the CoP has progressed beyond the conceptual phase.”

Domestic politics could also complicate the picture. Armenia’s parliamentary elections, expected in June, may prove decisive.

“Should Prime Minister Nikol Pashinyan lose the upcoming vote, projects such as the CoP and the TRIPP could lose momentum or even be abandoned, particularly if relations with Azerbaijan deteriorate,” the report said.

For now, Georgia remains the undisputed artery of the Middle Corridor. But the OSW analysis suggests that politics, rather than geography, may ultimately determine the South Caucasus’ transport map.

“In the short term, the current configuration of transport routes in the South Caucasus is unlikely to change significantly,” the report said. “In the longer term, however, should Armenia make further progress in normalising its relations with Azerbaijan and Turkey and succeed in opening its borders, the country’s infrastructure could begin to gain importance as a complement to the existing network.”

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