Relations with Russia plummeted to a post-Soviet low in August 2008 as the two countries fought a brief but intense conflict, and full diplomatic ties have been suspended ever since. Bilateral relations with Russia will continue to dominate the foreign policy agenda, and ties between the two will remain difficult as long as Mr Saakashvili is in power. The "reset" in Russia-US relations could have implications for Georgian-Russian relations. Georgia has indicated that it may not block Russia's accession to the World Trade Organisation (WTO), which is expected to occur within the forecast period, as long as Russia lifts its blockade on Georgian goods, and customs control is established at the internationally recognised border. Nonetheless, this will be difficult to achieve, as Russia does not acknowledge the border, recognising South Ossetia and Abkhazia as sovereign states.

The desire to join NATO, already high on Georgia's foreign policy agenda, has intensified following the conflict with Russia. However, divisions within NATO with regard to Georgian membership have hardened, and Georgia is unlikely to be granted a Membership Action Plan (MAP, the last formal step on the way to possible future membership) in 2011-12. Most west European countries are even more ambivalent about Georgia's NATO aspirations after the events of August 2008. These countries would block or postpone prospects for Georgian NATO membership, both to avoid alienating Russia, with whom they have burgeoning commercial ties, and to avoid the risk of going to war for Georgia, particularly if this was the result of a renewed attempt to recover the breakaway provinces.

US-Georgian relations were cemented by the large amount of financial aid pledged by the US in the wake of the Russia-Georgia conflict. However, US officials have described Georgia's recourse to military action as unwise, and in time the US may come to view with favour the replacement of Mr Saakashvili with a less impetuous figure. The Georgian leadership will seek to further its long-term ambition of achieving closer relations with the EU. However, ongoing enlargement fatigue, and especially reservations about expanding into the post-Soviet space, means that the EU is unlikely to offer Georgia a clear prospect of eventual membership.