The Republic of Georgia is a sovereign state in the Caucasus region, which obtained independence at the end of 1991 with the dissolution of the former Soviet Union. This country of 4.5 million people is located at the crossroads of Western Asia and Eastern Europe, and therefore enjoys an important geo-political position; it borders Russia, Turkey and Azerbaijan, it is close to Iran and the Middle East, and has easy access to the Black Sea ports. Moreover, the Republic of Georgia is the key transit point of energy resources from the Caspian and Central Asia to Europe.

On October 27th the people of Georgia will vote for a new president, who will no longer be head of state, since constitutional amendments transformed the country from a presidential republic to a parliamentary republic. Following the presidential elections, the head of state will be the Prime Minister, whilst the president will become mainly a symbolic figure.

In October 2012, a party coalition – The Georgian Dream – established by the billionaire Bidzina Ivanishvili, won the majority of the 150 legislative seats in the parliamentary elections, and defeated current President Saakashvili’s party, United National Movement (UNM), which at the time held the majority of the parliament. Soon after the elections, the new legislature approved Ivanishvili as Prime Minister, along with large-scale reforms, such as bolstering the power of the parliament, depoliticizing the Defense and Interior Ministries, and declaring a new national security strategy. In fact, Mr. Ivanishvili’s reforms included also arresting many of UNM officials and initiating investigations into Saakashvili’s closest allies. Those steps, some would say selective justice, were taken because of the conduct of President Saakashvili’s government, that tended to bend laws and occasionally pressure opponents and the media.

Surprisingly, the most interesting outcome of these elections is not whether the Georgian Dream’s candidate, Georgy Margvelashvili, will win the presidency but whether the current Prime Minister will resign after only a year in office. Last month, Ivanishvili shocked his country by announcing that he intends to step down after the presidential elections to concentrate on strengthening civil society.

Israel does not want to see Ivanishvili leave his post. After increased tension between the countries in the last few years, Georgia’s PM conducted an official visit to Israel in June 2013 in order to mend ties and to turn Israel into a strategic partner of Georgia. In a press conference, Ivanishvili considered his visit as the “most successful” of all his foreign trips and underscored the need to strengthen the bilateral relations.

The relationship between Tbilisi and Jerusalem began to flourish in the mid-1990s. Israel was looking to develop economic relations with the republics of the Caucasus, which required an arms and ammunition supplier. Until the outbreak of the war between Russia and Georgia in 2008, Israeli companies supplied specialized military equipment and advanced tactical training to the Georgian army. Jerusalem did not want to upset Moscow, and as a result halted the defense cooperation. When the war ended, Israel’s decision to improve its relations with Russia, a series of scandals involving Israeli businessmen in Georgia, and Tbilisi’s failure to pay in full for purchasing Israeli drones contributed to the deterioration of the relationship. Jerusalem was frustrated even more in November 2012 when Tbilisi decided to vote in favor of accepting Palestine as a non-member observer state at the United Nations.

Regardless of who wins the presidential contest and whether or not Ivanishvili remains Georgia’s Prime Minister, Jerusalem needs to follow in Ivanishvili’s footsteps, in order to repair the strained relations.

The Israeli government should:

a) Upgrade the bilateral ties to a comprehensive strategic partnership – Georgia’s importance to Israel stems from several factors: first, around 40% of Israel’s oil is imported via the Baku-Tbilisi-Ceyhan (BTC) pipeline, passing through Georgia and Turkey. In addition, in recent years there has been a discussion to import more oil through the BTC pipeline in order to ship it via Israeli companies to eastern Asia. Second, one needs to be aware that Georgia is a strategic partner of the United States. The countries cooperate in priority areas such as defense and security, and the U.S. supports Georgia’s bid to join NATO. Third, when Ivanishivili met Benjamin Netanyahu in Jerusalem a few months ago, the leaders spoke about the Iranian attempts to disrupt the security and stability of the region. After the attempted car bomb against a Georgian employee of the Israeli embassy in Tbilisi, allegedly linked to Iran, Georgia found itself in a risky front-row seat of the Israeli-Iranian tension. Georgia’s proximity to the Islamic Republic and their bilateral agreement for visa-free-travel could be beneficial for Israel.

b) Restore defense trade – until several years ago, Israel helped reform the Georgian army and supplied it with drones, rockets, and other military electronic systems. Both sides are interested in restoring the defense cooperation, as we can learn from the public meeting last week between the Georgian Deputy Defense Minister and the Israeli ambassador in Tabilisi. The Israeli Defense Export Controls Agency together with the Ministry of Foreign Affairs should permit resuming the arms sale to Georgia, which currently has an annual defense budget of 398 million dollars. In doing so, Jerusalem should walk a fine line, and be mindful not to upset Russia.

c) Sign a free trade agreement with Georgia – the countries already signed a bilateral investment treaty, which helps protect private investments and encourage the adoption of domestic policies that treat private investments in an open and transparent way. The next step should be signing a free trade agreement to reduce barriers for Israeli and Georgian export and create a more stable and transparent trading and investment environment. In their last meeting, Netanyahu and Ivanishvili held a discussion over a possible free trade agreement and even talked about easing and lifting travel visa requirements between the countries. A free trade agreement would boost the volume of bilateral trade and would lead to increased tourism, which has been on the rise lately.