Dream of statehood still distant for Georgia rebels

By Christian Lowe - Analysis

MOSCOW (Reuters) - The dream of Georgia's separatist Abkhazia and South Ossetia regions for fully-fledged statehood is still out of reach, even after their ally Russia, defying the West, recognised them as independent states.

Thousands of people in Abkhazia and South Ossetia poured on to the streets to drink wine and fire guns into the air when Russian President Dmitry Medvedev recognised their independence. But when the hangovers wear off, the cold reality will remain.

The two tiny regions are recognised by no other state or international organisation, their economies are crippled by a Georgian economic blockade and Kremlin leaders -- not the separatists -- call most of the shots.

"It doesn't really change anything in terms of who will be controlling these areas because Russia already was," said Svante Cornell, an expert on Georgia at the Institute for Security and Development Policy, a Stockholm-based think tank.

Sergei Shamba, Abkhazia's separatist foreign minister, acknowledged his region still had a long way to go.

Even Russia's closest allies have failed to join the Kremlin in recognising Abkhazia and South Ossetia, though ex-Soviet Belarus came close by saying it understood Russia's decision.

"For small Abkhazia, the recognition by Russia opens up many possibilities," Shamba told Reuters. "But we do not want the process of recognition to stop at that ... We will of course search for allies and friends."

VIABLE STATES?

Both regions already have many of the trappings of statehood, with their own parliaments, flags and national anthems. But there is a question mark over whether they are viable as independent states.

Abkhazia, on the Black Sea, has an area about half the size of Wales and a population the separatists put at 340,000. Its economy was wrecked by a 1990s separatist war and a Georgian blockade. It now depends on Russian investors and tourists.

South Ossetia, with a population of only around 70,000, used to earn revenue from a huge market selling black market goods imported from Russia. That market is now closed after Georgia cracked down on contraband.

RUSSIA TO THE RESCUE

Abkhazia and South Ossetia see Russia as the solution.

More than 80 percent of residents in both regions already hold Russian passports, Russian is the most widely-spoken language and transactions are in Russian roubles.

In Abkhazia, the Russian government pays all pensions via a bank transfer to the separatists' national bank. One of the biggest inward investment projects is a business centre in the capital, Sukhumi, being financed by the mayor of Moscow.