The government of Georgia has agreed to pay the Israeli defense contractor Elbit $35 million to settle a lawsuit. In April, Elbit announced that they were suing Georgia for $100 million for failure to pay for equipment it bought in 2007. Neither side has commented much on the suit, but it would appear to be related to Georgia's purchase of 40 Hermes 450 aerial drones from Elbit. From an Elbit press release:
Elbit Systems Ltd. announced today, further to its announcement dated April 8, 2011 regarding the filing of a lawsuit against the Government of Georgia ("Georgia"), that the Company and Georgia have signed settlement agreements for settling all claims and disputes.
According to the settlement, Georgia will pay the Company an amount of approximately $35 million and will also return to the Company certain equipment and sub-systems, that were supplied to Georgia by the Company in the past, against the full release of the initial claims.
So are they returning some of the drones?
Earlier this month, Georgian President Mikheil Saakashvili also pardoned two Israeli businessmen and settled the case they were jailed for, an episode that had strained relations between the two countries. It's not clear whether the Elbit settlement is related to that, but the timing is suggestive.
Jamie Kirchik, writing in The Tablet, says the resolution of the case of the jailed businessmen opens the door for an improvement of Georgian-Israeli relations, which also have been strained over various arms sales between Russia, Israel, Georgia and Israel's foes (including Syria and Iran). One sign of the improving relationship:
Georgia is one of several countries in the region—along with Armenia, Bulgaria, Cyprus, and Greece—that has benefited from the recent demise of the Israel-Turkey relationship. In September, the Turkish government signed an agreement with NATO to host a U.S. radar, part of a larger U.S. missile-defense system, on its territory. Turkey demanded, however, that it not be obliged to share information with Israel as part of the deal. Saakashvili, who studied at Columbia University and understands the innate American sympathy for underdogs, saw an opportunity and jumped. “We are willing to share with any country, including Israel,” Saakashvili told Newsweek in September.
It's not clear how this is a victory for Georgia: NATO in the end agreed to place the radar in Turkey, and pretty much everyone saw through Saakashvili's offer as unrealistic, and made more for the benefit of his anti-Russian backers in Washington than anything else. Kirchik also notes the possibility of a resumption of Israeli arms sales to Georgia as a result of Russian missile sales to Syria, which is a potentially serious development. But nothing has been said publicly about that since February, and it ignores a much bigger sale: that of Israeli drones to Russia, which Pavel Felgenhauer called "the biggest defense technology transfer deal between Russia and a Western nation since 1945." Israel's relations with Georgia and Russia are complicated, in short, in spite of the wishes of those in Washington who see the world in Manichean terms, consisting of countries who are with us and those who are against us. Nevertheless, Kirchik concludes:
The distraction of the Fuchs case behind them, and Russian duplicity potentially opening the way for a resumption of arms sales, Georgia-Israel relations would seem to have nowhere to go but up. Perhaps the greatest realm in which the friendship can grow is through the power of example. Given its comparable position as a nation under fire, Bokeria, the Georgian national-security adviser, told me, Georgia can learn from Israel “how to be a free country in those circumstances.” The Jewish state “shows that in many ways, it’s better to be a free country and a liberal democracy to survive,” he said. “I think Israel shows that, and I think Georgia shows that too.”
Translation: Georgia and Israel have discovered they can use the same PR campaign to convince gullible, idealistic Americans that their countries are "natural" allies. (And in fact, Kirchik notes that there is some overlap in the two countries' Washington lobbying efforts.)
Overheated rhetoric aside, it's certainly correct to say that Georgian-Israeli relations are looking up for the moment. But given the volatility of the Caucasus and the Middle East -- and all of the serious problems that the two countries have recently had -- we shouldn't expect things to remain that way for long.