Roads are freshly paved, petty corruption has been all but abolished and the electricity stays on. Well-heeled young Georgians are flocking to dozens of posh new sidewalk cafes sprouting up in Tbilisi's Old Town, where they enlist frosty pink drinks against the summer heat.
"The war wasn't good, but it has had some good results," said Ghia Nodia, chairman of the Caucasus Institute, a think tank in Tbilisi.
The five-day war in August 2008 was fought over South Ossetia, which, like Abkhazia, is a Russian-backed breakaway region that Georgia claims as its own. The war ended with Russia formally recognizing the two breakaway territories and maintaining military outposts in both -- a calamitous militarily defeat for Georgia.
But analysts say it has turned out to be a boon for this little country, and for Saakashvili, for three main reasons.
First, it catalyzed $4.5 billion in international aid -- that's $1,000 for every Georgian citizen -- a sum primarily responsible for keeping this tiny nation above water during the recent financial crisis. "It was a lucky break," Nodia said.
Second, the war drew pledges of political support for Georgia and, by extension, for Saakashvili's then-wobbly government. Saakashvili, who swept to power during a nonviolent coup in 2004, had watched his popularity wane substantially, reaching a nadir less than a year before the war, in November 2007, when tens of thousands of protesters gathered in downtown Tbilisi to call for his resignation.
European and American pledges of support for Saakashvili, combined with Moscow's call for his immediate dismissal, helped validate his previous four years in office. He was then able to entrench himself in the role of Russia's primary foe -- a politically advantageous image in Georgia -- and to pillory his political opposition by depicting them as apologists for Russia or even traitors. Since the war, the opposition's efforts to organize anti-government protests have largely fizzled out.
Third, in losing the battle for Abkhazia and South Ossetia for good -- or at least for the foreseeable future -- Saakashvili was able to gracefully redirect his own blustery nationalist rhetoric and reassess his domestic goals. As one young Georgian put it, "Russia helped him save himself from himself."
In the years leading up to the war, Saakashvili's public speeches were built on aggressively nationalist promises to re-establish Georgia's territorial integrity by reabsorbing South Ossetia and Abkhazia, which had unilaterally claimed independence after the fall of the Soviet Union. But for the last two years, his rhetoric -- while still blustery -- has aimed to muster Georgian nationalism for building economic growth and democratic institutions.
"[Russia] has failed to accomplish its declared goal ... of overthrowing the Georgian government," Saakashvili said in a speech this week commemorating those Georgian soldiers who died in the 2008 conflict. "It wanted to change Georgia's political course. ... But this course has been further strengthened. This course is irreversible."
The situation in South Ossetia is stable but grim. Tens of thousands of ethnic Georgians who fled South Ossetia have little hope of returning, since many of their villages and homes were bulldozed, looted and burned by South Ossetian militias. Damage from the war remains visible in both the countryside and the self-styled capital, Tskhinvali, and the Russian Army controls the borders with Georgia proper. Most ethnic Ossetians continue to live as subsistence farmers in the largely mountainous territory.
Saakashvili's current tack in solving the problem with the breakaway territories is to offer South Ossetians and Abkhazians access to what will be, he promises, excellent Georgian health care and educational facilities. It's the nationalist carrot, rather than the nationalist stick.
Mayoral elections in Tbilisi in May resulted in major gains for Saakashvili's United National Movement party and in the first peaceful transition of power in Georgia's recent history. Analysts see that as an important sign of growing stability.
But Georgia is not a Cinderella story yet.
Roughly 220,000 refugees, from the 2008 war and previous conflicts in South Ossetia and Abkhazia, continue to live in tumbledown apartment buildings and leaky, semipermanent camps around the country.
"How can we celebrate Georgia's successes when we can't even go back home?" asked Tamar Gavrik, who said her village in South Ossetia, like many others, had been bulldozed by Russians or South Ossetian separatists. She went back and visited several months ago.
"There is nothing there anymore. It's flattened," she said. "It's bad here -- we don't have toilets or jobs, and we don't own our land -- but it's worse there. What kind of decision is that?"
For Georgians who held out hope that the problems in South Ossetia and Abkhazia could be solved diplomatically, the war was catastrophic.
"There was nothing good for Georgia in that war. Maybe in the short term, there is more aid money," said Victor Dolidze, a former Georgian ambassador to the Organization for Security and Cooperation in Europe. "But what about in the future? Georgia must solve the problem of its territorial integrity in order to have stability, a lasting peace. And now, all our work is lost. We must start over from the beginning."
Other opposition leaders worry that the influx of international aid -- as well as Saakashvili's obvious progress in paving roads, rebuilding the country's electrical infrastructure and supporting the growth of small businesses -- has obscured Georgia's more worrisome problems.
A 2009 Freedom House report criticized Saakashvili's government for bullying political opposition, restricting civil liberties and compromising the judiciary.
"There is visible progress -- no one's arguing with that," said Tinatin Khidasheli, a well-known opposition leader in Georgia, sipping coffee in a plush cafe in Tbilisi. "We certainly didn't have places like this before."
"But at what cost? Will we trade paved roads for our human rights? For a justice system that works? For a real democracy?" she said. "Georgia may look like it's doing well, but it's a facade."
Saakashvili's second -- and under the constitution last -- term will be up in 2013. Whether Georgians then witness their first peaceful transfer of the presidency may be the true test of the war's legacy.





