The decade between 2003 and 2013 was a crucial moment for the consolidation of the post-Soviet Republics of the Southern Caucasus. The security context proved to be a major issue in the region, with a full-fledge conflict between Georgia and Russia over South Ossetia (2008) and an ongoing simmering conflict between Azerbaijan and Armenia over Nagorno-Karabakh. Nonetheless, internal political stability improved in all three countries and their economies grew substantially.
Armenia, Azerbaijan and Georgia followed distinctive paths and reached different outcomes. Armenia development was hampered by relative isolation and Russian support remained vital. Instead, Azerbaijan experienced an economic boom driven by oil and gas exports. Eventually, Georgia embraced a pro-Western orientation, which attracted direct investments but also a tough Russian reaction