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Ambassador Courtney began his talk by noting the remarkable progress which Georgia has made on the road to democracy and a market economy. If just four years ago some academics were referring to it as an example of a "failed nation-state," today it is one of probably only two states making very rapid progress toward these ideals (the other being Moldova). Georgia has eliminated its armed marauding gangs, and the only remaining vestige of its violent post-Soviet rebirth is the separatist movements in Abkhazia and South Ossetia, which are effectively semi-independent now. Georgia''s November 1995 elections were the freest and fairest in the Caucasus and Central Asia, and its parliament is the most reformist in the former Soviet Union, starting even to privatize land. If in September 1994 its monthly inflation rate exceeded 60 percent, in October 1995 it introduced a new national currency, the lar, which is now more stable than the US dollar. In fact, the US expects to end its large-scale humanitarian assistance programs to Georgia in 1997, since the country is making such a great economic turnaround. Georgia has also made good use of its position along what it calls the "Eurasian Corridor." Now that Georgia has stabilized, it is able to open the first major trade route, most notably featuring a planned oil pipeline, that will run from Europe to Central Asia to China, bypassing Russia. This is particularly important for the export of Caspian Sea oil. Trade is burgeoning, with trucking routes, for example, growing quickly. Georgia is also the only state in the region that has managed to establish good relations with all of its neighbors. Georgia has even normalized relations with Russia, which had been sour due to the extreme nationalist orientation of the Gamsakhurdia regime. Georgia''s main task now, Ambassador Courtney said, is to privatize its state assets faster so as to combat corruption and even organized crime. Georgia also needs to move ahead on law enforcement reform, since problems still seem to occur there, but the US thinks that Shevardnadze will probably do this. US-Georgian relations could not be better, and the US is heavily supporting Georgia''s economic reforms. The Ambassador said that he believes a deal is even in the making to settle the Abkhazia conflict. In supporting the Abkhaz, Russia cut off one of only two rail links to the Caucasus region, and it lost the other one during the course of its war in Chechnya. As Russia sees the wave of trucks coming from Turkey and the increasing presence of US oil companies, it is getting frustrated and becoming more willing to make a deal. The Georgians, for their part, want Abkhazia back, and they will be in a better position to negotiate as their state improves both economically and in legitimacy due to democratic reforms. The Abkhaz themselves, it is now clear, understand that they will have to cut a deal and be part of Georgia.