Georgia is a tiny mountainous state in the Caucasus that has been wracked by civil war, secessionist forces and plummeting living standards since it emerged from the ashes of the Soviet Union.

A region nestled on the eastern shores of the Black Sea, Georgia used to be a slice of paradise in the Soviet Union.

A fertile land, it supplied wine and produce to Russia and the other 14 republics and was among the top tourist destinations. Its people enjoyed the highest per capita income of any Soviet satellite.

But in the dozen years since independence, it is barely holding together as a single country after two regions effectively seceded and one is perennially threatening to do so.

Its economy has plummeted, today 54 per cent of the population live below the poverty line, and there are regular power outages. Western diplomats have designated Georgia as a "failed state".

The trouble started in 1991, when Georgia gained its independence from the Soviet Union.

In December that year, a standoff between then president Zviad Gamsakhurdia and the opposition turned violent and hundreds of people died on Tbilisi's cobbled streets in the fighting.

After years of fighting and thousands of casualties, Georgia and the rebellious republics settled into an uneasy truce with the regions.

Russia, which first annexed Georgia in 1801, has backed the Ossetian and Abkhazian separatists and is in de facto control of the regions.

Meanwhile the southern region of Adjara remains a potential flashpoint, as its powerful leader, Aslan Abashidze, desperately wants to see Georgia in Russia's orbit.

On the economic front, the government has let corruption and the illegal economy flourish to such an extent that it now finds itself unable to raise the taxes needed to help relieve poverty.

With the government nearly broke, state benefits often go unpaid, state employees' wages are paltry and late, and gas and electricity bills are crippling consumers because the state can no longer afford to subsidise them.

But the world is far from indifferent to the fate of Georgia.

For one, it is in a strategic location, wedged between NATO member Turkey and Russia.

It is also on a transit route for the export of crude from the nearby Caspian Sea, where Western oil companies are hungrily developing new fields.

Control the export route for the oil, say analysts, and you control the oil itself.

Both Russia and the United States have struggled for influence there in manoeuvres reminiscent of the so-called "Great Game" of the 19th century, when then world superpower Britain tried to outwit tsarist Russia for influence in Central Asia.

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