Foreign investors in Georgia aren't likely to sell their investments in a panic because of the conflict with Russia, predicts the Bank of Georgia's representative in Israel, Eitan Shmueli. What they're likely to do is sit tight and wait out the tensions, but he admits that could take six months to a year.

Shmueli is senior partner and head of the commercial banking department at the law office of Shibolet & Co., which represents the Bank of Georgia. "Everybody will wait. Nobody will be doing business," Shmueli said. "It will take a fairly long time before matters clear up. Meanwhile, investors will be rethinking their investments, and will freeze them. And that assumes that the fighting stops this week."

Meanwhile, the Georgian banking system continues to operate, the Bank of Georgia says. It means holding conference calls to discuss the situation with its customers and with its investors, most of whom are western institutionals. Matters in Tbilisi are normal, says Shmueli: "It's sort of like Sderot in Tel Aviv. Missiles may land on Sderot but in Tel Aviv life continues as usual." He did, however, have trouble yesterday getting the law office with which Shibolet works in Tbilisi on the phone.

Fear of invasion had been hovering. he says. Perhaps now, the uncertainty has disappeared, if the battles end without Russia overwhelming Georgia. In any case, people won't be rushing to sell their holdings, he predicts.