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georgia

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  GEORGIA

REPUBLICAN REFERENCE

Area (sq.km)
69,700

Population
5,471,000

Principal
ethnic groups

Georgians 68.8%
Armenians 9%
Russians 7.4%

Capital
Tbilisi

Currency
Lari

President
Eduard Shevardnadze

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Background:
Georgia was absorbed into the Russian Empire in the 19th century. Independent for three years (1918-1921) following the Russian revolution, it was forcibly incorporated into the USSR until the Soviet Union dissolved in 1991. Russian troops remain garrisoned at four military bases and as peacekeepers in the separatist regions of Abkhazia and South Ossetia (but are scheduled to withdraw from two of the bases by July 2001). Despite a badly degraded transportation network - brought on by ethnic conflict, criminal activities, and fuel shortages - the country continues to move toward a market economy and greater integration with Western institutions.

Update No: 253

The president of Georgia, Eduard Shevardnadze, is not for nothing a great advocate and practitioner of diplomacy. He was after all the Soviet Foreign Minister at a central time in history 1985-90. He resigned in December 1990, warning of an imminent coup, which duly took place in August 1991 with momentous consequences. There is no shrewder grandmaster on the world's geopolitical chessboard.
When he left power in 1990 he already had his sights on becoming president of Georgia again (he was for long the KGB head and then president of Georgia in Soviet times) in a post-Soviet order. He duly came back to power in 1992.
He has dominated the Georgian scene since then, being regarded as the indispensable man. But he is ageing and the succession question cannot be postponed indefinitely.
Shevardnadze showed his continuing acumen in December when he secured an agreement for close cooperation with Armenia president Robert Kocharyan. Armenia needs Georgia as its only outlet apart from Russia, to the outside world (that is so long as an embargo is maintained against it by Turkey and Azerbaijan). Shevardnadze is not one to overlook how to take advantage of being an international interlocutor for a state in difficulties; the West was doing it with him in the late 1980s all the time. Hence his prescience about the Soviet collapse and his survival despite of it.

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ENERGY

KfW with DEM 25m for ETLR II programme


A project agreement worth DEM 25m was signed recently with German KfW on the Electricity Transmission Lines Rehabilitation (ETLR) II programme in Georgia. The credit is allocated for 40 years under a 0.75 per cent interest rate on an annual basis.
As reported by Sharg, a tender will be announced by the German side to reveal an ultimate performer of rehabilitation works on the Zestaponi power unit to be defrayed from this sum. The Sakelectrogadatsema JSC will have to pay back the sum to the finance ministry over 20 years with a four per cent annual rate.

Georgia supports common energy system in southeast Europe

Georgian President Eduard Shevardnadze said on January 14th that his country supports a common energy system in southeastern Europe. A common energy system "should be formed with the participation of Russia, Ukraine, the Balkan countries, Azerbaijan, Turkey, Armenia, Moldova and other more distant countries" Radio Georgia quoted Shevardnadze as saying.
European institutions are also pondering the issue, the president noted. "Georgia will gain a lot if it initiates the common energy system," Shevardnadze said. Georgia will be a central country to contribute to the development of the common energy system, he said.
In Soviet times, a common energy system existed on the entire territory of the former Soviet Union and Gerogia was a part of it. "Today the common energy system implies the end to conflicts and close co-operation between nations. It is difficult to speak about state independence without being independent in energy," he stressed.
Therefore, Georgia has been drafting a long-term energy programme for several years. The programme is based on the building of oil and gas pipelines to carry Caspian fuel to Turkey and Europe via Georgia, he said.

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FINANCIAL NEWS

Georgia 2001 inflation falls below 6% estimate


Georgia posted inflation of 3.4 per cent in 2001, although it had been predicted at six per cent, Interfax News Agency reported, citing data from the state statistics department.
Inflation totalled 1.4 per cent in December, with food prices, including drinks and tobacco up 2.1 per cent. The biggest increased were six per cent for fats and vegetable oil and 5.2 per cent for fruit vegetables.
Non-food goods went up 0.2 per cent in December, while services remained unchanged on average. Medial services went up 0.7 per cent and transport and telecommunications services dropped 0.4 percent. Georgia posted inflation of 4.6 percent in 2000 and the predicted level at eight per cent. Inflation is forecast at five per cent in 2002.

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