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Update No: 258 - (27/06/02)

The Georgians are raising their profile abroad, as the US comes to town. In fact US forces are helping Georgian security organs flush out terrorists in the Pankisi Gorge in the north-east, bordering Chechnya. Shevardnadze, the shrewd president of the country is playing off the US against Russia, just as he once did Europe against the US as Soviet foreign minister under Gorbachev.
This early US contingent is 200 strong. The US's commitment extends to helicopters and military equipment. A success in rounding up al-Qaeda suspects would be a massive boost for Georgia's standing.

Opening up
Georgia is opening up its economy to foreigners. The inflow of foreign direct investment (FDI) has been respectable, if not yet spectacular. FDI in 2000 was US$152m, while in 2001 it was US$100m. But FDI in 2002 is likely to be in the order of US$150m.
The attractions of Georgia are manifold. In the Caucasus, neighbouring the Black Sea and Russia, it is a natural gateway for the whole region. The natural beauties of the countryside and coastline, its ancient churches, its excellent wines and cuisine make it a potential centre of tourism for Europe. Always the favourite of the Soviet elite, it only needs to shed its image of civil war for it to attract tourists in droves.
An earthquake hit Georgia in May, causing major disruption. The World Bank has allotted US$10m for reconstruction efforts, new housing and infrastructure. Being in an earthquake zone is a drawback certainly. But the quake did not involve heavy loss of life, unlike Armenia in 1988.

Energy hub of the region
One big development is the operation of a pipeline from Baku westwards via the Black Sea to Western Europe, which should earn Georgia hundreds of millions of dollars in transit fees. 
Shevardnadze sees Georgia as the energy hub of the region. Certainly the geopolitics there make it pivotal. The post 9:11 world is contributing to put it on the map.

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FOREIGN ECONOMIC COOPERATION

Black Sea economic cooperation clue to regional stability

Russian State Duma Deputy Speaker, Vladimir Averchenko, is certain that the establishment of mutually beneficial cooperation by the Black Sea Economic Cooperation zone member states will enhance regional stability, ITAR-TASS News Agency has reported. 
He was speaking at the Black Sea Economic Cooperation Parliamentary Assembly session, which opened in the Georgian capital, Tbilisi, on June 12th. Averchenko leads the Russian delegation to the forum that has brought together members of parliament from Armenia, Azerbaijan, Albania, Bulgaria, Greece, Georgia, Moldova, Romania, Russia, Turkey and Ukraine. Israel and the Slovak Republic are present in the capacity of observers. 
The chief Russian delegate noted the special importance of cooperation by countries in the region in view of several unsettled conflicts near the Black Sea. 
He said Black Sea economic cooperation was of tremendous importance to coordinating actions the countries of the region, connected by strategic transport routes and experiencing heavy migration. 
Black Sea countries, he said, have many reserves and opportunities yet to be tapped and the members of their parliaments should help put them to use. In his message of greeting to the forum, Georgian President Eduard Shevardnadze, said he was certain that "respect for each other's interests and joint efforts will turn the Black Sea region into a powerful economic instrument and a factor for the prosperity of our countries and peoples."
Shevardnadze pointed to the unambiguously positive role of the latest Russia-US summit meeting for the future of Black Sea economic cooperation. He recalled that the Russian and US presidents had brushed aside rivalry in the South Caucasus and Central Asia and were for the turning these regions into an area of cooperation. Shevardnadze said this would allow clearing the Black Sea region of terrorism and sources feeding it - extremism, nationalism, religious fanaticism, aggressive separatism and illegal arms trade and drugs trafficking.

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FOREIGN LOANS & AID

Western Georgia - ICRC launches assistance programme

The ICRC and the Georgian authorities have signed a memorandum of understanding that formally launches a new assistance programme for 20,000 of the most vulnerable internally displaced persons and local residents in Western Georgia, the International Committee of the Red Cross (ICRC) has announced on its web site. 
The ICRC had stopped such assistance in the area in November 1995, but decided to resume aid after a survey in 2001 showed that these persons were facing enormous difficulties in meeting basic needs. 
Under this memorandum of understanding, the Georgian Ministry of Health, Labour and Social Affairs and the Ministry of Refugees and Accommodation will ensure the identification of beneficiaries and distributions through local authorities. The ICRC will provide commodities for dry food distribution, resources for programme management and needs based monitoring of beneficiaries identified by the Ministries to confirm they require the assistance of the ICRC to meet basic and emergency food needs. 
The programme will be implemented in two phases. A first distribution of 12,000 rations was due to start on 28th May 2002 to an initial caseload of destitute persons unable to rely on savings, assets, family support or income from work or agricultural activity. The IDPs among them were displaced during the Abkhaz conflict in 1993/4. The assistance will consist of wheat flour, beans, oil, salt and yeast (a total of 17 kg/parcel). The ICRC and the two Ministries will continue working together to ensure the accurate targeting of the most destitute for Phase 2 in autumn 2002. 
According to Martin Amacher, ICRC acting Head of Delegation in Tbilisi, "in this situation of no war, no peace, there is no economic recovery and international development aid does not yet benefit destitute persons unable to participate in development programs. Ten years of such destitution have brought the most vulnerable in society down to a level where their very survival is at stake. The ICRC cannot meet all the needs of the population, but we are helping the authorities to support the most basic social welfare coverage." 
During press conferences held in Geneva and Tbilisi, the ICRC also called on the international community to more strongly support economic development and humanitarian programmes in a part of the world for which obtaining international funding has become extremely problematic.

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