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GEORGIA



 
Key Economic Data
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 3,324 3,100 3,000 124
         
GNI per capita
 US $ 650 590 590 151
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km)
69,700 

Population 
4,989,285 

Principal 
ethnic groups 
Georgians 68.8%
Armenians 9% 
Russians 7.4%

Capital 
Tbilisi 

Currency 
Lari

President
Eduard Shevardnadze

  

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: 275 - (24/11/03)

The end of Shevardnadze
There is a crisis in the Georgian Republic, which is leading to a change of regime. On November 2nd elections to parliament were held, which yielded a highly contested result, the official version of which was only made public three weeks later. Mass demonstrations were clamouring ever since election day for the resignation of Eduard Shevardnadze, the president since 1992, who duly acknowledged the inevitable and resigned on November 23rd.
The acting president until new elections in 45 days' time is Nino Burdzhanadze, the effective opposition parliament speaker, who declared herself president on November 22nd when Shevardnadze was forced to flee parliament. This happened thirteen years later to the day when Margaret Thatcher resigned, another leader who played a key role in ending the Cold War. Shevardnadze was Soviet Foreign Minister under Gorbachev and presided over the peaceful re-unification of Germany, where he is far more popular than at home. He might end up living there in Baden-Baden, where he is reputed to have bought a mansion.

Electoral fraud
The elections were clearly rigged in the eyes of international observers, but more importantly in the view of the general public. There was a big discrepancy between exit polls and the final result. This was a bad slip up by the regime in an election, which was otherwise undertaken in a predictable way. Many polling stations were not open and would-be voters were turned away. In one incident armed men in ski masks burst into a poll booth and absconded with the ballot box.
The results when first disclosed were not plausible to the public. The pro-regime bloc, For a New Georgia, won the most votes on 21.3, but no-one knew personally anyone who had voted for it. Opposition parties received nearly 70% of the votes cast. It was obvious that even on this rigged result the regime could not survive.

Defection of Shevardnadze supporters
Shevardnadze took a long time to bow to the inevitable. The situation became desperate when his own security chief, Tedo Japaridze, declared the elections fraudulent and demanded a rerun. The strong signal was given to the opposition that, if they pushed against the police lines, the police would give way, exactly what happened on November 22nd. Japaridze, a former ambassador to Washington, knew he would have US support. 
The other key figure in the crisis is Mikheil Saakashvili, the leader of the opposition party, the United National Movement, which was cheated of first place, receiving 18.08% of the vote, putting it behind not just For a New Georgia, but also the party of Aslan Abishidze, the tough dictatorial president of the virtually independent province of Adjara. Everyone knew the vote would be rigged in Adjara, so much so that, on average, every Adjaran of voting age cast about 1.2 votes for his party!
Saakashvili is now likely to become the next elected president. Like Japaridze he is pro-American, having been educated in universities in Washington and New York. He was a highly regarded justice minister who resigned three years ago in disgust at the corruption that became the hallmark of Shevardnadze's rule.

Corruption the key issue
The prevailing popular opinion is that the stalwarts of the pro-regime party are not for Georgia at all, but for themselves. The scale of corruption was extensive in Soviet times; it is now rampant. Poverty is rife and many are still refugees without homes. 
Shevardnadze has been around too long, for eleven years, for all that he has been able to do for his people. The charisma, after being the former Soviet Foreign Minister, of a statesman on the world stage has long worn out. Even those who still possessed it after ten years in power, De Gaulle and Thatcher, were so unpopular by the end that they had to leave. This is especially true of Shevardnadze as it is compounded in his case by the fact that for two decades before going to Moscow he was the Soviet republic's KGB boss and then communist president. 'Thirty years of Shevardnadze is enough,' shouted the demonstrators on November 22nd, who numbered over 100,000.
The pro-US flavour of the politics of Saakashvili and of the other two instigators of 'the velvet revolution,' as the ouster is being called, Jarapidze and Burdzhanadze, is highly important for the fate of the oil pipeline through the republic from Baku to Turkey, set to bring a million barrels a day of Caspian Sea crude to Western markets. This by-passes Russia and Iran, so that the turn of events is not welcome in Moscow or Tehran. The Great Game is still being played here and the US is just about to win an important trick. The US ambassador, Richard Miles, has been actively grooming Saakashvili for the succession. 'Shevvy,' as he came to be affectionately called in Washington, was once the US's favourite in the region, but he has clearly outlived his usefulness.

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ENERGY

Georgian president expects new parliament to cooperate on energy issues

"The complexity of the election process notwithstanding, no-one should forget that the most essential point for us is to maintain the state's course and stability, as well as to implement projects which will help create better living conditions for the population," Georgian President Eduard Shevardnadze said in his radio interview on 3rd November, Kavkasia-Press News Agency has reported.
The president meant the major [Baku-Tbilisi-Ceyhan] oil and [Sah Daniz-Tbilisi-Erzerum] gas pipeline projects, on the implementation of which, he believes, there is a consensus in the country.
Shevardnadze described the Sah Daniz project as important and necessary for Georgia because it would help complete the process of providing natural gas to the whole of Georgia. This project will provide Georgia with a substantial amount of gas free of charge and an additional amount at discount prices. "Such points will undoubtedly help us to cooperate with parliament and find solutions to problems of national significance together," he said, adding that the government-backed election bloc was ready for such cooperation.
Shevardnadze said that essential talks on these issues were held with the president of Azerbaijan, Ilham Aliyev

Tbilisi gets power from Russian electricity giant

Russia's electricity monopoly, Unified Energy Systems (UES), recently started supplying electricity to Georgia's capital, Tbilisi, through the Kavkasioni power cable, director general of the Tbilisi electricity distribution company Telasi, Dangiras Mikalayunas, said at a news conference, reports Interfax News Agency.
According to him, during the first phase Tbilisi would receive 100 megawatts of electricity from Russia each day. "Telasi has received an annual licence to import electricity not only from Russia, but also from Armenia," Mikalayunas said. "Electricity will be supplied from Armenia through the Alaverdi power cable." Mikalayunas said the imports and launch of the unit at Tbilisi State Regional Power Plant will cover a 1bn kWh shortage of storage capacity that Tbilisi faces during the autumn and winter seasons.

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FINANCIAL NEWS

Georgia may face "serious economic shock" if tensions continue - minister

Georgian Minister of Economy, Industry and Trade, Giorgi Gachechiladze, predicts a "serious economic shock" in the country if the current political tensions in Georgia continue for a few more days, Kavkasia-Press News Agency reported on 11th November.
In his conversation with journalists, Gachechiladze stated a number of facts to support his claim. He said, for example, that the inflow of imports in the first days of November had fallen by 70 per cent compared to the respective figures for October. The minister said that [presently] no funds were being invested in Georgian enterprises as investors had suspended this process. "The existing tensions in the country have affected the lari, the national currency, exchange rate, which has fallen by almost four points," Gachechiladze said.
The minister also noted that major shipping companies were switching to sea ports in other countries. For instance, the major shipping company Maersk [Sealand of Denmark], which used to unload its freights in Poti and Batumi ports [in western Georgia], has recently shipped its cargo to Novorossiysk in Russia, Gachechiladze said.
"The situation with respect to budget fulfilment is catastrophic. Our domestic resources will not be able to cope with such stagnation. What is happening now will directly affect the social sphere in one or two months," the minister said.

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FOREIGN LOANS

IMF to resume financial assistance to Georgia

The International Monetary Fund (IMF) hopes to resume its financial assistance to Georgia following a year-long suspension, Teimur Basilia, the Georgian president's economic reforms aide, said at a press conference, Interfax News Agency reported.
According to Basilia, the IMF board of directors has approved Georgia's Poverty Reduction and Economic Growth national programme, which was developed with the assistance of the fund's experts. The presidential aide said the IMF board of directors' decision paved the way for the resumption of the fund's assistance, which will be used to finance the programme, Interfax said. "The World Bank will also have to approve this programme. Its board of directors plans to consider it during its next session. The Poverty Reduction and Economic Growth programme will begin in 2004 and continue for 12 years. It envisions long-term low interests credits worth US$466m to be issued to Georgia by the IMF and the World Bank. Some US$114m of these funds will be provided within the first three years of the programme's implementation," Basilia explained. "Georgia's commitment to its obligations to these international financial institutions is integral to the programme's success," he added.

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