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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)

Books on Georgia

REPUBLICAN REFERENCE

Area (sq.km)
69,700 

Population 
4,934,413 

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

Capital 
Tbilisi 

Currency 
Lari

President (acting)
Nino Burdzhanadze

  

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 three military bases and as "peacekeepers" in the separatist regions of Abkhazia and South Ossetia.  They also have a base in Batumi in Adjania, the latest defector from Tbilisi's control. 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. But Russia has skilfully manipulated the situation so that it could, if it chose to do so, rapidly make Georgia totally ungovernable.  In effect therefore, Russia now has ultimate sanction over Kazak and Caspian oil flowing through to western markets by pipeline and by Black Sea tankers.

Update No: 277 - (01/02/04)

The Rose Revolution in Georgia has led to its expected outcome, the election on January 4th by a comfortable margin of over 95% of Mikhail Saakashvili to the presidency. He had led mass protests to topple President Eduard Shevardnadze in November. At 36 he represents a new generation and a new hope for the failed state which post-Soviet Georgia has become.
Shevardnadze's removal happened without violence, unlike that of his predecessor, Zviad Gamsakhurdia, eleven years ago that involved a civil war. That he left without resorting to force is the best proof that Shevardnadze was not a dictator of the durable kind, indeed, had democratic leanings to the end. But his regime was a dismal failure for the people, leaving behind a failed state with a ruined economy.
Corruption and crime are rife. Venality extended right up to the top places in the state. The revulsion against the regime was widespread and genuine.
Saakashvili 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, embedded in every layer of the Georgian state from cabinet ministers to traffic police.

Moves against the oligarchs
Georgia has its own oligarchs like Russia. They congregate in such places as Bakuriani, the ski resort, and had the temerity and, indeed, foolhardiness to be doing so on the eve of the presidential election. The conspicuous consumption of the super-rich may now boomerang upon them. For they are engaging in it in a republic that is now a democracy where 54% of the 4.5 million population live below the poverty line and where the elderly receive pensions of $6 per month.
Well aware that revulsion against the vast disparities of wealth has fuelled discontent, the interim government before January 4th had already set to work to root out the most flagrant examples of ill-gotten gains. Saakashvili had announced his immediate objectives: "We must arrest the people who created this system. There are maybe ten or twelve people or families who are very corrupted and who have appropriated millions of euros and they are the ones we must neutralize."
December saw the arrest of the former Energy Minister and of the football federation president, who is accused of misappropriating up to $340,000. Arrest warrants have been issued for the former railways chief and a former regional governor allegedly involved in the theft of 27kg of gold.
But this is just the tip of an iceberg. Further arrests can be expected as the new government gets into its stride. It is planning to ease taxes on small farmers and businesses, while raising them on luxuries, such as expensive cars and villas.

Now come the problems
The campaign against corruption is one thing, but restoring the economy another. The rose revolution will not be sustained unless there is an economic recovery and that can only come if Georgia is able to open trade links through the secessionist provinces of Abkhazia and Adjaria, that control the main trade routes into Russia and Turkey.
The key here is Russia. Russia has two military bases in Georgia, one in Adjaria, while it is running the peace-keeping operation in Abkhazia that prevents a return to civil war, that rent the province in the early 1990s. There is no hope of durable recovery without a peace settlement in Abkhazia and in South Ossetia, also on the Russian border and mired in violence in the 1990s. This requires a deal with Moscow.

New government headed by a star turn
That will be the responsibility of the new government. The likeliest new premier is the former acting president Nino Burdzhanadze, who is the 39 year-old daughter of Anzor Burdzhanadze, a rich businessman. He was the king of the bakers and butchers in Tbilisi, who was witness at the marriage of a certain Eduard Ambrosevitch Shevardnadze many years ago. Born in the same western region of Goury, the two men have known each other since childhood. The father of Nino was head of the local party, then minister of tourism, while his old friend was escalating the highest reaches of state power, being head of the national party from 1972, opening a long career at the top.
None of this prevented Nino from becoming an inveterate opposition figure, joining her own formation, the Democratic Bloc, into a close ally of Saakashvili's National Movement. She is fervently pro-Europe and pro-Atlanticist policies, as are all the opposition leaders. They also keep up relations with the liberals in Moscow. A decisive new orientation to the Occident looks to be impending in Tbilisi. 
But the Kremlin must also be kept in the picture. Says Saakashvili: "Without finding common language with Russia, it's not possible for Georgia to develop."

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ENERGY

Baku-Tbilisi-Ceyhan pipeline construction ongoing 


The construction of the Georgian section of a pipeline that will carry Azerbaijani oil from Baku to the Turkish Mediterranean port of Ceyhan via Tbilisi is proceeding according to schedule, the project operator said, Interfax News Agency has reported. 
Oil will start flowing through the pipeline early next year, as planned, David Woodward, president of the BP-Azerbaijan company, the Baku-Tbilisi-Ceyhan project operator, told reporters in Tbilisi after meeting with acting Georgian president Nino Burjanadze. 
Work on the Georgian section stalled for several days in December when workers struck for higher wages. Half the work on the section had been completed, and 25% of the pipes had been welded together by the end of last year. The pipeline will have a length of 1,767 kilometres: the Azerbaijani section will be 443 kilometres long, the Georgian section - 248 kilometres, and the Turkish section - 1,076 kilometres. Construction began in April last year and will finish in the fourth quarter of 2004. Exports of oil from Ceyhan will start in the second quarter of 2005. 
The project is valued at US$3.6 billion, including US$2.95 billion allocated for construction work. The construction project participants include British Petroleum, which holds a 30.1% stake, the State Oil Company of the Azerbaijani Republic with 25%, Statoil - 8.71%, TPAO - 6.53%, Unocal - 8.9%, Eni - 5%, Itochu - 3.4%, ConocoPhillips - 2.5%, IMPEX - 2.5%, TotalFinaElf - 5%, and Amerada Hess - 2.36%. 

BP allots Georgia US$1m to cover energy supply shortage 

British Petroleum is earmarking US$1m for Georgia as assistance in offsetting any energy shortage in the high-usage winter period, sources at BP-Georgia have told Interfax News Agency. 
A BP delegation led by company Vice President, Richard Paniguian, was recently in the Georgian capital, where it discussed issues involved in the building of the Baku-Tbilisi-Ceyhan trunk export pipeline and the Baky-Tbilisi-Erzerum gas pipeline with Georgian leaders. Also addressed were other pressing matters that included making sure Georgians have heat over the cold winter months. 
BP-Georgia noted that this assistance is offered by BP, operator and one of the main shareholders in the above oil export and gas pipeline projects, over and above a general US$8m investment program being implemented in Georgia by the participants in these projects. BP-Georgia is not ruling out that the additional BP funding could be used to buy electricity from Russia. 

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FOREIGN LOANS & AID

USA allocates US$6m to Georgia to fund winter fuel aid programme 

Over 230,000 socially vulnerable households throughout Georgia will get 45-lari-worth of electricity free of charge this winter in accordance with the winter fuel aid programme. The programme is funded by the American Agency for International Development which has allotted US$6m for this purpose, Imedi TV has reported. Official representatives of the agency and the Georgian electricity distribution companies signed a memorandum on the implementation of the programme at the Marriott Hotel in Tbilisi. 
The programme is being implemented in Georgia for the sixth time and this year, it will cover the whole territory of Georgia. 

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