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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: 282 - (30/06/04)

The Rose Revolution flowers
There is nothing like success to beget success. The world was stunned and astounded by the Rose Revolution in Georgia last year. Former Georgian President Eduard Shevardnadze was toppled from power in November. Thousands of protesters took to the streets after the alleged rigging of a general election.
Mikhail Saakashvili, the leader of the protests, won new elections that were held in January, promising to defeat corruption and reform his country. He is now the president. He is committed to a complete overhaul of the country.
He was asked a standard question recently about his predecessor's legacy, whether there was anything positive in it, and replied in an interesting manner: "There are some things. But there is so much bad. A politician isn't like a painter. A painter can paint some good pictures and some bad pictures. A politician is judged on the whole of his work." Indeed, as even the greatest leaders, such as De Gaulle, can find out.

The West buckles in 
National and international institutions have pledged more than US$1 billion to help Georgia defeat corruption and pull its citizens out of poverty, in an international conference on the subject. "This assistance will allow us to build Georgia as a sustainable democracy, as a country which will become much less dependent on international assistance in the following years. I want to express my gratitude," Georgian Prime Minister Zurab Zhvania said.
The organizers of the conference did not give a breakdown of the US$1 billion donations, but the EU said that it would give 125 million euros (US$150 million). Germany pledged 26 million euros (US$31.2 million) and Sweden 54 million kronor (US$7.2 million).
The United States pledged US$360 million over three years starting this year. "The changes in Georgia have brought a greater openness and willingness to reform the country. Sweden wishes to take part in supporting this development toward better living conditions, enhanced democracy and respect for human rights," Sweden's Ministry for International Development Cooperation said in a statement.
The money is to be used for many different projects, including energy, fighting corruption, poverty reduction, child welfare, food security and infrastructure projects.

What next?
But this is all very speculative; and one may well ask why it did not happen before. Georgia is a country rebarbative to Western ideas. It is after all the birth-place of Stalin.
Corruption is endemic. There is no easy solution to its problems. It is going to take decades to sort them out. 
Mikhail Saakashvili has an enormous job on his hands. The Western-educated intellectual and polylinguist (he speaks five languages) is probably the best prepared of the young elite to undertake it. He has made a clean break with the old elite by living in a modest two-bedroom apartment in the centre of town, eschewing the palatial surroundings of Shevardnadze, where he is still, rather cunningly, installed.
Saakashvili is one of the most unusual figures on the world stage. It will be interesting to see how he performs. 

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ENERGY

Georgian-Russian team to assess project of oil pipeline along Black Sea coast

The Georgian International Oil Corporation [GIOC] and Russia's [state oil pipeline monopoly] Transneft have formed a joint task force to prepare a feasibility study of the proposed Novorossiysk-Supsa-Ceyhan oil pipeline project, the GIOC president, Giorgi Chanturia, said, Kavkasia-Press News Agency reported.
Chanturia said that preliminary estimates of the project already had been made while more detailed analysis would take another three to four months. "The preliminary studies show that this would be a very serious project," Chanturia said. According to the GIOC president, the pipeline construction would cost US$3.5m and its annual capacity would be 50m tonnes initially and 60m tonnes afterwards.
Chanturia noted that the possibility of implementation of this project was discussed during Georgian Prime Minister, Zurab Zhvania's, recent visit to Moscow, as well as during President, Mikhail Saakashvili's, earlier visit to Russia.
It has been estimated that Russia's annual profit from the project could amount to US$500-700m.

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FOOD & DRINK

EBRD invests in winemaker


The European Bank for Reconstruction and Development (EBRD) is investing €1.2m in Teliani Valley, a wine processing, bottling and distribution company in Georgia, to help expand its production facilities, improve marketing initiatives and increase sales of its high-quality wines, New Europe reported recently. 
EBRD President Jean Lemierre said upon the announcement that Georgia has improved in recent months, and the new government faces big challenges to improve economic activity and the investment climate. Lemierre added that small- and medium-sized businesses like Teliani Valley will play a key role in that development, and that the bank will strongly support this sector.

Pepsi plant opens in Tbilisi

A Pepsi plant worth seven million Euro has opened in Tbilisi and it will be the exclusive distributor of PepsiCo products in Georgia and Armenia. The plant is owned by Georgia's Iberia Group, the European Bank for Reconstruction and Development (EBRD) and two individuals, the plant's Director General, David Lomjari, said, Interfax News Agency reported.
The bank of Georgia extended a two million Euro loan and the European Bank for reconstruction and development financed one million Euro to finance the project. The plant has a capacity of 12,000 litres of soft drinks a day, which will completely satisfy market demand, Lomjari said. The plant will produce soft drinks, including Pepsi, Pepsi Light and Miranda.

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FOREIGN ECONOMIC COOPERATION

Tbilisi strikes economic agreement with Moscow


Russian and Georgian Prime Ministers, Mikhail Fradkov, and Zurab Zhvania, respectively, have agreed to draw up a comprehensive economic agreement between the two countries. The two leaders held a series of thorough talks during Zhvania's official working visit to Moscow recently, Interfax News Agency reported. 
Both Fradkov and Zhvania looked into options for investing in the Georgian economy and agreed to instruct the two countries' governments to step up bilateral contacts.
The meeting's agenda, among other issues, included "investments in the energy sector, establishing joint ventures in the gas industry, as well as possible investments in the transport and oil sectors," Fradkov said, quoted by Interfax. The Russian prime minister also declared his country's willingness to increase electricity supplies to Georgia. He added that the talks also addressed Russian companies' potential role in reshuffling and modernising Georgia's electricity generating facilities. "Russian companies face a highly promising future in Georgia. This is the policy of the Georgian president and government," Zhvania estimated.
For his part, the Georgian premier stressed: "Today we are trying to turn a new page in our relations." Both leaders were pleased that the two-day talks had produced the strong impression that their countries are in a position to take specific measures and steps to ensure sound prospects for trade and business relations. "We have reached an agreement on our programme of actions," the Russian official said.
Advancing their talks, including culture and education issues, Fradkov said that will allow the two countries to clear all the tensions that have plagued their relations over the past few years. During his visit to Moscow the Georgian premier also held a meeting with Russian Foreign Minister Sergei Lavrov on issues concerning the transportation of their citizens between the countries. The two officials discussed the possibility of easing visa procedures. A statement from the foreign ministry read "the sides spoke in favour of reinforcing the recent trend of cooperation on relations between Russia and Georgia, above all, in the fight on terrorism. In light of this, the sides discussed the possibility of relaxing the procedures for issuing visas between the two countries.
During the negotiations, both Lavrov and Zhvania pointed out the necessity of opening consulates in Georgia and Russia.

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FOREIGN LOANS

IMF resumes lending to Georgia

The executive board of the International Monetary Fund (IMF) has decided to resume the programme of economic assistance to Georgia. At its meeting on June 4th, the board approved the allocation of about US$144m to Georgia [a three-year arrangement under the Poverty Reduction and Growth Facility], Prime-News News Agency reported.
The first disbursement of about US$21m has become available immediately. This amount will be used to boost the foreign exchange reserves of the National Bank of Georgia. The IMF had terminated the assistance programme last year because of Georgia's failure to meet undertaken obligations. At that time the IMF deemed that none of the Georgian government bodies except the National Bank had fulfilled any recommendations of the fund.

TRANSPORT

Georgia starts restoring rail link with South Ossetia's capital

Work on restoring the rail link with Tskhinvali [South Ossetia's capital] began recently in the village of Nikozi (6km from Tskhinvali). The start of the work was attended by Georgian Prime Minister, Zurab Zhvania, and the head of the Georgian railways, Davit Onoprishvili, ITAR-TASS News Agency reported. 
Davit Onoprishvili said that it would take three days to restore the link with Tskhinvali and start running a train. 
Prime Minister, Zurab Zhvania, made the following statement: "South Ossetia has been, and always will be, an integral and inseparable part of Georgia. This is our land, our motherland, and Georgia is the motherland of every Ossetian, whether he lives in South Ossetia or any other district or region of the country."
"We want every one of them [South Ossetians] to feel that they live in their own home, and that this home is Georgia. This is the very thing at which the policy of President Saakashvili is aimed. As is his decision to provide the residents of the Tskhinvali region with Georgian pensions, medical treatment and fertilizer," said Zhvania.

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