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Key Economic Data
  2002 2001 2000 Ranking(2002)
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


Area (


ethnic groups 
Georgians 68.8%
Armenians 9% 
Russians 7.4%



Mikhail Saakashvili


Update No: 286 - (28/10/04)

Georgia has fundamentally changed in all spheres - president 
Georgian President Mikhail Saakashvili believes that fundamental changes have taken in all spheres of life in the country over the past few months. "Today we are on a different planet compared to what Georgia used to be merely a year ago," he told a Cabinet meeting on October 8th. He was referring to the consequences of the Rose Revolution that brought down Eduard Shevardnadze a year ago.
He said that the approach to recruitment policy and state service has changed. "We took over a government that had been unable to pay pensions or wages for months, had failed to control the regions, seaports or customs, a country in which law was absolutely absent," Saakashvili said. 
"The situation in Georgia has drastically changed," he said. 
He said that at present the government is paying primary attention to strengthening the army. "On the anniversary of the November 23 revolution, our army servicemen will be in barracks repaired according to European standards," Saakashvili said. 

The South Ossetia conundrum
The most urgent problem facing the army is how to deal with the problem of South Ossetia. South Ossetia is legally a province of Georgia, but a conflict in the 1990s led to its de-facto independence. Tensions between Tbilisi and Tskhinvali, involving numerous armed clashes, have escalated in recent months as Saakashvili has stepped up efforts to restore control over South Ossetia. The tragedy at Beslan in North Ossetia, in which hostage-takers of children were inter alia trying to stir up ethnic strife in the Northern Caucasus has not helped to defuse the situation.
Nearly 500 Georgian interior troops are expected to take part in exercises in the Gori and Kaspi districts near the administrative border of the breakaway republic of South Ossetia. The exercises will involve artillery and aviation, and a competition of snipers will be held, a Georgian Defence Ministry source told Interfax on October 13th. 
He said the interior force's reserve peacekeeping battalion, which will participate in the exercises, will soon replace Georgian units performing peacekeeping duties as part of the joint forces in South Ossetia. 

Georgian PM, S. Ossetian leader may meet in Sochi - S. Ossetian official 
Officials of Georgia and the self-proclaimed republic of South Ossetia are discussing the possibility for Georgian Prime Minister Zurab Zhvania and South Ossetian President Eduard Kokoity to meet in Russia's Black Sea resort of Sochi. 
"Routine consultations are in progress to organize this meeting in Sochi and compile its agenda," Boris Chochiyev, South Ossetian minister without portfolio and a co-chairman of the Joint Control Commission on the Georgian-South Ossetian conflict, told Interfax-Military News Agency over the telephone from Tskhinvali on October 12th. He declined to disclose any possible date for the negotiations. 
The Joint Control Commission made a decision at its last session in Moscow on September 30-October 2 to set up an expert group involving representatives of all the parties engaged in the process to clarify such terms as the Georgian-South Ossetian "conflict zone," "the joint peacekeeping forces' zone of responsibility," and "a security corridor," he said. "The point is that the Georgian party has recently been trying to suggest its new interpretations of all these terms, thus deviating from the 1992 Dagomys agreements on South Ossetia," Chochiyev said. "The objective of the Georgian party is to expand the territory of the conflict zone to the Roki tunnel, but it will not succeed," he said. 
The South Ossetian minister suggested that Tbilisi had applied double standards to assessing early October's situations in which peacekeepers were injured. "When two Georgian peacekeepers sustained injuries in the village of Tamarasheni under unclear circumstances, the Georgian authorities immediately, without any inquiry, accused Ossetia of the incident. But Tbilisi kept silence when fire was opened on a Russian peacekeeper from a car with a Georgian license plate before the eyes of numerous witnesses in the village of Artsevi," Chochiyev said.

US gives Georgian army equipment 
Georgia is now in an informal military alliance with the US, with which Saakashvili has close ties, having received his higher education there. Some 200 US special forces are training the Georgian army in anti-insurgency techniques, while Georgia is augmenting its troop presence in Iraq.
The U.S. government in a recent move has given the Georgian army vital equipment, sources in the Georgian Defence Ministry told Interfax on Sunday October 10th. "A U.S. cargo place carrying this gift, which is worth a total of $1.1 billion, arrived at the military aerodrome near Tbilisi on Sunday," the source said. The figure of $1.1bn is clearly an error. $1.1 million is more likely, a useful addition in what is a small-scale war of attrition and manoeuvre.
"The gift includes 50,000 square meters of cloth for camouflage uniform, 300 sets of military uniform for service in deserts, and field equipment for the command of the 11th brigade of the Georgian Defence Ministry," the source said. 
Among the people attending the gift-giving ceremony was Saakashvili, U.S. Ambassador to Georgia Richard Miles, and Georgian General Staff Brigadier-General Vakhtang Kapanadze. "The purpose of this gift is to help Georgia ensure its national security," the source said. 
The 300 sets of military uniform were to be transferred to the Georgian commandos. "This battalion will soon leave for Iraq, where 159 people are currently serving. It is planned that the Georgian contingent will be increased to 300 servicemen before the end of November," the source said. 
At the end of the ceremony, Saakashvili told reporters that "the US assistance will be used for strengthening the Georgian army." "This assistance means that the logistical support of the armed forces has increased almost fourfold, which means that the combat potential of the army has increased," he said. 
In addition to equipment, the US has also provided military tents, special computers, bullet-proof vests, and night-vision devices, Saakashvili said. ""It's everything that is needed for effective military action," he said. 

BP to provide $60 million for security of Baku-Tbilisi-Ceyhan pipeline 
It is not just security of its territory, but of the new vital pipeline crossing, which insurgents could target. British Petroleum will provide $60 million to Georgia over the next five years for additional measures aimed at ensuring secure construction of the Baku-Tbilisi-Ceyhan export pipeline, Georgian Prime Minister Zurab Zhvania said on October 10th. 
Zhvania and British Petroleum Azerbaijan President David Woodworth have recently visited the Borjomi region, where the pipeline is being built. "The Georgian government is happy that British Petroleum has fulfilled all its demands regarding the security of the pipeline," Zhvania said. 
Zhvania also said British Petroleum will provide another $10 million for social and educational programmes in Georgia.

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Gazprom may spend 300m Euro for Georgian pipes control

The Georgian government is discussing the participation of Russia's Gazprom in the management of the country's gas pipelines and in the privatisation of Tbilgas, a government source said recently, Interfax News Agency reported.
He said the purpose of a working visit by Gazprom executives was to examine Georgia's gas infrastructure.
Gazprom is ready to pay about 300 million Euro to gain control of the Georgian pipelines, a source at the Georgian Economic Development ministry said following closed door talks with Gazprom. 
The details of the confidential talks were not disclosed. Gazprom executives also met at length with Georgian Prime Minister, Zurab Zhvania, Economic Development Minister, Kakha Bendukidze, and Energy Minister, Niki Gilauri. "We are interested in Georgia as a transit country," head of international projects at Gazprom, Alexander Gorokholinsky said. "As for the privatisation of Tbilgaz, this is part of the overall system," he said.
Gorokholinsky said the Georgian government has new players with new ideas. "So we are discussing various issues with them - time will tell whether this will be a joint venture or if another form of cooperation will be used," he said. "The main objective of the visit to Georgia was to coordinate positions on cooperation in the gas industry, namely by setting up a joint venture or by participating in the privatisation of gas assets in Georgia," a Gazprom source said.
"During the visit a plan was drawn up under which Georgia will provide a list of assets to be privatised and will provide full information on them. The sides will decide on privatisation with Gazprom participation by year's end," he said.

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EBRD issues new strategy for Georgia

European Bank of Reconstruction and Development (EBRD) recently issued a new strategy for Georgia. Georgia among the poorest countries of the EBRD's 27 countries of operations, has achieved notable progress since the elections of a new president and government earlier this year, according to a statement issued by the bank, New Europe has reported.
The new authorities have addressed key problem areas, namely those affecting Georgia's investment climate, such as organised crime and corruption, governance and structural issues in vital sectors such as energy and the weak external position with high foreign debt. The government's commitment, willingness and ability to reform are crucial to meet the significant challenges the country faces.
EBRD will intensify its policy dialogue with the authorities in an effort to improve the investment climate for local and foreign investors. In infrastructure the focus will be on power and energy, regional transport, water utilities and telecommunications. New investments would be considered mainly on a non-sovereign basis that is meaning without a guarantee from the national government and only if accompanied by appropriate regulatory and institutional reforms.
The bank will expand its funding of local enterprises, including micro-, small- and medium-sized enterprises and larger private enterprises, directly and through local banks. In the financial sector, the EBRD will support existing and new partner banks using the full range of debt instruments and will seek suitable equity investments.
Georgia forms part of the EBRD's "Early Transition Countries" (ETC) initiative launched this year to stimulate market activity in the bank's poorest countries of operations. The initiative aims to stimulate market activity by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging economic reform. The initiative is part of an international effort to address poverty in these members of the Commonwealth of Independent States (the former Soviet Union).
The bank will accept higher risk in the projects it finances in the ETCs, while still respecting the principles of sound banking. As of mid-2004, the EBRD has signed 35 investment projects in Georgia in the energy, transport, agribusiness, general industry and banking sectors worth more than 350m Euro.

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