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GEORGIA



 

In-depth Business Intelligence

Key Economic Data
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 3,937 3,324 3,100 126
         
GNI per capita
 US $ 830 650 590 145
Ranking is given out of 208 nations - (data from the World Bank)

Books on Georgia

REPUBLICAN REFERENCE

Area (sq.km)
69,700 

Population 
4,693,892 

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

Capital 
Tbilisi 

Currency 
Lari

President 
Mikhail Saakashvili



Update No: 303 - (27/03/06)

Foreign affairs
In any state foreign and domestic affairs closely interact. This is nowhere more true than in Georgia.
Tbilisi is striving to re-integrate its 'autonomous republic of Adjara,' that was on a secessionist course before its wayward regime was overthrown two years ago. It is turning to Turkey for help in this, as in other matters.

Saakashvili Speaks of Importance of Close Ties with Turkey
Georgia is seeking allies to the west and few are more important than Turkey, which is the vital link between the Baku-Tbilisi-Ceyhan oil pipeline and the wider world beyond. Turkish businessmen are the most active foreigners by far in the Caucasus, where they know the ropes of old.
President Mikhail Saakashvili said on March 14th after talks with his visiting Turkish counterpart Ahmet Necdet Sezer that Turkey is "a great state" which is "a friend" of Georgia. Saakashvili also said at a joint news conference after talks in Tbilisi that Georgia is "firm and consistent supporter" of Turkey's EU membership and added that Georgia is grateful for Turkey's support in Georgia's NATO aspiration.
President Saakashvili stressed the importance of boosting economic ties between the two countries. "I am sure we will be able to integrate our economies, which will foster mutual development," Saakashvili said.
The Georgian President also noted Turkey's "positive role" in solving THE Adjara crisis in 2004. "One of the major goals of our government to turn Adjara into a perfect regional example of successful development and in many cases we move towards this goal through the assistance of Turkey," he said.
Turkish Foreign Trade Undersecretary Tuncer Kayalar and Georgian Economy Minister Irakli Chogovadze signed on March 14th an agreement on a joint exploitation of Batumi airport in Adjara Autonomous Republic, which also envisages regular flights between Istanbul and Batumi. The airport will also become part of Turkey's network of internal flights. A consortium of Turkish companies, TAV and Urban, pledged last September to invest US$15 million in reconstruction of the Batumi airport.
President Saakashvili said that this agreement is a good example of economic cooperation between the two countries. He said that in the summer a new runway will be opened in Batumi airport.
Saakashvili also said that currently "talks are underway between the two sides on free trade between Georgia and Turkey."
The Georgian leader also noted THE importance of minimizing visa rules between the two countries. Georgia and Turkey enforced non-visa treatment for three-month long visits starting from February 10, 2006.
He stressed that this happened shortly before the announcement by Russia that it halts issuing of visas for the Georgian citizens.
"This was a historic coincidence, when A neighbouring country ceased issuing of visas and Turkey has lifted visa requirements for our citizens. This means more trade, more tourism and more close economic ties," President Saakashvili said.
Saakashvili also thanked Turkey for providing electricity during, as he put it, "energy sabotage" against Georgia in January, when twin blasts on gas pipelines in Russia stopped gas supply to Georgia. 
"We are now starting construction of a new high-voltage power line with Turkey which will enable us to export and import extra electricity," Saakashvili said.
The Georgian President said that Turkey and Georgia are "also cooperating very closely in respect of stability, peace and development in the Black Sea region."
"Turkey is a great state, our close friend and a model state for us. I have said for several times that Mustafa Kemal Ataturk's activities which were directed towards Turkey's unification and strengthening is a perfect example for me. I think that what he did for Turkey, we have to do the same for Georgia. Georgia should become a modern, united, developed and successful state and in many issues we follow example of our neighbouring friend - Turkey," Saakashvili said.
"We are also grateful for Turkey's support in Georgia's NATO aspiration. Integration into NATO is a vital issue for our political development. And we are firm and consistent supporters of Turkey's EU membership. I think this is a correct, but to a certain extent delayed process, which should be accomplished in a shortest period of time," he added.

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Domestic affairs
In the unruly Caucasus there are no more important jobs in government, after being its effective head, than those of the defence minister and the interior minister. Hence it is no small matter when the opposition is calling for the head of the interior minister, as now in Georgia.

Saakashvili Strongly Backs Interior Minister
President Mikhail Saakashvili downplayed on March 16th the opposition's calls for Interior Minister Vano Merabishvili's resignation as "very funny" and said that he will strongly support Merabishvili in his way of fighting crime. 
Opposition parties, as well as some human rights groups planed to hold a protest rally outside the President's Administration on March 17th to demand Merabishvili's dismissal over the Sandro Girgvliani murder case. Opposition blames Merabishvili for covering up several Interior Ministry officials and ex-officials who are allegedly lined to this murder case. They have been accused of the murder of banker Sandro Girgvliani, who was found dead on 28th January, and held in custody since 8th March.
President Saakashvili said at a late night news conference on March 16th that the murder of Girgvliani and "any case of this kind is my personal tragedy."
"Of course when Interior Ministry's officials are engaged in crime it makes the crime twice as grave. But we also should mention, that cases of this kind might occur in England, France, very often these kinds of cases take place in America. And Georgia has responded to this case, like it is responded to in these countries… Everybody who deserved to be arrested are already arrested and if there is someone else [guilty of this crime] they will be held responsible as well and everything will be investigated," Saakashvili said.
"There are no untouchables. Everyone, who is guilty, will be punished," he added. 
Saakashvili then spoke much about the success of the Interior Ministry in fighting against crime and added that Merabishvili has a key role in ongoing reforms in the law enforcement agencies. 
"Georgia has never before had such an effective police… Could you ever have imagined that the patrol [policy] would have such a high reputation?.. Do you think that all these have appeared just from the sky? All these have been done by Merabishvili… by all of us. So we will back police up to the end, up to the end," the President said.
"Calls for the Interior Minister's dismissal is very funny… Maybe we will bring here in this office Jondi Bagaturia of the opposition Labour Party, or maybe Shaliko Shalva Natelashvili, Labour Party leader, or Igor Giorgadze, wanted ex-security chief of Georgia will be better?" Saakashvili said ironically.
He also reiterated the earlier position of the influential parliamentarians from the ruling National Movement party, who alleged that opponents targeted the Interior Minister because of their attempts to thwart the police efforts to fight against organized crime.
"The same people and same number of people are repeating this demand on the Interior Minister's resignation time after time under the different pretexts. Georgia was ruled by several 'thieves in law.' The people who are now shouting loudly are the people who do not like that confiscation of property of 'thieves in law' has been launched," Saakashvili said. 
He also reiterated plans that the government plans to propose "a law according to which there will be a zero tolerance towards a petty crime."
"Merabishvili is really a very good Minister and I am going to support him to finish this fight against organized crime up to the end," Saakashvili said.

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But there are those who think that the government is not active enough in this essential task, such as the following:-

Georgia's war on the criminal world: Is the state's arm long enough?
By Lili DI PUPPO
In December 2005, new legislation on organised crime and racketeering was adopted by the Georgian Parliament and signed by Georgian President Mikhail Saakashvili. The legislation was passed on the initiative of Saakashvili, who had announced at several occasions that he would adopt a zero tolerance policy against crime since he was elected President in 2004. However, how far can the state's arm reach and what urgent reforms must the new government tackle if it wants to give any credit to its promise of "rooting out" criminal groups? Moreover, although there is unanimity on the government's declared objective of fighting crime, the methods it employs are often criticised, particularly when individual freedoms appear to be at risk. 
The law is aimed at challenging the power of the Soviet criminal organisation "thieves-in-law" (vory v zakone in Russian ). It contains a definition of the organisation "thieves-in-law" and "thieves' world" and it renders illegal membership to the organisation, including sanctions such as the confiscation of property.
The American and Italian models of fighting organised crime inspired this legislation, in particular the 1970 Racketeer Influenced and Corrupt Organizations Act (RICO), the key innovation of which was to criminalize per se membership in a mafia organisation. The legislation's objective was to contain the perceived spiralling influence of the Italian mafia in American politics and society.
The problem with these legal instruments, which include the 2000 UN Palermo Convention on Organised Crime, is that their definition of organised crime and what constitutes a criminal organisation is often relatively unclear. The same has been noted concerning the new Georgian legislation and the definition of the "thieves-in-law".

New legislation, new methods?
These legal instruments allow law-enforcers more freedom in their investigation methods, as they don't need to establish a connection between a crime and an individual. The starting point of the investigation is the individual, instead of the actual crime leading to the arrest of suspects. With the targeting of specific individuals, crime has a recognisable face for the public.
Moreover, drug seizures or arrests of criminals appear more spectacular, particularly as they receive a lot of media coverage. They increase the legitimacy of law-enforcement agencies when presented as one step in the dismantlement of a specific organisation. In Georgia, although the fight against drug trafficking is not known for its efficiency, Saakashvili has called for renewed vigour in combating drug trafficking. The new law is also designed to protect witnesses and encourage Georgian citizens to denounce crimes, although this last aspect remains controversial.

The fight against crime as a demonstration of the state's power
Despite Saakashvili's claim that crime will not go unpunished anymore, the connection between business and politics is still a very real issue, as a large number of MPs are famously first interested in defending their sometimes dubious economic interests.
Nonetheless, the crackdown on organised crime remains a key element of the Georgian government's project of state strengthening that aims at extending the long arm of the state to the criminal underground. In history, the war against lawless bandits and the setting of boundaries between the legal and the illegal spheres have always been key in state-building and the establishment of the state monopoly of violence. Moreover, this crackdown is aimed at signifying a decisive break with the dubious alliances and practices inherited from Soviet times.

How should we read into the recent incidents that have shaken Georgian prisons?
The crackdown on organised crime in Georgia goes hand in hand with the modernisation of the penal system. Prisons represent the environment where thieves-in-law flourish and retain power as they famously give orders from their cells. However, this last objective appears more problematic as conditions in prisons are reportedly unbearable. To arrest people is one thing, to incarcerate them is another. It was suggested by certain observers that Georgian prisons do not have the capacity to contain the increasing number of inmates following the recent wave of arrests. The government therefore plans to build a new prison in the capital Tbilisi with a capacity for 3.000 prisoners.
Prison riots were reported in the last months. One major strike occurred in December 2005 in Kutaisi, traditionally a strong base of the thieves-in-law, and quickly spread to other prisons, while a fight broke out between prisoners and police officers in a Rustavi prison in January 2006. The mutiny in Kutaisi was brought under control in January.
Such incidents may highlight the dissatisfaction of inmates with living conditions in overcrowded cells, but it may also signify that thieves-in-law are not yet ready to give up their power to the new authorities, as was implied in official comments. So strong is the belief in the collusion between the Interior Ministry and criminals that some observers have suggested that the strike could have been organised by the Interior Ministry itself to regain control of the corrections department that was assigned to the Ministry of Justice.

To be reviewed
Another cause of worry amid the crackdown on organised crime concerns the methods employed by the police. NGOs such as Human Rights Watch and Amnesty International have repeatedly condemned the use of torture in Georgian prisons and published extensive reports highlighting mistreatment and brutality against suspects. These reports have contributed to overshadow the international reputation of the new Georgian government despite its reassurances that the situation has progressed since the former regime, a fact that was acknowledged in Amnesty International's most recent report.
Accusations of mistreatments voiced by human rights groups finally led to the dismissals of Justice Minister Kote Kemularia and the chief of the penitentiary system, Shota Kopadze, in December 2005. A monitoring group composed of representatives from civic watchdogs was set up to investigate conditions in the prisons.
However, the crackdown on organised crime not only necessitates a reshuffle in the Ministry of Justice, but perhaps more crucially a crackdown on corrupt elements in the law-enforcement structures. First the law enforcement agencies must clean up their own ranks. This task appears even more pressing in the light of a recent murder affair that has involved four top officials from the Interior Ministry. 
Despite a loss of influence after the end of the Soviet Union, the reputation of the thieves-in-law as protectors has flourished against the background of the corruption and brutality of the Georgian police under Shevardnadze. Therefore, as long as the Georgian police fail to inspire trust, the thieves may well retain some of their past influence. 

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TELECOMMUNICATIONS

Georgia to call tender for United Telecommunications 


Georgia's Economic Development Minister, Irakly Chogovadze, confirmed the government's plans to sell its 90 per cent stake in United Telecommunications Company, reported Interfax News Agency.
An "international tender will be announced, in which all those who wish will be able to participate," the minister said at a February 8th cabinet meeting. "The starting price for one of Georgia's largest operators will be set at 50 million Euro," Chogovadze said. However, "we expect that this amount will increase considerably in the course of the tender." United Telecommunications has 350,000 subscribers, including 220,000 in Tbilisi. The company's network includes 51 switches, with digital switches serving 184,600 customers.

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