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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: 305 - (30/05/06)

The Kremlin gets tough with Georgia 
Relations between Moscow and Tbilisi have soured badly this year. In a series of clashes between the two post-Soviet states, Russia imposed a ban on Georgian wines and spirits after bitter rows earlier in the year when pipeline explosions cut Russian gas supplies to Georgia in the middle of winter.
The situation is getting worse, not better. There is a strong suspicion in Georgia that it is being punished by the Kremlin for having had the temerity to have launched the Rose Revolution two years ago. 
The Russians are certainly meddling in Georgian affairs in a most abrasive fashion, backing two secessionist provinces and hurting the economy. 

Russia bans Georgian mineral water Borjomi
In yet another bout of temper, Russia is banning imports of the Georgian mineral water, Borjomi, citing health and safety reasons, its consumer rights watchdog said on May 6th. 
"Analyses have shown that 56 inspected shipments of Borjomi mineral water ... do not correspond to safety requirements," said a letter by the head of the watchdog, Rospotrebnadzor, Gennady Onishchenko. "I therefore revoke from May 7 ... Borjomi mineral water safety certificates until the reasons and conditions, which have caused the above mentioned irregularities, are eliminated."
Onishchenko also asked customs officials to block imports of the mineral water and regional Rospotrebnadzor offices to take measures aimed at preventing sales of Borjomi to customers. 

Georgia to quit the CIS?
President Mikhail Saakashvili said his government would look into quitting the Russian-led Commonwealth of Independent States (CIS), which groups 12 ex-Soviet states, following the wine ban.
On May 5th, Georgian Prime Minister Zurab Nogaideli told Reuters that with the wine spat, gas disruption and Russian involvement in Georgia's separatist regions of Abkhazia and South Ossetia, Moscow was punishing Georgia for looking west.

Wine industry looks westwards
Russia says the wine ban is for health reasons, but analysts say it is to punish Georgia for trying to use World Trade Organisation talks to force Russia to stop its financial support for the two rebel regions that remain outside Tbilisi's control.
Georgia is hunting for new markets for its wine, which brought in US$90 million to its struggling economy last year, 70 per cent of it from Russia. Saakashvili has tasked a minister with publicising wine in the West.
Russia also suspended imports of wine from Moldova in March, saying it contained dangerous pesticides. Analysts saw the move was also designed to punish the ex-Soviet state for its own WTO-linked demands and insistence that the illegal Transnistrian breakaway client of Russia, accept reasonable terms for rejoining the nation. It is in other words, a crude powerplay by Russia towards its former colonies of Georgia and Moldova, which incidentally is quite likely to signal the breakup of the Moscow backed CIS. 

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The following is an article from Moscow News, quoting the president's view of the gravity of the crisis:-

Russia Threatening Democracy in Georgia, Ukraine - Saakashvili
Democracy in Georgia and Ukraine is under threat because Russia is creating obstacles to democratic processes in the two countries, the Georgian president said on May 5th at an international conference in Vilnius, Lithuania, called "Common Visions for a Common Neighbourhood" attended by heads of states from the Baltic and Black Sea regions and NATO and EU representatives, RIA Novosti reports.
During the last few months relations between Russia and the two countries have worsened. At the beginning of this year a gas conflict broke out between Russia and Ukraine. 
"If Moscow creates obstacles to our democratic values it means only escalating danger," Saakashvili said.
He added that Russian actions represent a challenge for Europe as well, as a threat to democracies in Georgia and Ukraine will also undermine European interests.
This was not the first criticism of Russia at the conference. Earlier the same day, US Vice President Dick Cheney rebuked Russia for rolling back the democratic "gains of the past decade'' and called on the country's state-controlled energy companies to stop intimidating nations in the region that need oil and natural gas to allow their economies to grow.

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CREDIT RATINGS

Fitch rates Bank of Georgia at B-, stable outlook


Fitch Ratings has assigned Georgia-based Bank of Georgia (BOG) ratings of Foreign and Local Currency Issuer Default B- (B minus), Short-term Foreign Currency and Local Currency B, Individual D and Support 5, Interfax News Agency reported.
The outlooks on both Issuer Default Ratings (IDRs) are stable. The rating agency said in a statement that BOGs ratings reflect the high credit risks resulting from rapid lending growth in the relatively high-risk Georgian economy. They also reflect its potentially vulnerable liquidity due to a predominance, to date of primarily short-term customer funding. However, the bank has a strong domestic franchise, sound core profitability and adequate capitalisation as well as a well-defined, albeit aggressive, strategy, which was adopted in 2004 and is being executed by new management with international experience. BOG is the second largest bank in Georgia by assets (end of first quarter 2006 unaudited: 606.3 million lari), serving both corporate and retail sectors.

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ENERGY

Georgia establishes oil, gas corporation 

Georgian Gas and Oil Corporation has been established, Georgia's Economic Development Ministry reported. The company was founded by Georgian International Oil Corporation, Georgian International Gas Corporation and Gruzneft, which are wholly state-owned. The new company's board is headed by Prime Minister Zurab Nogaideli, New Europe reported. 
The board also includes the energy and economic development ministers and chiefs from Georgian International Oil Corp and Gruzneft. Georgian International Gas Corporation President, David Ingorokva, has been appointed the new company's general director. Georgian Gas and Oil Corporation has charter capital of 101.12 million lari. The Georgian International Oil Corporation, Georgian International Gas Corporation and Gruzneft will hold a shareholders meeting on April 20th, the economy ministry said. They will discuss their reorganisation and the transfer of functions to the new company. This process is expected to end in the first half of May.
"As a result a full-fledged holding company will be formed that will work with one management team and carry out unified oil and gas strategy based on government interests," a ministry official said.

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FOREIGN LOANS

China to grant 2.5m Euro to build juice factory 

China has announced that it will grant 2.5 million Euro to Georgia to finance the construction of a juice factory, Interfax News Agency reported.
Chinese president, Hu Jintao, and Georgian President, Mikhail Saakashvili, who was on a visit to China, held a meeting on April 11th and signed a joint declaration, which reaffirms the two countries' preparedness for developing relations in various fields. Saakashvili, who arrived in Beijing, spent the first part visiting the Great Wall of China and the Emperor's Winter Palace. During his five-day visit to China, the Georgian leader also planned to visit Shanghai.

Georgia receives 4th tranche of IMF loan 

The National Bank of Georgia has received 14 million laris in the latest tranche of a loan from the International Monetary Fund as part of a three-year Poverty Reduction and Growth Facility (PRGF) programme, the bank said, Interfax News Agency reported.
This is the fourth tranche of the PRGF loan, which the IMF executive council decided to allocate at a meeting on March 31, 2006. Georgia received the first three tranches in June-December 2004 and in August 2005 in equal shares of 14 million laris. The total size of the loan is 98 million laris. Taking into account the latest tranche, Georgia has received 56 million laris (80.9 million Euro), the bank representative said. All the funds are put in the National Bank's international currency reserve.

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