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  2003 2002 2001 Ranking(2003)
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Millions of US $ 3,937 3,324 3,100 126
         
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 US $ 830 650 590 145
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Update No: 323 - (26/11/07)

Georgia in crisis
There have been a series of demonstrations and the like of late in Georgia. The Georgians are taking to democracy - THEY LOVE IT!

If there is a truly sophisticated and enterprising people in the FSU, it is the Georgians. The Rose Revolution of October 2003 gave them a taste for dramatic political upheavals. President Mikheil Saakashvili rode the storm in those heady days, but he is now reaping the whirlwind. 
Saakashvili on November 16 lifted the 15-day state of emergency he imposed in his country ahead of the schedule for fresh elections in the new year.

Tens of thousands have been demonstrating against him. He has agreed to an early presidential election in the new year. But this has still not quelled the popular distemper. 

Reshuffle of the government 
In an apparent bid to reduce potential support for opposition candidates in Georgia's upcoming special presidential election, Saakashvili is reshuffling his government. On November 16, the president named a new prime minister and charged him with putting greater emphasis on job growth, a key complaint of many opposition supporters. 

In a televised address, the president announced that Prime Minister Zurab Noghaideli would be replaced by Lado Gurgenidze, the chairman of the Supervisory Board of the Bank of Georgia. The address coincided with the lifting of Georgia's state of emergency.

Parliament is expected to quickly confirm the nomination. Saakashvili maintained that Gurgenidze would bring "new energy, new strength" to economic reform efforts. In justifying the move, the president credited the career investment banker with playing a leading role in "reviving Georgia's dead banking sector." 

"We need this sort of energy, this model of success, this level of management," the president said. Before joining the Bank of Georgia in 2004, Gurgenidze, who also holds British citizenship, worked in senior management positions for PutnamLovell, ABN AMRO and the Dutch bank MeesPierson. He possesses an MBA from Emory University. 

In remarks to reporters, Gurgenidze stated that "the people's message has been heard. And that message is to put more accent on jobs." Discontent over low job growth and inadequate salaries appeared to play a sizeable role in prompting many voters to take part in the November 2-7 opposition protests in Tbilisi.

Not surprisingly, doubling pensions, increasing teachers' salaries and expanding government employment schemes are among the tasks that Saakashvili said Gurgenidze's government would address. 

Those issues are also likely to feature prominently in the presidential campaign to come. Saakashvili himself has spent much of the past week visiting with socially vulnerable but influential groups of voters like doctors and teachers. 

A shake-up in the government had been expected for at least the past two weeks, according to a source close to the government. 

In preparation for early presidential elections on January 5 and in response to recent opposition protests, Saakashvili needed to add some "new blood" to his government and his administration's reform process, said Levan Ramishvili, chairman of the board at the pro-government Liberty Institute. 

Outgoing premier Noghaideli, a former finance minister, became prime minister in 2005 after the death of Zurab Zhvania. He left the November 16 presidential briefing without indicating his plans. "I think the president wants to reshuffle his government in order to be able to better respond to [the] public's criticism," Ramishvili said. "The reform process needs new blood to continue reforms, which might be somehow hampered by the November demonstrations." 

Ramishvili appraised Gurgenidze, widely respected among the Georgian business community, as a good choice for Saakashvili to use after the November 7 protest crackdown to "reassure" skeptical investors that there will be no reversal in Georgia's reform process. 

Gurgenidze, in part, has already started to fulfill that role. At a November 10 meeting in Tbilisi between the president and Georgian business leaders, Gurgenidze stressed that share prices on the London Exchange for the Bank of Georgia had already started to improve after an initial slump during the November 2-7 protests. 

The PM-designate may be a transitional figure, Ramishvili noted. The constitution stipulates that in the event of a victory on January 5, Saakashvili's government will have to resign and be reappointed. 
The introduction of a new prime minister could also have been calculated to help break a deadlock between the government and opposition. While the lifting of the state of emergency meets one key opposition demand, tension between the government and a 10-party opposition coalition remains high.

On November 16, Conservative Party parliamentarian Kakha Kukava, one of the coalition leaders, told EurasiaNet that talks with Parliamentary Speaker Nino Burjanadze and pro-government MPs were at an impasse. Kukava, however, asserted that the coalition would participate in the presidential elections, despite "all attempts" by the government to stop them. 

"Right now negotiations have gone into a dead end and we are asking the international community to [intervene]," he said. 

As has the United States, the European Union has so far backed away from any mediation role. European Commission special envoy Peter Semneby told reporters on November 16 that the suspension of the state of emergency "in general terms marks the return to a normal situation." In an official statement, the Organization for Security and Cooperation in Europe Chairman-in-Office, Spanish Foreign Minister Miguel Angel Moratinos, urged Georgia to "restore the broadcast license of all media outlets, as well as to continue its dialogue with the opposition in order to guarantee that the elections are held according to democratic standards." 

Kukava listed three major demands on which the government has allegedly refused to compromise in the ongoing political dialogue: allowing the pro-opposition television station Imedi to reopen; ending the alleged persecution of protestors from the November 7 clash with police; and establishing an election commission body based on parity. 

Imedi remains off the air following the lifting of the state of emergency, although private broadcasters Mze and the pro-government Rustavi-2 have returned. The pro-opposition Tbilisi station Kavkasia has also resumed broadcasts.

Greater movement appears on the election code issue. Parliament on November 15 passed on the first hearing amendments to the election code that would give the opposition six seats on the national election commission, and the government seven seats as well as the commission's chair. It is not yet clear which parties would hold the opposition seats. At the district level, two opposition parties, the New Rights and the Industrialists - both of which already have seats in parliament and did not participate in the November protests - will be given seats on commissions. 

While the opposition coalition has dismissed the amendments as insufficient, Tbilisi State University political scientist Malkhaz Matsaberidze believes that the opposition should be pleased with the compromise since it gives them an election code they can "trust." 

"Of course, it is better because the opposition did not trust the old law. There was no representative of the opposition on the Central Election Commission," he said, calling the changes "positive." 
In addition, the amendments, which still have to pass through a second hearing, include the president's initiative to lower the threshold for entrance into parliament from 7 percent to 5 percent of the vote - a move that the Council of Europe and other international bodies have advocated for more than four years. 

The parliament also took other international recommendations into consideration: one amendment calls for an expansion in the number of voter precincts. 

Eka Siradze-Delaunay, program manager at the International Society for Fair Elections and Democracy in Tbilisi, noted that the new amendments - as they currently stand - lack clarity. 

While the voting precinct expansion is positive, Siradze-Delaunay said, it is unlikely the government will be able to implement the change before the January 5 elections. To enact the change, officials must create new polling stations, and new voter rolls, as well as carry out a huge public information campaign so that people know where to vote. 

In addition, the amendments call for allowing candidates with at least a 25 percent popularity rating - an ambitious ceiling for most Georgian political parties - to receive free time in the media. However, who will collect the data, when it will be collected and what the polls will actually measure remain undefined, she added. 

"It is very unclear, very vague," Siradze-Delaunay said. Non-governmental organizations involved in elections work were not consulted about the changes, she added. 

Moscow has shown restraint
Contrary to what might have been expected, Russia has not tried to exploit the situation. It has completed the withdrawal of soldiers based in Georgia since the collapse of the Soviet Union in 1991, removing a source of tension with Georgian President Mikheil Saakashvili. 

"The withdrawal of Russian military hardware, arms and material from Georgia, scheduled for completion in 2008, has been accomplished ahead of schedule,'' General Alexei Maslov, commander of Russian ground troops, said in a statement posted on the Defense Ministry's Web site. 

Putin, certainly apprised of every development, is proving himself a statesman here.

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