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Books on Georgia
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Update No: 312 - (20/12/06)
Georgia's destiny is bound up with an unusual man, who is a
brilliant cosmopolitan lawyer, fluent in five languages. He knows the West,
having learned his law in the US. But he also knows the East.
He is courting the West, but has to deal with the East.
The CIS summit
Relations with Russia have been frigid of late. Wine and other exports have been
banned. Harrassment of the one million expatriate community of Georgians in
Russia has become common.
In late November Georgia's president had an unofficial one-on-one meeting with
his Russian counterpart at a summit of post-Soviet nations in Belarus. The
meeting between Vladimir Putin and Mikhail Saakashvili had a particular
significance amid the currently strained relations following an espionage
scandal, territorial disagreements and Russia's economic sanctions.
"We met face-to-face and discussed problems in Russian-Georgian
relations," Saakashvili said in London where he was on a one-day visit.
"Though many thought the meeting would not take place, dialogue has
begun."
The Kremlin said ahead of the summit of the Commonwealth of Independent States
(CIS) that negotiations with Saakashvili had not been on Putin's agenda as
Georgia had made little effort to arrange the meeting. Saakashvili said meetings
with the Russian president would be initiated by Georgia from now on.
"The meeting with President Putin was our initiative and it will be so in
the future because we need a regular dialogue with Russia," he said.
"Such meetings should continue in the future but they will be above all
guided by Georgia's interests," he said. "Russian-Georgian relations
are entering a different dimension."
The West-educated Georgian leader said his country remained committed to
integration with Europe and NATO. "Georgia has become an important country
for many other nations, and world leaders express support for it again," he
said in a reference to encouraging statements about Georgia made at the NATO
summit in Riga in late November.
In his comments on Russian gas supplies to Georgia, Saakashvili said the
Georgian economy would not collapse without Russian gas imports. Now that Russia
is seeking to double the gas price for Georgia, the country is looking to
diversify its gas imports, including through contacts with gas-rich Azerbaijan
and Iran.
"I talked with my Azerbaijani colleague Ilham Aliyev, and this winter will
be a historical example of Georgian-Azerbaijani brotherhood," he said.
Despite obstacles, NATO progress "irreversible"
Georgia is really heading for the West. Official presence at CIS summits in
the likes of Minsk is for solely practical purposes. The real issue is how soon
it can join the West.
The Georgian government is claiming a political victory after NATO decided to
advance discussions with Tbilisi on membership in the Atlantic Alliance. Yet
while Georgian officials celebrate, significant political and strategic tests
remain in Georgia's accession drive.
President Saakashvili declared that the so-called Intensified Dialogue is the
start of an "irreversible process" toward Georgian membership in the
military alliance, and a "major breakthrough." Noting in a televised
September 25 speech that he did not want to "set exact dates," the
president nonetheless asserted that there is no reason for Georgia's membership
process to be "delayed." The government has mentioned 2008 as a target
date for NATO membership.
A NATO statement on the September 21 decision, however, adopted a measured tone.
The Intensified Dialogue, the statement read, will give Georgia "access to
a more intense political exchange with NATO Allies on its membership aspirations
and relevant reforms, without prejudice to any eventual Alliance decision on a
further membership process."
The announcement has sparked a growing debate about what the ongoing partnership
with the Atlantic Alliance will actually mean for Georgia.
The government claims that it is all part of Georgia's embrace of Western-style
democracy after decades of misrule as part of the Russian Empire, Soviet Union,
and as a newly independent post-Soviet country. "NATO is not just a
military alliance; it is an alliance for humanitarian missions, rescue missions,
building democracy and so on," said Tornike Sharashenidze, director of the
Georgian Foreign Ministry's Information Centre on NATO. "It will give a
huge boost to Georgia for building its democratic institutions."
Georgia's commitment to building such institutions is one key test for any NATO
decision to extend membership to Tbilisi. European members have already
expressed concerns about reforms in the Georgian court system and in the
country's protection of human rights.
Others argue that Georgia's democratic reform status could take a back seat to
the alliance's strategic interests in the South Caucasus. "NATO is an
organization which, more than the European Union, let us say, uses the notion of
political expedience in a geopolitical situation," said Shalva Pichkhadze,
chairman of the Georgia for NATO non-governmental organization.
Russia remains a factor that can complicate Georgia's NATO bid. Moscow has made
clear that the Kremlin will see any change in Georgia's relationship with NATO
as a threat to Russian security. On September 22, the Russian Foreign Ministry
termed NATO's decision part of "the expansion of military-political
alliances created during the Cold War," adding that Russia's "negative
attitude" toward Georgia's NATO aspirations is "well-known,"
ITAR-TASS reported.
While acknowledging that it is Georgia's "sovereign right" to decide
for itself on NATO membership, Russian Defence Minister Sergei Ivanov emphasized
on September 22 that Russia is taking steps to reinforce its military presence
on Georgia's eastern borders. "We are actively developing two alpine
brigades with the latest equipment. Both brigades will be stationed right by the
border with Georgia," Russian news outlets reported Ivanov as saying.
"Therefore, Russian security will not suffer if Georgia joins NATO."
Sharashenidze dismissed Moscow's statements as a sign that Kremlin officials
"still identify themselves with the Soviet Union, which is why they
identify NATO with the Cold War."
Although the Georgian government has played down NATO's military aspect, the
idea of the alliance as a barrier between Tbilisi and Moscow holds a strong
attraction. At a news conference on September 22, Georgian Deputy Defence
Minister Mamuka Kudava praised NATO for paying "great attention" to
the stability of its member countries. "NATO's principle is that Georgia,
just as any other candidate country, should do as much as possible to create
guarantees of security in its own region," he said. Kudava added that
Georgia's actions concerning the conflict zones of Abkhazia and South Ossetia
would be coordinated with NATO.
Pichkhadze, however, argued that seeing NATO as a type of security blanket
against Russian aggression could make the conflict resolution process more
complex. "When we in Georgia are talking about NATO, both government and
society, for us NATO is not an organization, not an alliance based on some
values. Not an alliance that defends these values. For us, this is an alliance
which would defend Georgia from Russia and nothing else," Pichkhadze said.
"If we see NATO only as a shelter against Russia, it will not help settle
the conflicts."
But some local analysts caution that the Georgian government's celebrations
about NATO's decision may be premature. "They made statements that they
were expecting the ID Intensified Dialogue in July or August and they were
waiting for [the] MAP Membership Action Plan, an official step toward NATO
membership in November," Tamara Pataraia, a project manager and researcher
at Tbilisi's Caucasus Institute for Peace, Democracy and Development, said.
"My opinion is that they overestimated the situation."
An Intensified Dialogue has also been granted to Ukraine, another Russian
neighbour and former Soviet republic. On September 14, however, Ukrainian Prime
Minister Viktor Yanukovich announced that public opposition had prompted Kiev to
put its membership campaign on hold.
During a visit to Tbilisi in May, NATO Assistant Secretary General John Colston
said the alliance was "impressed" with Georgia's attention to reforms
- particularly those that concerned military and strategic
"structures" - but refused to comment on a timeline for the coveted
Membership Action Plan.
Nonetheless, optimism in Tbilisi persists. While the Intensified Dialogue may
not carry the same benefits as a Membership Action Plan, Pichkhadze commented,
the alliance's decision cannot be seen as a consolation prize for Georgia.
"[In] no way is it a step back," he said. "This is another form
of contact between a non-member state and the alliance. It is closer. This is a
form of closer contacts."
South Ossetia referendum plans raises temperature in the Caucasus
The risk of a renewed conflict between Georgia and the Russian-backed
separatist territory of South Ossetia appears to be growing by the day.
Talks aimed at achieving a political settlement of the conflict appear to have
hit a wall. A scheduled session of the Joint Control Commission - comprising
Georgia, Russia and North and South Ossetia - failed to convene as scheduled
September 15 because of a dispute over the composition of the Georgian
delegation. Since then, Georgian and South Ossetian officials have accused each
other of trying to scuttle a peace settlement.
On September 11, South Ossetian leaders raised the temperature of the peace
process with an announcement that they would hold an independence referendum in
November. The referendum likely would have more of a symbolic than a practical
significance, as even an overwhelming "yes" vote wouldn't generate
international recognition of South Ossetian independence. At the same time, the
referendum could possibly spark a resumption of armed conflict between Georgian
and South Ossetian forces, some regional experts believe.
Georgian President Mikhail Saakashvili engaged in some sabre-rattling on
September 18, voicing frustration over the peace process, according to a report
published by the Civil Georgia web site. Saakashvili said he would use his
scheduled September 22 speech at the United Nations General Assembly to tell
"the truth about the situation in Georgia." He appeared to issue a
direct challenge to Ossentian leaders, vowing that his administration would
never abandon its goal of restoring Tbilisi's authority in the separatist
territories of South Ossetia and Abkhazia.
"Georgia will no longer tolerate injustice and the infringement of our
rights," Saakashvili said. "We will no longer step back or keep
silent. Nobody has, or ever will intimidate us."
In response, both South Ossetian and Abkhaz leaders appeared to thumb their
noses at Saakashvili by applauding a September 17 referendum in the Transnistria
region, where residents endorsed the concept of seceding from Moldova and the
possible incorporation of the territory into the Russian Federation. "For
us, this [the Transnistria referendum] is a good example, and I am sure that our
voting will not end with lesser results," Civil Georgia quoted Yuri Morozov,
South Ossetia's self-styled prime minister, as saying.
Russian officials have been outspoken in their support of South Ossetia's
referendum plan. The Russian Duma's speaker, Boris Gryzlov, said September 12
that Georgia's hard-line attitude toward the breakaway region was "forcing
South Ossetia to hold the referendum." He indicated that the Duma would
dispatch a delegation to monitor the independence referendum.
Russia, which is a permanent member of the UN Security Council, is on record as
opposing any discussion of the so-called frozen conflicts of the Caucasus, as
well as the Transnistria conflict, by the UN General Assembly. Moscow also has
rejected Tbilisi's efforts to promote international discussion on the role of
Russian peacekeepers in South Ossetia and Abkhazia.
The Russian government maintains that Tbilisi, Tskhinvali and Sukhumi are equal
sides in the negotiation process, rather than looking at it as a "central
government vs. breakaway provinces" situation. Tbilisi, meanwhile, wants
the peace process to be seen as an internal affair of Georgia.
While supportive of South Ossetia, the Kremlin has kept its distance from the
referendum issue. After announcing the referendum plan, South Ossetian leader
Eduard Kokoity travelled to Moscow in search of political support. He met with
prominent politicians, including Russian Communist Party boss Gennady Zyuganov,
but members of President Vladimir Putin's administration publicly shunned him.
A cool reception by the Kremlin, however, doesn't mean that Russian leaders
disapprove of the plan: they merely want, at this stage, to keep their options
open, some observers in Moscow believe.
Putin himself has stated that if the former Yugoslav province of Kosovo can gain
independence, so should Abkhaiza and South Ossetia be allowed to choose their
own destiny. "One must not apply one rule in relation to Kosovo and another
in relation to Abkhazia and South Ossetia," a Kremlin news release on
September 13 quoted Putin as saying.
Some observers believe that the South Ossetian referendum is a trading chip in
Russia's antagonistic relationship with Georgia. In return for a pledge by South
Ossetia to abandon the referendum plans, Russia would expect Tbilisi to back off
from its threat of making a formal demand for the departure of Russian
peacekeepers.
The problem is, the window of opportunity for such trade-offs may be closed. The
lack of trust on all sides may run so deep that attempts at deal-making may have
the opposite effect of stoking conflict.
Bracing for conflict: Russia and Georgia in South Ossetia
Georgia and Russia appear on a collision course over the separatist regions
of Abkhazia and South Ossetia. Tbilisi stands to lose more than it could ever
gain by adhering to confrontational policies.
Speaking at the United Nations General Assembly on September 22, Georgian
President Mikhail Saakashvili spoke ominously about the future. He said that a
"fresh roadmap" for settling the so-called frozen conflicts was needed
- one that called for the replacement of Russian peacekeepers with an
international force. Russia has made it clear that such a change is
unacceptable. But Saakashvili said in his UN speech; "if we fail to unite
in support of new mechanisms to advance peace - we give a green light to those
who seek otherwise - and we risk plunging the region into darkness and
conflict."
Several preconditions for conflict are already evident in the region. For
example, both Moscow and Tbilisi regularly accuse each other of war-mongering.
Georgian officials believe that Moscow's support for separatists in Abkhazia and
South Ossetia is part of a Russian plan aimed at curtailing Georgian
sovereignty. Conversely, Moscow is wary about Tbilisi's recent move to solidify
its hold over the Kodori Gorge.
Many political analysts wonder if Russia is seeking a pretext to whip up a
conflict. They cite Moscow's tacit support for the independence referendum in
the Transnistria region of Moldova, as well as an upcoming plebiscite in South
Ossetia, as proof of malevolent intentions. In addition, Russian officials from
President Vladimir Putin on down have tried to establish Kosovo as a precedent
that would enable the international community's endorsement of break-away
efforts by Abkhazia, South Ossetia and the Transnistria region.
Beyond mutual recrimination, both sides have incessantly organized provocations
against the other. In recent months, there have been numerous instances of
military manoeuvring and skirmishes in South Ossetia. Georgia has angered Moscow
by detaining peacekeepers for alleged visa violations. Moscow, meanwhile, has
outraged Tbilisi with the imposition of economic sanctions, in particular a ban
on wine imports. Either South Ossetian forces or Russian forces escalated
tension in early September by shooting at a Georgian helicopter carrying Defence
Minister Irakli Okruashvili.
Each side's public and private statements reek with contempt for the other side.
Such sentiments, it must be stressed, can cloud rational decision-making.
Because the Georgian issue is now a personal one for Russia and vice versa, and
given the intense dislike of Russian and Georgian leaders have for each other,
there are good reasons to worry that one or the other side could easily make a
misstep and ignite an armed conflict.
Overconfidence is particularly apparent on the Georgian side. Georgia, with
assistance from the United States and NATO, has significantly improved the
professionalism of its armed forces. But the Georgian military continues to
suffer from serious defects, and there are not many reasons to believe that it
could currently stand up well to the rigors of war. Some Georgians have
needlessly riled Russia by questioning Moscow's will to defend its interests.
Such behaviour serves to reinforce the Russian view of Georgia as being home to
lazy and empty braggarts.
Any Georgian move to re-conquer either Abkhazia or South Ossetia would stand to
backfire on Tbilisi. An unsuccessful military campaign not only would crush any
hopes of a political deal that could bring Abkhazia and South Ossetia back into
Georgia's fold, it would likely deal a crippling blow to Tbilisi's efforts to
join NATO, and could additionally bring about the collapse of President Mikhail
Saakashvili's administration.
Georgia should not be lulled into a false sense of security by counting on
well-meaning, but uninformed statements by American commentators, legislators,
or self-appointed friends of Georgia. In the event of a war, Russia would
probably disregard American pleas for restraint vis-à-vis Georgia, and would
aim to achieve a decisive victory, not only to crush the Saakashvili
administration, but also to try to humiliate Washington. Indeed, the very idea
that Washington would risk conflict with Moscow over South Ossetia is a
delusional. Georgians also shouldn't be fooled by the relatively easy success of
the Kodori Gorge operation in the summer of 2006 against a rebel paramilitary
group. Georgian troops would likely encounter far better armed and organized
forces in either Abkhazia or South Ossetia.
The late Alexander Orlov, who defected from the Soviet Secret Police to the
United States and later wrote a Handbook on Intelligence and Guerrilla Warfare,
observed that the first rule is not to respond to provocation. It is obvious
that Russian policy for a long time has sought to provoke Georgia, either to
punish it or to goad it into taking an ill-considered step, such as attacking
Russian forces, or the Abkhazians or South Ossetians directly.
The stronger Georgia becomes internally through reform and legitimacy, the more
it has to offer its former provinces, and the less able Russia would be to
threaten it. Here the lesson of the Baltic states is instructive. Some
nationalists in the Baltic states wanted to redraw boundaries, or demanded
reparations from Russia. In the end, however, reason prevailed, and the Baltic
states refrained from taking confrontational action. Today, of course, the
Baltic states are members of NATO and the EU and enjoy greater security and
prosperity than ever before.
IMF approves economy
While noting Georgia's strong economic performance, the IMF mission says
that the Russian trade embargo will lead to a moderately slower GDP growth of
six-seven percent in Georgia in 2007.
The mission says that economic growth in Georgia has been hindered by the loss
of the Russian export market, but still remains 'robust.' According to the IMF,
real GDP growth is expected to be about eight percent for 2006.
"The recovery of the economy from this shock will rest largely on its
ability to generate rapid export growth in the medium term. To this end, the
mission urges the authorities to accelerate structural reforms, especially in
those areas pertaining to stronger property rights," the mission said in
its final statement on December 12.
The IMF mission visited Georgia on December 2-12 to review recent economic
developments, assess the impact of the Russian embargo on Georgia's economy, and
hold discussions for the fifth review under the IMF's Poverty Reduction and
Growth Facility (PRGF).
The IMF estimates that Russia's economic embargo will increase the current
account deficit by about USD 250-300 million in 2007. The Georgian authorities
expect to finance this deficit by higher foreign exchange proceeds generated by
the large inflow of foreign direct investment (FDI), as well as by a substantial
increase in tourism revenues.
"In view of the considerable uncertainty regarding the size and timing of
FDI inflows, the mission recommends that an adjustment to the external shock
could be eased by reducing the size of the overall fiscal deficit from the
current projection of 2.5 per cent of GDP for 2007," the mission says.
The mission notes that inflation has dropped from its peak in mid-2006 and the
end-period inflation for 2006 will be less than ten percent. The IMF calls this
"an important achievement", however noting that Georgia's prospects
for sustaining economic growth could be enhanced if inflation is reduced
further.
"To this end, the mission welcomes the authorities' commitment to target
inflation at six percent for 2007 and recommends continued tight monetary and
fiscal policies in 2007 to help achieve this objective," the mission says.
It's expected that the IMF's Executive Board will complete the fifth review
under the PRGF arrangement in late February or early March 2007.
The fourth review of Georgia's performance under PRGF has been completed in
September and IMF has approved a loan of US$20.7 million to Georgia.
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ENERGY
Energy ties to be developed with Iran
Georgia will develop energy cooperation with Iran, Georgian Prime Minister,
Zurab Noghaideli, said on November 27th, when asked to comment on objections
from US Ambassador to Tbilisi, John Tefft, in relation to the issue. "I
don't know what the US ambassador said. As for our energy relations with Iran,
we will naturally have such relations. We are considering importing gas from
Iran this year and we will probably exchange electricity," Noghaideli said
during a working tour of western Georgia, New Europe reported.
"Moreover, we had talks with US Assistant Secretary of State, Matthew Bryza,
during his visit to Georgia. He made clear that no matter the state of
US-Iranian relations, the United States cannot tell us to freeze during winter
and not buy gas or electricity from Iran," the Georgian premier said.
"It is natural that we will have relations in the energy sector with Iran,
moreover, we will exchange our electricity with Iran," Noghaideli stated.
Earlier, Tefft, in an interview published in November 26th issue of the
Georgian, Kviris Palitra, newspaper, said that a long-term strategic gas
agreement between Georgia and Iran was unacceptable to the United States. The US
diplomat noted that the US's position was based on the UN Security Council
resolution on Iran and the latter's nuclear enrichment programme.
Tefft's statement seems to contradict an earlier one by US Deputy Assistant
Secretary of State for European and Eurasian Affairs, Matthew Bryza, who while
visiting Georgia on November 17th noted that while the US was pursuing their
policy towards Iran, they did not want Georgia or Armenia or any other country
to be in a situation where it does not have energy for the winter.
Greenoak Group to build oil refinery, petrochemical plant
Greenoak Group, which owns a number of assets in Georgia, is planning to build
an oil refinery in Batumi and a plant that will produce methanol and ammonium,
the Batumi Oil Terminal, which is controlled by the group said, Interfax News
Agency reported on November 20th.
The cost of the project is more than US$3.2 billion. A representative of the
Batumi Oil Terminal said the Greenoak Group had reached an agreement with the
Georgian government on the privatisation of about 80 hectares of land next to
the Batumi Seaport for US$27.1 million. The territory formerly belonged to the
Batumi Oil Refinery.
Greenoak Group is planning to finance the project with its own funds, but will
also cooperate with BNP Paribas and energy suppliers. Denmark's Greenoak Holding
wholly owns the Batumi Oil Terminal through Naftrans Limited. The terminal was
privatised in 1999. Following more than US$52 million in upgrades to the
terminal in 2004, its handling capacity grew three-fold to nine million tonnes
of oil and oil products per year. The terminal can handle a maximum of 15
million tonnes of oil per year.
In December 2005, Greenoak Group acquired a 100 percent stake in Batumi Oil Base
and the Batumi Sewing Production Association, as well as an 11.4 per cent stake
in Batnavtoimpex. In May 2006, Greenoak Group won a tender for the right to
manage the state's 100 per cent stake in Batumi Commercial Seaport for 49 years.
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