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Books on Georgia
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Update No: 317 - (30/05/07)
From the first moment of independence, Georgia has courted the
West. During the civil conflicts of the early 1990s, this was with little
success. But since the Rose Revolution of October 2003 with much more result.
Georgia's firm support for the Iraq War has perhaps been a factor, although
investors are usually pretty hard-nosed about such matters. The fundamentals are
improving under the impact of reforms - not before time in a republic that saw a
greater contraction of GDP than in any other FSU state to under 30% of its 1991
level. But GDP is still a long way from having caught up again.
Saakashvili in London
Hailing the UK as the main investor in Georgia and a very important supporter of
Georgia's NATO bid, President Mikheil Saakashvili, on an official visit to
Britain, called for intensifying UK-Georgian political relations, as well as for
businesses to explore future business possibilities in Georgia.
Talking at 10 Downing Street, Saakashvili said Georgia is experiencing an
investment boom at the moment with more than USD 2 billion of direct foreign
investment expected this year. He also said Georgia is a role model in economic
reforms and an important hub for the East-West energy corridor, East-West trade
routes and all kinds of other bridges from the Caucasus to Europe.
When asked about Georgia's future business relations with the UK he said,
"I think more and more are coming and we are expecting, you know, some
major investment. A banker told me the last time when I was here in London there
is an inexplicable buzz around the investment community here in London, there is
a disproportionately high interest for a relatively small country like Georgia
in London right now and he was asking me how did we do it. I don't know how we
did it, I mean that is how it is and it is good news for me," he said.
British Prime Minister Tony Blair said the investment opportunities are enormous
in Georgia, stressing that UK companies are not investing in Georgia simply
because he or President Saakashvili tells them to, but because of the reforms
which allow the businesses to profit.
Blair reiterated the UK's support for Georgia's entry to NATO, adding that the
partnership framework Georgia has with NATO will help "the proper evolution
of Georgia."
"I think again the key thing here is for those members of NATO to see the
cooperation between NATO and Georgia grow, and also for a country like ours who
have got major strategic military interests, the fact that Georgia and ourselves
are working very closely in what is a very troubled situation in Iraq at the
moment is also important for that," he said at the press briefing on
Wednesday.
Saakashvili also talked about Georgia's relations with Russia, saying Russia at
the moment is coming through a "pretty turbulent period of
transition."
"We always had some complex and difficult relations with Russia, including
in the '90s with regards to Russia's participation in civil wars that were
taking place [in Georgia] basically with huge participation and important
participation of Russia and it was pretty negative," Saakashvili said.
However the president also said Georgia wants to see "a stable, secure and
confident Russia."
"Russians are important partners, they are very important for us and they
are very important for the rest of Europe, but also Europe is very important for
them. Russia is not North Korea, they want to be respected, they want to be
engaged on a daily basis, they would like to be part of the European
environment, some of them might not have come to this European Economic Forum
here in London but they are actually coming to London to enjoy life, they will
go to the Cote d'Azur, they want to be respected, they want to be part of the
wider European space," he said.
Later on April 25 Saakashvili met the British Defence Secretary Des Browne in a
closed doors meeting where they discussed Georgia's integration to NATO and
security issues.
On 26 April the Georgian president was set to meet the Chancellor of the
Exchequer Gordon Brown, who is set to become the next UK prime minister this
summer.
Rallies across the country
More than 7,000 students rallied on the border of the ex-Soviet republic of
Georgia's breakaway region of Abkhazia in late April to demand the release of
three young men held by separatist authorities.
Meanwhile, about 2,000 people also demonstrated in the capital, Tbilisi, to
protest against cuts in social programmes and increased taxes.
Busloads of students from across the country gathered at a checkpoint on the
border with Abkhazia, where they unfurled an enormous Georgian flag and chanted
"Freedom to the Georgian students!"
A bridge crossing the border was blocked by two armoured vehicles and about 20
Russian soldiers. Russia has deployed thousands of soldiers who act as
peacekeepers along the border with Abkhazia, which broke away from Georgia amid
heavy fighting in the early 1990s. Protesters were demanding the release of
three students detained in Abkhazia after crossing the border on March 1. The
students were involved in political efforts to undermine the separatist
authorities in Abkhazia and each faces up to seven years in prison.
Separatist authorities have demanded the return of a local Abkhaz official held
by Georgian police in exchange for the students' release. "This is only the
beginning of our struggle," protest organizer Ani Lezhava told Imedi
television. "We will win their freedom."
Simultaneously, demonstrators rallied outside the Georgian parliament for
several hours to protest government moves to cut social benefits and increase
taxes. The protesters accused President Mikheil Saakashvili, who swept to power
after Georgia's 2003 Rose Revolution, of breaking promises to improve living
conditions. Saakashvili has cut subsidies for utilities and public transport,
and increased some property taxes, in an effort to improve state finances.
"It is getting more and more difficult for us to survive," protester
Inga Vashalomidze said. "Saakashvili has broken all of his election
promises. He and his ministers are taking the shirts off our backs."
New plan for South Ossetia
From May 1 Georgian authorities have been taking concrete steps at creating
a temporary administrative unit on the territory of breakaway South Ossetia.
Tbilisi will cooperate with all parties to the conflict who are willing to work
for the peaceful settlement of the conflict, president Saakashvili stated on
April 23, presenting a five-point-plan for conflict resolution.
"I think it is time to shift from negotiations to concrete actions, and
particular proposals… this is a historical chance for peace, a chance for each
person," Saakashvili stated at the National Security Council session.
However, Saakashvili also pointed out that "the proposal is not time
limited and we are ready to give everybody an opportunity to participate in the
resolution and the decision making process."
According to Saakashvili, the five-point-plan gives the de facto South Ossetian
authorities of Eduard Kokoity and the 'alternative government' of Dmitri
Sanakoyev the opportunity to cooperate on the determination of the region's
autonomous status and decide on the head of the temporary administration. In
addition, the Georgian authorities will allow the temporary administrative
entity to appoint deputy ministers of internal affairs, economics, finance,
education, healthcare, culture, justice, agriculture and environment to the
central government in Tbilisi. The deputies will be entitled to deal with the
issues related to the region. "We are ready to grant this unit, which will
include ethnic Ossetians in the autonomous region, higher positions in the
central authorities of Georgia," Saakashvili noted.
For the rehabilitation and development of the administrative unit, a special
financial package is to be offered to the parties involved. "I would like
to stress that each of these steps are aimed at the security and welfare of
ethnic Ossetians, Georgians, and all other people residing in the region, and
the establishment of peace among all ethnic groups. It is intended to prevent
any future threats to our unity," Saakashvili stated.
He also made remarks on the existing negotiation format on the conflict, saying
it is "prolonged artificially" and called for a more constructive and
peaceful way to be found out of the existing stalemate. Nevertheless, he noted
that despite this Tbilisi is ready to continue dialogue "formally or
informally" within any format at hand.
"We are ready to talk to everybody, including the representatives of
Russia," he added. "We offer friendship to all our fellow citizens,
regardless of their ethnic origin, all those people who for various reasons were
not integrated into our state structures until now," Saakashvili said.
Responding to Saakashvili, South Ossetia's alternative president Dmitri
Sanakoyev said his government will "support all the initiatives proposed to
resolve the conflict by peaceful means."
The five-point-plan will be presented to parliament for approval from May 1.
Parliament has already adopted a "Draft Law on Creating Appropriate
Conditions for Peaceful Resolution of the Conflict in the Former Autonomous
District of South Ossetia" with 165 votes to two. All the major political
parties supported the proposal.
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BANKING
Combined bank assets up 62% in Q1
The combined assets of Georgian banks increased a whopping 62 per cent in the
first quarter of 2007, reaching 4.7 billion lari, according to a source at the
National Bank of Georgia, Interfax News Agency reported.
The credit portfolio of Georgian banks grew 55 per cent to three billion lari in
the quarter, it was reported.
Deposits in Georgian banks increased 48 per cent to 1.9 billion lari, with
deposits in the national currency increasing 60 per cent to 603 million lari and
deposits in foreign currency increasing 54 per cent. The charter capital of
existing banks in Georgia almost doubled in the quarter to 959 million lari from
494 million lari. Net profit of banks increased 36.6 per cent to 25 million lari
in the quarter, it was reported. The National Bank said its international
reserves totalled 1.019 billion Euro on March 31, up 113 per cent from the start
of the year.
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ENERGY
Piebalgs urges closer energy cooperation with Tbilisi
In his talks with Georgian Foreign Minister, Gela Bezhuashvili, EU Energy
Commissioner, Andris Piebalgs, said in Brussels that Georgia is growing in
importance as a transit country for oil and gas from the Caspian Sea region.
Talks focused on the development of transport routes through Georgia for oil and
gas shipped westward from the Caspian Sea region, notably through the port of
Baku, capital of neighbouring Azerbaijan.
"We are very keen to get a supply of resources from the Caspian Sea region
towards the European Union," Piebalgs was quoted by the press as telling
reporters, cited by AP.
"If there are to be more hydrocarbons passing via Baku then definitely we
will need increased capacities in Georgia," he added. "I got full
assurances from the Minister that it will be regarded in a positive
spirit."
The 27-country bloc seeks to reduce dependency on energy imports from Russia.
"It's important to diversity. Having one monopoly supplier at the end of
the day leaves the consumer exposed," Piebalgs said.
Bezhuashvili said George shared the "common vision" of boosting
Europe's energy security. "We very much appreciate the efforts Georgia is
making," Piebalgs said. "It definitely means more transit supply
passing via Georgia, it means more strains for Georgia, but Georgia is ready to
provide the necessary supply corridors."
Piebalgs said an oil pipeline from Baku through Georgia and on to the Turkish
Mediterranean port of Ceyhan which opened last year was the "first
breakthrough" in the EU's efforts to secure Caspian region supplies. A
similar pipeline for gas is now under construction, and Piebalgs said the EU was
also looking at the prospect of transporting fuel by rail.
NPL sells GOGC 50% stake in Ioris Veli for US$4.7 mln
Georgian Oil and Gas Corporation (GOGC) General Director, Alexander Khetaguri,
and Georgian representative for Switzerland's National Petroleum Limited (NPL),
Martin Miller, recently inked an agreement on the sale of NPL's 50 per cent
stake in oil producer Ioris Veli to GOGC for US$4.7 million, the corporation was
cited by Interfax News Agency as saying.
NPL will transfer to GOGC its rights and liabilities in Ioris Veli, which was
initially founded by the Georgian and Swiss companies on a parity basis, it was
reported. Gruzneft and NPL signed a product-sharing agreement in 1995. In
accordance with the document, the Swiss company received the right to search for
and produce oil in the Gardabansky and Sagaredzhoisky districts in eastern
Georgia in the XIB licensing section for 25 years. At present, Teletskaya Oil
Company, which is part of GOGC, is producing oil at the section. The licensing
sections of NPL and Teletskaya Oil Company were merged as a result of the
signing of the deal on the sale of the 50 per cent stake in Ioris Veli.
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FOREIGN LOAN
TBC Bank acquires US$47-mln syndicated loan
Georgia's TBC Bank has acquired a US$47-million syndicated loan on Western
financial markets, the bank told Interfax News Agency.
This is the largest transaction the bank has carried out on the international
financial market. JP Morgan provided assistance to the bank in acquiring the
loan.
The bank plans to spend the funds on corporate purposes, namely satisfying the
market's growing demand for financial and banking services.
TBC Bank was founded in 1992. Its main shareholders are the International
Finance Corporation (IFC) with 30.92 per cent, Germany's DEG with 13.33 per cent
and Georgian individuals.
TBC Bank ranked 151st by assets in 2006 on the Interfax-1000 list of the biggest
banks in the CIS and second among Georgian banks.
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