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Key Economic Data
  2003 2002 2001 Ranking(2003)
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


Update No: 329 - (01/06/08)

Strategic Caucasus state
Georgia's $10 billion economy lies at the heart of the Caucasus, where the United States and Russia are jostling for influence over the oil and gas transit route from the Caspian Sea. Georgia is the natural choice here.

It is locked in a dispute with Russia over its NATO ambitions and Moscow's support for the Georgian breakaway regions of Abkhazia and South Ossetia. Tbilisi's Western allies have taken its side in the row.

Saakashvili to the fore
President Mikhail Saakashvili of Georgia, a U.S.-educated lawyer, swept to power in the peaceful 2003 "Rose" revolution. He promised market reforms and to re-orient his country towards Europe and the United States. 

But the democratic credentials of the 40-year-old leader were tarnished when he sent riot troops to crush protests last November. He won a snap January presidential election which critics said was rigged. His party, United National movement has just won parliamentary elections, held on May 21, but with the same accusations of rigging being made. 

This time they may be false. As the nation is under threat from Russia, it is a natural time to rally behind the government of the day. 

The alarums of war
The Caucasus is a turbulent place, with a simmering potential for conflict that could become explosive at any moment. One just has to think of Chechnya, the Armenian enclave of Nagorno-Karabakh legally in Azerbaijan and Abkhazia and South Ossetia legally in Georgia. 

In the latter case the boiling point may almost be at hand, so it would seem. Russia`s deployment of extra troops in the breakaway Georgian region of Abkhazia has brought the prospect of war "very close", a Georgian minister said on May 6.

Separately, in comments certain to fan rising tension between Moscow and Tbilisi, the "foreign minister" of the breakaway Black Sea region was quoted as saying it was ready to hand over military control to Russia ( who exercise actual control anyway).
"We literally have to avert war," Temur Iakobashvili, a Georgian State Minister, told reporters in Brussels. Asked how close to such a war the situation was, he replied: "Very close, because we know the Russians very well."

"We know what the signals are when you see propaganda waged against Georgia. We see Russian troops entering our territories on the basis of false information," he said.

Fitch in ratings' change?
At a banking event in Madrid, Vice-Finance Minister Dimitri Gvindadze said the Georgian economy was holding up despite the tensions. However ratings agency, Fitch, said a conflict would likely hit Georgia`s ratings, but not immediately Russia`s. "Obviously if we have an unfreezing of the conflict that will be extremely negative for the country (Georgia) and would lead to negative ratings action," Fitch`s Edward Parker said in London.
Georgia, a vital energy transit route in the Caucasus region, has angered Russia, its former Soviet master with which it shares a land border, by seeking NATO membership. Russia has said its troop build-up is needed to counter what it says are Georgian plans to attack Abkhazia, a sliver of land by the Black Sea, and has accused Tbilisi of trying to suck the West into a war -- allegations Georgia rejects.

Tensions have been steadily mounting and escalated after Georgia accused Russia of shooting down one of its drones over Abkhazia in April, a claim Russia denied.

An extra Russian contingent began arriving in Abkhazia at the end of April and the beginning of May. Moscow has not said how many troops would be added but said the total would remain within the 3,000-limit allowed under a United Nations-brokered ceasefire agreement signed in 1994. 

Diplomats expect the reinforcement to be of the order of 1,200.
Security Guarantees

Russian soldiers acting as peacekeepers patrol areas between Georgian and Abkhazian forces but handing full military control of the breakaway province to the Kremlin would alarm both the Georgian government and its allies in the West.

"Those 200 km (120 miles), the distance between the Psou and the Inguri rivers, are all Abkhazia. We agree to Russia taking this territory under its military control," Sergei Shamba, "foreign minister" of Abkhazia, told Russian newspaper Izvestia. "In exchange, we will demand guarantees of our security."

Russian Foreign Minister Sergei Lavrov said Moscow had not received an official request from Abkhazia for its military to take control of the region.

Iakobashvili urged EU states to take a more active role in the region, with options including the deployment of border monitors or a police mission. Diplomats said EU President Slovenia was studying sending a delegation at the level of state secretaries to Georgia as a gesture of solidarity, but a number of ex-communist EU states were insisting it should be a full-fledged ministerial visit.

Georgia pulls out of missile defense treaty with Russia
Tbilisi is not exactly helping matters by withdrawing from the Missile Defense Treaty of Russia and Georgia, which it did on May 6. 

“The unilateral decision of Georgia to pull out of the missile defense treaty with Russia manifests its lack of will to peacefully settle the conflicts with unrecognized republics,” said the RF Foreign Minister Sergei Lavrov. “I cannot comment on actions of Georgia on each occasion. I think these actions show a line and, unfortunately, the line is undermining all previous agreements on the settlement of South Ossetia’s and Abkhazia’s conflicts,” Lavrov said. “It will be very bad for the region,” Lavrov pointed out.

Russia and Georgia sealed the Missile Defense Treaty on April 19, 1995. So far, the members of the united missile-defense system of the CIS have been Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

For once it is possible to see the Russian point of view. As Churchill said: “ ' Jaw-jaw' is always better than 'war-war'. “ Curiously enough it was he himself who pointed out that this is not always true; he was opposed to the Munich Pact of 1938 and thought war at that juncture superior to war a year later. There are exceptions to all rules.

But in the Georgian-Russian case, war would be a re-run of the tragic conflicts of the early 1990s. EU diplomacy is urgently needed to avoid it.

Victory for Saakashvili 
Times of international tension are traditionally good for incumbents. People firm up behind their government when the nation is in peril, from which Thatcher notably benefited. Saakashvili declared victory on May 22 in a parliamentary election that the opposition said was rigged in his favour and vowed to challenge by calling street protests.

Saakashvili said May 21 vote was fair, but the rigging allegations and the threat of protests will test his claim to lead the most democratic state in the former Soviet Union. The pro-Western president needs a clean election to persuade sceptical European states that it is worth defying Russian objections by making Georgia, a key transit route for oil and gas supplies from the Caspian Sea to Europe, a NATO member.

Saakashvili said his United National Movement could get close to a constitutional majority -- or two thirds of the seats -- in parliament. Partial results showed his party won more than 61 percent of the vote. "Yesterday was the triumph of the will of the Georgian people," Saakashvili said in an address to the nation. "No-one can raise their hand against the will of the Georgian people. Even I was astonished by the big level of support which we got in these parliamentary elections," he added.

But the opposition said voters had been intimidated by local officials and police and that the media had been dominated by coverage of the ruling party. "This was a criminal election," David Gamkrelidze, one opposition leader, told Reuters. "We together with the people must achieve the cancellation of the election results and the calling of a new parliamentary election."
Europe's leading election monitor, the Organisation for Security and Cooperation in Europe (OSCE), was to give its preliminary verdict on the fairness of the election.

With over a half the ballots counted, the main opposition coalition bloc was in second place with 15.3 percent, according to the Central Election Commission.

The Christian Democratic Movement was third with 8 percent and the Labour party fourth with 7 percent.

The election commission said the vote was fair.
Opposition coalition leader Levan Gachechiladze said as polling stations closed that he would call 100,000 people onto the streets. But only about 4,000 gathered in central Tbilisi on the night of May 21 and spent the first part of the protest watching the soccer Champions League final on giant screens.

"The struggle against Saakashvili's regime will continue every day until this regime departs forever," said Gachechiladze, who was once one of Saakashvili's allies.

Leaders of the coalition said they would meet to decide their strategy. The opposition, which broadly supports closer ties with the West and NATO, says Saakashvili's rhetoric about democracy masks intolerance of dissent.

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