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GEORGIA



 

In-depth Business Intelligence

Key Economic Data
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 3,324 3,100 3,000 124
         
GNI per capita
 US $ 650 590 590 151
Ranking is given out of 208 nations - (data from the World Bank)

Books on Georgia

REPUBLICAN REFERENCE

Area (sq.km)
69,700 

Population 
4,934,413 

Principal 
ethnic groups 
Georgians 68.8%
Armenians 9% 
Russians 7.4%

Capital 
Tbilisi 

Currency 
Lari

President 
Mikhail Saakashvili

  

Background:
Georgia was absorbed into the Russian Empire in the 19th century. Independent for three years (1918-1921) following the Russian revolution, it was forcibly incorporated into the USSR until the Soviet Union dissolved in 1991. Russian troops remain garrisoned at three military bases and as "peacekeepers" in the separatist regions of Abkhazia and South Ossetia.  They also have a base in Batumi in Adjania, the latest defector from Tbilisi's control. Despite a badly degraded transportation network - brought on by ethnic conflict, criminal activities, and fuel shortages - the country continues to move toward a market economy and greater integration with Western institutions. But Russia has skilfully manipulated the situation so that it could, if it chose to do so, rapidly make Georgia totally ungovernable.  In effect therefore, Russia now has ultimate sanction over Kazak and Caspian oil flowing through to western markets by pipeline and by Black Sea tankers.

Update No: 283 - (26/07/04)

The Georgian situation is volatile. This is usually so after a revolution. And that is what the Georgians have recently had.

The Rose Revolution Unfolds
In October 2003 a fraudulent election took place which spelled the end of the long political career of Eduard Shevardnadze, former Soviet foreign minister under Gorbachev.
The opposition, under the leadership of Mikhail Saashkavili, protested and got rid of the old regime. The Georgians did something remarkable. They had a revolution in which not one person lost their life.
It is extraordinary how communism, and its detritus in certain post-communist states, namely in Georgia, are leaving the world stage without a shot being fired.
This poses a stark contrast with the end of fascism, which involved a world war to end it, and the long-drawn-out denouement of the Franco regime, not quite fascist, but certainly
blood partners in the Russian campaign and visceral enemies of the western democracies.
The Adjarian dictator, Aslan Abashkadze, resisted the revolution, but bit the dust in May. He was leader of a breakaway province, whose authoritarian regime wanted no part of the new democratic order.

The new 'democratic' dictator?
The new boss in Tbilisi is increasingly being likened to the old boss. The Young Turk Saakashvili is hastily organising the very same repressive state forces and police state methods utilised by the old fox Shevardnadze. The Manila Times summed up the present state of affairs when it wrote that Georgia has become "a distinctly undemocratic one-party state."
The replacement of Shevardnadze with Saakashvili was an in-house affair, what John Laughland of the British Helsinki Human Rights Group, writing in The Guardian, called "a changing of the guard within an unchanged power structure."
Until recently Saakashvili loyally served in Shevardnadze's cabinet. He only became an opponent of Shevardnadze when he realised the old man's time was up in Washington.
The current ruling triumvirate of Saakashvili, Zhvania and Burdzhanadze all served in various positions in Shevardnadze's cabinets. Prime Minister Zhvania even holds the exact same post he did under Shevardnadze during the most savage period of the latter's rule. In addition the head of national security is unchanged. Indeed Shevardnadze's entire entourage has joined Saakashvili's new ruling party.
Saakashvili and his National Movement are heavily financed by Washington and to a lesser extent by Europe. These backers have become increasingly nervous as the media-created image of the "Rose Revolution" gives way to the new assessment, that of another south Caucasus dictator. This is sadly what it seems to be.
In vain human rights groups have been warning for weeks of the threat of dictatorial rule in Georgia. Saakashvili showed his true colours only weeks after his rise to power. In February he forced constitutional changes through parliament giving him unprecedented powers to hire and fire ministers at will. Two of Georgia's popular political talk-shows have been taken off air and general political discussion in the media has become subdued since Saakashvili's ascent. Journalists at a station critical of Saakashvili say they have received death threats. In February they marched through central Tbilisi carrying a coffin to symbolise the death of Georgian free media.
Saakashvili is now seemingly becoming like the Russians. In public round-ups broadcast live on national television as part of what is promoted as an anti-corruption drive, the Saakashvili administration has jailed business people, former officials of the Shevardnadze government and opposition members, whilst thumbing a nose at due legal process. These measures are primarily motivated by post-election score-settling and disputes between various factions of the Georgian ruling class. But they also serve to intimidate the Georgian population by showing them who is the boss. This is the ultimate reality, and score-settling, in Georgia.

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ENERGY

Georgia agrees to buy Iranian gas 


Georgia has arranged to start importing natural gas from Iran as early as January-February next year in a bid to guarantee its energy security and to avoid force-majeure, Niki Gilauri, the Georgian energy minister, said, Interfax News Agency reported. 
The agreement was reached during Georgian President, Mikheil Saakashvili's, visit to Iran recently, Gilauri said. 
Georgia currently receives gas produced in Turkmenistan via Russia under contracts with Russian gas monopoly Gazprom and the Itera energy group. 
Above all, Georgia is worried about accidents occurring along the gas pipeline that links Georgia with Russia. Gilauri said the infrastructure to import gas from Iran existed but needed to be rehabilitated. The pipeline runs across Azerbaijan and used to supply Georgia with gas in Soviet times. Georgian experts think it would only take four months at the most to renovate the line at a cost of approximately US$1.8m. 
Gilauri said Iranian gas was of high quality and cost more than Russian gas. "But from the point of view of diversification it is very important to find an alternative supplier of this fuel to Georgia," he said. 
Georgia received 1.009 billion cubic meters (bcm) of gas in 2003 - 257 million cu m of it from under contracts with Gazprom's export arm Gazexport and 752 million cu m under contracts with Itera. 

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FOREIGN LOANS

World Bank approves key loans

The World Bank approved three credits for Georgia: US$24m reform support credit; US$3.6m energy supplemental credit; and US$20m credit for secondary and local roads project. The overall loan stands at US$47.6m in new lending, Civil Georgia daily reported recently. 
According to the bank's statement, the key objectives of these new projects include contributing to sustainable economic growth by supporting the fight against corruption and efforts for better governance; assisting in improving efficiency of the public sector to make it friendly to the principles of market economy, and linking it to Georgia's economic development and poverty reduction programme process.

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PRIVATISATION

Georgia to sell 5 hydro plants

The Georgian Economic Development Ministry has included five hydroelectric plants in the west of the country, with a total capacity of about 250 megawatts, in the list of companies slated for privatisation over the next year and a half, a source in the Georgian Energy Ministry said, Interfax News Agency reported. 
The five plants to be privatised are Rioni, Shaori, Lajanuri, Gumati and Dzevruli hydroelectric plants. 
The privatisation of these plants was considered back in 2002, but following a recommendation from the World Bank the Georgian government dropped its plans to privatise them. This was due to the poor technical and financial condition of the plants, which meant that they would not have generated much revenue. 
A representative with the Energy Ministry said that in 2003 USAID was ready to provide Georgia with a grant of US$15m to carry out urgent repairs at the five hydro plants in the run up to their privatisation. This work was expected to increase the effectiveness of the plants and make them more attractive to future investors. 
It was hoped that after the repair work, the privatisation revenue from the sale of the plants would amount to at least US$50m. 
However, this repair work was not carried out, Energy Ministry sources said. Consequently, the Rioni plant requires urgent repairs to its water pipe, the Gumati plant needs significant mechanical repairs and the Shaori plant needs repairs to its dam. 
According to Energy Ministry experts, the total value of the five hydroelectric plants does not currently exceed US$20m - US$25m. 

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