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GEORGIA



 
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)

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 (acting)
Nino Burdzhanadze

  

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 four military bases and as peacekeepers in the separatist regions of Abkhazia and South Ossetia (but are scheduled to withdraw from two of the bases by July 2001). 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. 

Update No: 278 - (01/03/04)

The Name of theRose:- Revolution
The Georgians have added a new word to the political lexicon, the Rose Revolution, to match the Velvet Revolution of the Czechs. Both are particularly fitting. Prague is suitably symbolised by velvet, being of rare beauty and quality. Georgia is a rose of a country, being one of the most beautiful on Earth.
As befits a country in revolution, it is to have a new constitution. This is to be modelled on Western Europe, no surprise.

The Rose begets Ivy
A separation of powers will obtain, with a more powerful parliament and government than hitherto, curbing the excessive powers of the existing presidency. Its occupant is the young reformer and alumnus of Ivy League universities, Mikhail Saakashvili.
For him to be pushing for his own power to be curbed as the first exercise of prerogative in office is a welcome sign, so long as it does not impede the urgent business of government.

Reforms badly needed
For Georgia is in a bad way. Its polity is grievously marred by corruption. Its institutions do not work properly, red tape and delays being the norm, inherited from Soviet times. It is a failed state.
Its economy has fared poorly, despite double-digit growth reported recently. That has been from a terribly low base. Revolutions can easily breed unrealistic expectations and now the first need of the Georgians will be to have patience.
Once the new government is installed, led probably by Saakashvili's fellow reformer, Zurab Zhvania, it will be possible to assess its chances. 

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ENERGY

Georgia wants to keep buying gas from Itera

Georgia, which has a strategic natural gas import agreement with Russian gas monopoly Gazprom, needs to simultaneously keep its current deal to buy gas from another company, Itera, the Georgian Gas International Gas Corporation (GIC) said recently. Gazprom demanded that Itera stop using a Gazprom trunk pipeline for exporting gas to Georgia, where gas makes up 24% of the total energy that is consumed. However, Itera has been Georgia's main gas supplier for the past few years. It owns 12 enterprises in the Caucasus country, most of which are regional gas distribution companies, and a large chemical plant, Azot. Gazprom and Itera held talks in Moscow on January 20th, they did not produce any results other than a Gazprom promise not to cut off Itera's supply to Georgia for a week. GIC President Alexei Gotsiridze, who was present at the talks as an observer, asked Itera to settle its conflict with Gazprom within a week. Last year, Itera supplied Georgia with 705.9bn cubic metres of gas, New Europe reported recently.

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FOREIGN ECONOMIC RELATIONS

Georgian president wants more business with Russia

Georgian President Mikheil Saakashvili said recently that it was in Georgia's interests to "attract Russian capital to the national economy," ITAR-TASS News Agency reported.
In an exclusive interview, Saakashvili said he was in favour of Russian capital entering Georgia as actively as possible. Saakashvili cited the "successful activity of the Russian company Unified Energy System of Russia [electricity grid operator]", the affairs of which are proceeding better than its American predecessor. Since August 2003, Unified Energy System of Russia has possessed 75 per cent of the Telasi energy company. These shares had been owned by the American company AES from 1998 to 2003.
Saakashvili noted that "I met a group of Russian business people in Tbilisi who had expressed serious interest in working in Georgia, evoked by a healthy commercial interest in mastering our market".
"Russia's role in Georgia's economic development is difficult to over estimate, and we are willing to create stable and honest conditions for the work of Russian business people in our country, and to make tax policy more flexible, which will make it possible not only for large Russian companies, but also small firms and individuals, to carry out their projects and programmes in Georgia," Saakashvili said.

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