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  2003 2002 2001 Ranking(2003)
Millions of US $ 3,937 3,324 3,100 126
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 US $ 830 650 590 145
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Mikhail Saakashvili

Update No: 298 - (27/10/05)

Governing party sweeps by-elections in Georgia
Revolutions can become swiftly unpopular. But the Rose Revolution in Georgia, initiated in late 2003, seems to be holding its own, if recent electoral results are any guide.
President Mikhail Saakashvili's administration appeared to receive an endorsement for its policy course, as the governing National Movement Party swept all five seats at stake in by-elections held October 1, almost two years to the day after the revolution began. 
Despite opposition efforts to present a unified candidate in opposition to the National Movement contender, the Saakashvili-led party swept the elections. Prior to the vote, Saakashvili had set up the elections as a referendum on his administration's performance. "These elections will demonstrate whether the population supports the policies we have chosen," Saakashvili was quoted as saying in August by the Civil Georgia website. 
The by-election results seem to provide the Saakashvili administration with a domestic political boost as it attempts to respond to Russia's apparent determination to maintain a dominating presence in South Ossetia (see below). Four opposition groups joined together to present a united front against the National Movement in the October 1 contests. Despite encouraging results during their primary two weeks ago, the opposition candidates could not make a dent in the ruling party's popularity. 
Voting took place in five districts, Isani in Tbilisi, Tkibuli in western Georgia, and Kobuleti, Shuakhevi and Batumi in Ajara. The closest race was in Isani, where the National Movement candidate, Bidzina Bregadze, edged out Giorgi Mosidze of the New Rights Party by less than 300 votes, according to preliminary results. 
Mosidze said the results were heavily influenced by heavy National Movement spending on the campaign. Saakashvili also campaigned for Bregadze. Mosidze characterized his ability to capture 36 per cent of the vote as a 'huge accomplishment' for the opposition, given that his campaign spent 10-12,000 lari (up to US$6,680) on the contest. 
While celebrating the ruling party's victory, Saakashvili expressed regret at the "catastrophic" loses suffered by the opposition. "This means that the weakness of the opposition is a fact. This is not good," he said in a televised speech. "Every government, even the most successful, needs a strong, constructive and responsible opposition." 
The votes were not controversy-free. Citing fixed voter lists, the opposition-minded Conservative Party has filed complaints about the elections in Kobuleti, where its candidate, Jimsher Jincharadze, lost to Koba Khabazi of the National Movement by over 7,000 votes. Koba Davitashvili, the leader of Conservative Party, called the elections 'shameful' in an interview with Civil Georgia on October 2. 
However, the Central Election Commission (CEC) is defending the election and its results. In an interview with EurasiaNet, CEC Chairman Gia Kavtaradze called the by-elections "the best ever" that Georgia has held. "We received complaints in only one district," he said. Kavtaradze added that CEC lawyers were looking into the complaints about the Kobuleti vote.
Independent observers also gave the elections high marks, although there were some violations noted, particularly with voter lists in Isani, a district within Tbilisi, and Kobuleti in Ajara. "The elections were conducted according to the law," Tamar Zhvania of the International Society for Fair Elections and Democracy told EurasiaNet. "There were some violations but they will not make a difference in the results." 
Zhvania added that while the ruling party followed all of the rules, they were 'artistic' in their interpretation of some points of the election code. "They know the code very well and we have some articles that are open to interpretation," she said, noting that the election code was changed a few months ago. There is a need to refine the election code before the 2006 parliamentary elections, Zhvania added. "In the first place there needs to be normal voter lists," she said. "[We also need] professionals in the voting precincts. They should have more training and permanent education." 
Kavtaradze agreed that the election code needs work. He outlined three major areas that the CEC plans on addressing before the 2006 elections: certifying and training election officials, defining set procedures for the voter lists and simplifying voting procedure. "The procedure on election day is extremely complicated," he said. "[Now] a person has to go through 13 steps before he or she leaves the polling station." By 2006 Kavtaradze believes that number should be down to four. "You come in, write you name, get a ballot, drop in the box and go out," he said. 
Guranda Tavartkiladze, a representative from the United Nations Association Georgia Batumi branch, indicated that the main problem with the Kobuleti vote concerned inaccurate voter lists. At the same time, she stressed that it was ultimately the responsibility of each citizen to double-check the accuracy of the lists beforehand. "People came to vote and they weren't on the list although they had registered," she said in a telephone interview with EurasiaNet. "People should ... be more active in protecting their rights." 
Kavtaradze also called on voters to take the initiative and check the lists. "The major headache for us was the voter lists," he said. "Because our voters are passive, not many people [checked the lists beforehand]." Despite the voter-list problems, Kavtaradze is confident that the results are valid; according to preliminary findings only 2 percent of eligible voters were not on the lists. 
While Saakashvili is framing the by-elections as an endorsement for his administration, observers suggest that the vote in Ajara especially was determined more by individual rather than party loyalties. "People [in Batumi] really respect Jamal Inaishvili [the National Movement candidate]," Tavartkiladze said. "They were not voting for the party but for the person himself." She also noted that less than half of the registered voters went to the polls in Batumi. 
Davit Losaberidze, a program director at the Caucasus Institute for Peace, Democracy and Development in Tbilisi, also voiced doubts that the election results served as a clear endorsement for the Saakashvili administration. "Roughly speaking, a loss would have been more beneficial for the government," he said during an interview with EurasiaNet. "It would have shown them that everything is not as well as it should be." 

New dissensions with Moscow
The by-elections occurred at a geopolitically tense time, with Georgia and Russia again sparring over the renegade region of South Ossetia. On October 3, the Russian Foreign Ministry issued a sharply worded statement condemning the Georgian parliament's plan to discuss a resolution that would potentially call for the removal of Russian peacekeepers from South Ossetia and Abkhazia. 
"Pursuing clearly provocative goals, the Georgian parliament is preparing for a destructive discussion concerning the demolition of the negotiating framework, [including] the abolition of the Joint Control Commission for the Georgian-Ossetian settlement (JCC) and the Joint Peacekeeping Forces (JPF) in the region," the Russian Foreign Ministry statement said. "In our opinion, these bodies remain the only effective mechanism for the resolution [of the conflict]."

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Utilities start exploring wind energy

Two years ago, a coalition of Georgia electrical membership cooperatives began offering customers the option of paying a little extra each month to support renewable forms of energy. But the response has been under whelming. "We're a bit disappointed," said Michael Whiteside, president of Green Power EMC, New Europe reported.
"Wind and solar power are the only completely non-polluting renewable forms of energy," said Colleen Kiernan, "I hope the test shows we have enough wind in Georgia to generate some power," said Susan Baker, spokeswoman for Clarkesville-based Habersham EMC. "But a lot of the mountains are in the national forest or they're privately owned." Whiteside said there are only a couple of sites in Georgia where a wind turbine could conceivably be built. The Floyd County location is one of them, if the test results are favourable. Even if wind power were added, it would be only a small part of the overall energy mix used by the 28 EMCs involved in Green Power. In truth, their households are receiving the same electricity as regular EMC members, but by purchasing a "block" of renewable energy, they help support research into alternative power sources. "The more people who sign up, the more the cost will go down," said Blake House, spokesman for Sawnee EMC in Cumming. "We've had hundreds of phone calls about the programme, but when people find out it's going to cost them an extra US$4.50 a month, they don't want to sign up." Kiernan said the dilemma about renewable power is that it's very expensive, but only initially. "The cost is up front."

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Tbilisi, EBRD discuss aid programme

Georgian finance Minister, Aleko Alexishvili, said on September 16th at a press conference that the Georgian Finance Ministry has begun talks with the European bank for Reconstruction and Development (EBRD) on extending a credit for additional financing of projects under the Millennium Challenge Account programme. Alexishvili said, "The talks are about the EBRD's possible participation in co-financing projects. Talks on raising additional credit resources will also take place with other potential investors." The Millennium Challenge Account Programme, which the US government has agreed to sign contracts to extend about US$300m in 2005, includes four main areas. These include rebuilding regional infrastructures and developing entrepreneurship, such as in agro-business and tourism.

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Armenia-Georgian commission meets in Yerevan 

The fourth meeting of the Armenia-Georgian inter-governmental commission on economic issues was recently held in Yerevan, Interfax News Agency reported.
In the inaugural address, Armenia's Prime Minister, Andranik Margaryan, expressed confidence that this meeting will be the continuation of the efficient dialogue between Armenia and Georgia.
He also said that issues discussed during the meeting would give an opportunity to strengthen bilateral economic cooperation. Georgia's Prime Minister, Zurab Noghaideli, was pleased with the high level of this meeting. 
He mentioned the great opportunities for bilateral and regional cooperation, which will promote the settlement of regional conflicts. 
He also expressed his satisfaction with the fact that issues of mutual interest that were discussed will bring about solutions which will promote growth of turnover between the two countries and the establishment of joint enterprises. 
Noghaideli expressed hope for settlement of problems in mutual understanding and that the agreements which will be signed will boost development of Armenian-Georgian cooperation.

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Poti Shipyard signs deal with Dutch company 

Poti Shipyard signed an agreement worth US$18 million with the Dutch company, Damen Shipyards Bergum, on September 22nd. According to the agreement, the Georgian shipyard will construct 12 cargo ships for the Dutch shipbuilder, which will then distribute the ships in Europe.
Ships like the ones Poti Shipyard will construct carry dry cargo and typically are used in Europe, between Scandinavia, Great Britain, Holland, and Germany. Each ship can transport 200 tonnes of cargo.
Georgian Prime Minister, Zurab Noghaideli, and speaker of parliament, Nino Burjanadze, attended a signing ceremony at the Tbilisi Marriott Hotel. Both evaluated the deal as a new example of cooperation between a local enterprise and a foreign company. Noghaideli believes that the contract is the outcome of economic reforms which will provide 1,000 jobs for people in Poti.
Burjanadze stressed that the project was possible because of the government's support. Georgian officials label the contract as a revival for Georgian enterprise. According to the Poti Shipyard, the contract is "the most serious and important offer that any Georgian enterprise has ever received from a foreign country."
The shipyard's leadership underlined that the deal will improve the Georgian investment climate. "We are always looking for potential yards all over the world where we can build vessels," Manager of the Hull contracting department for Damen Shipyards Bergum, Walter van Gruythuysen, told The Messenger. He added that his company plans to invest "knowledge and experience" in the Georgian shipyard. Damen Shipyards Bergum builds seven to eight cargo ships per year. It has production facilities in China, Romania, and Ukraine.
Meanwhile, Poti Shipyard Director General, Dimitrios Eleftheriou, said that the Dutch company is interested in long-term cooperation. He thinks that the contract will be "an important stimulus for development of Georgian heavy industry." He noted that for the first time in Georgian history, the local enterprise will build a commercial cargo ship, The Messenger reported.

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Kars-Akhalkalaki railway to begin in 2006 

The Georgian, Turkish and Azeri governments have finally decided on the construction of a Kars-Akhalkalaki railway. Turkey will provide the bulk of financial aid while Georgia will manage to obtain US$252.7 million in grants from international foundations and Azerbaijan will also contribute. This was announced at a meeting in Turkey where Turkish Minister of Transport, Binal Ildrim, Azeri Minister of Transport, Zia Mamedov, and Georgian Minister of Economic Development, Irakli Chogovadze, were present, The Messenger reported.
The construction of the railway will begin in 2006 and it is planned to be finished by 2008, by which time the Russian military bases in Georgia will be completely withdrawn. The railway will reduce transportation expenses to a great extent and serve to further insure the Silk-Road project will become more popular.
The European Union is also interested in the construction of the Kars-Akhalkalaki railway. The project of lining Baku - Tbilisi - Akhalkalaki - Kars railroad will enable the Caspian Sea countries to transport cargoes and passengers from Baku to Europe through the territory of Turkey, the UN Deputy Secretary General, Anvarul Choudhur, stated. It was recalled that on December 28th 2004, representatives of Turkey, Georgia and Azerbaijan signed an agreement about the Kars-Akhalkalaki railway construction. 
The Kars -Akhalkalaki railway will serve to link the Turkish rail system with the Georgian, Azeri and Russian railway systems, in order to forge further links with Central Asia.

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