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GEORGIA



 

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Key Economic Data
 
  2003 2002 2001 Ranking(2003)
GDP
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)

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Area (sq.km)
69,700 

Population 
4,693,892 

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

Capital 
Tbilisi 

Currency 
Lari

President 
Mikhail Saakashvili



Update No: 309 - (26/09/06)

Distemper abroad in the land
Georgia is an unruly place that gave rise to the "Rose Revolution" three years ago this October in 2003. Still racked by grave economic distress, despite a sharp recovery this year, it is not an easy country to govern, as President Mikhail Saakashvili has discovered.
He is a remarkable man, educated in law schools in the US and fluent in five languages. He has decided to continue to live in a modest apartment in Tbilisi to stay in touch with the people and demonstrate his clean fingers. He wants to establish a Western rule of law in Georgia, a difficult task in a region known for its brigands and corruption.
He has many enemies, as anyone in power is likely to do in Georgia. Some are within the country; and some without - in Russia! 

Opposition party urges national disobedience, the president to resign
A Georgian opposition party, Justice, called on September 7th for a national disobedience campaign to topple the president and his government, as 14 party activists were charged with preparing a coup. 
The interior minister said the day before that the country's law enforcement agencies had information that supporters of controversial former Georgian minister and security chief, Igor Giorgadze, were preparing to overthrow the government and were making arrangements for Giorgadze's return from exile. In all, 29 people were detained in raids and 14 individuals who remained in custody were officially charged. 
But Justice party representative Irina Sarishvili told a news conference that her party would seek to bring down President Saakashvili, who himself came to power on the back of popular protests, and his government. "We propose setting up a national disobedience movement and starting large-scale actions with only one demand: that the country's current leadership resigns," said Sarishvili, who runs the Igor Giorgadze Foundation in Georgia's capital, Tbilisi. 
Justice party leader Giorgadze himself is said to live in Russia after fleeing the country in 1995 when he was accused of organizing an assassination attempt on then-president Eduard Shevardnadze. He has denied the claims. 
"If these authorities want revolution, they will get it," said Sarishvili, who also claimed that her office was being searched by security officers. 
Georgian law enforcement agencies carried out an operation on September 6th to arrest supporters of Giorgadze, his Justice party and other public and political organizations, including the leader of the opposition Conservative Monarchist party, Teimuraz Zhorzholiani, and of the Anti-Soros political movement, Maya Nikoleishvili. 
President Saakashvili told journalists in Poland, where he was on an official visit, that the alleged plotters would be dealt with harshly. "They will get what they deserve, and those who finance them can be sure of that," he said. 
But Sarishvili rejected a statement by the Georgian Interior Ministry about an alleged conspiracy aiming at overthrowing the authorities at a party conference on May 4th. "There was no conference and, of course, no plan to overthrow the authorities," she said. 
The detained activists have protested their innocence and have said their political work led to their arrest, which prompted Sarishvili to say the detentions looked like the start of a political repression campaign. 
A senior Russian diplomat said Moscow, which has had tense relations with Tbilisi since the 2003 "Rose Revolution" brought Saakashvili to power, regarded the arrests as a domestic matter for Georgia. "We regard the arrests of opposition representatives as the country's internal affair," Yury Popov, Russia's ambassador-at-large and co-chairman of the Joint Control Commission for Georgian-South Ossetian conflict resolution, told a news conference. The diplomat also said it was unsurprising that some politicians in Georgia had accused Russia of financing the opposition's activities. "Georgia by habit blames Russia for all its troubles," Popov said. 

Saakashvili says Russia has plans to destroy Georgia
Be that as it may, relations between the former Soviet states have been strained in recent months over the presence of Russian peacekeepers in conflict zones involving two self-proclaimed republics in Georgia and other issues, including a Russian ban on the import of Georgian mineral water and wine. 
President Saakashvili said on September 8th that certain forces in Russia were implementing three plans to ruin Georgia. "Certain forces in Russia decided that this autumn is the last time when it is still possible to stop the process of Georgia's formation," Saakashvili said. 
He said the first plan to ruin Georgia "was a full economic embargo and blockade of Georgia." Wine and mineral water imports from Georgia were banned from sale in Russia in the spring of this year over an alleged failure to meet Russia's hygienic standards. 
Saakashvili said the main aim of this plan was to bring people out onto the streets, "and in the end the authorities will be overthrown, and people will refuse independence and the restoration of our territorial integrity." 
"They received nothing of the kind," he said. "Moreover, this year economic growth in Georgia will be twice that of Russia's, despite all of its income from crude (oil)." 
He said the second plan called for an "international propaganda blockade," or distortion of information about events in the country. "It also failed. On September 7th, the World Bank announced that Georgia topped a list of 200 countries in terms of reform and the liberal development of the economy," Saakashvili said. 
The Georgian president added that some forces in Russia also pinned their hopes on "Georgian collaborators," but that this plan also failed. He was referring of course to the already mentioned supporters of Giorgadze, who were accused of preparing to overthrow the government and of making arrangements for Giorgadze's return from exile.

Georgia struggles to redirect wine exports
Almost six months after Russia imposed a ban on Georgian wine imports, the country's vintners continue to struggle to carve out new markets. Georgian officials have high hopes that American consumers can pick up some of the slack created by the Russian embargo, but marketing experts say it will take time to build global brand recognition. 
Russia imposed the wine ban in March, amid intense feuding between Moscow and Tbilisi over a variety of political topics, including the ongoing presence of Russian peacekeeping forces in the separatist territory of South Ossetia. Moscow justified the ban by claiming a high percentage of Georgian wine entering Russia did not meet health standards. 
Georgia officials insisted that the ban was politically motivated, designed to punish Tbilisi for pursuing policies running counter to Russia's geopolitical interests. Wine importers in the United States who already work with Georgian wines, and who are aware of the political conditions in the Caucasus country, tend to agree with that assessment. 
"Of course the ban was political. … But it's also an opportunity," said Brad Douglas, a wine importer based in Pleasant Hill, Iowa. Douglas said he would travel to Georgia later this year on behalf of his company, Gruzia, to discuss with the Georgian government an all-encompassing marketing campaign aimed at American wine drinkers. 
"The ban had a substantial impact on Georgia," Douglass said. "Wine exports were the largest percentage of the country's GDP. Georgia is already an economically small country. It's had a severe impact across the board, on the people and on the government." 
Georgian officials would like to redirect wine exports to the United States, but the going has been slow. One of the biggest barriers is a lack of familiarity among Americans with Georgian wines. "Georgian wine needs to establish [itself]," said Mamuka Tsereteli, the executive director of the America-Georgia Business Council. "In Russia, the wine enjoys recognition. Unfortunately, some of these [Georgian] brands are of terrible quality, but the wine is known and people [Russians] buy it. We need to get that same level of recognition with quality wines established in the European Union and the United States." 
Tsereteli indicated that wine merchants and Georgian officials were working to improve quality-control mechanisms, and to prevent counterfeiting. The government set a September 1 deadline for grape growers in Georgia to obtain registration certificates, a move designed to help ensure high quality standards. In addition, the Georgian wine industry is developing a tracking system that will enable each bottle of legitimately produced wine to be traceable to the vineyard of origin. 
American importers agree that investment is also needed to develop the overseas markets for Georgian wine. "It will take money and time," says Rita Kuparadze, a partner in Tbilisi Georgian Wines located in Brooklyn, New York. 
On August 11th, Georgian Agriculture Minister Mikheil Svimonishvili revealed that Russia had expressed interest in negotiating the lifting of Moscow's wine ban. Tbilisi remains wary about Russia's sincerity to discuss the issue. 
Meanwhile, Georgian grape growers are facing an economic calamity. On the eve of the harvest season, there appears to be limited demand among wine producers for the estimated 200,000 tons of grapes that are projected to be gathered. Because of the embargo, wine makers are carrying a far higher inventory than usual, and thus are planning to produce only a comparatively small number of bottles with the 2006 vintage.

Scheduling of local elections triggers furor
President Mikheil Saakashvili's August 26th decision to bring forward the date of elections for local and municipal councils and mayors of major towns and cities has triggered a storm of protest from Georgian opposition parties, including those that earlier announced their intention to boycott that ballot. And the apparent willingness of the ruling National Movement to "bend the rules" to permit parliament deputies to participate in mayoral elections has only made things worse. 
On August 7th, presidential-administration head Giorgi Arveladze said the local elections would be held in early December, Caucasus Press reported. But on August 28th -- a public holiday in Georgia -- it was announced that President Saakashvili signed a decree two days earlier scheduling the elections for October 5th. Those opposition parties that had not yet done so were constrained to scramble to submit applications to register for the ballot before the formal deadline for doing so expired at 6 p.m. local time on August 28th. 

To Boycott Or Participate? 
Earlier this summer, the major opposition parties -- the Republican party headed by Davit Usupashvili, the New Conservatives (aka New Rightists) headed by Davit Gamkrelidze, the Conservatives (co-chaired by Koba Davitashvili and Zviad Dzidziguri), the Industrialists (Zurab Tkemaladze), the Labour party (Chairman Shota Natelashvili), Tavisupleba (Liberty, chaired by Konstantine Gamsakhurdia, son of the late President Zviad Gamsakhurdia), and the People's Forum (headed by Akaki Asatiani) -- mulled a collective boycott of the ballot, but were advised against it on the grounds that the minimum voter participation for the ballot to be valid is so low that a boycott could not affect the outcome, according to "The Messenger" on July 17th. 
Following further consultations on August 5th, the Republicans, Conservatives, and Industrialists decided to field candidates in the ballot, while the remaining four parties held fast to the idea of a boycott, Caucasus Press reported. Labour's Natelashvili was nonetheless quoted on August 7 as saying he might reconsider that decision. 
On August 22nd, Republican party parliament deputy Davit Berdzenishvili was quoted by the daily "Rezonansi" as saying that the Republicans, Conservatives, and Industrialists would resume talks at the end of the month on forming an election bloc, and hoped they could persuade the Labour party to align with them, Civil Georgia reported. 
On August 31, Natelashvili announced that Labour will indeed participate in the vote, adding that he believes it has "the best chance" of winning, Caucasus Press reported. Labour made a strong showing in the 2002 municipal elections, garnering the largest percentage of the vote (25.5 per cent) in Tbilisi. But Tavisupleba reaffirmed its intention to boycott the election, Caucasus Press reported on August 28. 
The Greens and the movement We Ourselves issued comparable statements on August 30 saying they will not participate in the ballot, while Samartlianoba (Justice) did likewise on August 31. 

Registration Difficulties 
Prior to Saakashvili's August 28th announcement, the only opposition formation to have registered for the local elections was Georgia's Path, the movement established by Salome Zourabichvili following her dismissal as foreign minister last fall. 
On August 28th, seven other parties also applied for registration: the Republican party, Industry Will Save Georgia, and the smaller and less influential National Ideology Party, Merab Kostava Society, and Mother Georgia. The two latter parties were refused registration, however, on the grounds that they failed to submit the required 50,000 signatures in their support, according to Caucasus Press on August 31st. The Conservatives and Labour were exempt from registration, having fielded candidates independently in previous elections, according to Caucasus Press on August 28th. 
A total of nine parties finally succeeded in registering, according to Caucasus Press on August 31st: Industry Will Save Georgia, the Republican Party, the Conservative Party, the National Ideology Party, Georgia's Way, the New Conservatives, the ruling United National Movement, the National-Democratic Party, and the Labour Party. 

Tricky Scheduling 
Meanwhile, the Central Election Commission sought to address a further problem resulting from the timing of the local election. The election law stipulates that parliament deputies must temporarily relinquish their mandates before registering as mayoral candidates. But the deadline for registration is September 11th, while parliament reconvenes after its summer recess only on September 12th. 
That restriction affects Conservative party leader Koba Davitashvili and the Republicans' Berdzenishvili, who sought to run for mayor in Tbilisi and Batumi, respectively. Both men accused the Georgian authorities on August 29th of sabotaging their chances of participating in the election, the pro-government television station Rustavi-2 reported. 
Giga Bokeria, a prominent member of the parliament faction of the majority National Movement, suggested on August 28th that Davitashvili and Berdzenishvili should appeal to the parliament's bureau to convene an emergency session at which they could surrender their mandates, Caucasus Press reported. 
Central Election Commission Chairman Guram Chalagashvili for his part reasoned that the parliament bureau will convene one week before the opening of the fall session and that body strip the two deputies of their mandates, Civil Georgia reported on August 29th. 
But Tina Khidasheli of the Republican party countered on August 29th that Bokeria's suggestion violates not only the law on parliament deputies but also the Georgian Constitution. Parliament deputy Kakha Kukava (Conservative) similarly said it would be "absolutely illegal" for the parliament bureau to do so. 

Opposition Bloc Infighting 
The Tbilisi mayoral election may, moreover, prove an obstacle to the creation of an opposition bloc to challenge the ruling National Movement in voting across the country. Four parties -- the New Conservatives, the Republicans, the Conservatives, and Industry Will Save Georgia -- are currently mulling such an alignment, according to Civil Georgia on August 30th. 
But as indicated above, Conservative leader Davitashvili hopes to run for Tbilisi mayor, while the New Conservatives are reportedly considering making their participation in a putative opposition bloc contingent on that bloc nominating wealthy businessman Badri Patarkatsishvili as its candidate for that post. 
New Conservatives leader Gamkrelidze explained to journalists on August 29 that there is little point in participating in the elections unless the bloc has a real chance of success, and that Patarkatsishvili is undoubtedly their best bet. 
(An opinion poll of 447 people conducted in June by the weekly "Kviris palitra" found that Patarkatsishvili was the most popular prospective candidate, with 27 per cent support, followed by Zourabichvili [18 per cent], Davitashvili [16 per cent] and incumbent Gigi Ugulava and beer magnate Gogi Topadze, founder of Industry Will Save Georgia, both with 14 per cent.) 
But Tkemaladze was quoted on August 30th as saying the Industrialists plan to nominate Topadze as their candidate for Tbilisi mayor, while Republican party leader Usupashvili told Civil Georgia on August 22nd that his party has "never considered" nominating Patarkatsishvili. 
In light of those two parties' reservations about Patarkatsishvili's candidacy, the prospective opposition alliance could be confined to the Conservatives and Republicans. Those two parties are now considering the possibility of nominating former Minister for Conflict Resolution Giorgi Khaindrava as their candidate for mayor of Tbilisi, Caucasus Press reported on August 31st. 
Khaindrava, who was dismissed in July following disagreements with hawkish Defence Minister Irakli Okruashvili, has not yet commented publicly on that possibility. Nor is it clear whether Davitashvili would shelve his own ambitions to back Khaindrava. 
Zourabichvili, who plans to run in the Tbilisi mayoral election, stands to gain if the other opposition parties fail to unite behind a single candidate. Speaking on August 29th at a press conference in Tbilisi, she described herself as "the real opposition candidate," according to Civil Georgia. She also branded the authorities' decision to bring the election date forward by two months "a sign of weakness." 

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ENERGY

US senators discuss Caucasus oil transport corridor


A US delegation led by Senator Richard Lugar, chairman of the Senate Committee on foreign relations visited Georgia to discuss energy concerns. Lugar met with Prime Minster, Zurab Noghaideli to discuss Georgian energy policy and the oil transport corridor through the Caucasus. After meeting, Lugar confirmed US support for Georgia's territorial goals, stating that the US government agrees with Tbilisi that Russian peacekeepers should be withdrawn from Georgian conflict zones. According to a US Embassy press release, while in Georgia the senator visited biological and radiological sites being maintained under the Cooperative Threat Reduction Programme. The programme, also known as the Nunn-Lugar Act, provides US funding and expertise to help Georgia and other nations safeguard and dismantle nuclear, chemical and biological weapons and related systems.
Touching upon South Ossetia, Lugar stated that the difficulties in Tskhinvali region are not as complex as those in Abkhazia, and the US is working steadily towards resolution of the conflict.
A group of US senators led by Sentor John McCain also arrived in Tbilisi on August 26th for a private visit to Georgia. The senators visited Mtskheta, a former Georgian capital, where they and Georgian President, Mikhail Saakashvili, launched new buildings for the district prosecutor's office and court, the Georgian parliament press service said, Interfax News Agency reported.
The senators also visited Batumi and Kobuleti before they left Georgia to proceed to Turkey and then to Serbia and Montenegro.
McCain visited Tskhinvali, the capital of South Ossetia, and met with the breakaway province's president Eduard Kokoity. The details of the meeting have not been disclosed yet.
"Senator McCain had a number of questions for the leaders of the Tskhinvali de facto authorities. He wanted to receive answers to those questions," Georgian Parliament Deputy, Nika Rurua said in the town of Gori. The Georgian media reported that the US senators and Kokoity had discussed the situation in the conflict zone and the possibility of holding direct Tskhinvali-Tbilisi talks on ways to settle the Georgian-South Ossetian conflict.
Saakashvili said in Gori that "if one can believe the American press, we are honoured to receive, one can say almost confidently, the next US president - John McCain."
Saakashvili welcomed Lugar and a group of French officials. Making a point of addressing the assembled guests in English and French, Saakashvili thanked them for their support.

Shah Deniz to start production this month 

The Giant Caspian Sea gas field, Shah Deniz is expected to start production at the end of September to meet the growing demand of fuel. 
The Caspian's Shah Deniz field would start production to feed the European countries through new South Caucasus Pipeline (SCP). 
The major shareholders of Shah Deniz field are British BP, Norway's Statoil and the Azerbaijani state oil company SOCAR. BP Azerbaijan's President, David Woodward, briefed the press that the production at this Caspian gas field will start at the end of September and will grow in the course of the year. The oil will be delivered through the new South Caucasus Pipeline to Turkey and then it will feed Europe. Woodward said that Shah Deniz field would solve the energy problems of Azerbaijan and Georgia who are heavily reliant upon Russia. The SCP is a new route to export oil that bypasses Russia. 
A consortium of Western companies is set to start production at a massive Caspian Sea gas field at the end of the month that will provide Europe with an extra source of the fuel. The Caspian's Shah Deniz field, whose major shareholders are British BP, Norway's Statoil and the Azerbaijani state oil company SOCAR, will feed a new pipeline that leads to Turkey, where it will link up with European networks. 
Woodward said Shah Deniz gas would be fed through the new South Caucasus Pipeline (SCP), which traverses Azerbaijan and Georgia before terminating in the Turkish city of Erzerum, and would reach Turkey by the end of October. 
The pipeline is projected to reach a capacity of 8.8 billion cubic metres (310 billion cubic feet) of gas per year in the next few years. After 2012 its capacity could be expanded to 20 bcm per year, BP has said. 
The pipeline, which was built to supply energy-hungry Europe, will have the added effect of loosening Russia's grip on energy markets in Azerbaijan and Georgia. 
The two former Soviet republics still rely heavily on imports of Russian gas to heat homes and produce electricity. Azerbaijan recently launched the Baku-Tbilisi-Ceyhan oil pipeline, which mostly matches the path of the SCP but terminates in a Turkish Mediterranean port. The pipeline gives producers on the landlocked Caspian a route to export their oil that by-passes Russia.

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