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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: 317 - (30/05/07)

From the first moment of independence, Georgia has courted the West. During the civil conflicts of the early 1990s, this was with little success. But since the Rose Revolution of October 2003 with much more result.

Georgia's firm support for the Iraq War has perhaps been a factor, although investors are usually pretty hard-nosed about such matters. The fundamentals are improving under the impact of reforms - not before time in a republic that saw a greater contraction of GDP than in any other FSU state to under 30% of its 1991 level. But GDP is still a long way from having caught up again.

Saakashvili in London 
Hailing the UK as the main investor in Georgia and a very important supporter of Georgia's NATO bid, President Mikheil Saakashvili, on an official visit to Britain, called for intensifying UK-Georgian political relations, as well as for businesses to explore future business possibilities in Georgia. 

Talking at 10 Downing Street, Saakashvili said Georgia is experiencing an investment boom at the moment with more than USD 2 billion of direct foreign investment expected this year. He also said Georgia is a role model in economic reforms and an important hub for the East-West energy corridor, East-West trade routes and all kinds of other bridges from the Caucasus to Europe. 

When asked about Georgia's future business relations with the UK he said, "I think more and more are coming and we are expecting, you know, some major investment. A banker told me the last time when I was here in London there is an inexplicable buzz around the investment community here in London, there is a disproportionately high interest for a relatively small country like Georgia in London right now and he was asking me how did we do it. I don't know how we did it, I mean that is how it is and it is good news for me," he said.

British Prime Minister Tony Blair said the investment opportunities are enormous in Georgia, stressing that UK companies are not investing in Georgia simply because he or President Saakashvili tells them to, but because of the reforms which allow the businesses to profit. 

Blair reiterated the UK's support for Georgia's entry to NATO, adding that the partnership framework Georgia has with NATO will help "the proper evolution of Georgia."

"I think again the key thing here is for those members of NATO to see the cooperation between NATO and Georgia grow, and also for a country like ours who have got major strategic military interests, the fact that Georgia and ourselves are working very closely in what is a very troubled situation in Iraq at the moment is also important for that," he said at the press briefing on Wednesday.

Saakashvili also talked about Georgia's relations with Russia, saying Russia at the moment is coming through a "pretty turbulent period of transition." 

"We always had some complex and difficult relations with Russia, including in the '90s with regards to Russia's participation in civil wars that were taking place [in Georgia] basically with huge participation and important participation of Russia and it was pretty negative," Saakashvili said. However the president also said Georgia wants to see "a stable, secure and confident Russia." 

"Russians are important partners, they are very important for us and they are very important for the rest of Europe, but also Europe is very important for them. Russia is not North Korea, they want to be respected, they want to be engaged on a daily basis, they would like to be part of the European environment, some of them might not have come to this European Economic Forum here in London but they are actually coming to London to enjoy life, they will go to the Cote d'Azur, they want to be respected, they want to be part of the wider European space," he said.

Later on April 25 Saakashvili met the British Defence Secretary Des Browne in a closed doors meeting where they discussed Georgia's integration to NATO and security issues. 

On 26 April the Georgian president was set to meet the Chancellor of the Exchequer Gordon Brown, who is set to become the next UK prime minister this summer. 

Rallies across the country
More than 7,000 students rallied on the border of the ex-Soviet republic of Georgia's breakaway region of Abkhazia in late April to demand the release of three young men held by separatist authorities. 

Meanwhile, about 2,000 people also demonstrated in the capital, Tbilisi, to protest against cuts in social programmes and increased taxes. 

Busloads of students from across the country gathered at a checkpoint on the border with Abkhazia, where they unfurled an enormous Georgian flag and chanted "Freedom to the Georgian students!" 

A bridge crossing the border was blocked by two armoured vehicles and about 20 Russian soldiers. Russia has deployed thousands of soldiers who act as peacekeepers along the border with Abkhazia, which broke away from Georgia amid heavy fighting in the early 1990s. Protesters were demanding the release of three students detained in Abkhazia after crossing the border on March 1. The students were involved in political efforts to undermine the separatist authorities in Abkhazia and each faces up to seven years in prison. 

Separatist authorities have demanded the return of a local Abkhaz official held by Georgian police in exchange for the students' release. "This is only the beginning of our struggle," protest organizer Ani Lezhava told Imedi television. "We will win their freedom." 

Simultaneously, demonstrators rallied outside the Georgian parliament for several hours to protest government moves to cut social benefits and increase taxes. The protesters accused President Mikheil Saakashvili, who swept to power after Georgia's 2003 Rose Revolution, of breaking promises to improve living conditions. Saakashvili has cut subsidies for utilities and public transport, and increased some property taxes, in an effort to improve state finances. "It is getting more and more difficult for us to survive," protester Inga Vashalomidze said. "Saakashvili has broken all of his election promises. He and his ministers are taking the shirts off our backs." 

New plan for South Ossetia
From May 1 Georgian authorities have been taking concrete steps at creating a temporary administrative unit on the territory of breakaway South Ossetia. Tbilisi will cooperate with all parties to the conflict who are willing to work for the peaceful settlement of the conflict, president Saakashvili stated on April 23, presenting a five-point-plan for conflict resolution.

"I think it is time to shift from negotiations to concrete actions, and particular proposals… this is a historical chance for peace, a chance for each person," Saakashvili stated at the National Security Council session. However, Saakashvili also pointed out that "the proposal is not time limited and we are ready to give everybody an opportunity to participate in the resolution and the decision making process."

According to Saakashvili, the five-point-plan gives the de facto South Ossetian authorities of Eduard Kokoity and the 'alternative government' of Dmitri Sanakoyev the opportunity to cooperate on the determination of the region's autonomous status and decide on the head of the temporary administration. In addition, the Georgian authorities will allow the temporary administrative entity to appoint deputy ministers of internal affairs, economics, finance, education, healthcare, culture, justice, agriculture and environment to the central government in Tbilisi. The deputies will be entitled to deal with the issues related to the region. "We are ready to grant this unit, which will include ethnic Ossetians in the autonomous region, higher positions in the central authorities of Georgia," Saakashvili noted. 

For the rehabilitation and development of the administrative unit, a special financial package is to be offered to the parties involved. "I would like to stress that each of these steps are aimed at the security and welfare of ethnic Ossetians, Georgians, and all other people residing in the region, and the establishment of peace among all ethnic groups. It is intended to prevent any future threats to our unity," Saakashvili stated. 

He also made remarks on the existing negotiation format on the conflict, saying it is "prolonged artificially" and called for a more constructive and peaceful way to be found out of the existing stalemate. Nevertheless, he noted that despite this Tbilisi is ready to continue dialogue "formally or informally" within any format at hand. 
"We are ready to talk to everybody, including the representatives of Russia," he added. "We offer friendship to all our fellow citizens, regardless of their ethnic origin, all those people who for various reasons were not integrated into our state structures until now," Saakashvili said. 

Responding to Saakashvili, South Ossetia's alternative president Dmitri Sanakoyev said his government will "support all the initiatives proposed to resolve the conflict by peaceful means."

The five-point-plan will be presented to parliament for approval from May 1. Parliament has already adopted a "Draft Law on Creating Appropriate Conditions for Peaceful Resolution of the Conflict in the Former Autonomous District of South Ossetia" with 165 votes to two. All the major political parties supported the proposal.

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Combined bank assets up 62% in Q1

The combined assets of Georgian banks increased a whopping 62 per cent in the first quarter of 2007, reaching 4.7 billion lari, according to a source at the National Bank of Georgia, Interfax News Agency reported. 
The credit portfolio of Georgian banks grew 55 per cent to three billion lari in the quarter, it was reported.
Deposits in Georgian banks increased 48 per cent to 1.9 billion lari, with deposits in the national currency increasing 60 per cent to 603 million lari and deposits in foreign currency increasing 54 per cent. The charter capital of existing banks in Georgia almost doubled in the quarter to 959 million lari from 494 million lari. Net profit of banks increased 36.6 per cent to 25 million lari in the quarter, it was reported. The National Bank said its international reserves totalled 1.019 billion Euro on March 31, up 113 per cent from the start of the year.

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Piebalgs urges closer energy cooperation with Tbilisi

In his talks with Georgian Foreign Minister, Gela Bezhuashvili, EU Energy Commissioner, Andris Piebalgs, said in Brussels that Georgia is growing in importance as a transit country for oil and gas from the Caspian Sea region.
Talks focused on the development of transport routes through Georgia for oil and gas shipped westward from the Caspian Sea region, notably through the port of Baku, capital of neighbouring Azerbaijan. 
"We are very keen to get a supply of resources from the Caspian Sea region towards the European Union," Piebalgs was quoted by the press as telling reporters, cited by AP.
"If there are to be more hydrocarbons passing via Baku then definitely we will need increased capacities in Georgia," he added. "I got full assurances from the Minister that it will be regarded in a positive spirit." 
The 27-country bloc seeks to reduce dependency on energy imports from Russia. "It's important to diversity. Having one monopoly supplier at the end of the day leaves the consumer exposed," Piebalgs said.
Bezhuashvili said George shared the "common vision" of boosting Europe's energy security. "We very much appreciate the efforts Georgia is making," Piebalgs said. "It definitely means more transit supply passing via Georgia, it means more strains for Georgia, but Georgia is ready to provide the necessary supply corridors."
Piebalgs said an oil pipeline from Baku through Georgia and on to the Turkish Mediterranean port of Ceyhan which opened last year was the "first breakthrough" in the EU's efforts to secure Caspian region supplies. A similar pipeline for gas is now under construction, and Piebalgs said the EU was also looking at the prospect of transporting fuel by rail.

NPL sells GOGC 50% stake in Ioris Veli for US$4.7 mln

Georgian Oil and Gas Corporation (GOGC) General Director, Alexander Khetaguri, and Georgian representative for Switzerland's National Petroleum Limited (NPL), Martin Miller, recently inked an agreement on the sale of NPL's 50 per cent stake in oil producer Ioris Veli to GOGC for US$4.7 million, the corporation was cited by Interfax News Agency as saying. 
NPL will transfer to GOGC its rights and liabilities in Ioris Veli, which was initially founded by the Georgian and Swiss companies on a parity basis, it was reported. Gruzneft and NPL signed a product-sharing agreement in 1995. In accordance with the document, the Swiss company received the right to search for and produce oil in the Gardabansky and Sagaredzhoisky districts in eastern Georgia in the XIB licensing section for 25 years. At present, Teletskaya Oil Company, which is part of GOGC, is producing oil at the section. The licensing sections of NPL and Teletskaya Oil Company were merged as a result of the signing of the deal on the sale of the 50 per cent stake in Ioris Veli.

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TBC Bank acquires US$47-mln syndicated loan

Georgia's TBC Bank has acquired a US$47-million syndicated loan on Western financial markets, the bank told Interfax News Agency. 
This is the largest transaction the bank has carried out on the international financial market. JP Morgan provided assistance to the bank in acquiring the loan.
The bank plans to spend the funds on corporate purposes, namely satisfying the market's growing demand for financial and banking services.
TBC Bank was founded in 1992. Its main shareholders are the International Finance Corporation (IFC) with 30.92 per cent, Germany's DEG with 13.33 per cent and Georgian individuals.
TBC Bank ranked 151st by assets in 2006 on the Interfax-1000 list of the biggest banks in the CIS and second among Georgian banks.

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