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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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Update No: 314 - (22/02/07)

The Tbilisi-Vilnius axis
Existing members of both the EU and NATO find it all rather blasé. Indeed, NATO members are in considerable chagrin at the moment, given the parlous goings-on in Iraq and Afghanistan.
Potential adherents to both organizations are another matter. For them the upside of membership is huge - greater distance from Moscow's unwelcome attentions. There is no former Soviet republic of which this is more true than Georgia.
It is forging a new relationship with Lithuania, already a member of both organizations. High-level Georgian-Lithuanian talks on February 2nd in Tbilisi included the issue of deploying a Georgian military unit and civilian specialists to Afghanistan with NATO forces there. Lithuania's Prime Minister Gediminas Kirkilas, Minister of Foreign Affairs Petras Vaitiekunas, Chief of Staff Brig.-General Vitalijus Vaiksnoras, and Defense Ministry Undersecretary Renatas Norkus discussed this issue with their Georgian counterparts during the visit. 
Lithuania operates a Provincial Reconstruction Team (PRT) in Ghor province as part of NATO's International Security Assistance Force (ISAF) in Afghanistan. One option under discussion for the Georgian unit is to join the Lithuanian PRT. Georgian soldiers trained in mountainous terrain in their own country could add value to NATO's multinational contingent in Afghanistan.
Summing up Tbilisi's position, State Minister for Euro-Atlantic Integration Giorgi Baramidze expressed readiness to deploy a highly trained military unit to Afghanistan, as soon as the NATO Command determines the size and place of deployment and gives the green light.
Georgia made this offer to the Alliance officially in December 2006, immediately after NATO's summit in Riga, where Secretary-General Jaap de Hoop Scheffer urgently appealed for reinforcements to ISAF, amid incomprehension from many "old" allied countries. Already during the summit, Georgia's delegation, led by Parliament Chairwoman Nino Burjanadze and including the influential parliamentarians Giga Bokeria and Nika Rurua, made clear that Georgia would make its contribution to NATO's operations in Afghanistan.
This possible new deployment, as well as Georgia's ongoing contribution to NATO's Kosovo Force, was discussed at NATO headquarters in Brussels on February 1st as part of the NATO-Georgia's Intensified Dialogue on Membership Issues. Tbilisi also proposes to host an air force exercise in the framework of NATO's Individual Partnership Action Plan at one of Georgia's several upgraded airfields this coming summer.
Georgian troops were deployed to Afghanistan for several months in 2004, when ISAF temporarily increased its troops during the general elections there. A platoon-size Georgian unit from the Sachkere battalion operated with a British battalion in Afghanistan at that time.
Meanwhile, Georgia has been deploying more than 1,000 troops at any given time to Iraq and Kosovo. A group of 60 US trainers from the Joint Multinational Training Command is continuing a training programme for Georgian troops at the Krtsanisi base. At present, Georgia seems to rank third overall -- behind only the United States and Britain -- in terms of its troop contribution to US - and NATO-led operations, if calculated relative to the troop-contributing countries' population. According to Baramidze, any Georgian deployment to Afghanistan would not come at the expense of the Iraq and Kosovo operations.
When the three Baltic states were candidates for NATO membership, they successfully established a record of "behaving as de facto NATO members." The same is currently the case with Georgia. The difference seems to be that certain "old" members de jure tend to contribute less de facto, compared to some new members and certainly to the aspirant country Georgia at the present time.
Georgian President Mikheil Saakashvili and Prime Minister Zurab Nogaideli acknowledged Lithuania's offer at the concluding news conference. 

Energy crisis intensifies
Georgia is diversifying its energy supplies away from Russia as fast as it can. The Russians are insisting on market prices for their oil and gas, which is reasonable enough.
The Georgians cannot both be insistent on independence and demand to be mollycoddled by Moscow forever. 
But it is all happening with unseemly haste, requiring fast footwork by Tbilisi. 

New oil terminus to be built on the Black Sea 
President Saakashvili said on February 9 that construction of a new oil refinery is planned on Georgia's Black Sea coast in Samegrelo region. "In the coming months and years, along with other infrastructure projects, we are launching the construction of a new large oil refinery," Saakashvili said. He did not elaborate further on the issue.
Georgia has an oil terminal on the Black Sea coast at Supsa, a village located in the Samegrelo region. Another oil terminal, the construction of which is almost finished, is located in Kulevi, also in the Samegrelo region. Georgia also has an oil terminal and refinery in Batumi, Adjara Autonomous Republic.
President Saakashvili was speaking in Zugdidi, Samegrelo region, where he opened a new hazelnut-processing factory owned by Argonuts Ltd. The European Bank of Reconstruction and Development (EBRD) supported the company with a financing package worth US$4 million, consisting of a loan and the acquisition of a 15% equity stake in the company.

Turkey enhances regional cooperation with Georgia and Azerbaijan
Turkey signed an agreement with Georgia and Azerbaijan on February 9th for more regional cooperation, for energy and transportation projects in particular.
Meanwhile; Russia, Bulgaria, and Greece signed a deal in Sofia, Bulgaria on the same day for an oil transmission pipeline extending from Burgaz, Bulgaria to Dedeagaç (Alexandroupolis), Greece which will carry Russian oil bypassing Turkish straits. 
A similar project to carry Russian oil to the Mediterranean ports proposed by a Turkish-Italian consortium is yet to be started.

Erdogan: Turkey Trying to Allot its Shah-Deniz Share to Georgia
Turkey is now working on allocating a part of its gas share from Azerbaijan's Shah-Deniz field to Georgia, Prime Minister Recep Tayyip Erdogan said after talks with the Georgian and Azerbaijani leaders in Tbilisi on February 7. 
"We are doing our best to allocate 800 million cubic meters of gas to Georgia from the Turkish share by this July. This is our promise," Erdogan said at joint news conference in Tbilisi with the Georgian and Azerbaijani leaders.
But President Saakashvili said at the same news conference that Georgia will start receiving Turkey's share of gas as soon as Shah-Deniz is put into operation.
"First, I want to say that we will be receiving Turkey's quota as soon as Shah-Deniz is put into operation. At the same time Azerbaijan will gradually increase gas supplies to Georgia. This means that the share of more reliable and cheaper gas in Georgia's gas consumption balance will increase," Saakashvili said.
Tbilisi has already been trying for months to convince Turkey to give up part of its Shah-Deniz gas quota in order to reduce Georgia's dependence on expensive Russian gas, but a final agreement has not yet been reached.
According to Turkish media reports, Ankara is hesitating on the deal because it already has commitments to deliver part of its Shah-Deniz quota to Italy and Greece.
The Turkish Prime Minister also noted at the press conference in Tbilisi that Turkey, like Georgia and Azerbaijan, faces certain problems in energy supplies.
"But it is important to solve these problems based on solidarity between these three countries," PM Erdogan said.
President Saakashvili noted at the news conference that the most important thing is that the three countries have managed to put into operation an alternative energy supply route.
"This is an alternative route for Europe [to transport] oil and gas… That is why we call this cooperation [between the three countries] historic," Saakashvili added.
The three leaders signed the Tbilisi declaration on common vision for regional cooperation.
The transport ministers from Azerbaijan and Turkey and the economy minister of Georgia also signed an agreement on the construction of the Baku-Akhalkalaki-Kars railway.
Azerbaijan and Georgia signed an additional agreement envisaging the allocation of a US$200 million loan to the Georgian side for construction and rehabilitation of its section of the Baku-Akhalkalaki-Kars railway.

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The following is the text of The Tbilisi Declaration:-

"The Tbilisi Declaration" On Common Vision for Regional Cooperation
We, the President of Georgia, the President of the Republic of Azerbaijan and the Prime Minister of the Republic of Turkey have gathered in Tbilisi to celebrate a new stage of intensified cooperation among our countries. 
Recognizing the significance of this meeting for the shared interest of our nations and the entire region.
Realizing that our presence today demonstrates our commitment to facilitate economic growth, democratisation, and security in region and Europe at large through multilateral cooperation.
Reconfirming our commitment to the provisions and principles of the European Energy Charter Treaty.
Considering the importance of our region's crucial location in Eurasia.
Confirming our common desire and readiness to cooperate closely with all our neighbours based on the principles of good neighbourhood, respect of sovereignty, territorial integrity and inviolability of internationally recognized borders.
Acknowledging that through our cooperation and efforts we have already demonstrated our ability and commitment to assist each other in overcoming challenges.
Taking into account the growing role of regional initiatives in developing positive trends worldwide.
Sharing the understanding that intensified regional cooperation and economic growth will significantly contribute to peaceful settlement of existing conflicts in the region, stability, democratic development and the prosperity of our nations.
Emphasizing our determination to work closely towards the development of bilateral and multilateral interaction in various spheres of cooperation.
Confirming Turkey's significant role as a negotiating country to the EU for further enhancing the cooperation between the region and the EU.
Stressing the importance of successful implementation of the European Neighbourhood Policy Action Plan of Azerbaijan and the European Neighbourhood Policy Action Plan of Georgia for the region in terms of bringing it closer to the EU.

Considering further development of the East-West Energy and Transport Corridor as a basis of regional cooperation, have declared the following:

1. Today we celebrate the commencement of the Baku-Tbilisi-Kars "Silk Road" Railway project of geo-strategic importance. The realization of this project represents one more step in further intensifying and expanding our cooperation as well as opens new global opportunities. By doing so, we are complementing the existing transport connections and contributing to safer and more rapid transportation of goods and passengers between Europe and Asia.

2. With three successful energy infrastructure projects, the Baku-Supsa export oil pipeline; Heydar Aliyev Baku-Tbilisi-Ceyhan (BTC) export oil pipeline; and the South Caucasus gas pipeline (Baku-Tbilisi-Erzurum) our cooperation has established a vital and secure new source of energy for Europe, increasing the importance of the Black and Caspian Sea regions and entrusting it a significant role by contributing to the European and wider global energy security.

3. Together, we agree to establish long-term and predictable mechanisms that ensure the energy security of all three nations through the reliable, timely and commercially based provision of gas and electricity based on the infrastructure projects referenced herein. Taking into consideration the energy needs of our countries we appreciate the start of exploitation of Shahdeniz gas condensed field located in the Azerbaijan sector of the Caspian Sea. We agree to continue to cooperate in order to meet mutual needs for reliable and sustainable gas supplies.

4. We agree to support construction of a new electricity transmission line from the Republic of Azerbaijan through the territory of Georgia to the Republic of Turkey, as well as other appropriate projects, which will enhance electricity exchange between the Parties in future.

5. Working alongside with interested countries we envisage the expansion of our cooperation to encompass the Black Sea and Caspian Sea. We believe this approach will further enhance energy security and contribute to greater prosperity in the region.

6. We believe that implementation of these projects, and more to be implemented in the future, will create the infrastructure for economic growth and long-term security of the region.

7. We express our readiness to further support the establishment of multilateral cooperation that will ensure equal competitive conditions, on the basis of diversification of supply sources, transit routes and consumption markets.

8. We support active cooperation in multilateral formats, through regional organizations and projects that further increase and promote peace, stability and prosperity in the region and in wider Europe.

9. We attach importance to the further steps, which will facilitate the movement of people, goods, capital and services, as a way of fostering regional cooperation that would also contribute to the strengthening of ties with Europe.

10. Looking to the future, we share a commitment to tangible and commercially sustainable cooperation based on the principles of free market economy and the common European values and experiences as an important leverage for promotion of regional stability and security. 
11. We express our belief that intensified cooperation of this nature will enhance the ability of our countries to strengthen the security in the region which will also have a positive impact on Europe.

12. We will continue to deepen cooperation with new activities and investments. To this end, we have created a joint Working Group to examine and recommend further action.

13. To contribute to the common perspectives of the region we invite our neighbors to consider joining our efforts.

14. We express our gratitude to the Government and people of Georgia for the warm hospitality and excellent organization of this Meeting. 
15. Done in Tbilisi, on 7th February 2007, in English, in three copies, all of them are equally authentic.

Swift Russian reaction
Regional cooperation in South Caucasus should promote "development of multilateral links among all, without exception, countries of the region," the Russian Foreign Ministry said in a statement issued on February 10.
The Russian Foreign Ministry's statement is a response to the Tbilisi Declaration on Common Vision for Regional Cooperation signed by the Georgian President Mikheil Saakashvili, Azerbaijani President Ilham Aliyev and Turkish Prime Minister Recep Tayyip Erdogan in Tbilisi on February 7th.
The Declaration notes that by implementing major regional projects involving oil and gas pipelines and a railway network, the three states are establishing "long-term and predictable" relations. Armenia has protested against construction of a railway link which will connect Azerbaijan to Turkey via Georgia.
Russia is always ready for any forms of mutually beneficial and transparent cooperation aimed at promoting stability and social-economic prosperity in the Caucasus, the Russian Foreign Ministry said. 
The Russian Foreign Ministry said that Moscow will "closely watch the developments in frames of this initiative by our regional partners."
It also noted importance of the fact that the declaration contains a call towards neighbouring countries to consider joining the initiative.

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At home things are looking up, as the following attests:-

Government and opposition begin "positive and constructive" dialogue
By Ana Kamushadze
"Positive and constructive" was how opposition lawmakers described their February 6 meeting with President Saakashvili, the first after an almost total cessation of dialogue between the opposition and government that has lasted for months. 
Opposition politicians have long voiced their dissatisfaction with the lack of dialogue with the ruling party, pointing to the way government politicians had been avoiding debates with their opponents on TV talk shows and elsewhere. 
President Saakashvili addressed the issue earlier in the year. "I am ready to meet these people [opposition members] and representatives of different civil society groups regularly, in order to have a common position on major issues, including Georgia's foreign policy priorities, Georgia's territorial integrity, further democratic reforms, interaction with the people… as it is in all real and successful democracies," Saakashvili said on January 10.
This olive branch was greeted positively by most major opposition leaders, and on February 6 the long awaited meeting, described as "civil" by opposition leader MP Davit Berdzenishvili of the Republican Party, finally took place. Both sides spoke of their willingness to maintain contacts and continue dialogue in televised comments after the closed door meeting. 
"After three years in office President Saakashvili at last decided to engage in dialogue with his opponents, which is very positive… There are issues, including foreign policy issues, over which a broad consensus is needed in the decision-making process," Berdzenishvili told reporters shortly before the meeting was launched in the evening on February 6.
The opposition was represented at the meeting by MP Davit Gamkrelidze, leader of the New Rights Party; MP Zurab Tkemaladze, leader of the Industrialist Party; and MP Davit Berdzenishvili of the Republican Party, who was representing the Democratic Front parliamentary faction, which includes lawmakers from the Conservative and Republican parties.
Parliamentary Chairperson Nino Burjanadze and leader of the parliamentary majority MP Maia Nadiradze represented the ruling National Movement Party.
Government officials including Giorgi Arveladze, the Economy Minister; Davit Kezerashvili, the Defense Minister; Gela Bezhuashvili, the Foreign Minister and Merab Antadze, the State Minister for Conflict Resolution Issues, were also in attendance.
Officials said issues surrounding the secessionist conflicts, Georgia's NATO integration, relations with Russia, and also issues which, as Berdzenishvili put it, "none of us intend to talk about in public" topped the agenda at the meeting. 
After the talks MP Davit Gamkrelidze, who is a regular and fierce critic of Mikheil Saakashvili, said that the president was "quite constructive." He told Imedi TV that Saakashvili expressed his desire that talks of this kind happen frequently. According to the New Rights leader, Saakashvili brought up the authorities' alleged abuse of property rights, an accusation that has lately featured prominently in the local media. Gamkrelidze said that president promised to initiate a draft law which would put an end to illegal confiscations of property.
"My feeling is that Saakashvili is really concerned about society's reaction to this issue [the abuse of property rights], so he has decided to put an end to this illegal activity," Gamkrelidze told the press. 
The withdrawal of Georgia from the CIS, a flagship opposition demand, was also discussed at the meeting, according to Berdzenishvili; however, there were no commitments from the government on this issue.
The Republican Party's Berdzenishvili said that he appreciated the president's decision to at last meet with opposition representatives. The most important thing that Berdzenishvili sees in this is that the government has accepted that there is an opposition, and that the president didn't use any "sarcastic terms" to describe them.
"It doesn't matter if I'm confident or not about the meeting. The main thing is that the ruling party and the opposition came to a consensus. We talked about how it's important for Georgia to integrate into NATO, how it's important to settle the situations in Abkhazia and South Ossetia, about how democratic institutions must be strengthened." Berdzenishvili said. He also said that the necessity of creating a better legislative base to secure political pluralism was also noted during the meeting
Parliamentary Speaker Nino Burjanadze told reporters that the meeting was "very open and very frank." Burjanadze hopes the meeting will help to increase the level of political culture in the country.

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FOREIGN RELATIONS

Moscow awaiting Georgian moves to improve relations

Russia expects reciprocal moves from Georgia to normalize relations between the two countries after Moscow signed a natural gas exports agreement and made a decision to return its ambassador to Tbilisi, a Russian government source said on January 19th, Interfax News Agency reported.
"The process of normalising relations is always a bilateral process, which requires efforts by two states. Therefore, we will be closely following the development dynamics of Russian-Georgian relations, including reciprocal steps on the part of Georgia. At the very least, we hope anti-Russian rhetoric will be abandoned," the source told Interfax. "Currently, certain cooperative moves are on the agenda in the bilateral dialogue with Tbilisi, and the president of the Russian Federation spoke about this at a meeting with the ambassador to Georgia," he said. "The first such move was the signing of an agreement on gas between the Russian Federation and Georgia, and the return of the Russian ambassador to Tbilisi is also one such move," the source said.

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TRANSPORT

Baku, Tbilisi finalise deal on railway project 

Azerbaijan and Georgia are close to finalising a deal on terms of financing construction of the Baku-Akhalkalaki-Kars railway link which will connect Azerbaijan with Turkey via Georgia, officials said. Azerbaijani Transport Minister, Zia Mamedov, and the head of Azerbaijani Railways, Arif Askerov, led the Azerbaijani delegation, which met with Georgian Prime Minister Zurab Nogaideli on January 12, the Messenger reported. 
Georgian Economy Minister, Giorgi Arveladze, who was also engaged in talks said that this was a strategic project for Georgia. Former Economy Minister, Irakli Chogovadze, attended the negotiations as a consultant to the Georgian government as he was engaged in previous talks while serving as the economy minister. "I think we will have no problems and the results of talks will be known straight away. I do not think there will be problems with financing the project - the Azerbaijani side is ready to finance it," Mamedov said.
The project assessment report is expected to be ready in February, which will estimate a total amount of finances needed for implementation of the project. Reports about the total cost of the project vary from US$400 million to US$600 million. The project involves the construction of a railway link between the Turkish town of Kars and Akhalkalaki in southern Georgia. In addition, the rehabilitation of a portion of the railway on Georgian territory will also need to be completed. "We want to launch construction by the end of second quarter of 2007," the chief of the Georgian state-run Railway Company, Irakli Ezugbaia, said, but added that rehabilitation works on 192-kilometres portion of railway can be launched even earlier.
He said project implementation would take about two and half years. The railway will have a capacity to transport 15 million tones of cargo annually, Ezugbaia added. The presidents of Azerbaijan, Georgia and Turkey signed a joint declaration on May 25, 2005 in Baku over the construction of the railway. Armenia is against the Baku-Akhalkalaki-Kars railway, claiming that the project will further isolate the landlocked country. As an alternative, Yerevan is pushing for reopening the already existing Kars-Gyumri-Tbilisi railway.

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