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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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Update No: 368 - (26/06/12)

Since the 'Rose revolution' of 2003, Georgia has been seen as an oasis of democracy in the post-Soviet space, a fledgling independent state that hoped to emulate the principles of western European parliamentary democracies as opposed to the cronyist repressive regimes which emerged in the other CIS nations. Disappointment therefore has emerged of late to see that President Mikhail Saakashvili has been imposing draconian measures on the opposition, namely the Georgian Dream coalition led by businessman Bidzina Ivanishvili ahead of the parliamentary elections, which will take place in October. Tensions with Russia remain high over the fate of the two breakaway regions of South Ossetia and Abkhazia, considered by Tbilisi to be under Kremlin ‘occupation’. A recent visit by Hillary Clinton however confirmed US backing of Georgia's attempts to protect itself from external military threats and emphasized strong bilateral ties.

Many fear that democratic standards are waning in this nation. In December of last year, Georgia's political opposition was regalvanised by the appearance of opposition group, Georgian Dream. Led by formerly reclusive Georgian billionaire Bidzina Ivanishvili, the party (which draws together Republicans, the Free Democrats, the National Forum, the Conservative party, the Industrialist party inter alia) and the tycoon have encountered numerous hurdles. In October of last year, Ivanishvili was stripped of Georgian citizenship when he first made public his plans to create an opposition party (he also has French citizenship). An attempt at the start of April to be renaturalised has been refused. The authorities have stated he can only have joint French-Georgian citizenship. It has been easy for the ruling United National Movement party to brand the tycoon unpatriotic as he apparently made a considerable amount of his money on arch nemesis Russian soil. As a result, on May 11, he pledged to sell all of his businesses and properties in Russia by the end of the month in order to affirm his loyalty to Georgia. The Georgian Dream coalition has been subject to a sustained campaign of obstacles laid by the authorities. Amnesty International was moved to express concern when members of the opposition were called in for questioning by police. Fines have proved the preferred method of punishing the cash-rich coalition. On March 20, Ivanishvili was fined $1.65 million by monitoring committee the Chamber of Control for illegally funding his own campaign group. Just prior to this, two of Ivanishvili's companies were also fined around $2 million for illegally offering funds to his campaign under legislation that forbids company donations to political organizations.

In a more radical move, on June 22, it was reported that the police had confiscated 300,000 satellite dishes destined for the opposition tycoon's TV station. The Georgian Dream coalition released a statement saying, "The aim of the authorities is to maintain the information vacuum which has been made possible through government control of the federal TV companies." This was, of course, denied by the authorities. The satellite dishes, which were to be given away free, in order to increase Ivanishvili's TV presence, were considered a form of electoral bribe by the authorities, who have pledged that legislation will be put into place to guarantee equality of press coverage for all the parties during the electoral campaign. "It is very regretful that Bidzina Ivanishvili and Georgian Dream seem to think they are above the law and are constantly and purposefully trying to weaken the law and, consequently, democracy in this country," Deputy Interior Minister Eka Zguladze told journalists. Many would argue that the opposition will not have significant access to the media. A new law which would see radio on buses replace advertising has also been deemed a blow to the opposition as it is believed that the advertising agency behind the contracts are a group controlled by Tbilisi's Mayor Giorgi Ugulava, a close ally of President Mikheil Saakashvili. It is feared that passengers of the minibuses will now be bombarded with messages from the ruling party.

In terms of popularity, it would seem that Georgian Dream has a significant support base. On May 27, thousands of Georgians appeared for a rally in favour of the party, with former parliamentary speaker and government opponent Nino Burjanadze among them. Again on June 10, thousands of people assembled on the streets of Kutaisi, the largest city in western Georgia, in support of the coalition as it showcased its parliamentary election campaign in the regions. It is, opinion polls would suggest, still less popular than the ruling party. Nonetheless, Saakashvili has made a few gaffes recently, which might have dented his popularity. He was caught perusing watches at luxury brand Louis Vuitton in Milan just a few days after severe flooding hit Tbilisi killing five people. The images, then printed in newspapers, did little to indicate any sensitivity to the capital’s victims. In another unfortunate misstep, the firing of the director of the Georgian Education Ministry's examinations centre, Maia Miminoshvili, believed to be the architect of a number of important education reforms, has unleashed a wave of outrage from teachers. About 60 employees made their resignations public at a news conference on May 29, one day after Miminoshvili was officially dismissed because of "differences" between her position and that of the Education Ministry. 90 more employees also pledged that they would resign in protest. Apparently her son had been spotted at a Georgian Dream rally one day before and her brother has also shown sympathy for the opposition cause. Miminoshvili's colleagues immediately suggested that her removal was therefore politically motivated. "I cannot be 100 percent sure that this was indeed the reason [for my dismissal], but if it is the reason, I cannot help but express my indignation," Miminoshvili told reporters when asked about this interpretation. Ia Kutaladze, one of the officials who resigned on May 29, said that Miminoshvili's dismissal was a blow to what had been one of the most successful areas of reform in Georgian society.

The upcoming elections and the necessity of adhering to democratic standards was one the issues mentioned by Hillary Clinton on her visit to Georgia on June 5. The US Secretary of State asserted that a large number of election monitors would be sent from the US to ensure the electoral process is observed correctly. The tone of the meeting in Batumi with President Saakashvili was apparently friendly and the President will have been content to hear Clinton reiterate Washington's rejection of Russia's 'occupation' of the breakaway territories of South Ossetia and Abkhazia. The US even suggested the possibility of increasing assistance to Georgia in developing its air systems and defence. Prior to this point, the US had refrained from providing any military assistance in the form of weaponry, though it did train soldiers. Subsequent to the meeting however, it has been reported that the US will consider Georgia's request to buy weapons. Clinton also stated clearly that the US would assist in the modernization of the Georgian utility helicopters. Washington will also provide two refurbished U.S. coastguard vessels and is building a ship repair depot to maintain Georgia's fleet of patrol boats to help it defend its waters. The US interest in maintaining strong ties with Georgia is partly due to fears of regional instability in the volatile Caucasus as a whole and partly to maintain a defensive front against Russia. Georgia has also proved a steady partner in Afghanistan, where it has the largest number of troops for a non-NATO member. Clinton expressed her thanks for this and for supporting the Northern Distribution network. This appreciation was seconded by NATO Secretary General Anders Fogh Rasmussen at a meeting in Brussels with President Mikheil Saakashvili, on April 3. Rasmussen described Georgia as "a model partner" of the North Atlantic Alliance and reiterated NATO's 2008 decision pledging that Georgia should one day join the alliance "stands firm."

One of the other salient points to emerge from Clinton's meeting with Saakashvili was an announcement that the United States will recognize "status-neutral" documents issued by Georgia's government, which would allow residents of its separatist Abkhazia and South Ossetia regions to travel to the West, which would help engender a level of reconciliation. Russia has taken issue with the documents which it has branded a 'scam.' Since they are issued by the Georgian government, such documents are not really neutral, is the Kremlin’s line. The separatist leaders have also been vociferous in rejecting the scheme. The two breakaway territories, where Russia troops are stationed are the source on ongoing political if not military conflict between Tbilisi and Moscow. There have been few signs of improvement in this situation. On February 28 Saakashvili offered Russian tourists visa free travel. In light of this goodwill gesture, Russia then offered to restore diplomatic relations, and offer reciprocal visa free travel. An unexpected move, given that the Kremlin had pledged to cease to have any contact with Georgia until the President was out of office. The Georgian president rejected the offer unless Russia agreed to recognize that South Ossetia and Abkhazia are part of Georgia, a condition Moscow would naturally refuse to accept. It is unsurprising that these gestures failed to yield any relaxation in bilateral relations; analysts noted that the offer of visa free travel was not simply a diplomatic move. It was rather to bring Russian tourists in to financially bolster the country.

Saakashvili has since then become increasingly histrionic in his attempts to convince Russia to remove its troops. On April 26, he offered his resignation in exchange for the return of the two territories. He even went as far as to respond to Putin's famous comment that he would "hang him by the balls", telling the press that "In addition, I am ready to cut off and send them those parts of my body which they have shown interest in more than once [...] I am really ready to do it, and I say this without a hint of irony, as long as they pull out their forces from here and give Georgia's people -- its multi-ethnic population -- an opportunity to develop within the internationally recognized borders." This comment was, not unsurprisingly, removed from subsequent repeats of the interview. Upping the ante, on May 11, Russia accused Georgian security services of assisting Chechen terrorist group led by Doku Umarov in the transporting of weapons for attacks allegedly planned for the Sochi Olympics. The Georgian authorities have rejected those allegations as “groundless” and “absurd.” The terrorism issue has been a strand of Russia and Georgia animosity at several points, partly because of Georgia's recent decision to call the slaughter of thousands of Circassians in 1862 by Russia, genocide. Russia has accused Georgia of attempting to stir ethnic conflict in the Caucasus (which poses a serious security concern for Russia) through this kind of behaviour. On June 14, the Russian Federal Migration Service says there are more than 9,000 Georgian citizens currently on Russian territory illegally. These disputes rumble on with little sign of abating.

If Georgia looks to resolve its dispute with Russia it is perhaps for economic reasons more than anything. Following the 2008 war, the collapse in relations meant a decline in trade. Now Georgia has looked to other nations to improve its financial status. Thanks to strong ties with the US, Hillary Clinton announced on her visit that talks would begin on bilateral free-trade agreement, as a sort of reward for Georgia's allowing Russia to join the WTO. Meanwhile regarding other prominent Americans, real estate tycoon Donald Trump made a recent visit to Batumi to reveal plans for a luxurious housing complex to be built along the Black Sea coast, which is supposed to encourage more foreign investment. What remains worrying is the economic state of the two breakaway territories, which are still marked by the scars of the 2008 war and which, despite financial support from Russia, have failed to recover from the ravages of those five days. Citizens in the two states apparently lack access to adequate health care and infrastructure is dilapidated. Tbilisi was encouraged by Clinton to engage in "pragmatic cooperation" to ease the daily living of citizens. She will have been pleased to hear that on June 19, Georgia's Ministry of Education announced that it is ready to provide free university education to all residents of the separatist regions who have obtained "status-neutral" documents.

It seems unlikely, given that Vladimir Putin has returned to the Kremlin, that Georgia-Russia relations will evolve in a more cordial way in upcoming months. The run-up to the parliamentary elections is proving an interesting time in terms of domestic political rivalries and the climate is increasingly becoming a source of concern for international observers. Critics see increasing authoritarianism on the part of Mikhail Saakashvili, whose tendency towards grandstanding has been amply documented in his dealings with Russia. Given the close relations between Georgia and the US, and their binding economic and security interests, it can be hoped that Washington will continue to exercise more influence over the political climate if the screws tighten on the President's political opponents. 
   

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