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  • Georgia: Moscow, Tbilisi Open 'Historic' Business Talks

    Georgia: Moscow, Tbilisi Open 'Historic' Business Talks
    By Jean-Christophe Peuch

    Radio Free Europe, Czech Republic
    May 28 2004

    Dozens of businessmen have gathered in Tbilisi to attend the first
    Russian-Georgian economic forum. Over the next two days (28-29 May),
    Russian private entrepreneurs and government officials will discuss
    investment opportunities with their Georgian counterparts. This
    unprecedented initiative testifies to the new relationship that has
    been growing between Moscow and Tbilisi since the recent change of
    leadership in the Georgian capital. The development of Russian-Georgian
    economic ties is likely to have important consequences for the entire
    South Caucasus region.


    Prague, 28 May 2004 (RFE/RL) -- Georgia's Rustavi-2 private television
    yesterday said dozens of airliners carrying loads of Russian
    businessmen were expected at Tbilisi airport ahead of the conference.

    Although the report eventually proved exaggerated, it gives a good
    indication of the importance the Georgian side attaches to the event.
    Georgian President Mikheil Saakashvili is expected to inaugurate the
    two-day forum, which will be attended by Russian Economic Development
    and Trade Minister German Gref.

    Participants include top managers of Russia's Unified Energy Systems
    (EES) electricity monopoly and Aeroflot national air carrier, as
    well as representatives of LUKoil, TransGazOil, Rosnefteeksport and
    other energy companies. Prime Minister Zurab Zhvania, Economy Minister
    Irakli Rekhviashvili, Finance Minister Zurab Nogaideli, and Interior
    Minister Giorgi Baramidze will represent the Georgian government.
    Included on the Russian delegation's agenda is a tour of Kakheti,
    Georgia's most important wine-growing region. The perception of Russia,
    which helped secure Shevardnadze's resignation -- and more recently
    that of Aslan Abashidze, the unruly leader of the Black Sea autonomous
    region of Adjara -- has obviously changed in Tbilisi.

    Although this is the third time both countries have held business
    talks since 1991, never before have talks been conducted on such a
    large scale. In comments made to Georgia's state television upon his
    arrival in Tbilisi, Gref said that Russia sees today's forum as a
    "symbol" of its new relations with Georgia.

    Vladimir Chkhikvishvili, Russia's ambassador to Georgia, told reporters
    yesterday the upcoming event would mark a milestone in the history
    of bilateral ties. "It is both a political and economic event for
    our bilateral relations," he said. "More generally, one could even
    say that this is a historical event. As far as I know, it's been a
    long time since such a large and high-level Russian delegation has
    come to Georgia."

    A Georgian official statement says neither of the first two bilateral
    business conferences has produced any concrete results despite
    Tbilisi's willingness to open its market to Russian capital.

    The last Russian-Georgian economic consultations were held in October
    2003, just days before street protests spearheaded by Saakashvili and
    Zhvania forced then-President Eduard Shevardnadze out of office amid
    controversy over disputed parliamentary elections.

    Since then, Russian-Georgian relations have significantly improved.
    Both Saakashvili and Russian President Vladimir Putin have pledged to
    foster political and economic ties between their countries, prompting
    positive reactions from the United States, which sees stability in
    the Caucasus as key to its foreign-policy agenda.

    The perception of Russia, which helped secure Shevardnadze's
    resignation -- and more recently that of Aslan Abashidze, the unruly
    leader of the Black Sea autonomous region of Adjara -- has obviously
    changed in Tbilisi.

    When they were still in the opposition, Georgia's current leaders
    were among the fiercest critics of Russia's economic presence in the
    country, in particular in the energy field. But now they have adopted
    a radically different stance. During a visit to Moscow earlier this
    week, Zhvania secured an agreement over the rescheduling of Georgia's
    debt toward Russia, thus paving the way for the resumption of talks
    between his government and the International Monetary Fund.

    At a meeting with his Russian counterpart Mikhail Fradkov, the Georgian
    prime minister welcomed the warming of bilateral ties that followed
    Shevardnadze's departure. "I believe we have now the opportunity to
    build a new, closer relationship between Georgia and Russia. To our
    great satisfaction, we note that our relations can now develop in a
    climate of much greater trust," Zhvania said.

    The two prime ministers agreed to draft a comprehensive economic
    treaty that would pave the way for an increased Russian presence in
    Georgia's energy sector.

    Addressing reporters at the end of his visit, Zhvania praised
    Russia's EES monopoly for helping his country meet its electricity
    needs this past winter. Last December, EES acquired a 75 percent
    share in Telasi, the formerly U.S.-owned electricity-distribution
    company that services Tbilisi. It also purchased majority stakes in
    the Mtkvari power station and other Georgian energy facilities.

    EES Chairman Anatolii Chubais has hinted that the company could use
    Georgia as a springboard for expanding its presence in Azerbaijan
    and beyond. In remarks made during a visit to Baku on 25 May, Chubais
    floated the idea of connecting the power grids of Russia, Azerbaijan,
    and Iran. He also said his company could help Georgia trade electricity
    with neighboring Azerbaijan.

    Normalization of Russian-Georgian ties would have another positive
    impact on the region's economy. Having secured its authority over
    Adjara, Georgia counts on Moscow's help to restore control over the
    northwestern region of Abkhazia, which formally seceded in 1993 to
    develop close political and economic ties with Moscow.

    Zhvania this week hinted that in return for Russia's assistance
    in solving the decade-old Abkhaz conflict, Georgia could lift its
    objections to the reopening of railroad connections between Russia and
    landlocked Armenia through Abkhazia. "We will see how things develop
    [with regard to Russian-Georgian ties] and, naturally, any significant
    progress in that direction will allow us to consider the opening of
    [this] railway line," he said. "This would be an extremely important
    development for our entire region. This is a very important question,
    not only for Georgia and Russian-Georgian ties, but also for the
    entire South Caucasus region."

    Rail communications between Russia and Armenia were disrupted during
    the Abkhaz conflict and, despite an agreement reached at a 1994 CIS
    summit, were never restored.

    Rail traffic between the Abkhaz capital Sukhum and the Russian Black
    Sea port of Sochi resumed early last year amid protests from Tbilisi.
    Georgia links the reopening of the Sochi-Sukhum-Tbilisi-Yerevan
    transport route -- one of Putin's pet economic projects -- to the
    repatriation of internally displaced ethnic Georgians to Abkhazia's
    southern Gali district.

    Ethnic Georgians made up the bulk of the Gali population before
    the war and, although most internally displaced people now have
    the opportunity to return to the area, Tbilisi is seeking security
    guarantees for them. Fradkov this week said Moscow and Tbilisi had
    agreed to seek a solution to the Gali issue that would meet the
    interests of all sides involved.

    In another good sign, while insisting that the Gali and railroad
    problems should be solved at the same time, Georgian parliamentary
    speaker Nino Burdjanadze said yesterday that Tbilisi was ready to
    look at the whole Abkhaz issue "with new eyes."
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