Loan to Georgia Illustrates Asian Dismay With Russia
September 13, 2008
The executive board of the Asian Development Bank, representing countries from Japan and China to Turkmenistan and Uzbekistan, unanimously approved a $40 million loan to Georgia at the lowest possible interest rate on Friday, the latest sign of Asian dissatisfaction with Russian military action there.
Juan Miranda, director general of the bank’s Central and West Asia Department, said that the loan had been scheduled for board consideration on the Friday before Russian troops moved into Georgia a month ago. But the Russian military action strengthened support at the bank for helping Georgia, he said.
The 32-year loan carries an interest rate of just 1 percent for the first eight years and 1.5 percent for the remainder of the loan, making it a soft loan on preferential terms.
The loan was so popular with the 12-member board that if it had not already been on the most generous terms available from the bank, “we would have softened it,” Mr. Miranda said.
The bank is also studying the possibility of making an emergency loan to Georgia to help it cope with budget problems after the brief war with Russia. “The month of August was not a very good month for tax collection,” in Georgia, Mr. Miranda said.
Russia’s military incursion into Georgia has alarmed other Asian countries that also have potentially separatist regions and do not want a big power to align itself with any of these regions.
The presidents of the Shanghai Cooperation Organization, a Central Asian security group in which Russia and China both play important roles, did not back Russia’s military action at a meeting in Dushanbe, Tajikistan, on Aug. 28. The organization chose instead to take a neutral stance and urged Russia and Georgia to resolve their disagreements peacefully.
China has been wary of separatists in Tibet and in the western region of Xinjiang and has been leery of projecting military power abroad for fear of attracting a hostile reaction. China expressed “concern” about the Russian action in Georgia a day before the Shanghai meeting, but Beijing officials have mostly avoided the subject since.
China names one of the 12 directors of the Asian Development Bank and has considerable influence over which loans are approved. The Chinese directors have had a policy over the years of not commenting to the news media on bank matters, and the Chinese office at the bank had no comment Friday on the loan.
Indonesia, which reluctantly let East Timor become independent in 2002 and reached a peace agreement with separatists in Aceh on the island of Sumatra only after the devastating tsunami in December 2004, has also been wary of Russian activities in Georgia. Indonesia was among the members of the United Nations Security Council that called for an immediate halt to hostilities during last month’s conflict.
Russia has been seeking membership in the Asian Development Bank since 1997. It has been blocked by the United States, which has been wary of any increase in Russian influence in the region. The bank does not proceed on the admittance of new members until a consensus has emerged on the board.
The United States, China and Japan each name a director to the board. The other members, including 17 European nations, share representation by the remaining nine directors.
Georgia, the newest member of the Asian Development Bank, joined last year. The loan approved Friday is for the Municipal Development Fund of Georgia, which in turn will relend the money to municipalities to pay for sewage works, clean water supplies and other basic services.
Source: The New York Times, September 2008
www.nytimes.com/2008/09/13/world/asia/13asia.html?_r=1&oref=slogin
Prisoners Freed During Ossetian War Voluntarily Return
September 13, 2008
31 prisoners released by wardens at Tskhinval’s prison, when Georgia assaulted the South Ossetian capital, have voluntarily returned to their cells. The Ministry of Justice is considering reducing their sentences, or even granting amnesty to the conscientious inmates.
When Georgian artillery rained down on the prison, it became clear that prisoners’ lives were at risk with the city facing a fierce battle. Wardens took the daring decision to open the gates and released all the inmates.
Some took up arms and defended the city and others went to protect their families. They all promised to return, but the head warden wasn’t holding his breath.
Georgia Rejects Goods of Russia in Favor of Ukrainian Product
September 13, 2008
In the wake of the military clashes with Russia, Georgia intends to halt import of Russia’s consumer goods, shifting to the product of Ukrainian make, GUAM General Secretary Valery Chechelashvili announced in Kiev. GUAM is a regional organization comprising four ex-Soviet states - Georgia, Ukraine, Azerbaijan and Moldova.
Ukraine will be the leading trading partner of Georgia. It ranks the third or the fourth now, after Turkey and Azerbaijan. But the role of Ukraine will be growing; it will completely substitute for the economic relations that Georgia had with Russia, Newsru.com reported with reference to Chechelashvili.
Through the help of the United States, the EU and Ukraine, Tbilisi will re-establish economy as soon as possible. The worth of Ukrainian-Georgian economic relation will soon reach $1 billion, Chechelashvili was sure.
For Georgia, economic aftereffects of the war are grave. The Economy Ministry has downgraded the outlook for the GDP growth from 12 percent to between 5 percent and 6 percent. But the size of the humanitarian aid is impressive. Chechelashvili said Washington appropriated $1 billion, the EU gave
€130 million and Ukraine provided 100 million hryvnias.
Given this statement of Chechelashvili, the destiny of Russia’s assets in Georgia provokes speculations. Russia’s business owns quite a number of assets there, LUKOIL-Georgia, for instance, covers up to 25 percent of diesel fuel and petrol retail and Bank VTB (Georgia) is one of the leaders of Georgian banking sector with its 14 branches and 13 service offices in all regions of the country. Itera-Georgia supplies gas to 103 enterprises in Georgia, including 38 regional gas distribution companies, in nine of which it owns majority stakes. What’s more, Russia hasn’t halted gas supplies to Georgia and the fuel transit to Armenia via Georgia.
Russia had been the fifth biggest trading partner of Georgia before the South Ossetian war. It had followed Turkey, Azerbaijan, Ukraine and Germany in terms of the trading turnover.
Source: Kommersant, September 2008
www.kommersant.com/p-13215/Georgia_Russia_goods_reject/
Russian Military Leaves Georgian Port
September 13, 2008
Russian troops have begun leaving some parts of Georgia.
Russian forces evacuated five posts in western Georgia today, which Moscow had promised to dismantle. Among the closures were military camps in Nabada and Patara Poti, outside the strategic Georgian port of Poti, as well as in Teklati and Pirveli Maisi, near the town of Senaki.
Georgian Security Council chief Alexander Lomaia has confirmed the withdrawal.
Russian Foreign Ministry spokesman Andrei Nesterenko said today’s withdrawal from the Poti-Senaki line was taking place in accordance with a September 8 agreement between Russia and the European Union.
GEORGIA: EXAMINING POSSIBLE SOVEREIGN FUTURES AND THE INTERNATIONALIZATION OPTION
September 13, 2008
At a recent special panel on the Georgian crisis convened at the Bled Strategic Forum, European foreign ministers and representatives of international organizations lamented that they had failed to adequately engage Georgia’s unresolved or “frozen conflicts.” Since the early 1990s, the international community effectively ignored the disputes between Tbilisi and Abkhazia and South Ossetia, allowing tensions to fester until in early August the disputes escalated into a six-day war between Georgia and Russia. Russia’s subsequent recognition of Abkhazia and South Ossetia independence has legally challenged Georgia’s very territorial integrity and sovereign boundaries.
While much of the West struggles to enforce a precarious ceasefire and formulate a common response to Russia’s actions, it is worth considering the exact sovereign forms that might govern Georgia in the near future. Three options - indefinite occupation, formal partition or international administration - are possible; though all three pose risks, the internationalization option, the least discussed thus far, may offer the best blueprint for stabilizing the region and eventually resolving status issues.
Under the first and most likely scenario, Abkhazia and South Ossetia will remain recognized by Russia and a handful of other countries, such as Nicaragua, that wish to curry favor with Moscow. We could refer to this as the “Cyprus model.” [For background see the Eurasia Insight archive]. Under this arrangement, Russia ensures the dependency of the breakaway territories by stationing a permanent military contingent and keeping the de facto governments isolated from Georgia. In the case of Cyprus, the Turkish military intervention of 1974 was followed by a relatively stable three decades, during which a sizable contingent of Turkish troops was stationed in the self-proclaimed Turkish Northern Republic of Cyprus (TRNC). During this time the sequestered TRNC languished, while the Greek-Cypriot part of the island developed rapidly, culminating in its admission to the European Union 30 years later. [For background see the Eurasia Insight archive].
The Cyprus model is less likely to stabilize Georgia. Unlike Cyprus or Northern Ireland, Georgia and the breakaway territories have no realistic hope of being absorbed by the European Union. Tbilisi has made restoring Georgia’s territorial integrity politically paramount and, even after its military defeat, is already being supported anew by inflows of US economic and military assistance. [For background see the Eurasia Insight archive]. The risk of a renewed military clash between Georgia and the breakaway territories will loom large as long as the United States and Russia actively supports each side.
Perpetual unrecognized status also would have destructive economic consequences. Unable to forge “normal” economic ties with the world due to an international embargo, Abkhazia and South Ossetia would be forced to depend exclusively on Russian aid packages and fiscal transfers. Without official aid from international economic institutions, the de facto authorities and their security services would be forced to operate within the illicit economy and would exploit their unregulated legal status to engage in smuggling, trafficking and money laundering.
A second, though less likely sovereign possibility, is that Georgia itself will be formally partitioned. Under what some have advocated as a “grand compromise” between Russia and the West, a pro-Western Georgia would be admitted to NATO, but its territory would be curtailed as the breakaway territories would be severed and either formally annexed to the Russian Federation (more likely in the Ossetian case) or recognized internationally as independent.
Although, such an arrangement could “normalize” the status and behavior of the territories, partition would set an unacceptably dangerous international precedent, one considerably more destabilizing than the so-called “Kosovo precedent.” Regional powers would retain the right to intervene militarily in neighboring states under a type of ethnically based justification that the international community explicitly rejected during the Balkan Wars. A legally partitioned Georgia would also dramatically heighten the insecurity of other post-Soviet territories with large numbers ethnic Russians, especially Ukraine, Moldova and Kazakhstan.
A third option would be to internationalize the status of the breakaway territories altogether and place them under international trusteeship and administration. With authorization from the United Nations, the international community - as it did in the post conflict settings of Bosnia and Kosovo - could assume supervision of the sovereignty of Abkhazia and South Ossetia. An international peacekeeping force would guarantee security, one that would include a sizable contingent of Russian peacekeepers, but who would be placed under an international command structure. International peacekeepers could be supplemented by an external civilian police force that would coordinate with the activities of the de facto security services under OSCE auspices.
As they did in East Timor and Kosovo, UN civilian advisors would work with de facto authorities and their respective ministries to bring administrative capacity and practices up to international democratic standards. An international body could monitor the orderly return of internally displaced persons to certain areas and begin a process of property claims and restitution. The move to final status negotiations would be deferred until international monitors were satisfied that governance had been brought in line with international standards.
International administration would also economically connect for the first time the breakaway territories to the international economy and its institutions. Abkhazia and South Ossetia could be offered valuable trade deals and would become eligible for reconstruction funds from the European Union, emergency financing from the International Monetary Fund and development aid from the World Bank. Increased economic ties with Georgia would help forge links and business interests between the communities.
Though not the current first choice option of any of the regional parties involved, an internationalization strategy could yield benefits for all sides. The international community would have a common focal point to channel its engagement and resources, while the de facto governments of the breakaway territories would be offered a chance to finally engage with the international community as if they were independent. The government of Georgia would buy itself a number of years to rebuild trust with authorities in Abkhazia and/or South Ossetia before status would be decided. Finally, the Russian Federation, by conceding the territories to international authority, could demonstrate its willingness to play an engaged and constructive role in an internationally sanctioned legal process to stabilize the region. An international presence that guaranteed order and stability would transform the run-up to the 2014 Winter Olympic Games in Sochi, just miles from the Abkhaz border, from a tense and volatile political dispute, to a pre-Olympic period that showcased Russia’s pivotal role in facilitating renewed international engagement with the Caucasus.
Source: Eurasianet.Org, September 2008
www.eurasianet.org/departments/insight/articles/eav091208.shtml
Russians Troops Pack Up, Leave Western Georgia
September 13, 2008
Hundreds of Russian forces packed up and withdrew from positions Saturday in western Georgia, and a Georgian official said Russia met a deadline for a partial pullout a month after the war between the two former Soviet republics.
Russian soldiers and armored vehicles rolled out of six checkpoints and temporary bases in the Black Sea port of Poti and other areas nearby, Georgian Security Council chief Alexander Lomaia said.
“They have fulfilled the commitment” to withdraw from the area by Sept. 15 under an agreement European Union leaders reached with Russia last week, Lomaia told The Associated Press. But he stressed that Georgia — like the West — demands a full withdrawal to pre-conflict positions.
Russian Foreign Ministry spokesman Andrei Nesterenko confirmed the withdrawal.
“Right now the withdrawal of our peacekeeping forces is happening from these posts,” Nesterenko said in televised comments.
However, Lomaia said some 1,200 Russian servicemen still remain at 19 checkpoints and other positions, 12 outside South Ossetia and seven outside Abkhazia.
Russia said it would pull them out by Oct. 11 as long as a 200-strong delegation of European Union observers was in place by Oct. 1. However, OSCE documents seen by The Associated Press have raised questions over Russia’s true willingness to accept the monitors.
The presence of Russian troops dug in deep in undisputed Georgian territory more than a month after the fighting ended has deeply angered Georgians and been an enormous sore point between Russia and the West.
Russia’s military campaign in Georgia and its subsequent recognition of Georgia’s separatist regions of Abkhazia and South Ossetia as independent nations has plunged its relations with the United States and Europe into their worst crisis since the Cold War.
An Associated Press television crew saw Russian soldiers pack military trucks before dawn Saturday with blankets and other supplies at a post by a road leading to Abkhazia province. Among the items taken down — the Russian tricolor flag.
Four trucks stood packed and ready to leave the post in the village of Pirveli Maisi, along with an armored personnel carrier. A Russian column about the same size rolled past on a road leading to Abkhazia.
Russian forces left the two posts they had maintained for weeks on the outskirts of Poti, one by a bridge on a main road leading into the city and one a few miles from Georgia’s main port and devastated naval base, Interior Ministry official Shota Utiashvili said.
“Russian forces have withdrawn completely from Poti,” he said.
A third Russian post established more recently by the port of Poti had also been vacated, Lomaia said. He said some 250 soldiers and 20 armored vehicles pulled out of their positions and headed toward Abkhazia.
Near the de facto border with Abkhazia, an Associated Press photographer saw several small columns of Russian armor crossing a bridge leading toward the breakaway region and military trucks heading across another bridge at a separate location.
The brazen presence in Poti had been particularly galling for Georgia because it is hundreds of miles from South Ossetia, where the war broke out and where most of the fighting occurred.
Under an additional agreement forged last week, the Kremlin promised to withdraw from Poti and other posts in western Georgia by Monday and from all its positions on Georgian territory outside Abkhazia and South Ossetia within 10 days of the deployment of EU observers.
But in Vienna, confidential OSCE documents revealed that Russian forces and their separatist militia allies were deliberately keeping international monitors out of South Ossetia, where large numbers of Georgian homes have been looted and burned down.
The documents obtained Friday by The Associated Press say Russian troops stopped some observers from entering South Ossetia as recently as two days ago.
Western governments also say Moscow’s plans to maintain 7,600 troops in Abkhazia and South Ossetia for the long term violates a provision in the cease-fire calling for both sides to return to positions held before the conflict erupted.
Georgian troops tried to retake South Ossetia by force on Aug. 7, but were quickly repelled by Russian tanks, troops and warplanes. The Russian military then drove deep into Georgia, occupying large swaths of territory before an initial withdrawal in late August.
The five-day war killed hundreds of people and drove over 150,000 people from their homes.
Source: The Associated Press, September 2008
news.yahoo.com/s/ap/20080913/ap_on_re_eu/georgia_russia
Georgia’s Saakashvili warns NATO on Russia
September 12, 2008
Georgian President Mikhail Saakashvili urged NATO on Thursday not to push his country away in the wake of Moscow’s military campaign, warning that showing weakness would cause a “never-ending story” of Russian aggression.
In an interview with The Associated Press before a visit by NATO leaders next week, Saakashvili said Russia invaded Georgia to keep the ex-Soviet republic out of the Western alliance.
“If NATO sends a sign of weakness — and clearly this invasion was intended to deter, to scare NATO away — if NATO gets scared away, then this will be a never-ending story,” Saakashvili said.
Saakashvili has angered Russia by seeking NATO membership for Georgia. The alliance has promised Georgia will eventually join, and a review of its request for a road map to membership is scheduled for December.
He suggested that keeping Georgia out of NATO because of increasing Russian control over South Ossetia and another separatist region, Abkhazia, would be precisely the result the Kremlin intended — and a recipe for forceful intervention elsewhere.
“People are saying, ‘Georgia has conflicts, so maybe Georgia cannot be accepted, but maybe we can accept Ukraine.’ But if you put it this way, you automatically are going to get conflict in Ukraine.”
Saakashvili said NATO nations must stand together and expressed confidence that Russia’s use of what Western governments condemned as disproportionate force had strengthened support from some alliance members for Georgian membership.
He said Russia’s actions were aimed at “shaking the foundations of the alliance and their decision-making process.”
The Kremlin has accused the United States of encouraging Saakashvili to wage war against separatist South Ossetia and of moving to rebuild Georgia’s military following the fighting. Saakashvili said he is committed to peaceful solutions to Georgia’s territorial disputes and is not seeking robust military aid from the United States.
“We don’t expect to get anything from the U.S., we haven’t got anything recently from the U.S. and we will not be getting any large-scale hardware or military material assistance from the U.S.,” he said. “All this talk about Americans rearming Georgia, or others coming in and rearming Georgia has been just part of the propaganda.”
The U.S. Defense Department said Tuesday that it would send an assessment team to Georgia this week to help determine its needs as a way of showing U.S. support for its security.
Saakashvili denied Russian claims that U.S. military aid, which included training Georgian forces, was instrumental in emboldening Georgia to try to retake South Ossetia by force on Aug. 7.
“No matter what kind of theoretical assistance we could have got from anybody, there is no way Georgia can fight wars with Russia,” he said.
In Moscow on Thursday, Russian Prime Minister Vladimir Putin aggressively defended the invasion, saying Russia had to act when Georgia attacked South Ossetia. Russian forces repelled the offensive and drove deep into Georgia before withdrawing most of the troops and tanks late last month following a cease-fire deal.
Russia has pledged to withdraw its remaining forces still positioned outside Abkhazia and South Ossetia within a month, but says it will keep thousands of troops in the separatist regions themselves for the foreseeable future. It has also recognized them as independent nations, deepening the confrontation with Georgia and the West.
Saakashvili contends that Georgia was acting in self-defense amid increasing Russian support for the separatists and indications of imminent aggression.
“At a certain moment it was clear that the country was facing an existential threat,” he said.
He reiterated his promise that Georgia will gain control of South Ossetia and Abkhazia, but said it would rely on legal mechanisms and pressure from the international community to do so.
Source: The Associated Press, September 2008
ap.google.com/article/ALeqM5geomtOYYynWwMbsvM1iu7rMBHruwD934QP7O0
Abkhazia Now Craves Investors’ Recognition
September 12, 2008
Abkhazia is looking to attract investors with sandy beaches, 220 days of sunshine every year and an airport that once served as a backup landing pad for the Soviet space shuttle.
“We are ready to talk to any country, organization or firm,” Abkhaz leader Sergei Bagapsh said.
Abkhazia and another republic, South Ossetia, broke away from Georgia following the Soviet collapse. Abkhazia has lived in poverty and oblivion after winning de facto independence in a 1992-93 war against Georgia, with no county agreeing to recognize it.
Medvedev ‘Would Attack Georgia Even If On NATO Track’
September 12, 2008
Russian President Dmitry Medvedev has said that even if Georgia were on a firm path to NATO membership, he would not hesitate to attack it under circumstances similar to last month’s conflict.
Speaking to the annual meeting of the Valdai Club, a group of Russia experts, Medvedev also said he believed that Georgia’s August 8 attack on the pro-Russian breakaway region of South Ossetia was Russia’s equivalent of the September 11, 2001, attacks on the United States.
“Immediately after the events in the Caucasus, it occurred to me that August 8 was for us almost what 9/11 was for the United States,” Medvedev said.
The Kremlin leader again attacked NATO’s plans for further expansion into neighboring Ukraine and Georgia. He said putting these countries on an official track to membership would not help them in the event of another conflict with Russia.
Next In Line? Saakashvili’s Possible Successors As Georgian President
September 12, 2008
Georgian President Mikheil Saakashvili won the right to a five-year term in early presidential elections in January 2008. But Russian President Dmitry Medvedev’s recent likening of Saakashvili to a “political corpse” has fueled speculation the Georgian leader, embattled by the brief war with Russia in August over South Ossetia, may serve only a fraction of that time.
Such statements, coming from Moscow, only strengthen the conviction among Georgia’s pro-Western population — even those critical of Saakashvili’s conduct before and during the war — that replacing the president at this critical juncture would mean subjecting the South Caucasus country to Russian will for years to come.
If change is needed, they say, early parliamentary elections would be the most painless step toward addressing the current predicament. Still, several names have already been suggested as potential substitutes to Saakashvili should he be forced to step down before his natural term ends in January 2013.
Nino Burjanadze
Among the camp of pro-Westerners, former parliamentary speaker Nino Burjanadze has emerged as the likeliest choice to serve as Georgia’s next head of state.
Saakashvili’s onetime Rose Revolution ally, Burjanadze, 44, has twice served as acting president. Ahead of this year’s May parliamentary elections, however, she broke ranks with Saakashvili’s National Movement, refusing to head the party list.
The decision prompted speculation at the time that Burjanadze was planning an eventual presidential run. That buzz has only intensified as Saakashvili’s fortunes have waned in the wake of the war with Russia. Burjanadze, despite her Western-leaning stance, is also seen as a pragmatist who can do business with Russia while avoiding the antagonism with the Kremlin that has marked Saakashvili’s rule.
Irakli Alasania
Georgia’s 34-year-old ambassador to the United Nations, Irakli Alasania, is also widely discussed as a potential future leader.
Before moving to the UN, Alasania’s political career was largely related to the resolution of the Abkhazia and South Ossetia conflicts, and he is one of the few Georgian officials to enjoy the trust of de facto authorities in Sukhumi and Tskhinvali. (His father, Mamia Alasania, was killed in fighting with separatist forces in Abkhazia in 1993.)
A born diplomat, he is said to excel at coaxing political opponents into dialogue. Well-known and respected within U.S. political circles, Alasania is seen by many Georgians as a calm, seasoned alternative to the charismatic, high-intensity officials currently in charge.
Given the frequent clashes with Russia in the UN Security Council, however, it’s not clear how palatable an Alasania presidency would be to the Kremlin.
Levan Vasadze
A more Moscow-friendly potential candidate includes Levan Vasadze, a 37-year-old Georgian businessman based in Russia. Young, prosperous, and sociable, Vasadze is a father of five and a close friend of the head of the Georgian Orthodox Church, Patriarch Ilia II. All those factors could work in his favor, although any perception that his candidacy would be supported by Moscow could ultimately work against him at home.
Bidzina Ivanishvili
Another entrepreneur with close ties to both Russia and Georgia is Bidzina Ivanishvili. The 52-year-old banking and mining tycoon, with a net worth of $6.4 billion, this year ranked 149th in Forbes’ annual list of the world’s billionaires. Ivanishvili divides his time between Russia and Georgia, but is appreciated at home for his numerous charity projects and support for arts and religion. That said, Ivanishvili is a largely reclusive person — people are acquainted with his works but know little about the actual man.
Others Will Rise
Additional candidates will no doubt rise from the ranks of the current political parties, whose leaders currently enjoy popularity rankings between 5 and 8 percent. Levan Gachechiladze, who in January stood as the main opposition option to Saakashvili with a promise to abolish the presidency if he won, is expected to refrain from another run.
Much depends, as well, on efforts to clean up Georgia’s voting procedures, which are generally seen by the public as archaic and susceptible to manipulation. If clear steps are taken to clean up voting procedures — bringing in new machines and ballot-counting devices — then an even more diverse crop of candidates can be expected to rise from the ranks of civil society.
The ideal outcome, for those who favor the process of democracy over the outcome, would be an even playing ground leading to a transparent first round and a fair and decisive second round.
Source: RFE/RL, September 2008
www.rferl.org/content/Saakashvilis_Possible_Successors/1199521.html