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facebook.com/ georgiatoday

Issue no: 970/90

• AUGUST 8 - 10, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue... Georgia Addresses Poland Regarding Ex-President Saakashvili NEWS PAGE 2

Electricity Market Watch GALT & TAGGART PAGE 4

Life in Europe’s Highest Village BUSINESS PAGE 5

FOCUS

Paper for Trees: The Tissue Paper Initiative

ON SAAKASHVILI

A look at former President Saakashvili before and after his Ukrainian Visa PAGE was stripped from him

BUSINESS PAGE 6

GEM Fest Drug Accusations: One Dead, 20 Hospitalized

2, 9, 11

SOCIETY PAGE 7

Source: © REUTERS/ UKRAINIAN PRESIDENTIAL PRESS SERVICE/HANDOUT VIA REUTERS

Prometheus Cave, Martvili Canyon, Kazbegi National Park among Top Tourist Destinations in Georgia BY NINO GUGUNISHVILI

P

rometheus Cave and Martvili Canyon have been named among the top touristic destinations in Georgia this year. According to current statistics for 2017 from the Agency of Protected Areas of Georgia, Prometheus Cave has so far been visited by 81,110 tourists, Martvili Canyon by 74,580 visitors and Kazbegi National Park by 72,102 visitors. The list continues with Sataplia, (55,815 visitors), Okatse Canyon (38,088 visitors) and Tbilisi National Park (30,228 visitors). The Prometheus Cave Natural Monument located near the city of Tskhaltubo in the Imereti

region, offers visitors exceptional views of stalactites, petrified waterfalls, stalagmites and stone curtains. Prometheus Cave has 17 halls which can be explored in guided groups, and a

river, which can be explored by boat. Martvili Canyon, the second most popular site to visit in Georgia, is situated in the Samegrelo-Zemo Svaneti region of Georgia. Here, visitors can enjoy a 700- meter looping paved route which guides you over beautiful waterfalls to what is known to have been the “favorite bathing spot’ of the Dadiani (old royal) family. For an additional 10 GEL fee over the 5 GEL entrance, guests can take a self-row boat ride along the river Abasha within the canyon. Martvili Canyon was also recently named among the eight best scuba diving sites in Europe. Kazbegi National Park, in the northern slopes of the Caucasus Mountains, with a total area of 9.030 hectares, of which only 35% is covered by forest and the rest of alpine pastures, was third on the list of areas most visited by tourists in Georgia.

Popular Oligarchy: Why the Public Still Supports Georgian Dream POLITICS PAGE 8

Explaining Stalin’s Popularity Through Putin POLITICS PAGE 10

Mark Mullen on the Future of Misha POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets Asof04ͲAugͲ2017

STOCKS BGEOGroup(BGEOLN) GHG(GHGLN) TBCBankGroup(TBCGLN)

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m/m

BONDS

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GBP36.15

+5,1%

Ͳ0,2%

GEOROG04/21

105.76(YTM5.03%)

+0,1%

+0,7%

GBP3.57

+0,7%

Ͳ3,4%

GEORG04/21

111.94(YTM3.39%)

+0,1%

+0,3%

GBP17.09

+5,8%

+4,1%

GRAIL07/22

109.87(YTM5.44%)

+0,0%

Ͳ0,2%

BGEOLN07/23

102.32(YTM5.54%)

Ͳ0,0%

+0,6%

Price

w/w

m/m

52,42

Ͳ0,2%

+5,7%

CURRENCIES

1258,88

Ͳ0,8%

+2,9%

GEL/USD

2,3910

Ͳ0,3%

Ͳ0,3%

GEL/EUR

2,8140

+0,1%

+3,4% +0,6%

Price

w/w

m/m

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w/w

m/m

GEL/GBP

3,1171

Ͳ0,9%

FTSE100

7511,71

+1,9%

+2,1%

GEL/CHF

2,4574

Ͳ0,7%

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19969,73

+1,2%

+3,5%

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0,0399

Ͳ0,7%

Ͳ1,2%

DAX

12297,72

+1,1%

Ͳ1,1%

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0,6775

Ͳ0,2%

+0,5%

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22092,81

+1,2%

+2,9%

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1,4182

Ͳ0,2%

Ͳ0,3%

6351,56

Ͳ0,4%

+4,0%

GEL/AMD

0,0050

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NASDAQ

Ͳ1,0%

147,41

+1,3%

+3,7%

GEL/UAH

0,0924

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+0,4%

1067,26

+0,4%

+6,0%

EUR/USD

0,8494

Ͳ0,2%

Ͳ3,6%

SP500

2476,83

+0,2%

+2,0%

GBP/USD

0,7669

+0,7%

Ͳ0,9%

MICEX

1953,49

+1,9%

+1,9%

CHF/USD

0,9727

+0,4%

+0,7%

MSCIFM

2748,16

Ͳ1,3%

+1,5%

RUB/USD

59,9685

+0,7%

+0,9%

GTIndex(GEL)

1133,66

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TRY/USD

3,5280

+0,0%

Ͳ0,9%

GTIndex(USD)

922,38

Ͳ0,4%

+0,6%

AZN/USD

1,7014

+0,2%

+0,9%

MSCIEMEE MSCIEM


2

NEWS

GEORGIA TODAY

AUGUST 8 - 10, 2017

Georgia Addresses Body of Georgian Soldier Killed Poland Regarding in Afghanistan Brought Home Ex-President Saakashvili BY THEA MORRISON

D

eputy Head of the Public and Mass Media Relations Department of the Prosecutor’s Office of Georgia, Giorgi Grdzelishvili, stated that they have addressed Poland with regard to former President Mikheil Saakashvili. “Based on the information spread by the media on Saakashvili’s visit to the Polish Republic, the Prosecutor's Office of Georgia addressed the competent authorities of the Polish Republic and started all relevant procedures envisaged by law," he said. After being deprived of his Ukrainian citizenship in late July, the former Georgian President arrived in Poland several days ago to attend the 73rd anniversary of the Warsaw Rebellion. Now that Saakashvili does not have citizenship of any country, it was a wonder how he was able to fly from the United States to Poland. Saakashvili says that although he was deprived Ukrainian citizenship, he had “no problem traveling to Poland from the US”. “I left the US with a Ukrainian passport and I arrived in Poland in the same manner, passing the proper control,” he said, adding that he plans to leave Poland for other European countries.

Saakashvili stressed that he is going to Ukraine to protect his rights. “I will return to Ukraine before the trial in order to protect my rights and appeal against the absolutely illegitimate order," he said. Malgorzata Gosiewska, a Polish MP, commented on Saakashvili’s case in a Facebook post, underlining that despite the spread of tinformation in Georgian media that the Georgian side had asked Poland to extradite Saakashvili, the Polish side has not received any official letter with such a request. “Saakashvili is in Poland as a friend of Poland and the Polish people, and the authorities and citizens of the Polish Republic treat him with the honor he deserves, because he is a politician who played an important role in establishing friendly relations between Poland and Georgia,” the MP stated. Gosiewska added that Saakashvili's presidency has been highly esteemed in Poland for implementing public - political - economic reforms as well as for bringing Georgia closer to NATO and European Union and also for the continuation of the road that will be concluded by integration with Euro-Atlantic structures in the future. Saakashvili was stripped of his Ukrainian citizenship around a week ago. If he returns to Ukraine, he will be deported to Georgia and held responsible for charges officially raised against him in 2014.

Georgia to Host First International Competition of Qvevri Wines BY NINO GUGUNISHVILI

T

he first international competition of Qvevri wines is to be held in September, the Georgian Wine Association (GWA) announced. The GWA will be organizing the event with the support of the Georgian

National Wine Agency. The competition is to be held within the frames of the 4th International Qvevri Wine Symposium. The first international competition of Qvevri wine will introduce the best local and foreign Qvevri wine brands and is expected to promote its production and consumption. The competition is open to all Qvevri wine producers worldwide.

BY TEA MORRISON

T

he body of a Georgian peacekeeper, Junior Sergeant Mdinari Bebiashvili, 25, who was killed during the attack on Bagram airfield in Afghanistan, was brought back to Georgia by a special flight of the United States Air Force on Sunday. A mourning ceremony was held at Tbilisi International Airport, seeing representatives of the government, diplomatic corps and citizens gathered to pay tribute to the Georgian soldier. Georgian Prime Minister Giorgi Kvirikashvili said at the ceremony that the loss was a tragedy for all Georgia. “I would like to offer condolences to the family and the relatives of the deceased and then to the whole country,” the PM stated. Giorgi Margvelashvili, President of Georgia, said that Bebiashvili died a hero, defending global security.

“I share the pain of the family and friends of the deceased soldier,” the President stated. The Minister of Defense of Georgia, Levan Izoria, underlined that Bebiashvili was an exemplary soldier who had “sacrificed himself for his country's interests”. “His name will be immortal,” the minister added. The US Ambassador to Georgia, Ian Kelly, also attended mourning ceremony. “I cannot find proper words to express my pain and sympathy for the deceased Georgian soldier. I would like to offer my condolences to the family,” the Ambassador stated. After the ceremony, the body was transferred to the National Bureau of Expertise from the Airport and taken to Bebiashvili’s village, Martotunbani, in Zestaponi municipality, western Georgia. Junior Sergeant Mdinari Bebiashvili had been serving in the Georgian Armed Forces since 2010. Having participated in the International Security Assistance Force (ISAF) mission in Afghanistan twice, in 2012 and 2014, he was awarded for participation in peacekeeping operations.

Bebiashvili is the 32nd Georgian soldier killed while performing duties in a peacekeeping mission in Afghanistan. He died on August 3 in an attack during joint motorized patrolling in the Islamic Republic of Afghanistan. Three other military servicemen of the Georgian Armed Forces, participating in the Resolute Support Mission, were also injured in the attack and were taken to Bagram medical hospital. The Ministry of Defense reports that Corporal Gega Kharshiladze is in a good condition and was discharged from hospital on Saturday, while the health of Captain Mikheil Gvirjishvili and Lieutenant Giga Khakhutashvili, also injured in the attack, is satisfactory. To honor the memory of Bebiashvili, the Georgian flag was lowered at the Hamid Karzai International Base, Bagram Base, the Resolute Support Mission Command Headquarters in Kabul and the Mazar-i-Sharif Base, Marmal at the joint decision of the Chief of Military Armed Forces of Georgia in Afghanistan and NATO's Afghan Command.

Georgian Wine Export Increases by 60% in 7 Months BY THEA MORRISON

G

eorgia’s National Wine Agency (NWA) reports that in January-July 2017, around 38.3 million bottles of wine were exported from Georgia to 44 countries worldwide. Based on these numbers, exports were 60 percent higher in the last seven months than the same period in 2016. January-July wine exports this year amounted to $84.3 million, which is 52 percent more than 2016. “According to the export data of seven months, wine export has grown by 60 percent compared to the same period of the previous year and. Wine income has grown by 52 percent. Export of Gorgian wine has grown in the countries of European Union, south-west Asia, USA and other countries- a result of the collaborative work and marketing activities of the NWA and wine sector,” the head of the Agency, Giorgi Samanishvili, said. The top importers of Georgian wine are Russia, China, Ukraine, Poland, and Kazakhstan. In addition, during the seven-month period, 8,212,243 bottles of brandy were exported to 17 countries, 91 percent more

than in 2016. January-July brandy exports this year amounted to $18.7 million, which is 89 percent higher than the earnings for 2016.

On the whole, export income for alcoholic drinks this January-July amounted to $143,15 million, a growth of 55 percent compared to the same period in 2016.


4

BUSINESS

GEORGIA TODAY

AUGUST 8 - 10, 2017

The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research. For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

Electricity Market Watch FOR GEORGIA TODAY BY MARIAM CHAKHVASHVILI

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ector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our energy sector coverage, we produce a monthly Electricity Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch.ge.

CHANGES IN ELECTRICITY AND GAS MARKET RULES AND REGULATIONS By signing the Energy Community charter in October 2016, Georgia took on the obligation to synchronize Georgian legislation with EU standards in the energy sector. On June 30, 2017, changes were made to the Law on Electricity and Natural Gas, setting deadlines for the gradual opening of the market and filling the gaps in the current secondary legislation. Changes in the natural gas sector are more technical – the Grid Code for Natural Gas, which needs to be developed and approved by September 2018, will regulate the technical aspects of natural gas supply for each market participant. Changes in the electricity sector are more significant, as they will result in an increase in the number of players outside the regulated market and stimulate competitive trades between market participants.

DEGREE OF DEREGULATION IN ELECTRICITY MARKET SET TO INCREASE IN 2018 Currently all TPPs, as well as HPPs constructed before August 1, 2008, with installed capacity of over 13MW, are regulated by GNERC, which limits their ability to sell electricity for more than the predetermined tariff. According to the changes to the Law on Electricity and Natural Gas, the minimum threshold will increase from 13MW to 40MW as of January 1, 2018. Based on our estimates, this change will result in an

increase in the share of deregulated power plants from 15.5% to 20.5% of total installed capacity and about 3.1TWh (26.0% of electricity supply in 2016) will be supplied to the Georgian market at unregulated prices annually over 2018-2019. Notably, 77.6% of deregulated power plants (in terms of installed capacity) have PPAs with ESCO. Therefore, a significant portion of the newly deregulated generation will still be traded through ESCO at the rate and for the period set out in the respective PPAs.

DIRECT CONSUMERS SET TO ACCOUNT FOR AT LEAST A QUARTER OF TOTAL ELECTRICITY CONSUMPTION IN GEORGIA According to the changes to the Law on

NEW END-USER TARIFFS FOR NATURAL GAS GNERC has recalculated natural gas enduser tariffs for the three leading gas distribution companies, which together accounted for 89.8% of the market in 2016. Old tariffs varied by region and supply pressure, while the new methodology sets a uniform, transparent tariff structure. The end-user tariff is comprised of three components: transmission, cost of gas, and distribution. The transmission tariff, which has remained unchanged for 17 years, is now set at 1.884 tetri/m3 for all consumers, an average increase of 0.5 tetri/m3. Cost of gas, which now incorporates a government subsidy of 5 tetri/ m3, in effect since March 2013, is set at 26.8 tetri/m3 (a decrease of 12.5%, as stated by the officials). The distribution tariff,

ENERGO-PRO BUYS KAKHETI ENERGY DISTRIBUTION Kakheti Energy Distribution was sold for GEL 21.7mn at a public auction. The buyer was Energo-Pro Georgia, the largest electricity distribution company in Georgia, whose market share will increase from 60.2% to 64.6% as a result of this transaction. Energo-Pro Georgia will become the sole electricity distributor in Georgia outside of Tbilisi. Kakheti Energy Distribution has operated in bankruptcy since 2011, managed by a representative of the National Bureau of Enforcement. For three years prior, the company was owned by a Lithuanian concern, Achemos Grupe. Current outstanding debt of GEL 21mn will be paid off from the GEL 21.7mn purchase price.

ELECTRICITY CONSUMPTION AND GENERATION – JUNE 2017 Electricity and Natural Gas, starting May 1, 2018, consumers connected to high voltage (35kv and above) transmission lines will automatically be registered as direct consumers. This change will result in an increase in the number of direct consumers from two to over 60, with aggregate annual consumption of at least 3.1TWh (28.2% of 2016 consumption). Other companies will retain the option to be registered as direct consumers. The increase in the number of players on the unregulated market should foster price competitiveness for all market participants. Furthermore, such legislative changes can lead to electricity traders appearing on the market, which can be beneficial for direct consumers, as they offer various services, including fixed price contracts and one-shot payments, among others.

designed to cover the distribution licensee’s investment costs, is the only remaining driver of tariff differences among distribution companies. End-user tariffs (including VAT) per m3 as of July 20, 2017 are set at 46.153 tetri for KazTransGas Tbilisi (+1.2%); 56.940 tetri for Socar Georgia Gas (+26.7%, on average); and 57.011 tetri for SakOrgGas (+30.5%, on average). Notably, these changes apply only to regulated users, which account for 47% of total supply. Consumers who were connected to the national gas infrastructure in the regions after Sep-2007 and in Tbilisi after Aug-2008 are deregulated and pay the prices set independently by distributors (50 to 63 tetri/m3 on average). The Ministry of Energy has voiced the possibility of the entire gas distribution market becoming regulated, with a uniform tariff structure for all users.

Domestic consumption increased 3.1%

y/y in June 2017 and 6.9% y/y in 1H17. Consumption of distribution companies increased 2.9% y/y in June. The Abkhazian region’s electricity usage was up 1.3% y/y and accounted for 9.3% of domestic consumption. Consumption by eligible consumers was up 5.6% y/y, with Georgian Manganese usage up 10.3% y/y.

DIVERSIFIED EXPORT MARKETS

10 Galaktion Street

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge

Electricity exports increased 8.6% y/y in June 2017 to 230.1 GWh and 7.4% y/y in 1H17. 28.3% of exported electricity went to Turkey, down 38.8% y/y. The top exporters to Turkey were Georgian Urban Energy (58.0% of total) and Adjar Energy 2007 (26.2% of total). ESCO also exported 5.1 GWh (8.0% of total) to Turkey, in exchange for electricity imports from Azerbaijan in 2012. Exports to Armenia decreased 2.3% y/y and accounted for 18.4% of total exports, split between GIEC (60.3%) and ESCO (39.7%), which exported electricity in exchange for the electricity imported

during Feb-Apr from Armenia. Exports to Russia almost doubled (+98.2% y/y) and accounted for over half of electricity exports (53.3%), with ESCO being the sole exporter. The reason behind the increase in exports to Russia was an unexpected surplus of generation in the second half of the month and inflexibility of other markets to import additional electricity on short notice. Overall, ESCO accounted for 63.4% of total electricity exports in June 2017.

HPP GENERATION SATISFIED ELECTRICITY DEMAND Electricity demand was satisfied largely by hydro generation, with 99.1% in the supply mix. The new wind power plant accounted for 0.8% of total electricity supply. 20.9% of domestic generation was exported. Total hydro generation was up 3.4% y/y. Deregulated HPPs posted a 22.7% y/y increase in generation, due

to the addition of Dariali and Khelvachauri HPPs, while generation was up only 1.8% y/y by Enguri/Vardnili and down 1.8% y/y by other regulated HPPs. The guaranteed capacity fee was halved, down 50.5% y/y to USc 0.39/kWh, as Block 3 and Gardabani CCGT were under maintenance for the entire month and did not receive guaranteed capacity payments, while the other TPPs provided guaranteed capacity for the entire month.

ELECTRICITY PRICES IN GEORGIA AND TURKEY Wholesale market prices in Georgia increased 5.0% y/y to USc 5.1/kWh. Only 4.8% of total electricity supplied to the grid in June 2017 was traded through the market operator, with the rest traded through bilateral contracts. The average monthly market clearing price in Turkey decreased 17.0% y/y to USc 4.3/kWh, 14.9% below the Georgian wholesale market price in June 2017.


BUSINESS

GEORGIA TODAY AUGUST 8 - 10, 2017

5

Life in Europe’s Highest Village BY NANA MGEBRISHVILI

A

t an altitude of 2,200 meters above sea level, the remote village of Ushguli in Georgia’s Svaneti mountains is known as the highest permanently inhabited settlement in Europe. The village stands at the foot of Mt Shkhara (5,200m), one of the highest summits in the Caucasus. Unlike many other mountain villages, Ushguli is still home to up to 70 families, and even boasts a public school and an outpatient clinic. Its superb location and the unique lifestyle of its inhabitants have made it a popular and interesting destination. Ushguli has naturally been the focus of much attention from local, regional and national authorities. The rehabilitation of the road from Mestia (Svaneti’s administrative center) to Ushguli has already begun, and is expected to solve most of the problems the local population faces. And the private sector, too, has been very active in this unique region. MagtiCom most notably implemented a unique project in the village called “MagtiSat Digital Broadcasting in Every House of Ushguli,” whereby it provided a digital satellite television signal to each household via SES’s satellite. The project was implemented during Georgia’s terrestrial digital switchover in 2015, and was initiated by SES, a leading satellite operator which provides satellite communications services to broadcasters, content and internet service providers, mobile and fixed network operators, governments and institutions around the world. Georgia’s terrestrial switchover was not an easy process, especially in the country’s numerous mountain regions, but thanks to this unique, oneoff project, SES and MagtiSat managed

to ‘digitize’ the remote mountainous village of Ushguli in just a couple of days. Georgia was committed to its digital switchover. Through a decision of the International Telecommunications Union and the EU, the process was to be completed during 2015,not only in Georgia, but across Europe as a whole. Switching to digital television broadcasting was yet another step towards Georgia’s development and its overall digitization, but a significant milestone had already been reached in early 2012 with the launch of MagtiSat, Georgia’s first-ever domestic digital satellite television company. The establishment of MagtiSat was the result of a long-term agreement between the Georgian telecommunications company MagtiCom, and SES, one of the world’s largest satellite operators. “Ushguli has recently seen significant development,” says Beso Charkseliani, the local governor’s representative in Ushguli. “The rehabilitation of the road is particularly valuable. The road from Mestia to Ushguli is only 45 kilometers, but because of the road’s extremely bad condition, it takes over 2 hours to drive. This is a huge problem for us. Rehabilitation works have already begun, and we hope they will be finished soon. A good road will really help the local population: communication between Ushguli and the rest of the world will be simplified and it will also help efforts to improve access to medical services”. “Education and healthcare have really improved in the village,” Charkseliani adds. “We have a public school, but we don’t have teachers of mathematics, physics or sports. An outpatient clinic was opened recently, but the services it can provide are insufficient and much needs to be improved. Providing a full first-aid service is not possible up here. Introducing modern technologies is essential for the local population. The

MagtiCom-SES project was a very important moment in the history of Ushguli. All the necessary equipment for digital satellite broadcasting and installations were provided by MagtiSat and the population of Ushguli will enjoy a 25-channel package free of charge forever”. Young people are most aware of the need for modern telecommunications systems in the village. 28-year-old Bakar Nijaradze works in the fields with his family every day. Agriculture, as well as tourism, is their main source of income. “It’s summer now and the village is full of people, joy and happiness. But in winter it’s completely different, as there aren’t so many people around. People stay at home throughout most of the day, watching TV and waiting for summer. TV and satellite broadcasting is very important for the village. Thanks to television, we don’t lose contact with the world,” he says. The local population learns a lot from the information they receive via TV. They discover new hospitality standards and improve existing ones, watch how developed resorts welcome tourists and try to do the same, and find out more about the needs and requirements of foreign visitors. As a result, young people in Ushguli are increasingly interested in tourism. They are deeply involved in the ongoing development of the sector in the village, do their best to ensure the high standards of guest houses, and try hard to offer tourists a perfect service. Having analyzed Ushguli’s potential and existing opportunities, 22-year-old Rusudan Ratiani decided to obtain a degree in Tourism. After graduating from the State Teaching University in Gori, she returned to her village and now runs a guest house with her parents, five sisters and two brothers. “Tourism is developing very fast in Svaneti, and so I decided to study for a

degree in this field,” she says. “Tourists particularly like our early medieval stone towers, our local cuisine and our handicrafts. The number of tourists increases every year. Tourism has become the main source of income for local people as it’s hard to find any other employment in Ushguli. And there isn’t much we can do for entertainment- we mostly watch TV when we have spare time. I love music and often watch musical programs and sing with my siblings. TV is also our main source for information,” she adds. Laerti Charkseliani, 40, lives in Ushguli with his wife and two children. Their café is one of the best in Ushguli, and is often full of tourists. Charkseliani attributes the rise in the number of tourists to the rehabilitation of the road to Mestia and developed telecommunication in Ushguli. “Ushguli honestly deserves attention. The village is a UNESCO World Heritage Site and is clearly experiencing development, but much more is needed. People always say ‘the summer is good, but what to do in winter?’ The local population mostly stays at home and watches TV in winter. There is nothing else to do. I’m glad that we have free TV broadcasting. It’s nice that someone cares about us and that every family can now watch television. Telecommunications are really moving forward, and this is essential for the development of our

tourism potential,” Charkseliani explains. This is how people live in Ushguli. The village welcomes tourists in summer, and watches TV in winter. But the most important thing is that they don’t lose hope… hope that everything will change for the better, that all their plans will be successful, and that the highest permanently inhabited village in Europe will be developed as much as it deserves. In 2015, the Georgian mobile and telecommunications company MagtiCom, with the support of global satellite operator SES, launched a project called “MagtiSat Digital Broadcasting in Every House of Ushguli”. MagtiSat provided a digital satellite television signal to each household via SES’s ASTRA 5B satellite at 31.5 degrees East. All the necessary equipment for digital satellite broadcasting and installations were provided by MagtiSat free of charge. As a result, the village of Ushguli is now 100% digital, and each family can enjoy the superior quality of a satellite signal thanks to a 25-channel “G” package free of charge forever.


6

BUSINESS

GEORGIA TODAY

AUGUST 8 - 10, 2017

Paper for Trees: The Tissue Paper Initiative INTERVIEW BY DAVID MONGAZON

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ASHA Bank has been deeply involved in the rehabilitation of Borjomi Forest, joining the Aghadgine project in May. This project aims to replant the 750,000 trees which were burned during the 2008 war and a wildfire in summer 2015. The project is ambitious, and PASHA Bank seems to realize this, as it has been introducing partners to the campaign progressively in order to bring together all goodwill institutions who want to help. One of them is Tissue Paper, a company that collects and recycles paper and creates new products with it. Tissue Paper recently announced it will collect paper waste from volunteer companies and donate 0,15 GEL to the Borjomi Forest reforestation project for each kilogram of paper collected. GEORGIA TODAY spoke to Levan Devadze, General Manager of Tissue Paper, to find out more.

RECYCLING IS A NEW CONCEPT FOR GEORGIA. HOW DID TISSUE PAPER COME ABOUT? Tissue Paper was established in 2014 and aims for an environmentally sustainable approach, using paper, from the offices of companies which otherwise consider it waste, as a source to create new products. Our products have gained in popularity because we have an original approach, ensuring good quality and an affordable price, plus they are made in Georgia and from Georgian materials. Because of this, the size of the company and its activity is increasing, as well our workforce: at the beginning, there were 60 people working for us, today we have 135. We collect our raw material from three sources, which are linked with the principles of our company. We have a collection network which is spread

In the long run, I think we can plant 1820,000 trees annually all over the country, especially in big cities such as Tbilisi, Batumi and Kutaisi. Also, as Tissue Paper is part of a publishing company, Palitra Holding, we introduced the idea of making the paper and raw materials into new books. It’s a very interesting and promising campaign which also targets government organizations in the regions. Outside the capital, there are schools, libraries and government organizations which have used paper just waiting to be recycled. Twice a month we have advertising campaigns via local TV channels and

by SMS and we also call libraries and schools to inform them on which date our trucks will come to pick up the paper. It works especially well in isolated regions. But it’s not only pick-up trucks, it’s also a sort of bookshop. For example, we give them a portfolio books and in exchange we take their waste paper. Our third campaign started in July and is the campaign of reforestation together with PASHA Bank and BIA Holding.

HOW DO YOU SEE THE MARKET OF WASTE MANAGEMENT IN GEORGIA, AND PARTICULARLY PAPER WASTE? Georgia has huge opportunities for environmentally-oriented business development. Our business is quite low in this sector right now and I hope that Georgian companies will support our government and international organizations to make the necessary changes. Nowadays, we have more opportunities than ever before to introduce new technologies and new production processes. It will save us a lot of money, a lot of time, and potentially have spectacular results quantitatively, in terms of production, but also in society.

WASTE MANAGEMENT IN GEORGIA IS MAINLY ORGANIZED BY COMPANIES THEMSELVES, BUT DO YOU THINK THE PUBLIC WOULD BE MORE ACTIVE IF PUBLIC INSTITUTIONS GOT MORE INVOLVED IN WASTE COLLECTION? One direction for the development of waste management in our country is self-management and the self-organization of the companies themselves to align their activities with an environmental approach. Another direction which could have a bigger impact comes from the government. For example, they introduced cleanliness laws for both private and government companies, which encourages the separation of waste. Such initiatives also impact individuals. Only by doing this can we solve waste issues and the many problems linked with it, such as pollution. It’s also good for environmentally-oriented companies, because without such legislative framework, we lack the raw material resources we need for our recycling process.

SO, IT’S ALSO GOOD FOR YOUR COMPANY‌ Of course, and not only for us, but for other recycling companies, too. And I want to draw your attention to another issue: a lot of countries have protection legislation frameworks which restrict the uncontrolled exportation of raw material. The majority of paper from Georgia is exported, mainly to Turkey. And the problem is that companies there recycle it and then transform it into products they sell in Georgia. We’re losing a lot of surplus value due to this. Our company is also working on protecting raw material from such uncontrolled extraction. FIRST BRAND HOTEL IN KUTAISI UNDER BEST WESTERN INTERNATIONAL Within the framework of the Georgian Hotels’ Regional Network Development Project “12 hotels in 12 regionsâ€? by GHYHORSPHQWFRPSDQ\Âł6LPHWULD´WKHÂżUVWEUDQGKRWHOKDV been opened in Kutaisi under the Best Western International brand. The hotel accommodates 45 guest rooms, including 40 standard rooms and 5 suites. The hotel was designed taking into consideration special conditions and safety for guests with disabilities.

Address: 11 Grishashvili Str., 4600, Kutaisi, Georgia TEL 219 71 00 info@bwkutaisi.com

Three mobile conference halls are available with a total capacity of about 100 persons. (XURSHDQFXLVLQHFDQEHHQMR\HGLQWKHJURXQGĂ€RRUFDIp and a grill-bar menu in the roof top restaurant with panoramic views over the city. The International Hotels Management Company “T3 Hospitality Management,â€? providing the hotel management, has 20 years’ experience in hotel management in different countries globally.

THE GOAL IS TO REHABILITATE THE WHOLE BORJOMI FOREST WITHIN 5 YEARS, WHICH MEANS REPLANTING 750,000 TREES. HOW MANY TREES DO YOU PLAN TO PLANT WITH THIS CAMPAIGN? We’re not alone in this campaign- there are 15 other companies participating. But for our part, we already gathered 10 tons of paper in 10 days. That means we already gathered enough money to replant 130 trees. But we believe this will increase and we don’t expect to stay at a level of 300-400 trees per month, we know it will increase in the long run. As soon

as the companies see the real results of our activity, I think the scope will become quite impressive. And the staff of these companies will probably be proud to contribute to it. In fact, we have a very nice model to attract them: instead of paying money to the companies, we pay the holding and they finance the reforestation. We think this approach will have an impact. We plan to reforest the Borjomi region and also go further because not only have fires affected the area but also a lot of parasitic infestations. In the long run, I think we can plant 18-20,000 trees annually, it’s a realistic prospect.

WHAT IS THE ROLE OF PASHA BANK, THE LEADING COMPANY OF THIS PROGRAM? It’s the gathering company in this project. Of course, they don’t take commissions. Even in 2008, when the deforestation of Borjomi forest was starting, PASHA Bank independently started a campaign by themselves. But then I think they understood doing it alone didn’t make enough impact, and in mutualizing their successful experience with BIA Holding and Tissue Paper, they realized it would work better. Pasha bank is an idea promoter. And it also uses its client base to increase the scale of the project.

THE IDEA OF THIS CAMPAIGN IS ALSO TO EMPOWER THE CHAIN OF TREE EXPLOITATION AND PAPER PRODUCTION AND CONSUMPTION. IS THERE ALSO A PLAN TO RAISE AWARENESS OF THE FACT THAT PAPER AND TREES ARE A LIMITED RESOURCE? Our campaign includes not only the reforestation program: it’s also a means to promote these issues in schools, for younger generations. The main idea is to show them how they can be active citizens, to teach them how to use materials effectively and to recycle, like in Germany, France and other countries. And, for example, as I know, GEORGIA TODAY has a special edition for schools, Georgia Today Education. This could be used to raise awareness of the teachers. Then we could intervene in schools and explain to children and teachers how important it is to sort raw materials. Activities outside schools can also be important, like in the forests. And step by step there would be more responsible citizens in Georgia. It’s not only through fines and punishment that we can make the streets cleaner; the people also have to take care of their cities. It’s also an issue of self-awareness.

The majority of paper from Georgia is exported, mainly to Turkey... companies there recycle it and then transform it into products they sell in Georgia


SOCIETY

GEORGIA TODAY AUGUST 8 - 10, 2017

7

GEM Fest Drug Accusations: One Dead, 20 Hospitalized BY THEA MORRISON

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22-year old girl died on Saturday allegedly due to an overdose of drugs at the famous month-long Georgian Electronic Music Festival (GEM Fest) in the Black Sea coastal town of Anaklia. The girl was taken to Zugdidi Hospital but died eight hours later. It is alleged that she took the psychoactive drug “Bio,” also known as Gamma-Hydroxybutyrate (GHB), which has been seen increasingly throughout Georgia of late. GHB is a central nervous system depressant that is commonly referred to as a “club” or “date rape” drug. GHB is used by teens and young adults at bars, parties, clubs and “raves” (all night dance parties), and is often placed in alcoholic beverages. Over the last 5 days, around 20 people have been taken to hospital from the festival with similar symptoms to the deceased girl. One of them is a citizen of Ukraine. All but one of them were discharged from hospital on Monday. Giorgi Sigua, GEM Fest founder, says that the festival territory is strictly controlled by in-house security and local

police and no drugs are sold there. "From the very first day of the festival, entrance has been strictly controlled and the maximum safety measures applied due to the number of visitors expected,” he stated. Around 20,000 people are said to be visiting the festival on a daily basis. “Representatives of the Ministry of Internal Affairs are mobilized at the entrances as well as on the coastline. Nobody is allowed to sell narcotic substances on the territory,” he emphasized. Georgia’s Ministry of Internal Affairs (MIA) has so far detained five people for drug crimes at GEM Fest. “MIA law enforcers seized 38 pills of 'Ecstasy' and 6547 grams of 'MDMA' during personal searches,” the ministry reports. Community organization White Noise has asked the government to call an extraordinary parliamentary session to discuss the drug reform proposed by the National Platform for Drug Policy. Their statement reads that, reportedly, several cases of intoxication by an unidentified psychoactive substance were reported at the festival but at this stage it is not known whether there is a link between this case and the 15 hospitalized festival attendees. The organization is pushing for a more

BUSINESS

Turkmen Crude Oil Discharged in Iran bypassing American Sanctions

FROM INFORMATION AGENCY ‘PIRWELI’

O

n August 3, a VF Tanker-20 under the Russian flag arrived at the Iranian Caspian port of Neka and discharged around 6,000 tons of Turkmen-origin crude oil produced by the company "Dragon Oil". The discharge of that cargo took place on 3-4 of August into the terminal, which is owned and operated by the National Iranian Oil Company (NIOC). This is the first time in a long time that Dragon Oil, 100% owned by the Emirate National Oil Company (ENOC), decided to deliver crude oil cargo to Iran independently, via its trading sister company “ENOC Singapore”. To date, Dragon Oil sold all its crude oil export volumes on tenders on an FOB Aladja- Turkmenistan basis. Due to the sanctions against Iran, from 2011, export volumes were transported towards Europe solely through the territories of Azerbaijan (either via pipeline Baku-Tbilisi-Ceyhan or via railways Baku-Batumi) and Russia (via pipeline Makhachkala-Novorossiysk). The decision of Dragon Oil and ENOC to resume oil supplies to Iran caused surprise among market participants. Despite the fact that some of the sanctions against Iran were lifted in 2016 after the “Iranian Nuclear Deal” in November 2015, many restrictions remain in place. Most of the companies prefer to wait for detailed recommendations from the Office of Foreign Assets Control of the US Treasury (OFAC) before starting any business related to Iran.

In this particular case, the decision of Dragon Oil to start deliveries of crude oil to Iran looks both hasty and risky considering that the oil producer performs all financial transactions in US dollars, works on a long-term basis with US contractors (for instance: the largest American oilfield service company “Schlumberger”) and has US citizens occupying top-management positions. It is also surprising that ENOC, the national oil company of the United Arab Emirates, is actively developing new business with Iran, bypassing US sanctions, despite the fact that the UAE is the USA's main ally in the region. It is not excluded that this delivery to Iran was not initially planned. Indeed, the VF Tanker-20 arrived first in Baku Port, Azerbaijan, and queued on roads from July 25 to August 1. However, the vessel was rejected for discharge due to undocumented (possibly smuggled) cargo aboard the ship being found. Thereafter, ENOC redirected the tanker to the Iranian port of Neka, where it was possible to discharge cargo without actual presentation of documents for goods. Now, market participants are waiting for further developments of the situation, as well as answers to their questions: was this oil shipment a random cargo discharged in Neka because of document issues, or is it the start of a planned program for the supply of Turkmen crude oil to Iran? Several signs speak in favor of the second scenario: ENOC is currently very active on the freight market and several ships belonging to the Russian shipping company "VF Tanker" have been redirected to the Caspian Sea towards the port of Aladja.

liberal drug policy to “solve the existing drug problems within the country”. “The only correct answer to this situation is a fast, fundamental reform of Georgia’s drug policy,” White Noise representatives said on the topic of drug use. “Providing appropriate structures

fully equipped with monitoring mechanisms for drug use will help to prevent unwanted risks. This can only be achieved by providing the right medical health care and social welfare for citizens”. The movement also calls on law enforc-

ers to publicize the results of the investigation and inform society what substance killed the young girl and poisoned the others. “We call on those people who consume drugs to take care and not to take unknown substances,” the organization said.


8

POLITICS

GEORGIA TODAY

AUGUST 8 - 10, 2017

Popular Oligarchy: Why the Public Still Supports Georgian Dream BY BIDZINA LEBANIDZE, SENIOR ANALYST, GEORGIAN INSTITUTE OF POLITICS

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ecent public surveys have confirmed a paradoxical trend in Georgian political life: despite pressing problems, political blunders, and a troubling socio-economic situation, the ruling Georgian Dream (GD) party remains the most popular political force in Georgia. It has been almost five years now since GD first came to power, and its list of achievements remains quite short. Economic growth has slowed and Russia continues to demarcate what it considers the independent territories of South Ossetia and Abkhazia. Georgia has not made any major breakthroughs in terms of democratic and political reform, either. Instead, controversial constitutional amendments are poised to further erode checks and balances. Georgia’s democratic score has not advanced significantly in major democratic rankings. Under such circumstances, the logic of power politics in a democratic environment would predict a decline in the ruling party’s popularity in favor of the opposition. However, GD remains the

most popular force in the country and, according to the last public surveys commissioned by the National Democratic Institute (NDI), its candidate looks poised to become the mayor of Tbilisi following elections scheduled for later this year. In light of the above, I propose six reasons why, despite many setbacks, the Georgian public still prefers GD to the opposition and is ready to tolerate its continued stay in power. GD managed to correct the neoliberal economic policies of its predecessor and establish a moreor-less functional social safety net. It is true that the extensive social programs come at a high price: they put immense pressure on the country’s macroeconomic stability and could undermine Georgia’s long-run economic prospects. For most voters, however, the long-term economic implications of imprudent social reforms are less important than the short-term benefits from the universal healthcare system and other social programs. Moreover, the safety net adds to the feeling of social inclusion in Georgia’s socio- economic life, something that was missing during the rule of the United National Movement (UNM) with its emphasis on neoliberal market-economy reforms. GD’s sociallyoriented policies may be undermining the country’s economic prospects in the long-term, but they certainly contribute to a positive image of the government in the immediate term. GD has proven itself to be a pragmatic political player. The party did not embark on reforms that could put it at odds with the veto players within Georgian society. Rather, GD and its patron Bidzina Ivanishvili decided to coopt certain influential social groups such as the Soviet-era Georgian intelligentsia, people that Mikhail Saakashvili considered to be “flushed down” into oblivion. The aversion to painful reform is not necessarily good news for the country, but it cultivates GD’s image as a status-quo political force that doesn’t threaten the vested interests of influential groups by implementing painful reforms or withdrawing their benefits. GD appears less threatening to citizens than did its predecessor, UNM. The political system built by Bidzina Ivanishvili rests on weakened state institutions (exception State Security Service) and various informal cooptation mechanisms. Unlike the rule of Mikhail Saakashvili, the GD government rarely uses coercion to repress political opposition or public discontent. A combination of perceived weakness and the absence of coercive mechanisms have made GD appear less threatening and thus more acceptable to the majority of the population. There has been no major backsliding of the key reforms GD inherited from its predecessor. Petty corruption has not returned to Georgia. Neither have old Soviet-era institutions such as “thieves in law.” Georgia’s impartial institutions proved themselves robust enough to survive when UNM’s tight control over the state apparatus was removed. That fact has been acknowledged by the public. For instance, the Transparency International’s Corruption Perception Index has improved since the change of power in 2012. Hence, although GD lacks the drive for reform which characterized UNM, it has successfully escaped a reputation as a retrograde or reform-resistant political force. GD is not considered a spoiler of the successful state-building reforms implemented under Mikhail Saakashvili. GD has successfully withstood accusations by the opposition of being a pro-Russian political force. GD did abandon the confrontational manner of interaction with Russia, and trade relations between the two countries have significantly improved since it assumed power. However, GD has not abandoned Georgia’s pro-Western foreign policy course. In fact, it has accomplished important milestones on the path of European integra-

tion, including ratification of the Association Agreement and achievement of the visa-free regime. However, GD has failed to stop Russia’s “borderization” policy and there have been no breakthroughs in resolution of the territorial conflicts. The internal weakness of the opposition is perhaps the most important reason for GD’s continued popularity. The splitting of UNM into two separate parties did not aid pluralism in Georgia’s party system. The splinter group—the Movement for Liberty-European Georgia— seems to be successfully replicating the path of the Republican Party of Georgia, marginalizing itself and becoming politically insignificant. The remnants of UNM, on the other hand, suffer from brain drain and the long political shadow cast by Saakashvili. The other liberal opposition parties are in even worse condition. Each lack political stability, a clear vision and, most importantly, public appeal. To be sure, the majority of these parties are led by young, liberal, and pro-Western politicians. Unfortunately, however, none have the political charisma and financial resources to win the hearts and votes of Georgians. As ironic as it may sound, it seems that Saakashvili was Georgia’s only liberal proWestern leader capable of performing a nearlyimpossible balancing act of promoting liberal ideas and staying popular with the population for a sustained period of time. In conclusion, it is a personal achievement of multibillionaire Bidzina Ivanishvili that GD remains firmly in power after five years of rule. Ivanishvili built a political system which does not rely on coercion but rather cooptation through material and political incentives. Therefore, the state appears less threatening and does not challenge the vested interests of influential veto actors. Ivanishvili has succeeded through the use of a pragmatic and Machiavellian policy mix to establish a system of oligarchic governance that remains fairly popular.

The Georgian Institute of Politics was founded in 2011 to strengthen institutions and promote good governance and development through policy research and advocacy in Georgia. It publishes its blog with Georgia Today twice per month. Check out our website in English and Georgian at gip.ge for more blogs, data, and analyses.


POLITICS

GEORGIA TODAY AUGUST 8 - 10, 2017

9

Putin Nemesis Mikheil Saakashvili Is Now a Man Without a Country Source: Financial Times

oligarchs leading up to the 2019 Ukrainian presidential elections. A big question now is how much did the Russians know and when? The Kremlin did not appear to want to kill him, much less hang him literally by the balls. The Russian strategy for him has been to destroy the former Georgian president’s legacy, his credibility, and finally his dignity. So far, with help from him, it’s working.

THE EXILE FACTOR

OP-ED BY WILL CATHCART

F

ourteen years ago, a group of protesters burst through the doors of the Georgian Parliament while Georgian President Eduard Shevardnadze was giving a speech. Shevardnadze was a legendary Soviet foreign minister, but under his tenure Georgia had become a failing state rife with corruption. The protesters carried no weapons. Instead they held out roses as a sign theirs was a peaceful revolution. They were led by a charismatic young idealist and reformer named Mikheil Saakashvili. As Shevardnadze’s guards escorted him out the back, Saakashvili ascended the podium and, in what later came to seem an omen, downed the former leader’s glass of tea in a single gulp. Saakashvili was elected president shortly after and began to reform and modernize Georgia at what to many was an unsettling pace. His reforms, though based on free market ideas, supposedly à la Ronald Reagan, often seemed more like Machiavellian machinations. Still, Saakashvili became a darling of the West. For a decade “Misha” Saakashvili was promoted at home and abroad as a paradigm for the kind of democracy that America was attempting to export to the nations of the former Soviet Union. But after almost a decade, and a disastrous war with Russia, it’s fair to say the bloom was off the Rose Revolution, and in late 2012 Saakashvili lost power to a Georgian billionaire named Bidzina Ivanishvili. Today, Saakashvili is hated by the current Georgian government almost as much as he is hated by Russia’s president, Vladimir Putin, who told French President Nicolas Sarkozy during the 2008 fighting, “I am going to hang Saakashvili by the balls.” Legend brings us various versions of Saakashvili’s response on hearing of that remark. One is that the impetuous Misha retorted with the schoolyard taunt that at least he had balls. Another claims the Georgia president said Putin would need a very long rope. In still another version he supposedly (and improbably) used a favorite pun he often repeated in private. Putin he said, was Lilliputin, alluding to the buff Russian’s diminutive stature. (Saakashvili is about 6’4”; Putin not quite 5’7”.) But like so many exaggerated historical legends, it seems that Saakashvili’s response was pretty simple: nervous laughter. And with reason. Putin made that threat while his troops waited 25 miles from the Georgian capital.

UNDOCUMENTED ALIEN I spent nearly two years working for Misha Saakashvili and saw the visionary best and venal worst of the man. If hypocrisy is the cardinal sin of politics, he surely must be damned. He allowed too many around him to enrich themselves. He abused his own power. He is now a wanted man in his native country. Today this figure, who once seemed to me larger than life, is stateless and adrift in Donald Trump’s Washington D.C., and as it happens, Vice Presi-

dent Mike Pence has just been in Tbilisi. According to our sources, over the course of the last week or so, the Georgians have been petitioning Pence to help them bring Saakashvili back here to be prosecuted. In 2015, burned out in Georgia, Saakashvili gave up his citizenship there and took Ukrainian citizenship the day before President Petro Poroshenko appointed him governor of the strategically crucial and notoriously rotten port city of Odessa. The ever-quixotic Saakashvili, the great reformer-to-be, first turned against Ukraine’s oligarchs, then against Poroshenko himself. Perhaps Saakashvili decided that this time he wasn’t going to comprise. Whatever the case, Saakashvili failed and went into opposition. Odessa remains as corrupt as ever. After Poroshenko’s first official visit to Georgia last month, on July 17, he stripped Saakashvili of his - last remaining citizenship. Saakashvili was in the United States at the time.

WHY THE US? Last Monday, as Pence’s team arrived in Tbilisi, Georgia's minister of justice, Tea Tsulukiani, went on Georgia's largest television network to reiterate publicly Georgia’s demand for Saakashvili's extradition from Ukraine to Georgia, even though he’s in the States. In fact, it appears Poroshenko doesn’t want Saakashvili back in Ukraine at all, whether to prosecute or extradite him, and the timing of the announcement invalidating his passport was calculated carefully. According to the Kyiv Post, “On July 24, Poroshenko reshuffled the Commission on Citizenship in what critics saw as preparation for the suspension of Saakashvili’s citizenship.” Two days later Saakashvili was stripped of his citizenship. Had Poroshenko acted earlier, the politically savvy Saakashvili might have made a drama out of his “escape” from Ukraine, arriving in D.C. and appearing on cable news as a kind of hero exiled by a corrupt regime. With Saakashvili already in the U.S., Misha had less opportunity for RoseRevolution-style grandstanding: no flowers, no planes to exit, no reporters to greet him. He just woke up in the U.S. to some bad news. “America is not Georgia or Ukraine, and Misha cannot just be bundled into a plane on a presidential whim,” says veteran analyst William Dunbar. But that may be a false sense of security. Two high-ranking members of the United States Armed Forces, who requested to remain anonymous, told media outlet The Daily Beast that over two weeks ago, Georgian officials began lobbying Mike Pence to extradite Mikheil Saakashvili. What the defense officials found most unusual was that the Georgians approached the US vice president about the extradition of Saakashvili back to Georgia two days before his Ukrainian citizenship was revoked on July 24. This is the same day that Poroshenko reshuffled his Commission on Citizenship to expedite Saakashvili’s extradition while Saakashvili was in the U.S. As an opposition figure in Ukraine, Saakashvili was a thorn in Poroshenko’s side. He was calling more and more attention to the country’s corrupt

Statelessness is exile of the truest kind. And Mikheil Saakashvili deserves a fair trial, but he will not find that in Georgia. The recent case of the Azeri dissident and journalist Afghan Mukhtarli shows clearly the disrespect for legal procedures and human rights. Mukhtarli was abducted near his home in Tbilisi in broad daylight on May 29. He turned up in custody in Baku, Azerbaijan the next day. If the Trump administration extradites Saakashvili back to Tbilisi, Russian authorities would go to great lengths to get their hands on him. Such a move would send the wrong message to every dictator and thug within a thousand miles: if it can happen to Saakashvili, it can happen to anybody. As I type, I’m looking out at the Batumi skyline, and reminded of the part of Saakashvili that was a great man. This place was once a corrupt fiefdom ruled by gangsters and polluted by a Soviet oil refinery. People did not go outside at night, unless they were part of its ruler Aslan Abashidze’s clan, who waved Ak-47s and raced Ferraris on the boulevards of what is now a bustling seaside resort. Today Batumi, a “jewel” of the Black Sea coast, is a symbol of many things for its many neighbors. In midsummer, Batumi and Tbilisi, Georgia’s capital, are full of Persian, Arabic, Turkish and, yes, Russian tourists seeking refuge in a place where they can live freely, voice their ideas, and pursue happiness without fear of authoritarian-

ism—unless of course they are Azeri dissidents. This modern multicultural Georgia is Mikheil Saakashvili’s legacy. Yet Vladmir Putin is only Saakashvili’s second greatest enemy; the first is himself. Putin realized this in 2008 when, after relentless military provocations, Saakashvili took the bait and gave Putin grounds to invade the country and nearly take the capital. This was the low point in Saakashvili’s career, until now. Stateless Misha has few friends left at home after his Georgian political party, UNM, split in January. Many of UNM’s most influential members got fed up with him, broke away and formed a new party. The lights of Batumi glow ever brighter, and Tbilisi’s TV Broadcasting Tower, once a symbol of Soviet media domination and oppression still flickers luminously. Georgians remain in a mostly free and reformed country, which a flawed man often brutally modernized, as it were, in a single gulp. Perhaps the greatest irony is that it was here in Batumi that in 2012 Donald Trump, the faux investor lending his name to a project, and Mikheil Saakashvili shook hands after cutting a $250 million deal to add a Trump Tower to the brilliant lights of the skyline. The deal would no doubt have made a lot of people wealthy, but Trump pulled out for good just before his inauguration. For Misha in the day the biggest payoff was the photo, the money shot, if you will, of him and the Donald shaking hands with Batumi at their back. Saakashvili put the photo everywhere. A massive billboard bearing the image of Trump and Misha’s handshake was the first thing you saw upon exiting the airport, the exact place where Saakashvili will be arrested if he is sent home. First published on thedailybeast.com, reprinted here with permission of the author.


10

POLITICS

GEORGIA TODAY

AUGUST 8 - 10, 2017

Explaining Stalin’s Popularity Through Putin

Source: The Lady Travels

OP-ED BY EMIL AVDALIANI

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oving one’s own history brings a remarkable feeling. Victorious battles, military campaigns and progress in the scientific realm are most quoted. However, there are political figures or events which cause an ambivalent reaction. In Georgia, many remember the 17th century politician-general Giorgi Saakadze in the same way France remembers Napoleon. For Georgia’s northern neighbor, Russia, such a figure is communist leader Joseph Stalin. What differentiates the Russian case from almost all others is that in Russia the popularity of Stalin very much depends on the overall political climate inside the country and the agenda of Russian politicians. The current attitudes towards Stalin highlight those deep problems Russia is experiencing today: pressure from the West, economic troubles, Putin’s long rule, and the need for internal consolidation. All these processes are of great importance as they directly influence Russia’s foreign policy towards its neighbors. Surprisingly, the Russian government is still unsure how to approach the Stalin epoch. It was under him that the Soviet Union won World War II, but it was also during his rule that millions died or were displaced. Russian school books at times provide a less than full picture of Stalin’s rule and the wording is changed almost annually to adjust to the existing political atmosphere. Recently, Stalin’s popularity has grown significantly, with survey results showing it at a 16-year high. For instance, according to the Levada Center pollster from February this year, almost 46 percent of respondents viewed the Soviet leader positively, while only 21 percent hated or feared him. 22 percent described themselves as merely “indifferent”. 32 percent of Russian respondents said they looked upon Stalin “with respect” while 10 percent said that they had “sympathetic views” and 4 percent looked upon the leader with “admiration”. In April, according to the same Levada Center pollster, Stalin was named by Russians as the world's most outstanding public figure. Approximately 1,600 Russians were asked to name ten of the world's greatest personalities and Stalin came first, gaining 38%. He was followed by the Russian poet Alexander Pushkin and President Vladimir Putin (both up 34%). Stalin’s popularity is now reaching the top echelon of the Russian government. In a June interview, Putin criticized the “excessive demonization of Stalin” as a reaction to the fact that many Russians have tried

to preserve the memory of Stalin's victims. Indeed, the attitudes of Russian state institutions are changing and a good example of this would be the silence from the government on July 30 – the 80th anniversary of the launch of purges known as the Great Terror. The Russian government in fact staged some celebrations, but only for the annual Navy Day holiday. No official commemorations were made to mark Soviet government secret police head Nikolai Yezhov’s Order No. 00447, which initiated the terror. This silence is very symptomatic of Russian society's ambivalent understanding/perception of Stalin’s rule and particularly of the Great Terror. As a reflection, a recent opinion poll by the All-Russia Center for the Study of Public Opinion (VTsIOM) showed that a staggering 43 percent of Russians think that Stalin’s repressive measures were necessary “to maintain order in the country”.

PUTIN’S PREPARATIONS Putin is experiencing a pretty tough period in his career. Foreign resistance to his foreign policy has worked successfully thus far, seeing Russia more or less isolated. Internally, there are some serious issues regarding Putin’s rule and it is getting more and more difficult for the Russians to understand why his presidency should go on so long. Next year, Putin’s rule will become the longest (17 years) since Stalin’s. There is already an entire generation of young Russians which have seen only Putin as their country’s leader. And this is very problematic for the Russian government as there is an ever-higher proportion of opposition-minded people in Russian society: for example, it was the younger generation which was most active in the country-wide protests earlier this year. Although Putin is likely to run for presidency in next year’s elections, he has yet to find a platform on which to run. And this platform is not economic or social as in European countries, but psychological. He could explain his participation by the need to oppose a unified Western front in Russia, but many Russians think that the warming to western ideas is due to Putin’s unsuccessful foreign policy anyway. Other platforms such as a struggle against terrorism and separatism would not work this time as they did before. And hence the growth of Stalin’s cult. Stalin ruled longer than Putin has and state centralization reached its highest point under him. Putin simply does not want to criticize Stalin’s rule as it will be more difficult for him to explain his plans to stay in power for yet another six years. Thus, in Russia, even Stalin’s memory is at the mercy of wider political agendas.


POLITICS

GEORGIA TODAY AUGUST 8 - 10, 2017

11

Mark Mullen on the Future of Misha DO YOU THINK HE’LL EVER COME BACK TO GEORGIA AND, IF HE DOES, IN WHAT CAPACITY – AS A CONVICT OR AS A POLITICAL FORCE?

INTERVIEW BY VAZHA TAVBERIDZE

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ikheil Saakashvili’s future is still unclear – for all his pledges that he will return to Ukraine and fight for his citizenship, that it’s not over and the show has just begun, or whether he’ll just stick with that rather reassuring one-year working US visa, the divisive ex-President of Georgia’s prospects are very much up in the air. After news broke of his being denied Ukrainian citizenship, those prospects rapidly became one of the top subjects to ponder for Post-Soviet space experts everywhere. Mark Mullen, longtime observer of Georgia and a man once considered “Misha’s Dzmakaci,” perhaps knows more than most. GEORGIA TODAY and Panorama TV Show caught up with the former Transparency International guru to ask him what he thought of Saakashvili’s future prospects and political career. Not much, it turned out.

A lot of that depends on Georgian Dream (GD). The reality of it is that GD’s leadership hates Saakashvili and will convict him in any way they can. On the other hand, Saakashvili has committed crimes that he could be imprisoned for. I don’t think he’d come back to Georgia to go to jail. If the GD government allows Georgia to remain as democratic as it is right now, if they allow themselves to be elected out of office at some point in the future, then things could happen. Frankly, it’s unlikely that Saakashvili will have any political future [here]. If GD becomes unpopular at some point in the future, in 5 or 10 years, it is theoretically possible that people might think that Saakashvili is the only one that could take their power. But I’d be very surprised if that happens at all. Saakashvili is not a patient guy. I don’t think that he’s really thinking about that time frame. If he were, he’d be behaving in a very different way right now.

HOW WOULD YOU, AS HIS FRIEND, ASSESS SAAKASHVILI’S POLITICAL CAREER POST-GEORGIA? When it comes to Saakashvili, I think his most important legacy was not political. It was putting together the group that got rid of petty corruption in Georgia. But as years passed, he increasingly refused to listen to people who had opposing ideas. He isolated himself, so losing the elections in 2012. From 2013, his role in Georgian politics wasn’t a positive one and I don’t think he has much of a role in Georgia personally anymore. The main thing he’s done [recently] is to prevent the UNM from being as influential as they could have been as an opposition party. He and the people in the country had very different ideas about how it should be run. He tends to be aggressive, whereas most of the leadership of the UNM in Georgia is a little bit more conciliatory. So, his involvement from outside has been generally of the negative kind for the Georgian opposition.

A MAN ONCE PROCLAIMED A HERO AND HARBINGER OF DEMOCRACY NOW FINDS HIMSELF WITHOUT CITIZENSHIP. HOW? Truth be told, I never heard anybody saying that Saakashvili was the harbinger of democracy. Democracy was not his greatest strength. What he did was get rid of corruption and then he tried to take that message to another country. Ukraine and Georgia are very close countries, having a long history of mutual respect and cooperation. But it’s a different country and the reality of it is that the Ukraine leadership was not ready for his aggressive style of operation. Although he had some very good ideas in Odessa, most of his anti-corruption

SO, IS IT GAME OVER FOR SAAKASHVILI’S POLITICAL CAREER?

efforts were sabotaged. At the same time, he was personally aggressive to everybody that he needed to work with. And keep in mind it’s not his homeland. Eventually, they got tired of him. Poroshenko said he would not extradite him because he would immediately be thrown in jail and I don’t think Saakashvili would get a fair trial in Georgia. But they did make him stateless, so now he’s in a sort of limbo, in exile in the US.

That might very well happen. Lithuania is the kind of place that would be OK about giving him a base of operations in Europe. Certainly, there are many in Europe who respect him and care about him and would like him to see him there.

The question at this point is what his relevance in European politics is. The Ukrainian government doesn’t want him, the Georgian government doesn’t want him. The question is, who is he talking to? He’s not much of an analyst: he’s a person who acts. But the places where he can make a difference don’t want him.

WHAT DO YOU THINK THE WEST WILL DO? WILL THEY SHELTER SAAKASHVILI? WILL THERE BE REPERCUSSIONS FOR UKRAINE? I doubt there’ll be repercussions for Ukraine. I think that at this point the West understands Saakashvili quite well; his strengths and weaknesses. What happens to Saakashvili next is a complicated question. My guess is that the US will allow him to stay there. I don’t know whether he’ll be offered citizenship anywhere else. I don’t think he’ll be given American citizenship. He might claim asylum, though…

HE SAID HE WON’T SEEK ASYLUM AND HE’LL FIGHT TO RETURN TO UKRAINE. A LITHUANIAN MEP EXPRESSED READINESS ON BEHALF OF

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Saakashvili has never really reckoned with the truth of what happened to his presidency in Georgia. He’s never apologized and he’s never really recognized the many bad things that happened while he was in power. Until he does, I doubt that people in Georgia or abroad are very interested in what he has to say. Some of his commentary about Ukraine is interesting but he was totally ineffective there and I don’t think people believe him regarding Georgia. A politician needs to have an arena and Saakashvili just doesn’t have one.

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Issue #970 Business  

August 8 - 10, 2017

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