Issue no: 1014/112
• JANUARY 16 - 18, 2018
• PUBLISHED TWICE WEEKLY
The National Bank of Georgia receives greater supervisory powers over the country's bank holdings
PRICE: GEL 2.50
In this week’s issue... Bitcoin Center in Georgia Denies Links with Ex-PM Ivanishvili NEWS PAGE 2
ATM Terminals Poti & Poti New Terminals Consortium Sign MoU BUSINESS PAGE 4
Guardian Puts Tbilisi on Hotlist Destinations for 2018 BUSINESS PAGE 5
The Plastic Bag Polemic
Adventure Tourism School Opens in Gudauri BY NINO GUGUNISHVILI
n Adventure Tourism School has opened in the Gudauri mountain resort. The official opening ceremony was attended by the Minister of Economy and Sustainable Development, Dimitry Kumsishvili. The school was established by the Mountain Resorts Development Company of Georgia, the Georgian Mountain Guides Association, and the Ministry of Education and Science of Georgia, and has been supported by the Millenium Challenge Fund, which provided over half a million Dollars financing for the project within its grant program framework. Continued on page 5
BUSINESS PAGE 5
Mark Rein-Hagen On Georgia In The Gaming World BUSINESS PAGE 8
Trump's Foreign Policy Puzzle with Hindsight Photo: Adventure Tourism School opening in Gudauri
POLITICS PAGE 9 Prepared for Georgia Today Business by
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JANUARY 16 - 18, 2018
Putin Compares Communism to Christianity, Lenin to a Saint invented,” Russia’s leader claimed. Putin added that the attitude towards the body of Bolshevik leader Lenin, which is preserved in a mausoleum, is not at all different from the veneration of saints in Christianity. “How is this different from the relics of saints for Orthodox Christians and for Christians in general? When they say that there’s no such tradition in Christianity, well, go to Athos and take a look: there are relics of saints there, and we have holy relics here,” Putin added. Vladimir Lenin died on January 21, 1924. His body was embalmed and put on display in a mausoleum in Red Square, Moscow. The cult of Lenin was part of Soviet ideology. Since then, there have been various discussions whether to give Lenin’s remains a proper burial or not; however, according to Gennadiy Zyuganov, the head of the Russian Communist Party, Putin promised that as long as he remains president, Lenin’s body will remain in the mausoleum in Red Square.
BY THEA MORRISON
ussian President Vladimir Putin has made claims the communist ideology is similar to Christianity, and added that Lenin’s body can be compared to a saint. In his interview for the documentary ‘Valaam’, an excerpt of which was broadcast on Russia 1 TV, Putin recognized that his words might fall under criticism from some. “There were those years of militant atheism when priests were eradicated, churches destroyed, but at the same time a new religion was being created. The communist ideology is very similar to Christianity, in fact: freedom, equality, brotherhood, justice – everything is laid out in the Holy Scripture, it’s all there. And the code of the builder of communism? Sublimation: it’s just a primitive excerpt from the Bible, nothing new was
OSCE, US Demand Release of Azerbaijani Journalist Sentenced to 6 Years in Prison BY THEA MORRISON
he Organization for Security and Co-operation in Europe (OSCE) and the United States (US) Department of State have called for the release of Azeri journalist Afgan Mukhtarli, allegedly abducted in Tbilisi in May 2017, who was sentenced to six years in prison by the Balakan District Court in Azerbaijan on January 12. The OSCE Representative on Freedom of the Media, Harlem Désir, condemned the sentencing of the journalist, saying “the sentence, based on spurious charges against the investigative journalist, is a clear attack on free media.” Désir, who previously called on the authorities to drop all charges against Mukhtarli and respect his right to freedom of expression, added that silencing independent journalists can never be accepted. “I hope this verdict will be overturned on appeal,” the OSCE Representative said, going on to note that the investigation by Georgian authorities is still underway. The US Department of State also released a statement, saying the smuggling of and related charges against Mukhtarli are widely considered to be politically motivated. “We urge the Government of Azerbaijan to release Mr. Mukhtarli and all those incarcerated for exercising their fundamental freedoms,” the US statement reads.
The statement also notes that the US continues to closely follow the Georgian investigation into the reported abduction, and reiterates the call that it be “full, transparent, and timely.” Mukhtarli is a political migrant who left Azerbaijan around four years ago. In Tbilisi, he held protests in front of the Azerbaijan Embassy and wrote about the persecution of Azerbaijani activists in Georgia. He disappeared on May 29, and the following day was found in the Baku police department. Mukhtarli told his lawyer that he was detained and forced into a car near his house in Tbilisi by Georgian Special Service officers. He said that he was beaten and EUR 10,000 was planted on him. The Azerbaijani authorities accused him of "smuggling", "illegal crossing of the border" and "resisting an official representative." The journalist’s wife and lawyer, as well as many international organizations, claim that Mukhtarli’s case is politically motivated. Mukhtarli’s wife Leila Mustafayeva says her husband was transferred by Georgian law enforcers to the Azerbaijani side. Member of Georgian Dream (GD) ruling party, Gia Volsky, says there should be no doubts for the Government of Georgia, adding Mukhtarli lived in the country for years and no one had any problem as a result of him being here. “Before his detention, we had never heard of him or his activities,” Volsky said, going on to express hope that the investigation in Georgia will soon answer all the questions surrounding the case.
Photo: A rally to support the Azerbaijani Journalist Afgan Mukhtarli, Tbilisi, Georgia, 31 May 2017. Photo source: REUTERS/David Mdzinarishvili
Bitcoin Center in Georgia Denies Links with Ex-PM Ivanishvili
Photo: The Bitcoin Data center in Tbilisi was opened in 2015. Source: steemit.com
BY THEA MORRISON
he biggest Bitcoin data center of the virtual currency mining giant BitFury, located in Gldani District, Tbilisi, has rejected the Georgian opposition’s accusations that tycoon Bidzina Ivanishvili, founder of Georgia’s ruling Georgian Dream (GD) and ex-Prime Minister, is a co-owner of the company. The Bitcoin center also denies charges that the factory consumes a lot of energy but gets electricity at the lowest tariffs. The BitFury data center, located in a Georgian Free Industrial Zone since 2015, has released a statement publicizing their electricity tariffs and the amount of money they pay for electricity. According to the statement, in November 2017, the data center consumed 28,516.620 kilowatt hours of electricity and paid GEL 3,514.388. In December, the company used 27,017.100 kWh energy and paid GEL 3,329.587. “Our electricity tariff was 12.324 Tetri per kWh in 2017 without VAT. From 2018 it is 13.653 Tetri,” the company stated. The BitFury Group claims the volume of investments made by them in Georgia in the past three years is GEL 140 million, while the number of employees
exceeds 180 persons. They also added the average salary in the Gldani mining center is GEL 2,500. “Moreover, we want to add that former Prime Minister of Georgia, Bidzina Ivanishvili, does not have any shares in the BitFury Group,” the statement reads. The Georgian National Energy and Water Supply Regulatory Commission (GNERC) increased electricity tariffs in Georgia from January 1, 2018. The GNERC said one of the changes in tariffs was increased consumption of electricity in the country. Tbilisi-based subscribers of electricity provider Telasi have seen their tariffs increase by 1.5 Tetri and the price per kWh electricity is now 12,980 Tetri for people who consume less than 101 kilowatts electricity. For the second category of subscribers, who consume around 101 - 301 kilowatts, the tariff is now 16,992 Tetri, and for people who consume more than 301 kilowatts - 21,476 Tetri. Parliamentary opposition party, European Georgia, claims the tariffs increased due to the large amount of electricity consumed by the Bitcoin data center in Tbilisi. European Georgia member Sergo Ratiani claims that the a Free Industrial Zone was created especially for the factory, adding the factory building was transferred to Ivanishvili for a symbolic price of GEL 1. The party calls on the government’s
economic team to go to Parliament and discuss the issue. The opposition has slammed the government for the increased electricity and water tariffs, saying the lowering of taxes was the main pre-election promise of the GD, which has instead increased utility fees annually. European Georgia also says that the electricity tariff of 13,653 Tetri indicated by the BitFury company in their statement, is lower than the tariffs for the remainder of the population. Akaki Bobokhidze, party member, says that it is clear the company enjoys benefits as it consumes a lot and pays less than ordinary citizens. BitFury also used to produce Bitcoins in Georgia's Eastern city Gori, but for now mining is underway only in Tbilisi. Bitcoin is a crypto currency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
GEORGIA TODAY JANUARY 16 - 18, 2018
Georgian National Museum to Celebrate Museum Selfie Day Georgia’s National Food Agency Fines 56 Dairy Manufacturers for Violations BY THEA MORRISON
eorgia’s National Food Agency (NFA) has fined 56 dairy manufacturing companies and suspended the operation of 11 businesses after the NFA carried out monitoring of business owners in the country. In 2017, the National Food Agency carried out 424 state controls of dairy production companies, including 373 inspections and 51 documentary inspections. The NFA checked the compliance of labeling with milk regulations. 24 business operators were subsequently fined for violating the labeling rule. The NFA also took samples to test products for salmonella and listeria monocytogenes, but no violations in this regard were found. Technical regulations on dairy products came into force in July 2017. The regulations prohibit the
use of artificial fat in products labeled as dairy products. Use of the term 'milk substitute product' for products containing vegetable oil was also banned. The regulations were imposed in August 2015, but producers were given time to adapt to the changes. The National Food Agency stated that after the imposition of the technical regulations, product quality has increased. Imported products are also controlled in the same way as local products. As for cheese, microbiological analysis of 15 different cheeses showed that the rules and norms defined by the state had not been enforced in 12 samples out of 15. The survey was conducted by MIC-TNS, which aimed at studying consumers' attitude towards Georgian cheese, and checking hygienic norms in various trade facilities. Results showed that coliform and staphylococcus bacteria were present in most of the cheeses tested.
Only 25% of Refugees Gained Asylum in Georgia Since 2012
BY TOM DAY
ver the past six years, a total of 5,885 people applied for asylum in Georgia, yet only one quarter of them achieved humanitarian or refugee status – according to data published by the Institute for Development of freedom of Information (IDFI). In most cases of refusal, the applications were terminated by the applicants themselves (2,743 cases), while 1,346 people were rejected. The data also shows a steady decline in the number of people requesting asylum since 2014, when the annual figure reached its peak of 1,792. Last year, there were only 379 asylum seekers. Most applications came from citizens of Iraq, Ukraine, Egypt, Iran and Syria. The publication says that “asylum seekers from Azerbaijan, Armenia and especially Turkey are not
granted refugee or humanitarian statuses in almost all cases. Of 202 registered asylum seekers from these countries, only 5 were granted asylum in 2012–2017.” It also says that the refugees are not given a reason for the refusal of their application. “Court judgements include neither concrete details, nor the general basis for denial,” it says. Another analysis by the IDFI published last week about Georgian legislation and judicial practices said that the Georgian government has the right to refuse applicants if they are thought to “endanger the state security of Georgia, its territorial integrity or public order.” The publication goes on to say that “the asylum seeker does not have specific or general information on what particular grounds is he/she refused asylum. These details are not specified in the court judgments either. Even the general basis for refusal (such as connection with a terrorist organization, for instance) is not given to asylum seekers.”
Photo by Dr.Love. Photo source: Georgian National Museum
BY NINO GUGUNISHVILI
he Georgian National Museum is to celebrate Museum Selfie Day on January 17 by inviting visitors to go to any of its museums, take a selfie, and share it on Facebook, Instagram or Twitter with the hashtag #museumselfie and #GNMuseumSelfie.
Museum Selfie Day is celebrated worldwide. The campaign was initiated back in 2014 by the website Culturalthemes and launched by a group of museum professionals with the aim of attracting more museum-comers and raising awareness of great museum collections internationally. For a list of Georgian Museums to visit for Museum Selfie Day, go here: http://museum.ge/index.php?lang_id=ENG&sec_id=31
JANUARY 16 - 18, 2018
ATM Terminals Poti & Poti New Terminals Consortium Sign MoU BY NINO GUGUNISHVILI
Memorandum of Understanding (MoU) between APM Terminals Poti and Poti New Terminals Consortium was signed on January 12 at an official signing ceremony held at Courtyard Marriott Tbilisi Hotel. The MoU marks a more than $100 million investment for a new bulk cargo terminal with the capacity to process a minimum of 1.5 billion tons of dry bulk cargo annually. It is expected to bring new trade opportunities to the Georgian transit corridor. The new terminal is being built on land and infrastructure belonging to APM Terminals Poti. APM Terminals Poti, among the world’s largest port operating companies, is to expand Poti Port in a northerly direction, within its “North Territory,” which will involve the construction, development and operation of a new breakwater, dry bulk cargo terminal and its related infrastructure, according to international standards. Poti New Terminal Consortium unites a group of Georgian and foreign businessmen to create and further develop the new dry bulk cargo terminal. As Tamaz Chkhikvishvili, Head of the Poti New Terminals Consortium, noted in his speech prior to signing the MoU, “the time has come for Georgia to make use of the historic corridor, transporting shipments from China to the Middle East and other countries. Building a new, bulk cargo deep-sea terminal in Poti will give us such an opportunity,” he said. “Building a new bulk cargo terminal in Poti will not only create new employment opportunities, but will also attract new railway shipments and will open new investment possibilities,” Chkh-
The time has come for Georgia to make use of the historic corridor, transporting shipments from China to the Middle East and other countries
ikvishvili added. “We’re open for cooperation and partnership with anyone interested in participating in the project in any form; we have our vision and our own segment, and the new terminal will serve bulk cargo specifically, which has been in decline in recent years,” he said, going on to note their active cooperate with European financial institutions, as well as a group of interested businessmen wanting to invest in the project. According to the Head of the Poti New Terminals Consortium, the planning and building process of the new bulk cargo terminal in Poti, prior to its exploitation, will be monitored by APM Terminals Poti specialists, bringing together highly qualified experts that will serve as a guarantee that all further operations when the terminal is finally launched will be in full accordance with the world’s leading international standards. The new Bulk Cargo Terminal is to be 300 meters long and 135 meters deep, spread over a 10-12 hectare area. “This is exactly what our business is for; creating new opportunities for the
The city of Poti needs new opportunities, new development, and new investment local community,” Klaus Holm Laursen, Managing Director of APM Terminals Poti stated as he addressed the audience at the signing ceremony on Friday. “It is also very important to understand that the city of Poti needs new opportunities, new development, and new investment. This, we will try to create together, for the people, for Georgia and for the Caucasus corridor,” he noted. “It
10 Galaktion Street
is very important for us to take this step today, because Georgia deserves port facilities that are of international standards in both safety and operation,” he added. “The agreement we signed today is about the future, and the idea is to make the first deep-sea port terminal for bulk cargo: a very important step. Our business as a port is to facilitate trade and the movement of incoming and outgoing cargo. With a new deep-water port, we will expand bulk cargos beyond the Black Sea: we can attract more business, create more opportunities. It’s a great support to the idea of making Georgia a transit country. It’s also a significant infrastructure investment and will give numerous opportunities for businesses in Poti, creating jobs for people there and providing greater opportunities in terms of in-land transportation. Georgia’s neighboring countries will naturally also benefit from that,” Holm Laursen told GEORGIA TODAY at the MoU signing. “Poti is to have new bulk cargo terminal that will bring shipment back to our country, freight that we lost over time,
There are many beneficial factors that are interlinked within this project more stimulus and it will raise the effectiveness of the railway. There are many beneficial factors that are interlinked within this project,” Chkhikvishvili told us. The MoU signing ceremony between APM Terminals Poti and Poti New Terminals Consortium was attended by representatives of the Ministry of Economy and Sustainable Development of Georgia, Georgian Railway and Sea Administration, Poti City Hall, Poti Sea Port Corporation, and numerous interested business persons.
Tel: (995 32) 2 45 08 08 E-mail: email@example.com
GEORGIA TODAY JANUARY 16 - 18, 2018
The Plastic Bag Polemic OP-ED BY TOM DAY
walk down the narrow, crowded streets of Tbilisi, negotiating the approaching pedestrians, having just arrived for the first time. There are sharp, screaming horns on the roads, beggars with defeated looks on their faces as I walk past, and the weird and wonderful sound of the Georgian language being carried by the crisp winter air. This new and alien city is a bit overwhelming at first, so I seek the comforting and familiar white light of a small local market to pick up some supplies for the evening. Two packets of instant noodles and a bottle of juice. Nothing special. I decide against asking for a plastic carrier bag; my hotel is just around the corner and I have two hands. I approach the store clerk, lay my items down and reach for my wallet. When I look back up she has already bagged the items. Sneaky. Being British and a bit too polite, I don’t protest. I choose a different store the next day though, and before I have a chance to say anything (apart from Gamajoba), the same thing happens. The day after, I ask the store clerk specifically not to bag my items before I hand them over, to which they return a look of confusion. More recently I entered a supermarket to buy some vegetables. After being told to individually bag separate items before weighing them, at the checkout I was given the already bagged items in yet another plastic bag. We sometimes need something to carry our items from the store to our homes – that’s never going to change; we have a finite number of hands which are of a limited size. What we don’t need is a plastic bag to help carry our plastic bag
containing one or two items. As a European, I was appalled at this morbid overuse of an environmentally damaging material. Throwing them away does not destroy them; it is common knowledge among EU countries that even when we properly dispose of our plastic bags, they take around 400 years to degrade. If they don’t make it to being buried underground, they can reach oceans, beaches, streets, trees, and so many other places that Georgia prides itself on. Georgia for me so far has proven to be one of the most – if not the most - for-
ward-thinking countries of the former Soviet Union republics. I had no problem crossing the border with my EU passport, and it took less than an hour to obtain a residency permit. This joyful lack of bureaucracy is enjoyed by foreign investors, who can establish a business in just one day. I was expecting corruption to be a problem before I arrived, but it is non-existent. In fact, one of my first days here the police guided me, a confused and lost-looking foreigner, to my hotel. That has never happened anywhere else. It is one of the safest countries I have ever spent time in too, let
alone lived in. Georgia’s way of thinking surprises me regularly, most recently decriminalizing cannabis. So why is it that the plastic bag usage is so far behind everything else? The Environment Ministry revealed in 2014 that the average Georgian uses 525 plastic bags every year, while EU countries such as Ireland use just 14, and Denmark and Finland use only 4. These countries have certain restrictions in place. In my own country of the United Kingdom, we have been charging 5p (18 Tetri) per plastic bag in shops since 2015. Our neighbors, France, banned the use
of plastic bags altogether in 2016. Estonia has made it cheaper to buy a paper bag in supermarkets, making plastic ones double the price. I view Georgia as a beautiful flower which is thriving off the soil of its past. It is developing far quicker than its neighbors. It is a common belief that Georgia will most likely become another member state of the EU very soon. But before that can happen, a small number of habits such as the one discussed in this article need to change. So, next time you go to the store to buy something small, just think, ‘do I really need a plastic bag for this’?
Guardian Puts Tbilisi on Hotlist Destinations for 2018 BY NINO GUGUNISHVILI
he UK’s Guardian named Tbilisi among 40 fabulous destinations around the world to try out in 2018. Akureyri (Iceland), Palermo (Italy), Leeuwarden-Friesland (The Netherlands), Moscow (Russia), Flandres (Belgium), Paris (France), Valletta (Malta) and Amsterdam shared a recommendation alongside Tbilisi, capital of Georgia, which has “contemporary culture making its mark, earning the city a reputation as an edgy party destination.” The article further notes that, “the foodie revolution in Tbilisi started in 2011, when young Georgian chef Meriko
Gubeladze opened her fusion restaurant Shavi Lomi.” “The nightlife scene features major techno clubs Bassiani and Khidi (which both opened in recent years), as well as LGBT-friendly Café Gallery and Success Bar, and new galleries, such as Project ArtBeat which opened in 2017, adding to the growing number of spaces giving a platform to young Georgian artists,” - the article reads. It also mentions Fabrika hostel which combines “an industrial chic look with a huge courtyard surrounded by independent bars and shops.” “Last year, Georgian Airlines started direct flights from Gatwick, and though they’re not the most convenient connections (flying through the night on Wednesday or Saturday), it still halves the journey time to this dynamic city,”
- the article suggests. Other destinations listed with Georgia’s capital include Corsica, Bratislava,
Valencia, Cairo, Fezz, Morocco, South Africa, Uganda, Seychelles,Scottish Highland’s, Norfolk, Isle of Wight,
Newcastle-Gateshead, Dundee, Liverpool, Laos, South Korea, India, Mongolia, Taiwan, Toronto, and New Orleans.
Adventure Tourism School Opens in Gudauri Continued from page 1 Ketevan Natriashvili, first deputy to the Minister of Education and Science, and Alexandre Onoprishvili, Director of the Mountain Resorts Development Company and the Mountain Guiding Specialists, also attended the opening. The Adventure Tourism School is set
to prepare professionals in the adventure tourism sphere whilst training hiking, alpine, ski and mountain guides, winter sports and adventure tourism instructors. It is also expected to create a system which will enhance safety at Georgian resorts and improve professional education in adventure tourism, raising it to international standards.
“Opening the Adventure Tourism School is extremely important, as it will prepare and train students who will be practically guaranteed future employment. Our country vitally needs such professionals for its tourism development,” Kumsishvili said at the opening. While in Gudauri, the Minister of
Economy visited the ongoing infrastructural projects in the area. “Infrastructure projects are very actively ongoing in Gudauri: several ski lifts will be built during 2018, in 2016-2017 a 36 kilometer water supply system was built, and the project is still ongoing. An artificial lake construction is also planned which will be
used for the artificial snow system,” Kumsishvili noted. The artificial lake project cost over GEL 11 million, according to the Ministry of Economy. In addition, Kumsishvili visited the 7 kilometer Kobi-Gudauri ski lift construction, and the projects realized by the real estate development company RED-CO.
JANUARY 16 - 18, 2018
Gazprom Receives 36% of Europe, LNG from Yamal Sold to the US & Spain BY DIMITRI DOLABERIDZE
ew Year brought good news to suppliers and producers of Russian gas. According to the 2017 results, Gazprom broke the historic record of gas exports to occupy 36% of the European market. At the same time, the first deliveries of LNG from Yamal went to Spain and the US, where Russian gas had not previously been supplied. Last year, Gazprom broke the historic record of gas exports to Europe and, according to operative data, increased it to 193.9 billion cubic meters. “This is 14.6 billion cubic meters (8.1%) higher than the previous maximum reached in 2016,” said the head of the Russian holding, Alexei Miller. Indeed, no other supplier, including Norway and Algeria, was able to so significantly increase exports in such a short time. According to web portal ICIS, an energy business information service from the UK, the share of Gazprom in the European market had increased to 36% by the end of 2017. The second largest supplier was Norway, which gave as much as it could, providing 24% of the EU's gas needs, despite domestic production in 2017 not exceeding 23%. “The situation in 2018 will largely depend on fluctuations. The growth in LNG supplies from the Asia-Pacific region and Latin America are still more attractive than Europe, and therefore they do not yet threaten the positions of Gazprom in the market,” analysts of the Russian Finam Investment Group stated. Deputy Director of the National Energy Security Fund (NESF), Alexei Grivach,
says that future gas supplies to Europe depend on the dynamics of energy prices and the energy policy of the EU and the European Commission. "If the installation to refuse coal is logical from the point of view of environmental policy, then in the medium term, Europe needs 200-300 billion cubic meters of additional imports,” the expert said. In his opinion, these volumes can be provided only through the mobilization of all sources. “And it's absolutely impossible to do this without Russia. Practice shows that in conditions of fair competition our gas has an advantage.” Meanwhile, Poland has reduced the import of "blue fuel" from Russia. According to PGNiG (Polskie Górnictwo Naftowe i Gazownictwo, the leader in the Polish natural gas market and a listed company operating in exploration for and production of natural gas and crude oil) reports for the first half and the third quarter of 2017, by October 1, the company had imported 7.1 billion cubic meters of gas from Russia, 600 million cubic meters less than the same period of 2016. The share of Gazprom in Poland's imports decreased from 90% to 71%. The remainder was covered by gas supplies for spot contracts from Europe and LNG from Qatar (16%). The increase in Poland's purchases of non-Russian gas is said to be a policy, not an economy, although in his last interview, the Vice-President of Polish state-owned PGNiG, Maciej Wozniak, said that Warsaw is ready to buy Russian gas, but under normal market conditions. Yet PGNiG is not satisfied with the fact that, for example, German companies work with Gazprom on more favorable terms. For example, according to PGNiG, in June 2017, for neighbors it cost $ 219 per thousand cubic meters, and in Poland - $ 241. However, Poland is unlikely to achieve
the conditions received by German companies as they not only buy more Russian gas, but they participate in Gazprom's transport and production projects. Further, the German companies do not put at risk projects of the Russian holding company in Europe and do not shout about the threats of dependence on Russia. According to the 2017 results, Germany accounted for 27% of Russian gas imports and delivered 53.4 billion cubic meters comparable to the capacity of "Nord Stream" of 55 billion cubic meters. Together with the increase in supplies to other Nordic countries, the Netherlands (up to 4.6 billion cubic meters), France (up to 12.3 billion), Denmark (up to 1.75 billion), and stable demand in the UK (about 18 billion), the need for Nord Stream-2 is becoming even more urgent. The same situation can be seen in the southern direction, where the Turkish Stream is being built. Turkey increased import of Russian gas from 24.7 billion
cubic meters to 29 billion cubic meters last year. "Growth across Europe is very significant. In just three years, the volume of supplies from Russia to the EU increased by 33 billion cubic meters. The availability of additional infrastructure significantly increases the reliability and flexibility of supply and reduces the likelihood of price shocks, such as those we see now in the northeast of the United States, where the price of gas is ten times higher than the price level in other regions of the country, in Europe and even in Asia,” Grivach noted. The reverse situation occurred with the second batch of LNG from Yamal. On December 29, the Boris Vilkitsky gas carrier delivered it to the Chinese stateowned company CNPC in Rotterdam. However, LNG was not sent to China. As journalist Zog Weyler wrote on Twitter on January 2, the Russian liquefied gas was reloaded to the Clean Ocean
tanker and headed for the Spanish Mugardos LNG terminal, which is located in the north-east of the country at the Ferrol port. In December, gas prices in Spain were also high, but lower than in Asia ($ 10 for MBTU vs. $ 11 for MBTU [Editor’s Note: MBTU is a standard unit of measurement for natural gas and provides a convenient basis for comparing the energy content of various grades of natural gas and other fuels}. However, the cost of shipping to Spain from Rotterdam is much lower. According to Marine Traffic, the Clean Ocean tanker unloaded in Ferrol and is now docked at the port waiting for further instructions. The international consulting agency Timera Energy considers the Yamal LNG project one of the most promising in the world. If the Yamal LNG cannot compete with Qatar's liquefied gas, it will freely compete with the American, analysts say. A total of 16.5 million tons of LNG (about 23 billion cubic meters) are planned to be supplied annually by the project of three stages of “Yamal LNG”. Most of the gas was contracted by the Yamal LNG participants themselves - Novatek (50.1% in the project), French Total (20%) and China's CNPC (20%). In addition, Gazprom and Spanish Gas Natural Fenosa are to buy 2.5 million tons annually. Yamal LNG is one of the few successful projects in the Russian Arctic. This is also a demonstration of successful international cooperation. In addition to Yamal LNG, Novatek is also planning to implement the Arcticovatek LNG-2 project on the Gydan Peninsula. Its capacity is 20 million tons, and the price is $10 billion. The difference in cost with the first LNG project is that the company plans to build gravity platforms on which a modular plant for liquefying gas will be located.
Second Thread of Turkish Stream Depends on EC Guarantee BY DIMITRI DOLABERIDZE
he second thread of the Turkish Stream gas pipeline will be built only if solid guarantees are received from the European Commission (EC). Russia has said it is ready to discuss additional ways of laying the gas pipeline, Foreign Minister Sergei Lavrov announced. The Turkish Stream can be extended to Europe, though at present only the
first thread, directly for Turkish consumers, is under construction. “The second will be built only if we get reinforced concrete guarantees from the European Commission that it will not throw out the same number it did with the South Stream in respect of Bulgaria, which is now ready to consider taking the second thread of the Turkish Stream,” Lavrov said. “We are ready for any option. But only an option that is 100% guaranteed by the European Commission.” By January 4, Gazprom had laid almost 700 km (38%) of the offshore section
of the Turkish Stream gas pipeline on two strings. Gazprom started the construction of the underwater section of the Turkish Stream on May 7, 2017. The project envisages laying two strings of a gas pipeline from Russia to Turkey along the bottom of the Black Sea. The power of each of the threads of "Turkish flow" will be 15.75 billion cubic meters of gas per year. Serbia could also become an important transit country for Russian gas when it connects to the Turkish gas pipeline project, President Vladimir Putin stated earlier.
GEORGIA TODAY JANUARY 16 - 18, 2018
Irakli Kovzandze. Photo source: tabula.ge
National Bank Given Greater Supervisory & Enforcement Powers
he President of Georgia has signed legislative amendments to the Organic Law of Georgia on the Central Bank, the Law of Georgia on Commercial Bank Activities and other respective laws endorsed by the Parliament of Georgia. Irakli Kovzanadze, Chairman of the Budget and Finance Committee of the Parliament of Georgia stated that almost six months of scrupulous, laborintensive work and approximation of positions within the Fiscal Committee of the Parliament of Georgia preceded the endorsement of the referred package of legislative amendments by the Parliament of Georgia last December. The aim is to regulate issues that over recent years were consistently raised by citizens and businesses regarding the performance of commercial banks and other credit institutions operating in the country. Namely, according to Kovzanadze, “banking holdings” have been segregated at a legislative level from commercial banks, thus granting the authority and responsibility of supervision to the National Bank of Georgia (NBG) not only towards individual banking institutions, but also towards entire banking holdings or financial groups that certain commercial banks are related or affiliated to. The NBG has been mandated to obtain any essential information; carry out consolidated supervision, and request the separation of a bank and other legal entities within a group whenever required to enforce financial or other sanctions. Further, a Framework of Operation and Regulation has been defined at the legislative level for micro-finance organizations (MFOs) and those credit organizations that attract funds from the general public in any form and manner. The NBG has been granted all the essential rights to carry out comprehensive supervision of the sector. Areas of responsibility have been defined for
The NBG has been granted authority and responsibility to supervise not only individual banking institutions, but the entire banking holding - Irakli Kovzanadze commercial bank management, shareholders and administrators at the legislative level so that they are prevented from applying work-related information and position for their own investments or for positioning other businesses or legal entities directly or indirectly related to the bank in a privileged position. The NBG has also acquired a number of tools to carry out due control. “The Budget and Finance Committee of the Parliament of Georgia will tightly and permanently oversea the enforcement of the referred law. We will closely analyze the administrative regulations that the NBG will develop within its competence towards this end. We will periodically collect information and hold Committee Hearings,” Kovzanadze said.
The NBG has been granted all the essential rights to carry out comprehensive supervision of the sector. Photo source: pbs.twimg.com
JANUARY 16 - 18, 2018
Mark Rein-Hagen On Georgia in the Gaming World INTERVIEW BY VAZHA TAVBERIDZE
‘Tamar leads Georgia’ - intoned the narrator, and the Georgians rejoiced.
hen a celebrated figure from your history becomes a character in one of the most celebrated video games in the world, it's worth celebrating, I say. Apart from matters of national pride, it has pragmatic benefits as well: people are going to learn about Georgia, and, based on empirical evidence, those who do, want to come here; from invaders in ancient times
A lot of Europeans and Americans don’t realize how big and important Georgia once was. They don’t understand how crushed Georgia got by the Mongol invasion
all the way to the ever-swelling numbers of tourists our country seems to attract nowadays. And who better to talk to about Georgia's "game world" future than Mark Rein-Hagen? A role-playing, card, video and board game designer best known as the creator of Vampire: The Masquerade and its associated World of Darkness games, along with Jonathan Tweet, he is also one of the original two designers of Ars Magica. His work on World of Darkness influenced the movie series Underworld, TV series True Blood, and other kin sub-cultures such as Real Life Vampires and Real Life Werewolves. Mark was kind enough to both host us and give us his insights as soon as the news about Civ VI's new expansion broke.
ASIDE FROM YOUR FAME AS CREATOR OF ONE OF THE MOST POPULAR GAME SETTINGS, YOU ARE QUITE AN ADEPT AT PLAYING CIVILIZATION, TOO. When the last edition of Civilization came out, I’d had some surgery done and wasn’t allowed to move my back at all. So, for two months straight, I played Civilization, getting the world’s highest scores in certain categories. It was one of my proudest moments, really. My favorite game in a highly difficult moment.
WHAT’S YOUR TAKE ON TAMAR’S INCLUSION IN THE GAME? I’m really happy. It’s about time Georgia got included! I’m a huge proponent of bringing tourists to Georgia. It helps the economy, we have full employment, wages go up. It’s great! This game is played by millions of people worldwide and is one of the bestknown computer games ever made. So, having Georgia in it means that people will know Georgia; they will learn the history, ‘cause when you play Civilization, you don’t just play a game, you learn about world history. And now Georgia’s history is a part of the game. This is nothing but good news. People who play it will want to come and visit, trust me.
WHEN THE NEWS BROKE, THERE WERE SOME AMERICANS AND EUROPEANS COMING OUT WITH THE OPINION THAT GEORGIA SHOULD NOT HAVE BEEN INCLUDED BECAUSE IT HAD NOT CONTRIBUTED MUCH OF NOTE TO WORLD CIVILIZATION. WHAT WOULD BE YOUR RESPONSE? A lot of Europeans and Americans don’t realize how big and important Georgia once was. They don’t understand how crushed Georgia got by the Mongol invasion. It would be completely different if they hadn’t been swept under. Because they haven’t heard it in history books, they don’t know about it. That’s why it’s so great that Georgia was included. I keep writing about Georgia on social media. This is a very special place: it’s much older than Europe, and is the cradle of tradition of wine, not France. Civilization will help people come to see it themselves.
SOME ON THE GEORGIAN SIDE WERE SURPRISED AT TAMAR’S HAVING DARK SKIN. SOME WERE OFFENDED. Well, I must admit that after all the invasions, you know, the DNA of the country changed a little bit. Color can change. She is definitely darker than many would expect. But then we all have different colors. People love to imagine medieval England all being white, and they forget that there were black people then. The whole world has been mixing for a long time. I personally think [the designers] got it wrong, but it’s no big deal.
WHAT ASPECTS OF GEORGIAN HISTORY OR LITERATURE COULD BE BEST REPRESENTED IN THE MEDIUM OF VIDEO GAMES TO YIELD GOOD RESULTS? LET'S ASSUME WE ARE TALKING ABOUT AA PRODUCTION, LARGE-SCALE, EPIC STUFF. WOULD KNIGHT IN PANTHER’S SKIN MAKE A GOOD VIDEO GAME? Sure, it would make a great game. Or one about Georgians during the crusade, when the Georgian
cross became the symbol. The idea of Georgians going on crusade, taking part in it, or fighting the Mongols. Struggling alone against the mighty army: that’s a great story!
NO MATTER HOW AMAZING THE HISTORY MIGHT BE, NO MATTER HOW COLORFUL KNIGHT IN PANTHER’S SKIN MIGHT BE, THERE’S LITTLE CHANCE A FOREIGN STUDIO WILL PICK UP ON IT. THE IMPETUS SHOULD COME FROM GEORGIA. This is a great industry for Georgia to be involved in because you don’t need natural resources to do it: you just need people. Georgia has always been good at math. It’s practically a tradition in Georgia. And creativity. Remember, ten years ago, Poland was where Georgia is today. There was almost no game industry, no companies. Now they have a company which has several hundred employees. It creates enormous wealth in Poland. Now people know about Poland as a country because they play The Witcher for hundreds of hours. We need something like this about medieval times in Georgia. Because we have this amazing scenery here, very unlike what there is in Europe, like Game of Thrones: it’s unique. So, people see this in the video game and are excited because they’ve never seen it before.
APART FROM TACTICAL WAR GAMES, WHAT OTHER GENRES WOULD WORK? RPG? Sure. You play a crusader, say, from Britain, who befriends a Georgian noble in Jerusalem and you come back with him to Georgia after the first crusade and you see this kingdom: together you have an adventure like a magical version of medieval times.
THERE WAS ALSO THE RISE OF ARGONAUTS. IT WAS A QUITE SUCCESSFUL TITLE THAT COULD ALSO WORK IN THE TIME PERIOD FOR FANTASY GAMING. Absolutely, the whole Medea myth is just waiting to be told. Not the Greek version: the Georgian version. Greeks "borrowed" a lot of things. Prometheus on the mountain? It’s a Georgian myth. People argue whether it is Greek or Georgian. Well, Georgia is a much older country than Greece. When Georgia was a country, Greece was still a tribe. Georgia has been a land for 20,000 years or more. This is an ancient country. Much more ancient than any country in Europe, and it has all rights it needs to tell the world its version of this myth.
The whole Medea myth is just waiting to be told. Not the Greek version: the Georgian version
GEORGIA TODAY JANUARY 16 - 18, 2018
Photo source: i.ytimg.com
Trump's Foreign Policy Puzzle with Hindsight BY VICTOR KIPIANI
If you hate a person, you hate something in him that is part of yourself. What isn't part of ourselves, doesn't disturb us. Herman Hesse
ver a year has passed since the last US presidential elections, marking a rather convenient milestone (albeit merely thanks to hindsight) for a definitive analysis of the Trump administrationâ€™s foreign policy. Indeed, a proper understanding of the new charts (if any) according to which the country is being steered on the global map can help us to trace future developments in 2018 and beyond. Beyond the academic interest in doing so, acquiring such an understanding is especially important for Georgia given the need to recalibrate and readjust, whenever needed, the countryâ€™s foreign policy to world affairs. Our reading of US foreign policy-making is based upon a series of categories which are briefly outlined below.
NOTHING HAS CHANGED AT ALL Among the key prevailing thoughts when attempting to interpret current US foreign policy, the legacy of retrenchment and the abandonment of the worldâ€™s "peripheries" have gained fresh momentumâ€”albeit only under the veil of a new disguise. For centuries, the key drivers of US foreign policy have been propagating the new Wilsonian vision of an expanded Monroe Doctrine, and marking US national interests around the globe wherever the need to consolidate and defend the liberal order was at stake. This policy was not only carried out by interposing post-World War II arrangements (e.g. the UN, Bretton Woods institutions, etc.), but also by nestling new democracies under a unified (read: predominantly American) security umbrella. This order in fact led to a Pax Americana, and was heavily fed by Cold War realities and existential threats to liberal international values. The Wilsonian vision survived the break-up of the Soviet bloc, and both the George W. Bush and later Clinton administrations largely continued to successfully pursue a new, somewhat modified version of "perpetuating the liberal order". Efforts to consistently maintain this doctrine following the Cold War first faltered due to overstretched capabilities after 9/11, and culminated in Russia's invasion of
Georgia in 2008. All in all, facing a set of worldwide challenges, Obama opted for a policy of withdrawing from peripheral responsibilities (seen from the standpoint of US core interests) by reconciling, in a way, American commitments with corresponding capabilities. Various observers argue that Trump's policies are not U-turns, but rather a tweaking of Obama's trend towards retrenchment and a fine-tuning of "selective" diplomacy.
A POLICY OF INCOHERENCE Much has been said about the apparent lack of a Grand Strategy for current US foreign policy, but during this very initial stage of the Trump era one of the prevailing views is that the US is strongly biased towards a visible record of flip-flopping on key geopolitical and geo-economic issues. This approach is nothing new, however, and was purportedly the basis for the maverick dealings of Nixonâ€™s national security adviser, Henry Kissinger. Called the "madman theory", the core goal is to express a "rational irrationality" as part of a wellcalculated strategy of achieving concessions from adversaries and partners by appearing unsophisticated and immature. According to other analyses, the strategy rests upon a level of gambling on irresponsibility in international affairs which practically verges on intimidation (when needed) and a coercive "diplomacy behind the curtains". Moreover, some argue that it is imperative for the United States, as a liberal hegemon, to maintain a degree of flexibility and the ability to sail with the wind, and that the country would be much better off without the rigidity imposed by outlining its preferences and assessing underlying costs and benefits. Continued on page 10
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States, like investors with their portfolios, can manage risk by diversifying their foreign policies
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JANUARY 16 - 18, 2018
UN Sec Gen: Towards a New Global Compact on Migration OP-ED BY ANTÓNIO GUTERRES
anaging migration is one of the most profound challenges for international cooperation in our time. Migration powers economic growth, reduces inequalities and connects diverse societies. Yet it is also a source of political tensions and human tragedies. The majority of migrants live and work legally. But a desperate minority are putting their lives at risk to enter countries where they face suspicion and abuse. Demographic pressures and the impact of climate change on vulnerable societies are likely to drive further migration in the years ahead. As a global community, we face a choice. Do we want migration to be a source of prosperity and international solidarity, or a byword for inhumanity and social friction? This year, governments will negotiate a Global Compact on Migration through the United Nations. This will be the first overarching international agreement of its kind. It will not be a formal treaty. Nor will it place any binding obligations on states. Instead, it is an unprecedented opportunity for leaders to counter the pernicious myths surrounding migrants, and lay out a common vision of how to make migration work for all our nations. This is an urgent task. We have seen what happens when large-scale migra-
tion takes place without effective mechanisms to manage it. The world was shocked by recent video of migrants being sold as slaves. Grim as these images were, the real scandal is that thousands of migrants suffer the same fate each year, unrecorded. Many more are trapped in demeaning, precarious jobs that border on slavery anyway. There are nearly six million migrants trapped in forced labor today, often in developed economies. How can we end these injustices and prevent them recurring in future? In setting a clear political direction about the future of migration, I believe that three fundamental considerations should guide discussions of the compact. The first is to recognize and reinforce the benefits of migration, so often lost in public debate. Migrants make huge contributions to both their host countries and countries of origin. They take jobs that local workforces cannot fill, boosting economic activity. Many are innovators and entrepreneurs. Nearly half of all migrants are women, looking for better lives and work opportunities. Migrants also make a major contribution to international development by sending remittances to their home countries. Remittances added up to nearly $600 billion last year, three times all
development aid. The fundamental challenge is to maximize the benefits of this orderly, productive form of migration while stamping out the abuses and prejudice that make life hell for a minority of migrants. Secondly, states need to strengthen the rule of law underpinning how they manage and protect migrants – for the benefit of their economies, their societies and the migrants themselves. Authorities that erect major obstacles
to migration – or place severe restrictions on migrants’ work opportunities – inflict needless economic self-harm, as they impose barriers to having their labour needs met in an orderly, legal fashion. Worse still, they unintentionally encourage illegal migration. Aspiring migrants, denied legal pathways to travel, inevitably fall back on irregular methods. This not only puts them in vulnerable positions, but also undermines governments’ authority. The best way to end the stigma of illegality and abuse around migrants is, in fact, for governments to put in place more legal pathways for migration, removing the incentives for individuals to break the rules, while better meeting the needs of their labor markets for foreign labor. States also need to work together more closely to share the benefits of migration, for example through partnering to identify significant skills gaps in one country that migrants from another are qualified to fill. Third and finally, we need greater international cooperation to protect vulnerable migrants, as well as refugees, and we must reestablish the integrity of the refugee protection regime in line with international law. The fate of the thousands who die in
Trump's Foreign Policy Former Tbilisi Puzzle with Hindsight Mayoral Candidate Elisashvili to Run for President Continued from page 9
By doing so, the country's leadership would restrict its capacity for choice— especially given the turbulence and unpredictability of international politics. This approach has multiple intrinsically negative effects, however: any discrepancy between the President’s credibility and the country’s own credibility damages US interests; foreign leaders are forced to gauge real intentions by turning to the "grown-ups" in the administration; the President loses his authority on the international stage; and, ultimately, the United States risks losing predictability along with credibility.
"UNIQUELY" TRUMPISH POLICY TRAITS
BY THEA MORRISON
ormer Tbilisi mayoral candidate, Alexander Elisashvili, who came second in the October 2017 mayoral race after the ruling Georgian Dream (GD) candidate and current mayor Kakha Kaladze, says he will run in the Presidential elections in October 2018. Elisashvili made the statement in his interview with the Palitranews program 360 Degrees. Elisashvili said he is going to form a social-political movement, which will be different from any political force in Georgia. “I am going to pay several visits abroad, as international organizations expressed
their desire to meet me after the municipal elections. After that, I plan to establish a socio-political movement,” he stated. The politician said that Georgia needs a real political force that will “take the country out of the its current climate.” Elisashvili underlined that the new movement will not be merely based on his views. "I do not agree with parties’ dependent only on the decisions of one person,” he added. Alexander Elisashvili is a former member of Tbilisi City Council. He quit the council ahead of the October 2017 municipal elections to run for Tbilisi Mayor. He has also been very actively involved in Tbilisi life, especially when it comes to environmental issues and fighting corruption.
The world order, post 1945, emerged through a set of international institutions, with the United States ensuring the liberal order and freedom by either entering into open-ended alliances or deploying troops abroad. Despite having shrunk in size and impact following the end of the Cold War, this policy was never called into question—at least not openly—until recently, when President-elect Trump boldly ventured into discussions of US international commitments, significantly outweighing the benefits of "nationbuilding at home" (note the strong resemblance with the so-called Jacksonian populist nationalism), and encouraging interaction on various important international issues on a transactional, caseby-case basis. We touched upon the transactional nature of US foreign policy in earlier publications, stating that this transactionality could be seen as part of a new version of realpolitik. At that time, however, we were of the opinion that this novel approach was due to the abandonment of bipolar and multi-polar worlds, ensuring a focused pragmatism during tactical decision-making but maintaining the imperative of long-term consistency.
Today, this statement remains valid if one considers that the tactical essence of a state-led corporate process is maintained, and that the administration strongly favors direct engagement with other state actors with a firm (and unashamed) emphasis on trade-offs, utilizing the plethora of means at its disposal whenever necessary and on a case-by-case basis. Developments in South-east Asia are a clear example of this, and yet this policy is not without its flaws and is visibly in disarray when dealing with crises in the Middle East.
SO WHERE DO WE STAND? States, like investors with their portfolios, can manage risk by diversifying their foreign policies. This diversification is even more appealing to small nations, especially those at the crossroads of major geopolitical policies. In fact, the search for order at home and abroad is an arduous exercise which demands sustainability, cohesion, and a set of flexible actions ready to be deployed. The latter may well consist of piecemeal responses but, ultimately, should not deviate from a strategic course of coherence. Even more critical and exhausting is the need to reconcile both larger interests with limited risks as well as patience with pragmatism, paying due attention to both one’s means and ideals. As for Georgia in a decentralizing world, transactionality may well be an option, particularly given the fact that a major ally is arguably shying away from showing clear-cut "leadership" in the region. But such an approach requires an amazing set of skills capable of handling the process in a highly sophisticated manner, as nations that hedge their bets on conflicting big interests can become trapped, and doing so during the unpredictable redistribution of powers and influence is even more precarious. Another problem in this regard is the risk of diving into huge uncertainty with highly destructive consequences. It is also worthwhile to
doomed efforts to cross seas and deserts is not just a human tragedy. It also represents the most acute policy failure: unregulated, mass movements in desperate circumstances fuel a sense that borders are under threat and governments not in control. In turn this leads to draconian border controls which undermine our collective values and help perpetuate the tragedies we have too often seen unfold in recent years. We must fulfill our basic obligations to safeguard the lives and human rights of those migrants that the existing system has failed. We must take urgent action to assist those now trapped in transit camps, or at risk of slavery, or facing situations of acute violence, whether in North Africa or Central America. We have to envisage ambitious international action to resettle those with nowhere to go. We should also take steps – through development aid, climate mitigation efforts and conflict prevention – to avoid such unregulated large movements of people in future. Migration should not mean suffering. We must aim for a world in which we can celebrate migration’s contributions to prosperity, development and international unity. It is in our collective power to achieve this goal. This year’s global compact can be a milestone on the road to making migration truly work for all. The author is Secretary-General of the United Nations
The growing trend to economize in international relations is largely prompted by a very real businessman at the helm of the largest economy in the world bear in mind the deplorable history of humankind, during which the interests of small states have very often been sacrificed in order to please larger ones; nothing guarantees that the former will be taken into consideration when the latter are dealing or “transacting” with each other under the pretext of various bilateral or multilateral formats (i.e. "business as usual"). Although the real quest for a Georgian transactionality seems less urgent considering the unequivocal stance of the free world standing alongside us and all the support we receive from "the indispensable nation" (a term coined by Madeleine Albright), we should not forget that what we are observing is clearly a growing trend to economize in international relations which is largely prompted by a very real businessman at the helm of the largest economy in the world. Regardless of the real face of international politics when it comes to Georgia's challenges, most of us agree (or ideally should) that the main task is to build a much more "grown-up" and "responsible" country—one which, in a changing world, predominantly relies on its own resources and capabilities and, in the first instance, is guided by its national interests.
GEORGIA TODAY JANUARY 16 - 18, 2018
Russia-Iran Partnership: Economics, Politics & Regional Ambitions OP-ED BY EMIL AVDALIANI
hroughout centuries, Iran has been a regional power. Powerful Iranian dynasties such as Achaemenids, Sasanians in the ancient period, or Safavids and Kajars in the XVII-XVIII cc. aspired to achieve a major role in the Middle East, South Caucasus and elsewhere. Autor the Cold War, decades followed with sanctions imposed by western countries on Tehran’s nuclear program, constraining Iran in its being able to project economic and political influence in the above regions. However, with sanctions officially lifted in early 2016 and, despite rhetoric, the Trump administration not reversing the Iran nuclear deal for the moment, means Iran now sees avenues for projecting its economic and political clout in its neighborhood from the Mediterranean to the South Caucasus and elsewhere. These geopolitical ambitions, however, do overlap with another large power: Russia. Moscow has its own imperatives in the South Caucasus, where its struggles to keep the EU and the US at bay, and in Syria where Europeans and Americans likewise have their own stakes. Current cooperation between Russia and Iran ranges from economic and military to purely geopolitical reasons. For instance, both are aiming for the European market to initiate/increase their gas and oil exports to Europe. Indeed, Iran is quite well positioned to have its share of the European gas market as the EU is worried about Russian predominance there. Iranian gas could be a very good tool to assuage European fears, but to export its gas, Iran would need the Black Sea ports of Batumi and Poti in Georgia. Moreover, Tehran has often expressed its willingness to use the Trans-Anatolian Gas Pipeline and the Trans-Adriatic Pipeline. As a result, there has been progress made by the Iranian side to establish itself on the Black Sea coast. In late 2016, it was agreed that Iranians would construct oil-reproduction facilities near Georgia’s Black Sea city of Supsa on approximately 1.2 square kilometers. However, despite some successes, there are significant constraints which Iran will continue facing in the South Caucasus, as Russia and Turkey are well represented both militarily and economically in the region. Russia, for instance, successfully obstructs any Iranian moves on establishing independent/new pipelines or railways to Armenia and Georgia. Another area of involvement for Iran in the Russian “sphere of influence” could be the simmering Nagorno-Karabakh conflict. In the early 1990s, there were some unsuccessful attempts by the Iranian government to mediate the conflict. Since both Armenia and Azerbaijan border on Iran, it is quite natural to expect Tehran to try to play a bigger role in the Nagorno-Karabakh conflict. However, Russia, which still is a dominant power in the conflict resolution process, would be opposed to any Iranian initiatives which can diminish Moscow’s role.
DESPITE RIVALRY, IRAN AND RUSSIA CAN ALSO COOPERATE Still, although from the geopolitical standpoint
It is in both countries’ common interest to cooperate in obstructing western military encroachment in the South Caucasus and Middle East. Photo source: i.ytimg.com
Russo-Iranian relations are not always devoid of difficulties, there is ground for cooperation between the two. The map of Eurasia gives a glimpse into the rationale of the Russian political elite behind closer cooperation with Iran. Russian political thinkers of the 1990s often thought that Iran and Turkey should have been pillars of future Russian influence in the Middle East. The so-called Eurasianists (those who believe that Russia is neither in Europe nor in Asia, but in order to successfully compete with western powers, it needs Teheran and Ankara) under Russian president Vladimir Putin saw their notions officially pushed aside, though not in practice. It has been in Russia’s perennial interests to keep Iran at least neutral, and it happened historically both during the Romanov period and the Soviet empire. It is in both countries’ common interests to cooperate in obstructing western military encroachment in the South Caucasus and Middle East. Both consider the evolving US grand strategy in the Eurasian landmass as negative to their respective geopolitical imperatives. For Russia, the US violates the post-Cold War order by ramping up military pressure on Moscow in the former Soviet space; for Iran, the US wants to limit Tehran’s nuclear ambitions as well as Iranian geopolitical outreach throughout the Middle East. Indeed, this common fear of the United States could be considered one of the drivers behind close Russo-Iranian cooperation. Recently, when the US unveiled a new national strategy document enumerating major problems across Eurasia, Russia and Iran featured as most problematic for Washington. One such theater of cooperation is in Syria, where both are interested in stopping western (primarily US) influence in the country. Much has been written on what military and economic measures Russia and Iran have been implementing in Syria for years already. But as usual, real differences between war-time allies began only after the end of hostilities. Indeed, from time to time there have been hints in media on various disagreements between Russia and Iran on methods, aims and results of the war in Syria. Indeed, although Moscow and Tehran cooperate, they also loath each other’s geopolitical ambitions. Iran has almost solidified its land reach to the Mediterranean, and Moscow could well be worried that a strong Iran would be less susceptible to follow the Russian lead. It could be argued that despite the fact that Russia and Iran do share political differences in the Middle East as well as a number of energy issues, geopolitical forces right now are strong enough to drive the two to continue even closer cooperation in the future.
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January 16 - 18, 2018