By Eka Janashia (03/04/2015 issue of the CACI Analyst)
The Kremlin continues Russia's annexation of Georgia's breakaway regions and at the same time warns Tbilisi to cease its effort to integrate with NATO. On February 18, breakaway South Ossetia signed a "border treaty" with the Russian Federation, and declared its intention to strike an "Alliance and Integration" deal with Moscow shortly.
The agreement mirrors the "Alliance and Strategic Partnership" agreement inked between Moscow and Sokhumi in November, though envisions a deeper integration of the South Ossetia's defense, security, and customs agencies with those of Russia. An already signed border agreement dictates the abolishment of the border crossing point at the Roki tunnel connecting the South Ossetia to Russia.
The border eradication initiative was first aired by Vladislav Surkov, the Russian president's aide in charge of supervising Moscow's relations with the two de facto republics, on February 17, during a meeting with Abkhazia's de-facto president Raul Khajimba. "There must not be a border between us," Surkov said and added that Russia's financial support for the two breakaway regions would be upheld in the face of Russia's current economic troubles.
The border agreement between Moscow and Tskhinvali is a swift implementation of this initiative. After signing the border treaty, Russia's Foreign Minister Sergey Lavrov expressed the Kremlin's readiness to avert the "negative effect" of "never-ending attempts to drag Tbilisi into NATO."
The Kremlin's apprehension is directed towards the establishment of NATO's "Training and Evaluation Center" (TAEC) in Georgia which, in the words of Russia's permanent representative in NATO Alexander Grushko, provokes Moscow, escalates tension and worsens regional security.
At the recent NATO summit in Wales, Georgia obtained a "substantial package," which along with other supportive tools, aims to enhance Georgia's defense capabilities through launching the TAEC, which could obtain a regional dimension in the future.
As part of this policy, NATO's Deputy Secretary General Alexander Vershbow visited Georgia in January 2015. Vershbow assured that despite the Kremlin's nervous reaction towards the planned NATO-Georgia training center, the alliance will make a resolute effort to create the facility before the end of this year.
He underlined that the TAEC will be "the most visible element of a NATO presence in Georgia." While it will primarily focus on command post exercises, field exercises with participation of foreign troops as well as live and simulated trainings for allied military units committed to the NATO Response Force and Connected Forces initiative might also take place, Vershbow said. He also announced that periodic military exercises involving NATO allies and partner countries will start in Georgia this year.
The Kremlin's reaction to the high NATO official's statement was soon reflected in the border removal initiative and strict declarations on Russia's counter-measures to deal with the undesirable implications of NATO-Georgia cooperation. Zurab Abashidze, the Georgian Prime Minister's special representative for relations with Russia, commented that Moscow, Brussels and Tbilisi all are well-aware "that Georgia's membership to NATO today and tomorrow is not on the agenda" and that Georgia-NATO cooperation "in no way aims at deploying NATO military infrastructure in Georgia."
Later, Defense Minister Mindia Janelidze restated that Georgia has no plans to host a NATO military base and that only the TAEC, aiming to enhance the professionalism of Georgian servicemen and with no additional military functions, will be established. The parliamentary minority immediately slammed these official remarks. The former state minister for European and Euro-Atlantic integration issues, Free Democrat Alexi Petriashvili dubbed Abashidze's statement another proof that the country's Euro-Atlantic course is under threat. The Free Democrats, led by former Defense Minister Irakli Alasania, quit the ruling coalition Georgian Dream (GD) in November with the same motivation.
The United National Movement (UNM) party, in turn, argued that Abashidze had voiced the government's position. The party's leader David Bakradze said that instead of distancing himself from Abashidze's statement, the defense minister had justified it.
Abashidze's statement came a few days before his meeting with Russia's Deputy Foreign Minister Grigory Karasin in Prague. The Karasin-Abashidze format is the only channel for direct communication between Tbilisi and Moscow, established by former PM Bidzina Ivanishvili. The previous government led by Mikheil Saakashvili government did not engage in direct negotiations with the Kremlin and preferred dialogue in an international format with the participation of representatives from partner countries.
While Russia's anti-NATO policy hardly surprised anyone, Abashidze's statement, which the opposition interpreted as appeasing to Moscow, was unexpected and triggered doubts about the consistency of Georgia's Euro-Atlantic aspirations.
Through the border removal initiative as well as the "amalgamation agreements" with South Ossetia and Abkhazia, Russia signals that the establishment of a training center where the troops of NATO partners may hold military exercises is totally unacceptable to Kremlin. Georgia's incumbent government clearly seeks to avoid irritating Moscow, but it yet uncertain to what extent this stance will slow Georgia's NATO integration pace. However, ambiguous moves with regard to Euro-Atlantic policy not only cast doubt on Georgia's achievements at the Wales Summit, but also minimize its chances to reach any tangible success at the Warsaw Summit scheduled for next year.
By Eka Janashia (02/18/2015 issue of the CACI Analyst)
On February 4, Tbilisi City Court ordered pre-trail detention for eleven former and incumbent police officers in connection with the death of two young men in the so called “tennis court special operation” taking place in 2006.
According to the then-official version, spread by the Ministry of Internal Affairs (MIA), on May 2, 2006, Zurab Vazagashvili, Aleksandre Khubulov and Bondo Puturidze were on their way to commit armed robbery in a Tbilisi district and the police prevented the crime through a special operation. When law enforcement officers tried to stop the suspects’ car nearby a tennis court in downtown Tbilisi, the suspects opened fire, which was returned by the police officers. Vazagashvili and Khubulov were shot dead whereas Puturidze was wounded.
The Public Defender’s Office commissioned an alternative ballistic investigation, detecting that no shots were fired from the car. Nevertheless, in 2007 the case was closed. Zurab’s father, Yuri Vazagashvili has accused the authorities of fabricating evidence to clear the offenders. The case was even brought to the Strasbourg-based European Court of Human Rights.
After coming to power in 2012, Georgian Dream (GD) coalition reopened the investigation into the Vazagashvili case though could not reach any tangible results. Yuri Vazagashvili then asked former Prime Minister Bidzina Ivanishvili to help in dismissing the suspected officials who were still working in law enforcement.
In a recent interview to newspaper Kviris Palitra, Vazagashvili criticized the lack of government efforts to determine the truth and accused the then interior minister Alexander Tchikaidze of protecting the culprits. On the next day, Vazagashvili was killed in an explosion at the grave of his son in the village of Karapila located near the South Ossetian conflict zone.
The murder gave rise to widespread speculation regarding the links between the explosion and Vazagashvili’s continued efforts to penalize his son’s murderers. PM Irakli Gharibashvili said the incident “shocked” him and urged the law enforcement agencies to investigate the case immediately, and to complete the investigation of the 2006 special operation “in the shortest period of time.” Almost immediately, Interior Minister Tchikaidze resigned. Tchikaidze’s written statement reads, “Though Yuri Vazagashvili’s allegations are far from reality, I feel the moral responsibility to quit the post.”
In two weeks, the Prosecutor’s office (PO) indicted Irakli Pirtskhalava, former deputy head of the Criminal Police Department, for the premeditated murder of Khubulov. The prosecutor’s motion states that Khubulov tipped off police regarding Pirtskhalava’s brother, Levan, drug-related crimes resulting in his arrest in April, 2006. Pirtskhalava then decided to take revenge on Khubulov, plotting a special operation by inventing the false story of a robbery, resulting in the shooting of Khubulov and Vazagashvili. By eliminating the witnesses, Pirtskhalava was able to avenge his brother while keeping his “official influence and reputation,” the PO’s motion said. The Tbilisi City Court rejected the defense lawyer’s petitions to release the former and active detained officers on bail.
On February 8, Gia Sosanashvili, another policeman and allegedly a friend of Pirtskhalava, was detained as a suspect of Yuri Vazagashvili’s murder. According to PO, he was identified through a DNA sample detected on part of a hand grenade that went off at the grave. The PO said that Sosanashvili installed the explosive device while someone else gave the order. The detained policeman denies guilt. His lawyer said that at the moment of the explosion, Sosanashvili was at a public place and that dozens of witnesses can prove it.
The recent developments taking place in about two weeks had an immense resonance among the public. From the very beginning, the “tennis court special operation” involved inconsistencies and controversies but the investigation has focused only on the possible use of excessive force by the police. The PO’s new charges, however, turned previous findings upside down and raised several additional questions. For example, how the deputy head of the department was able to mastermind a murder of this scale and involve so many subordinates in it. Moreover, if Pirtskhalava aimed to liquidate witnesses, why did Puturidze survive?
Another striking feature is the timing of the crimes’ resolution. After the investigation was idle for two years, the PO was able to solve both cases in two weeks, while other baffling murders occurring during the GD’s term in power remain unsolved. Most significantly, the assassination of the politician and media tycoon Erosi Kitsmarishvili and the murder of 10 month-old baby-girl Barbare Raphaliants, who was allegedly killed for political reasons.
GD supporters have welcomed the PO’s move, labeling it a “restoration of justice” – one of the prominent pre-election promises of the coalition. Others suspect political motives behind the events and perceive them as an attempt by the government to divert public attention from simmering social discontent.
By Eka Janashia (01/22/2015 issue of the CACI Analyst)
At the beginning of 2015, Russia’s state-owned oil producer Rosneft entered Georgia’s oil retail market by purchasing a 49 percent stake of Petrocas Energy Ltd. Petrocas’ affluent assets include an oil terminal in Georgia’s Black Sea port of Poti with a capacity of 1.9 million tons per year as well as a network of 140 gas stations in Georgia under the Gulf brand.
By launching a joint venture with Pertocas, Rosneft will gain high-quality storage capacity in one of the major oil and oil products hubs in the region, enrich supply routes options and enhance its operations in the Central Asia and South Caucasus oil market. “[It] is a new milestone that will highlight the strategic importance of the South Caucasian energy corridor,” the main shareholder of Petrocas, Russian businessman David Iakobashvili said.
The opposition United National Movement (UNM) party insisted that Rosneft plans to acquire a controlling interest in Petrocas and called on the government to revoke a deal damaging to state interests. The government responded that it was during UNM’s term in power that Russian investments penetrated strategic areas of Georgia’s economy such as finances, electricity, chemicals, ore industry, food and dairy products. For example, at that time, the Russian state-owned electricity trader, Inter RAO, obtained 75 percent of Tbilisi’s electricity distribution company Telasi, thermal power generating plants, as well as the management right of two hydro power plants; Khrami I and Khrami II. The government also lamented that it has no right to influence private business, especially the decisions of Petrocas, which is registered in Cyprus and manages its operations from there.
UNM counter-argued that Rosneft operations in Abkhazia breach the Law on Occupied Territories and that the government is obliged to cancel the agreement granting the Russian company “the most important communications on the country’s Black Sea shore.”
Indeed, in 2009 Rosneft started offshore explorations and development of oil and gas fields in Abkhazia under an agreement signed between the company and Abkhazia’s de facto government. Against this background, three of Georgia’s government agencies began to study the legitimacy of the Rosneft-Petrocas deal. The results are yet unknown.
The recent deal reflects Russia’s strategy to strengthen its infrastructure capabilities in the South Caucasus to ensure an uninterrupted delivery of oil as well as other products to Armenia, which recently became a member of Eurasian Economic Union (EEU) but lacks land access to other EEU members in the absence of common borders. The reconstruction of the railway through Abkhazia and the planned Avro-Kakheti highway from Dagestan to eastern Georgia and then to Armenia, can be understood in this light.
While improving Armenia’s situation is Moscow’s key rationale, the Kremlin is also interested in consolidating its position in the Georgian market. UNM asserts that the Rosneft-Petrocas deal is only the beginning of “a big process” and unless countervailing measures are taken, “Moscow will have no obstacles at all.”
On January 17, Iase Zautashvili, the General Director of Airzena, Georgia’s national airlines, disclosed correspondence between Georgian and Russian state agencies regarding the prospect of restoring flights between the two countries. These clandestine negotiations aim to grant Russian companies a monopolistic position in Georgian airspace, Zautashvili said.
Referring to other covert correspondence taking place between the Russian and Georgian sides via the Swiss Embassy, UNM claims that 11 Russian companies, including Vladimir Putin’s Private Company, will enter Georgia’s airspace by dumping prices and eliminating the competition, including the national airlines, in order to obtain a monopolistic position in the Georgian market. The UNM also claims that some of these companies fall under the international sanctions against Russia while others have violated the Law on Occupied Territories.
The Enguri hydropower plant with a total capacity of 1,300 megawatts could become another target of Russian strategic interest. Russia allegedly intends to register Georgia’s most powerful hydroelectric station in the region in Abkhazia. Although Georgia’s Ministry of Energy categorically denies that the plant’s ownership is under discussion, Aslan Basaria, Director of Abkhazia’s power company Chernomorenergo, claims that negotiations have already been launched with participation of the Georgian side. “The plant is located on Georgian territory and belongs to the Georgian state. The Chernomorenergo Director General’s statement is far from reality,” the Ministry of Energy says. Despite the denial, Sokhumi in fact raised the question of the Enguri hydropower plant’s ownership a month ago when Abkhazia’s de facto leader Raul Khajimba said “what is located on our territory should be owned by the Abkhaz people.”
In fact, the Enguri generators are located on the territory of occupied Abkhazia while its arch dam is in the Georgian-controlled area. According to the informal agreement reached between Tbilisi and Sokhumi in the 1990s, Abkhazia gets 40 percent of the electricity generated by the plant free of charge while the rest goes to Georgia. The fact that the agreement terms are rather favorable to the Abkhaz side suggests that the questions raised over the plant’s ownership comes from Moscow, rather than Sukhumi.
Taken together, signs are emerging of several steps taken by Russia to make inroads into vitally important sectors of Georgia’s economy.
By Tomáš Baranec (01/07/2015 issue of the CACI Analyst)
In the course of 2014, developments in the Georgian-Ossetian Administrative Border Line (ABL) attained some attention in both Georgian and international media. This was due to renewed fencing activities by the Russian army and the de facto South Ossetian authorities in September 2013. However the roots of the problems, which local dwellers have to face in their daily life, are more acutely linked to the “water embargo” imposed on the region by the South Ossetian de facto authorities and the Russian trade embargo on their agricultural products.
By Eka Janashia (01/07/2015 issue of the CACI Analyst)
The changes taking place in Georgia at the end of 2014 will have crucial implications for next year’s political and economic agenda. In the beginning of December, a bout of reshuffles started both in government and inside the ruling Georgian Dream coalition (GD). It was the second wave of shifts since November, when the Free Democrats, led by the former Defense Minister Irakli Alasania left the GD coalition. This time, the alterations occurred within the GD party itself and affected the senior and mid-level government officials as well as party’s political council.
The party’s executive secretary, and PM Irakli Garibashvili’s relative, Zviad Jankarashvili resigned. Until April, 2014 he was head of the General Inspection of the Ministry of Internal Affairs (MIA). Meanwhile, first Deputy Interior Minister Giorgi Zedelashvili, a distant relative of Jankarashvili and one of the most influential figures in the MIA, was detached from the ministry and moved to the post of Deputy Secretary of the State Security and Crisis Management Council.
The head of the Special State Protection Service (SSPS) – an agency responsible for the security of high-ranking officials, state facilities and buildings – Teimuraz Mgebrishvili, was replaced by Ivanishvili’s former chief bodyguard Anzor Chubinidze. Another close associate of Ivanishvili, Nodar Javakhishvili, replaced Zurab Kopadze on the post of Deputy Minister of Regional Development and Infrastructure.
The heads of the State Security Service (SSS) and the General Inspection of the MIA, Malkhaz Chikviladze and Irakli Samkurashvili, also resigned. Ivanishvili’s crony, Mirian Mchedlishvili became head of the SSS.
Nearly all opposition parties detect Ivanishvili’s hand behind the recent relocations. Rumors swirled about Ivanishvili’s growing mistrust toward Garibashvili. Allegedly, Ivanishvili appointed his trusted associates to tactically important posts in order to control the PM.
The United National Movement (UNM) accused Garibashvili’s family of bribery long before the reshuffles. At the beginning of this year, the party disclosed an apparent corruption scheme run by Garibashvili and his father-in-law, Tamaz Tamazashvili. The scheme allegedly envisaged the establishment of fake firms and companies to participate in state tenders and accumulate large amounts of money. UNM asserts that the total volume of corrupt deals amounts to US$ 8 million.
The changes in government and GD were accompanied by a drastic depreciation of the Georgian Lari (GEL) which lost around 12 percent of its value against the U.S. Dollar in mid- December. Although Garibashvili’s government insisted that the drop was mainly caused by external factors, economic analysts argue that the government’s inefficient economic policy disrupted the balance between the US$ and GEL.
According to some economic analysts, the toughened visa regulations for foreigners imposed by the government last year have damaged the overall investment climate. The volume of investments has dropped by 10 percent for two quarters in 2014 compared to the same period of 2013. Although another source of external financing – export – has recently increased, the growth rate of imports is still much higher than that of export. Meanwhile, the ongoing economic recession in Russia contributed to a drop in the volume of remittances to Georgia.
As a result, abridged US$ inflows instigated a depreciation of the GEL, especially harmful for those who get their incomes in the national currency but have taken loans in Dollars. Data from Georgia’s National Bank disclose that 60 percent of all loans and 77 percent of mortgages are dollarized, implying that a significant share of the population is affected by the Lari depreciation.
Moreover, the appreciation of USD against GEL connotes that imported goods will become more expensive for Georgians. Taking into account that import comprises 49 percent of Georgia’s GDP while imported products constitute 70 percent of Georgia’s consumer basket, the ongoing depreciation of the GEL appears to be especially troubling.
Economic concerns amplified the uncertainty triggered by the shifts taken place inside the GD party. Several analysts and politicians have discussed Ivanishvili’s changing confidence in Garibashvili, which could end with the PM’s reassignment. Many speculations have also been devoted to the question who might be the next PM and whether Ivanishvili himself may officially return to politics.
Although the expected changes will heighten the political turbulence and economic fluctuations in the country, instability seems to be growing even without further shifts in the government. GD’s pattern of ruling deprives Georgia of institutional development and instead benefits crony networks, clan clashes and personality politics.
Meanwhile, if economic predicaments are not dealt with timely and efficiently by pursuing a more liberal economic policy, the country may face both political and economic crises. Alarmingly, these problems could derail Georgia’s Euro-Atlantic course and seriously slow the country’s democratic development.
In 2015, the Georgian government will have to address the most critical issues to maintain social stability. Thus, this year may present the true litmus test for GD and its ability to preserve its status as Georgia’s dominant political force.
The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.