GEORGIA: SITREP 20: RUSSIA'S RECOGNITION SOBERS

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 001474

SIPDIS

DEPT FOR EUR/CARC AND TASKFORCE-1

E.O. 12958: DECL: 08/26/2018
TAGS: PGOV PREL PHUM RU GG
SUBJECT: GEORGIA: SITREP 20: RUSSIA'S RECOGNITION SOBERS
SAAKASHVILI

Classified By: AMBASSADOR JOHN F. TEFFT FOR REASONS 1.4 (B) AND (D)


1. (C) Summary. President Saakashvili sought to reassure
the nation in an upbeat televised speech, but Russia's
recognition of the breakaway regions has increased the
pressure on the president and the nation. The situation in
Akhalgori seems to have been resolved for the moment with
Georgian troops backing away, but reports continue to surface
of continuing looting and forced departures in villages in
South Ossetia, and the international community has little
means to verify them. Local businesses will likely suffer in
the short term, but remain hopeful about an eventual
recovery. Georgian officials report damage to USG-provided
border security equipment and facilities in the west.
Georgia's former administration head in South Ossetia
Sanakoyev applied for a U.S. official visa with plans to
visit New York and Washington beginning August 30. End
Summary.

SAAKASHVILI ADDRESSES THE NATION
--------------


2. (U) In an August 26 televised speech, President
Saakashvili declared Russia's recognition of the breakaway
regions illegal and insisted Georgia would respond with calm,
unity, and development, and would ultimately be stronger as a
result. He said that Russia had "failed to bring Georgia to
its knees through military aggression, failed to break our
people, expel Georgia's government, undermine Georgia's
fundamental values and make Georgia disappear from the map."
Citing the sharp international condemnation of Russia's
decision, Saakashavili repeated his appeals to the
international community for support, suggesting that
Georgia's territorial integrity is more than a bilateral
issue between Georgia and Russia, but a question of
fundamental importance for the "civilized" world.


3. (C) In an apparent effort to project an image of calm to
his people, Saakashvili adopted a positive and reassuring
tone in the speech that came across to some observers as
artificially optimistic. He may have been trying to
compensate for his own concerns, which Embassy officers
observed in a meeting with him earlier in the day, shortly
after the news of Russia's recognition had been announced.
Instead of projecting his usual extreme self-confidence,
Saakashvili seemed subdued and more realistic in the meeting.
He did not confidently predict -- as he has in recent days
-- that Georgia will survive the crisis, admitting quite
frankly that his government and the Georgian economy faced
ruin without international assistance.

AKHALGORI IS CALM, BUT PROBLEMS ELSEWHERE
--------------


4. (SBU) The OSCE reported that the Ossetian and Georgian
sides have left the vicinity of Akhalgori, and life has
returned somewhat to normal. OSCE observers noted that
Russian forces have set up new checkpoints south of Akhalgori
to prevent Georgian forces from moving back into Akhalgori
and to prevent Ossetian forces from moving further south
through Akhalgori toward other villages. The OSCE observed
full freedom of movement and people returning to work. As
far as OSCE can determine, however, no one is currently
exercising normal administrative control in Akhalgori. In
addition, many ethnic Georgian residents -- in particular
young people -- are not spending the night in Akhalgori, but
rather commuting in to work during the day while spending the
night in areas farther south.


5. (SBU) The press reports increased aggression by Ossetian
forces, including instances of looting and forced departures,
since Russia's announcement of recognition, including in
Shertuli in the Gori region and other villages. The OSCE
visited several checkpoints along the outer line of Russian
control, but was advised not to go further north, where
Russian forces could not guarantee their safety. The OSCE
will have additional discussions with the Russians regarding
travel further north on August 28. USG travelers moving
north from Gori were stopped at the outer line of Russian
checkpoints and not allowed to travel further.


6. (SBU) The press reports both South Ossetia and Abkhazia
have begun negotiating military agreements with Russia.

LOCAL BUSINESSES TAKE A HIT
--------------


7. (SBU) An informal survey of local members of the American
Chamber of Commerce produced the following information:
-- Several companies had employees called up as reservists,

TBILISI 00001474 002 OF 002


with one employee being injured and a few others displaced.
-- Little damage to assets was reported, except for banks
in Senaki and Gori.
-- Many business deals and transactions have been postponed
and in some cases canceled, with significant loss of revenue
predicted in the short term.
-- Many companies have adopted a "wait-and-see" attitude,
with hope for normalization soon (Note: This survey was
conducted before Russia recognized the breakaway regions).
-- The AmCham sees its role as continuing to support the
community, to encourage FDI, to promote investors'
confidence, and to avoid politics, but not to forget property
rights and judiciary concerns.

GEORGIA'S BORDER CONTROL FACILITIES SUFFER
--------------


8. (SBU) Georgian Coast Guard (GCG) officials told the
Embassy that Russian forces continue to remove GCG equipment
and supplies from its post at Poti, although the full extent
of the losses awaits a formal assessment. Three GCG vessels
were sunk, and the government has requested USG assistance
with salvage efforts; another high-speed cutter donated by
the UK was reportedly taken by the Russians. The radar
station at Anaklia was also bombed and looted, but the
Georgian Border Police (GBP) reported that the main buildings
provided by the Georgia Border Security and Law Enforcement
program are still standing at Poti and Anaklia, although they
will need substantial repairs. The GBP reported their newly
opened regional office in upper Abkhazia was lost. The
USG-funded radar stations at Chakvi and Supsa, south of Poti,
have not suffered any damage.

RECOVERY AND ASSISTANCE EFFORTS
--------------


9. (U) The press reported that rail movements between east
and west Georgia have been restored. Only cargo shipments
will be allowed for the first week, with passenger traffic to
resume September 1.


10. (SBU) The USS Dallas arrived in Batumi and docked
portside August 27 with another shipload of humanitarian
assistance.

VISITORS
--------------


11. (SBU) The economic delegation completes its work today.
TDA Director Walther signed a grant agreement to fund a
feasibility study on the potential for developing coal
methane gas reserves as an alternate energy resource, and U/S
Jeffrey provided a series of press appearances, concluding
with a final press conference. Senator Corker arrives in the
evening August 29 for a full day of meetings August 30; Rep.
Joe Donnelly (formerly led by Rep. Hunter) will lead a
four-member delegation here on September 1. Meanwhile the
OVP advance team has arrived and begun its preparations.
TEFFT