GEORGIA BI-WEEKLY UPDATE MARCH 21

UNCLAS SECTION 01 OF 02 TBILISI 000497

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV PHUM ECON KDEM GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE MARCH 21


1. This cable contains current items of political,
economic, and social interest concerning Georgia during the
weeks of March 8-21.

Okruashvili Asserts Control of Shrinking Party
-------------- -

2. On March 15, the political party United Georgia elected its most
prominent founder, former Defense Minister Irakli Okruashvili, to
the post of chair of the party in absentia. Former party chair Gia
Tortladze and former party secretary Gia Tsagareishvili, both MPs,
formally left the party March 15. These are not the first
defections from the party this month. On March 4, MP Keti
Makharashvili announced that she was quitting the party and would no
longer remain in politics. On March 11, a group of young members of
the party held a news conference in the offices of the ruling
National Movement and announced that they were leaving Okruashvili's
party to join the ruling party. These young party members said they
objected to the opposition's tactics of street protests and tents.
Okruashvili, who is currently in France fighting extradition to
Georgia on corruption charges, gave an interview to Rustavi 2
television March 20, in which he strongly criticized both the
government and the opposition for their tactics in ongoing
negotiations, and spoke favorably about a possible election boycott.


Christian Democrats Plot Party's Course
--------------

3. On March 11, Poloffs met with Giorgi Rukhadze, the head of the
international division of the newly established Christian Democratic
Movement, which is led by former Imedi TV anchor Giorgi Targamadze.
Rukhadze said the Christian Democrats are a center-right party based
on Christian ethics and traditional moral values, but also strongly
support separation of church and state. The party sees Christian
Democratic parties in Germany and Poland as models. Financially,
the party hopes to rely on small and medium-size businesses and
foreign supporters. The party supports reduction of poverty, a free
market economy, development of agriculture, membership in NATO, and
social dialogue between all classes of the population. Rukhadze
said the party currently has approximately 5,000 members all over
Georgia. Rukhadze said the party has not decided yet whether it
will participate in elections alone or in a block with other
parties.

Women's Party Established
--------------

4. MP Guguli Maghradze (who left the ruling United National Movement
in November) founded a new political party, the Georgian Women's
Party, on March 12. The new party describes itself as center-right
and will focus primarily on supporting women's active involvement in
politics. Maghradze says the party plans to cooperate with all
political forces for whom the principles of equality and justice are
important. She said the party would consider running in the
parliamentary election in May, but she did not indicate if it would
run together with other parties. Perhaps suggesting a likely
alliance, Nikoloz Liluashvili, the political secretary of the
newly-formed opposition Christian Democratic Movement, congratulated
Maghradze at the event in which she announced the new party.

Former Patarkatsishvili Supporters Form New Parties
-------------- --------------

5. Gocha Jojua, who headed the late Badri Patarkatsishvili's
presidential campaign, officially launched a new political party
called Our Georgia on March 14, with the stated goal of creating a
state based on justice and "removing Saakashvili from power." Jojua
said that while the party currently has no financial backing, it
would try to keep the identity of any future donors secret to
protect them from retribution by Saakashvili. Another political
party which emerged from Patarkatsishvili's campaign team is the
Democratic Party of United Georgia, which was established on March

19. Gia Shervashidze, former commander of interior forces, is the
chairman of the party and Davit Shukakidze, who headed
Patarkatsishvili's election headquarters, is the secretary general.
Shukakidze said that the party would have a center-right
orientation.

Georgia-Russia Flights Reportedly to Resume Soon
-------------- ---

6. Russian aviation authorities have informed the Georgian side of
their agreement to resume air traffic between Russia and Georgia on
March 25, on the basis of accords between aviation authorities of
the two countries. Air traffic between Russia and Georgia stopped
in October 2006 as a part of Russia's economic sanctions against
Georgia. Moscow had previously told Tbilisi that the resumption of
air traffic required the payment of Georgian airlines' debts for the
services of Russian air traffic controllers. Georgia's biggest
airline, Georgian Airways, has already paid USD 2 million for air
navigation services to Russia. The rest of the debt, which is about
USD 1.7 million, will be paid gradually by other air companies until
the end of 2008 in line with a schedule agreed upon with Russia. A
separate outstanding issue is an alleged debt to Rosaeronavigatsia,
accumulated in the early 1990s by Georgian companies that later went
bankrupt. Georgian Airways denies it has any obligation to pay the
Roseaeronavigatsia debt.

TBILISI 00000497 002 OF 002



Georgia Attracts Arab Investors
--------------

7. A billionaire Saudi prince, Alwaleed bin Talal Alsaud, listed as
number thirteen in Forbes 2007 rankings of the world's richest
people, arrived March 14 on a visit to study Georgia as a potential
location for investment. He met with high-ranking Georgian
officials and traveled to several regions, including Adjara, where
President Saakashvili personally familiarized him with investment
opportunities. Two other groups from the Arabian peninsula have
already demonstrated their confidence in Georgia's economy. Arabian
Rakeen, established in the UAE in 2006, is implementing the
ambitious Uptown Tbilisi project in Dighomi, on the outskirts of
Tbilisi close to the U.S. Embassy. The project envisages a USD 630
million investment for an 80,000 square meter development, including
a premium residential area and commercial and entertainment centers.
Another project of the company is a complex in Tabakhmela (Tbilisi
suburb),designed by the American company TAA, that includes
residential villas, a medical clinic, tennis courts, a golf course,
and a school. Another UAE company, Dhabi Group, has acquired
Standard Bank, previously owned by Badri Patarkatsishvili, and
intends to acquire controlling stock in the Kempinski Hotel
construction project in Tbilisi from Swiss investment company
Capital Vostok.

Romanian Senate Chairman Visits Georgia
--------------

8. During a four-day visit, Chairman of the Romanian Senate Nicolae
Vacaroiu met Parliament Speaker Burjanadze, Prime Minister
Gurgenidze, Finance Minister Gilauri and other senior officials. On
March 17 Burjanadze and Vacaroiu discussed economic cooperation and
the importance of Romania's support for Georgia's NATO integration,
including at the upcoming NATO summit in Bucharest. Burjanadze
asked Vacaroiu to provide Romanian observers for Georgia's upcoming
parliamentary elections.

Government Hosts Human Rights Forum
--------------

9. On March 15, the Georgian government held a Human Rights forum at
a resort on Georgia's Bazuleti Lake. NGO representatives dealing
with prisons, juvenile justice, minority rights, and domestic
violence were invited. The Minister of Justice, the Prosecutor
General, representatives from the penitentiary system, and the
Public Defender participated in the meeting, which was chaired by
Deputy Minister of Internal Affairs Eka Zguladze. A representative
from UNICEF made a presentation on the current situation of juvenile
justice in Georgia and future plans to address deficiencies.
Government representative made opening remarks and fielded questions
from NGO representatives throughout the daylong session. According
to the Public Defender's office, this is the first time the
government has organized such an event since 2003.

PERRY