GEORGIA BI-WEEKLY UPDATE APRIL 18

UNCLAS SECTION 01 OF 02 TBILISI 000665 SIPDIS SIPDIS DEPT FOR EUR/CARC E.O. 12958: N/A TAGS: PREL PGOV PHUM ECON KDEM GG SUBJECT: GEORGIA BI-WEEKLY UPDATE APRIL 18 ¶1. (U) This cable contains current items of Political, Economic, and social interest concerning Georgia during the weeks of April 4-18. New Director of Public TV -------------- ¶2. (U) Levan Kubaneishvili, the new Director of Public Television, is the former head of TBC Studios, an independent production company, which produces news shows as well as providing a monitoring service. Kubaneishvili is widely viewed as a media professional connected to the government but having friends in the opposition as well. He is being quite careful to avoid even the slightest appearance of favoring any party. Despite opposition parties wanting to debate the government directly, Kubaneishvili insists on giving equal time to every party. Beginning April 21, every week the station will air two debates and three political parties will go on air to promote their platforms. A new analytical program, Seven Days, produced by former members of Imedi recently began on Public TV. The first show featured two pieces quite critical of government actions' on November. Tevdoradze Talks about Ombudman's Annual Report -------------- -- ¶3. (U) Elene Tevdoradze, Chairman of Parliament's Ethics Committee, said that the Ombudsman's annual Human Rights Report will be heard by the new Parliament after the May 21 elections. She told Pol off that the Ombudsman's presentation, originally slated for December 2007, was postponed due to November events and was rescheduled for February 15, 2008. Tevdoradze said it was Subari himself who proposed then to move the date to March, at which time Speaker Nino Burjanadze recommended waiting until after the May elections. Subari maintains that the government is delaying his presentation as it does not want to address the human rights issues included in the report. Larsi Crossing -------------- ¶4. (U) On April 8 representatives from the U.S. Border Security and Law Enforcement and the U.S. Army Corps of Engineers traveled to Kazbegi to determine if road conditions would permit the resumption of traffic on the highway bordering Georgia and Russia (Larsi) which Russian officials announced on March 25 "would open soon." Ongoing road repairs appear to be able to support both the opening of the road to personal and commercial vehicular traffic and the resumption of construction activity at the port of entry. Although Georgian Border Police are present now, there are no customs officials at the checkpoint. Georgian customs officials would need 10 days prior notice to have personnel in place to permit vehicles and persons to cross. Talking Turkey--TIP -------------- ¶5. (U) An official delegation from Georgia visited Turkey to discuss bilateral cooperation in the combat of trafficking-in-persons (TIP) March 25-27. Ms. Lali Papiashvili, a jurist on the Constitutional Court of Georgia and former MP who has championed Georgia's anti-TIP efforts and legislation, headed the delegation. Both the Georgians and their Turkish counterparts called the visit a success in furthering their mutual understanding. It is hoped that the visit will lead to increased cooperation and more efficient communication between the two countries in their mutual drive to eliminate trafficking in persons. Adjara's Head Criticizes the Minister of Finance -------------- -------------- ¶6. (U) On April 7 Levan Varshalomidze, Chairman of the Adjara Autonomous Republic Government, in a televised meeting with his cabinet, openly criticized Minister of Finance Gilauri for failing to solve the region's unemployment problems or to obtain cheap loans for Adjara residents. Varshalomidze attributed the high rate of local unemployment to outsiders, foreigners and those from Tbilisi, who are given priority for jobs over locals. This is the first time Varshalomidize publicly criticized another minister. Such sessions are usually closed to the public and the heated exchange was widely publicized. Free Economic Zone (FEZ) Project--Poti -------------- ¶7. (U) On April 15, 2008, Georgian President Mikhail Saakashvili inaugurated a FEZ in the west Georgian coastal town of Poti. Georgia sold a 51% stake of Poti port to the Investment Authority of the UAE's Ras Al Khaimah (RAK) emirate. RAK will develop a FEZ zone in Poti and build a new port terminal. The new port terminal will have triple the capacity of the current terminal. Over the next 4 years, over $200 million will be invested in the new Poti industrial zone. President Saakashvili said that the government TBILISI 00000665 002 OF 002 will increase pensions and expand cheap credit program for the newly established Georgian businesses associated with the port. Georgia Sells Eurobonds -------------- ¶8. (U) The Georgian government's first ever Eurobond issue was a big success; there was more interest than bonds available. The $500 million fixed rate Eurobonds were priced at 7.5% when issued on April 8 and the price immediately rose from 101.66 to 102.375. Fitch Ratings awarded a BB-rating to the bond. Fitch approved of Georgia's sovereign ratings which are a moderate 25 percent of GDP government debt burden and the outlook for 9 percent GDP growth in ¶2008. It sees risks in Georgia's high current account deficit and separatist conflicts. The government said that the proceeds of the bonds may be placed in two recently created sovereign wealth funds, or spent on a new electric power transmission line to Turkey and a gas storage project. GIOGIE Conference -------------- ¶9. (U) The Georgia International Gas, Infrastructure and Energy Conference (GIOGIE),held in Tbilisi April 3-4, featured speakers who discussed the capacity of the various oil and gas transport systems through Georgia. SOCAR, Azerbaijan's state oil company, and major organizer of GIOGIE, is a significant investor in Georgia. Participants expressed optimism that Trans-Caspian transit will be realized soon by using existing and new pipeline and terminal infrastructure. Despite concerns about the potential for Azerbaijan to monopolize cross-Caspian transit systems, this issue was not discussed. Presenters indicated that Georgia has a large hydropower potential, and if developed, could become the "battery" for the entire region. GIOGIE participants were interested in the government's plans to offer dozens of hydropower sites for development. TEFFT