GEORGIA: SCENESETTER FOR THE VISIT OF VCJCS

S E C R E T SECTION 01 OF 03 TBILISI 000203

SIPDIS

E.O. 12958: DECL: 02/04/2019
TAGS: PGOV PREL GG
SUBJECT: GEORGIA: SCENESETTER FOR THE VISIT OF VCJCS
GENERAL CARTWRIGHT

Classified By: CLASSIFIED BY CHARGE D'AFFAIRES, A.I. KENT LOGSDON FOR R
EASONS 1.4(b) AND (d).


1. (SBU) Your visit to Georgia follows the visit of USAREUR
Commanding General Ham, which was well-received by the
Georgians, but focused mainly on military-to-military
discussions. Your itinerary will be broader - we have
requested meetings with the President and Minister of Foreign
Affairs, and will include a stop at Georgia's main port in
Poti on the Black Sea. By the time of your visit, we hope to
have a decision on how we will implement the Secretary of
Defense's Security Assistance concept and it would be useful
for you to provide details about our policy to the Ministers
of Defense, Foreign Affairs, Parliamentary Speaker and
President. They will also be eager to hear more about U.S.
plans for continued close cooperation in the military sphere.
They will also be looking to you for reassurance of strong
USG support for Georgia, Georgia's territorial integrity, and
Georgia's integration into NATO and the Euro-Atlantic
community.


2. (SBU) Since the August conflict, tension along the de
facto boundaries with the separatist regions of Abkhazia and
South Ossetia remains high. Twelve Georgia Ministry of
Internal Affairs police officers have been killed since the
conflict; others have been wounded in violent incidents and
sniper attacks. International monitors still do not have
access to South Ossetia and the UN's movements within
Abkhazia are limited. The Georgians signed an MOU with the
European Union's Monitoring Mission (EUMM) taking some
unilateral steps to build confidence; to date, the
Russians/Abkhaz/South Ossetians have not responded in-kind.
On the defense side, MOD procurement actions are likely less
corrupt than in the past but remain non-transparent, which
impedes progress in the defense transformation process. Our
top priorities remain western-based professional education
and training for individuals and units, doctrine development,
and improving homeland defense capabilities (air defense and
anti-armor are the priorities). Economic pressures resulted
in a 39% reduction in the defense budget for 2009.

SAAKASHVILI WEATHERING THE POLITICAL STORM


3. (C) The fallout from the August war remains a dominant
political issue in Georgia, although concerns about the
economy are probably foremost for the public. Although many
of those displaced by the war have returned to their homes,
those displaced from South Ossetia itself and part of
Abkhazia have for the most part been unable to return. On
November 28, in an unprecedented event, President Saakashvili
voluntarily defended his wartime decisions during a four-hour
appearance in front of a Parliamentary commission
investigating the war. Saakashvili remains the primary
figure in Georgian politics, but his wartime decisions have
drawn significant criticism from various opposition leaders.
While vocal, opposition parties and leaders remain largely
fractured and without a political program, thus far not
representing a credible alternative to Georgia's current
leadership.


4. (SBU) As a result of Russia's invasion, President
Saakashvili ha re-committed his administration to a new wave
of democratic reform and we are encouraging him in this
effort. Several new ministers to include the current
Minister of Defense were appointed between December 5 and 9.
The new Prime Minister, former Finance Minister Nika Gilauri,
QThe new Prime Minister, former Finance Minister Nika Gilauri,
was appointed on January 30, after the former PM resigned due
to health concerns. The moves have generated little public
reaction and reflect no significant change in overall policy
direction, although some opposition voices have been critical
of the constant game of ministerial musical chairs. As Prime
Minister, Gilauri has responsibility for the overall
direction of the Georgian Government's economic team as well
as the allocation of the $4.5 billion in pledges from the
international community to support Georgia following the
conflict. These pledges include $1 billion from the United
States.

MOD TEAM


5. (C/NF) In addition to DCHOD BG Dave Nairashvili, whom you
met in late October 2008 in your office, two other
English-speaking and western-oriented reformers were
appointed by President Saakashvili in the last ninety days;
CHOD Colonel Lado Chachibaia (graduate of US Army CGSOC and
Army War College courses) and Defense Minister David
Sikharulidze (former Georgian Ambassador to the US as well as
a former Deputy Defense Minister). Both are English-speakers

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and well acquainted with the U.S. The CHOD met with Admiral
Mullen on the margins of a NATO event and reportedly
generated a favorable impression. This is no surprise as
Chachibaia is a long-time friend and contact of the DAO and a
genuine military professional. While significantly younger
and arguably less-experienced than both of his DCHODs, the
CHOD enjoys the confidence of the Minister of Defense and is
genuinely dedicated to transforming his armed forces. The
Minister is also a familiar figure to us and works closely
and personally with the ODC's Defense Transformation team on
various reform initiatives. It is safe to say that the
current MOD leadership is the most amenable to making the
tough choices that defense transformation requires since

2006. Whether they have the authority to make all the
necessary changes remains in doubt. DOD representatives have
unrestricted access to the Defense Minister, CHOD, and DCHODs
though it appears that all conversations within the MOD are
recorded, not necessarily by the Ministry of Defense.


6. (C) Senior Georgian interlocutors continue to brief to us
and other foreign security specialists that the priority for
defense transformation is improving training and education,
developing doctrine, increasing homeland defense
capabilities, and participating in international operations
(if the security situation in Georgia allows it). The top
priorities for homeland defense capabilities are AIR
defense/air surveillance and anti-armor, each of which will
require both training and new/additional weapons purchases to
execute. CG USARAEUR agreed to assist in developing an
anti-armor training program (pending approval from policy
makers) without linking it to military sales initiatives.


7. (S/NF) The principal impediment to transformation remains
the political will to make hard decisions. Absence of
transparency in the acquisition and procurement process (to
include contracts for infrastructure development) creates an
environment conducive to corruption, which both the CHOD and
Defense Minister recognize but do not have the power to
change. CHOD has confidentially and personally expressed his
frustration to the DATT that he lacks the authority to remove
corrupt personnel from the structure or to bring transparency
to the process. This frustration may, at some point,
overwhelm the CHOD and result in his resignation - a move bad
for the Georgian Armed Forces and bad for U.S. interests. A
comment from you on managing change in areas where it is
possible and offering your services as a sounding board would
be welcome.


8. (C/NF) You will almost certainly hear a request for
assistance in allowing Georgia to procure the ammunition and
weapons systems it needs to create the AIR defense/air
surveillance and anti-armor capabilities we think they
require. Your interlocutors will know that these decisions do
not rest with you but will ask that you advocate for them
with U.S. policy makers.


9. (C) Georgia still sees its ultimate security guarantee
coming from NATO membership. Georgian government officials
hailed the December NATO Ministerial in Brussels as a victory
for Georgia. They said the decision to intensify cooperation
between Tbilisi and NATO and invigorate the NATO-Georgia
Commission (NGC) would play a central role in moving Georgia
toward membership. Opposition politicians have criticized
Qtoward membership. Opposition politicians have criticized
the government's failure to progress in MAP accession.
Russian Prime Minister Putin was also widely quoted in the
Georgian press as hailing the decision in yet another stab at
the Saakashvili government. Nonetheless, polling indicates
that most Georgians support membership in NATO and see it as
their strongest, irreversible step into the West. As a part
of the NATO-Georgia action plan, the MOD is leading an
inter-agency effort to draft and approve a National Security
Review, a concept which heretofore has not been a requirement
for NATO aspirants. The projected completion date for the
document is end-of-year 2010. The ODC's defense
transformation team is working with the MOD on the project.

GEORGIA'S ECONOMIC MACHINE HIT BY THE WAR AND THE GLBAL
CRISIS


10. (C) On the economic front, the Georgian economy is
recovering slowly after the shock of Russia's August
invasion. The government is facing challenges of supporting
the economy and exploring ways to house and care for an
estimated 30,000 newly displaced persons into undisputed
Georgian territory, at least temporarily. Preliminary
estimates for negative growth have been revised and the
government privately expects total GDP growth for 2008 to be
around 2 percent, well below last year's growth of 12

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percent. The government has real concerns that unemployment
numbers could skyrocket in light of the August conflict and
global financial crisis. The overall credit crisis still
threatens the recovery of the Georgian economy, which is
heavily dependent on foreign direct investment (FDI) for
growth. The conflict has slowed the FDI stream considerably,
and the government seeks to reassure investors about the
stability of Georgia's market. The 2009 MOD budget is 39%
less than last years, and has 43% less purchasing power when
considering currency devaluation. Although the Defense
Minister and CHOD both say that there are no major equipment
purchases forthcoming, they mean purchases of major end items
(tanks, aircraft, APCs) are not programmed and AIR defense or
anti-armor purchases are still actively being sought.


11. (SBU) The global economic downturn, coupled with the
fallout of the August conflict, has slowed a once-vibrant
Georgian economy which, prior to the war, enjoyed
double-digit growth rates and was the 15th best place in the
world to do business. In 2009, the government will be
heavily dependent on foreign aid to achieve many of its
reconstruction goals. The US has pledged $1 billion in total
support and last November, transferred $250 million of direct
budget support to the Georgian government. In total, roughly
$750 million of the pledged $1 billion USG aid has been
allocated and is in the process of being transferred to the
Georgian government. An additional $250 million still
requires Congressional approval. A total of $4.5 billion of
aid was pledged to Georgia at an October Donors Conference in
Brussels, to be distributed over three years, although to
date little - other than US assistance - has been disbursed.
LOGSDON