GEORGIAN BUSINESS WORRIES ABOUT APRIL 9 INSTABILITY

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 000683

SIPDIS

E.O. 12958: DECL: 04/06/2019
TAGS: ECON ENRG PGOV PREL RU GG
SUBJECT: GEORGIAN BUSINESS WORRIES ABOUT APRIL 9 INSTABILITY

Classified By: DCM Kent Logsdon for reasons 1.4 (b) and (d).


1. (C) Summary and Comment: Business leaders, both
international and Georgian, are increasingly nervous about
the upcoming April 9 protest. Nearly to a one, they
highlight that opposition leaders, in their single-mindedness
to oust Saakashvili, are slowly destroying the economy and
Georgia's ability to attract new investment. Like everywhere
else, Georgian business prefers stability, although many are
not cheerleaders for the current government. Some business
leaders, such as Fady Asly, a long-time resident of Tbilisi
and head of the International Chamber of Commerce (ICC) have
publicly prevailed upon the opposition to recognize the
impact protests will have on the Georgian economy and urged
them to keep the protests peaceful. Others unwilling to get
pulled into the political fray have restrained from public
comment, but have said privately that they are worried
because the opposition has no plan and does not care what the
country would look like if protests succeed on April 9 in
ousting Saakashvili and his government. Without Saakashvili
and his team of technocrats, business leaders worry it could
take years for the economy and the country to recover. End
Summary and Comment.

DOING WHAT'S BEST FOR THE COUNTRY?


2. (C) George Tavadze, President of the GMT Group, a
significant investor in real estate and manufacturing, told
Econoff that he is concerned that opposition leaders are
looking out for their own political fortunes to the detriment
of the country. Tavadze, no fan of the Saakashvili
government, added that Georgia can't seem to make it more
than six months without a crisis, whether internal or
external. Despite press reports and rumors to the contrary,
Tavadze stressed that neither he nor the GMT Group is funding
Irakli Alasania or any other political group, including the
United National Movement. In business since 1996, he said
the only way GMT, owners of both the Tbilisi Marriott and
Courtyard Marriott, has been able to survive is by avoiding
political entanglements. Tavadze realizes that tying his
fortunes to any political group could quickly and easily
backfire, making it impossible for him to do business.

RUSSIAN FUNDING THROUGH GEORGIAN BUSINESS ABROAD


3. (C) Tavadze said that to his knowledge Georgian
businesses were not experiencing pressure, despite the
worsening economy and tumultuous political situation, to fund
political parties - either opposition or the UNM. He said
that most of the opposition parties did not need money, as
they were being funded by Georgian businessmen abroad, mostly
in Moscow. He said that while rank and file opposition
supporters might not be aware, the bulk of the funding coming
from Georgian business abroad, he believed, originated with
Russia.

THE GOVERNMENT IS ITS OWN WORST ENEMY


4. (C) Tavadze said he believed that it was the government's
lack of movement on a new election code, as well as its
efforts to stifle moderate opposition voices that have helped
create the radical opposition it must confront today.
Tavadze said that in order to create the democratic processes
desperately needed in Georgia, the government must pass a new
electoral code supported by all parties, as well as find ways
to discuss and compromise with political rivals. Tavadze
pointed to the work of Christian Democratic Party leader
Giorgi Targamadze as a model for the opposition. He said
while many might question Targamadze,s background, the
Christina Democrats are using democratic structures to build
QChristina Democrats are using democratic structures to build
a party platform and an increased following among the
population. Though not a Targamadze supporter, Tavadze said
he admired what he had been able to accomplish.

INSTABILITY ) NO FRIEND TO GEORGIA


5. (C) President of the ICC and long-time Georgia resident
Fady Asly said that in a series of recent meetings with the
non-parliamentary opposition he stressed that a destabilized
imagine of Georgia does not help the country or its people.
In an open letter to the opposition published in several
local newspapers, Asly highlighted the destructive nature of
the non-parliamentary opposition's playbook. He said that
regardless of what happens on April 9, international
investors will see Georgia as &another unstable country to
avoid at all costs.8 He added, &The only losers in this
expression of democracy will be Georgia and every single
Georgian citizen, including each and every member of the
opposition.8 Asly is also making the rounds of western
embassies, urging Ambassadors to push the opposition toward
dialogue.

AMCHAM CHOOSES TO STAY OUT OF THE POLITICAL FRAY

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6. (C) All of the members of the American Chamber of
Commerce Board of Directors have said they are worried about
April 9 and how it might impact both business and the
country. In an economy already weakened by the August
conflict and the international financial crisis, many believe
Georgia can ill afford to lose potential investors due to
perceived or actual domestic political turmoil. The Board
decided however, echoing Tavadze,s thoughts above, that
AmCham should remain first and foremost a business
organization, and for the good of its members stay out of the
public political debate.

WHAT WILL HAPPEN ON APRIL 9?


7. (C) Business leaders clearly believe that as long as
people rally in the streets on April 9, the Georgia economy
will suffer. Tavadze said that he believes the protests will
be short-lived due to the upcoming orthodox Easter holidays.
He said, however, if the protests draw significant numbers of
people, especially from the ranks of ordinary Georgians, the
government will not recover unless it addresses the concerns
of the population. Tavadze said he doesn't believe the
government will fall on April 9, but he wondered out loud
whether Saakashvili would be able to serve out his entire
second term.
TEFFT