Mercredi 26 Juin 2019  

N°91 - Troisième trimestre 2010

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République Dominicaine
États-Unis d'Amérique
  Géorgie : La clé du Caucase
  « La coopération avec l’UE, un outil inestimable pour la transformation de la Géorgie »
  Un processus d’intégration à l’OTAN irréversible
  « La France peut vraiment montrer un avantage compétitif sur certains secteurs »
  La Géorgie : gloire de la montagne
  La France en Géorgie : une nouvelle dynamique de coopération
  La France : le choix du cœur et de la raison ?
émergence & développement
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Partenaire Lettre Diplomatique
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Bank Republic-Societe Generale Group
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  S.E.M. / H.E. Mamuka KUDAVA

On the road to Euro-Atlantic integration

Less than a decade after the "Rose Revolution", the radical reforms undertaken by President Mikheil Saakashvili have transformed Georgia. The country’s security has become a major geopolitical challenge for Europe as it stands as a transit corridor for oil in the heart of the Caucasus. Two years after the conflict with Russia, H.E. Mamuka Kudava, Georgia’s Ambassador to France, tells us his thoughts on the strengthening of the relationship with the EU and NATO initiated by Tbilisi, on France's role in this process and on the achievements of the Georgian economic development.

The Diplomatic Letter: Mister Ambassador, President Mikheil Saakashvili was re-elected on 9 January 2008 and kicked off in 2010 the second wave of democratic reforms around a revision of the Constitution shortly afterwards. Where is this new wave heading, and what is driving it? And, more taking a step back to look at the bigger picture, how has Georgia changed seven years after the Rose Revolution?
H.E. Mamuka Kudava:
The Rose Revolution sprang from the Georgian people’s resolve to put an end to the inertia that enveloped the government at that time, and to drive our country forward. The people who came to power as a result of this bloodless revolution have firmly embarked Georgia on the path towards Euro-Atlantic integration, to build the rule of law and a State that respects western values.
In 2003, our country was bankrupt. Georgia needed radical change. So we set up the mechanisms we needed to pass a series of bold laws, in particular to curb corruption, cut through bureaucracy, revamp education, overhaul the police force and liberalise the economy. The Constitution we adopted to do that draws a lot on the French model, and affords the President of the Republic authority over a broad spectrum of issues.
However, after extensively debating the issue and based on the State Constitutional Commission’s conclusions after over a year of discussions, the Georgian Parliament adopted in 2010 a new Constitution that transferred sizeable portions of the President’s authority to the Government and Parliament (the constitutional experts on that commission felt that Georgia initially needed to take a big step away from the past but now needs a more stable and balanced system to move forwards).
This revision of the Constitution should usher in genuine parliamentary democracy. It will also be our way of showing that a former soviet republic need neither embrace Popular Democracy nor Vertical Power. There is no doubt that these reforms have worked. International institutions have pointed that out too. The upswing that we have been enjoying since the government unbridled the economy (double-digit GDP growth until the 2008 downturn) is one example. All this springs from three major breakthroughs that have created the environment that businesses need to thrive:
- Cutting taxes (we have the lowest tax rates in the region) to attract foreign direct investment
- Reforming labour law using models from countries such as Singapore to limit the constraints on business and thereby create jobs
- Easing the administrative burden by cutting incorporation red tape, timeframes and costs to a minimum
I would also like to point out that President Saakashvili’s government has practically eradicated corruption. This was one of its big wins – even though it entailed arresting a number of prominent government and parliament officials and employees. It swept across the administration – in particular across the police. The people eyed the police askance before the Rose Revolution but now rank it as the country’s second most popular institution. All this tore down the atmosphere of impunity that we had inherited from soviet days, and which undermined authority. It has also sparked interest in neighbouring countries and contributed to creating the right conditions for business. It is all the result of a firm political drive, which involved unbendingly applying the law as well as a full training system with mandatory anonymous exams.
T.D.L.: Georgia’s economy grew 9% on average from 2004 to 2007, when the conflict with Russia in August 2008 and the international financial downturn hit it from two sides practically at once. What is your government planning to do to get your country’s economic momentum and social development back on track? What can your country do to sharpen its competitive edge despite the Russian embargo on Georgian products and the constraints it entails?

As I said earlier, the situation in Georgia has improved considerably. In the summer of 2008, however, there was a lot of uncertainty about how long our institutions would last before imploding and whether our country had a future. Russian soldiers were 40 km out of Tbilisi. We managed to protect our democratic system – but not avoid Russian troops occupying 20% of our territory, in Abkhazia and South Ossetia, or the displacement of tens of thousands of people.
This obviously dampened our economy, which shrank 3.9% in 2009. But we seem to be back on a buoyant upward trend (our GDP growth should overshoot 6% in 2010). The roughly US$ 4 bn we received from the United States and the European Union over the past four years have obviously made efforts to rebuild Georgia’s economy easier.
Georgia has continued to roll out deep-reaching economic reforms since the downturn you mentioned, and they have borne fruit. We are pushing ahead with the drive to cut taxes. The goal is to get the overall rate down from 20% today to 15%. Along with the Economic Freedom Act, the Georgian Parliament adopted a constitutional amendment providing the guidelines for economic policy and providing a general framework – inter alia for the budget deficit, which now has the same 3% ceiling as EU countries.
These measures were mapped out to provide more visibility for the measures on the table for the coming years, and thereby bolster business and lender confidence. They have also substantially improved the business environment. The World Bank ranks our country 11th worldwide on that score. Now, our government is focusing on curbing inflation down from 9% in 2010 to under 6% eventually.
And, yes, the embargo that Russia imposed dealt the Georgian economy in general and its farming sector in particular, a serious blow. Georgia, for example, exported 80% of the wine it produced to the Russian market. Paradoxically, however, there is an upside: now we have to boost the quality of our products to break into new markets such as Turkey and Central Asia, and then on to the Middle East, Europe and the Americas. So, at the end of a day, these moves are making us more competitive and slowly but surely enabling us to pick up our exports again.
I would like to insist on one last point. Russia is on the World Trade Organization’s (WTO’s) doorstep. We are supporting its membership bid today. But we would like to stress that it should respect the rules, in particular, from our perspective, as regards the location of the Russian Customs posts on the border between our two countries, as the Georgian regions of Abkhazia and South Ossetia are still occupied.
T.D.L.: The Poti free economic zone is one example of Georgia’s plans to cement its position as a trade hub in that part of the world. What does international trade stand to gain from travelling through your country? Are you working on any infrastructure projects besides revamping Tbilisi airport? Your tourism and construction sectors are thriving but what other opportunities will foreign investors find in the Georgian market?

We have indeed opened up free zones in Poti and Kutaisi (Georgia’s second-largest city) to attract foreign investment. Beyond the business-friendly environment we have created there, Georgia is in a strategic position near big regional markets with no fewer than 50 million consumers. The east of Turkey has been blossoming since the frontier between our two countries opened up, Central Asian countries are thriving, and other regions such as the North Caucasus and South Caucasus (Armenia and Azerbaijan) are brimming with potential.
The Georgian government has also kicked off a vast privatisation programme encompassing the port infrastructure in Poti and Supsa – which will become our country’s biggest port when a deep-water port that can handle 40 million tonnes of cargo a year is built there.
From a big-picture perspective, buttressing infrastructure is one of the Georgian government’s top economic priorities. Not much has been done on that front over the past two decades even though, as 70% of our country is mountainous, we have to do so much more to make it easier for people and merchandise to move around and thereby spur our economic development. Several transport-infrastructure projects are rolling out as we speak. A strategic motorway connecting Tbilisi to the Armenian border near Turkey was inaugurated in mid-November. There is also a lot of investment going into state-of-the-art equipment to develop cutting-edge technology.
Tourism and energy are Georgia’s two most attractive sectors, besides infrastructure. Georgia is a traditional tourist hotspot: its coastline has been dubbed the French Riviera of the Caucasus, and the variety of landscapes and climates (it has nine climatic zones), hospitality, fine food and cultural heritage attract tourists. And, as it’s such a small country, it’s no problem to go skiing in the morning and for a dip in the sea that afternoon.
The tourism and building sector are flourishing. The downturn slowed them but growth is coming back fairly fast. The government is in particular trying to help a number of areas such as Adjara (around Batumi) and several ski resorts in the mountains, to develop.
The energy sector has also been very dynamic since the government privatised it to harness the considerable hydroelectric power potential we have. We already have several hydroelectric power plants, and have set several more projects and calls for bids in motion. Foreign investors – especially Japanese, Korean, Chinese, Turkish and Czech investors – have shown considerable interest. We have also passed measures to smooth investment in this sector. We had trouble keeping up with domestic energy demand in 2008, but Georgia is exporting energy today. Countries such as Turkey, as well as Russia, run into power supply deficits several times during the year. And we are only using 18% of our total potential, meaning that there is so much more out there just waiting to be tapped.

T.D.L.: As your country is right in the middle of the Caucasus, and between the Caspian Sea and the Black Sea, it has become a hub for hydrocarbon travelling from the rest of the region to international markets. What is your view on the geopolitical role that transporting energy affords your country? The Nabucco project will mean a lot to Georgia but what about the uncertainty over funding and feeding that pipeline, with construction work scheduled to start by the end of 2011?

Georgia is indeed a strategic country as regards energy supply in the EU, Turkey and other international markets. Today, there are two pipelines carrying hydrocarbons from the Caspian Sea (Azerbaijani oil and gas, principally) across Georgia: the BTC (Baku-Tbilisi-Ceyhan) oil pipeline and the BTE (Baku-Tbilisi-Erzrum) gas pipeline. There is another pipeline across our country, connecting Baku to Supsa – where, as I mentioned, a large-scale deep-water-port construction project is underway to cater for tankers. More and more projects with Central Asia (Kazakhstan and Turkmenistan, especially) should be coming on stream soon. A liquefied natural gas (LNG) transport project – AGRI, for Azerbaijan-Georgia-Romania Interconnector – is now underway and will entail building an LNG terminal near Poti to ship gas to European markets more easily.  We are of course involved in the Nabucco project because it will cut through our country. We are backing it, even though we will not be the ones building it. But the fact that our country is in the limelight as the only viable alternative to supply European and international markets in the region is good for us.

T.D.L.: Relations between Tbilisi and Moscow had never been cosy since Georgia’s independence but completely boiled over in the summer of 2008 with the brawl over Abkhazia and South Ossetia, two breakaway provinces. The consultation to stabilise the Caucasus began in October 2008. What is your view on normalising relations in the Caucasus over the long term?

The Geneva talks were implemented through an agreement comprising six points on 12 August 2008. They are the only direct dialogue between Russia and Georgia. Diplomatic relations broke off with the war in August 2008 and we have no intention of re-establishing them as long as Georgia’s territorial integrity is disregarded and the alleged independence of these two Georgian regions acknowledged.
If you want to understand exactly what the violation of Georgia’s sovereignty and international law entails, read the conclusions in the independent international inquiry by the EU, run by Ms Heidi Tagliavini, a Swiss diplomat. This report also showed that the conflict between Russia and Georgia started long before the summer of 2008.
You have to understand that tension with our northern neighbour dates back to 1991, and that it was already palpable in the Georgian regions of Abkhazia and Tskhinvali, South Ossetia, where Russia intervened directly and via separatist movements, at the cost of many human lives and displacing as many as 300,000 Georgian people. Tension had been escalating since the Rose Revolution in 2003, and of course spiralled out of control when military forces occupied our territory on 7 August 2008. It has not abated yet. The independent organisations that worked on the EU’s international inquiry and the 2008 report published by the Organization for Security and Co-operation in Europe (OSCE) Office for Democratic Institutions and Human Rights confirm the fact that Georgian populations living in the occupied areas were relocated.  Georgia is nevertheless open to talk with competent Russian authorities at every level from the top down. In our view, these talks should focus on the big issues, starting with the full implementation of the 12 August 2008 agreement. Our country’s main objective as regards its relations with Russia is to put an end to the occupation end and see all Russian armed forces withdraw from our territory.

T.D.L.: The breakaway of Abkhazia and South Ossetia and the fact that Russia recognised their independence prompted the Georgian government to adopt its State Strategy on Occupied Territories (“Engagement through Cooperation”) in January 2010. What, basically, does that strategy entail and how is your government planning to deal with the Georgian refugees?  

Russia unlawfully recognised Abkhazia’s and South Ossetia’s independence, in contempt of Georgia’s territorial integrity and sovereignty – and flying in the face of Helsinki Final Act Principle I, which states that, “The participating States will respect each other's sovereign equality and individuality as well as all the rights inherent in and encompassed by its sovereignty, including in particular the right of every State to juridical equality, to territorial integrity and to freedom and political independence.” So it is a violation of international law, which can provide a dangerous precedent and therefore jeopardise other States’ territorial integrity and security. So it is vital that the international community continues to qualify this de-facto situation as an occupation. As you know, neither the EU nor the Commonwealth of Independent States (CIS) have acknowledged their independence. A solid international presence on the ground is also necessary to avoid the violence escalating and to protect human rights. Russia’s repeated vetoes on the OSCE mission to Georgia (in December 2008 and May 2009) and on the UNOMIG (in June 2008) finally isolated the Georgian regions of Abkhazia and Tskhinvali, South Ossetia, ultimately blocking out international observers.
The Georgian government adopted its State Strategy on Occupied Territories in January 2010 to avoid their isolation. It is setting up mechanisms and structures to enable interaction between the Georgian people split by the occupation lines, and ensuring the people living in Abkhazia and Tskhinvali, South Ossetia, enjoy the same rights as all other Georgian citizens.  The Office of the State Minister for Reintegration fine-tuned this strategy and action plan after liaising extensively with all relevant stakeholders in the government, and with Georgia’s political parties and people, NGOs, experts and the international community.  The action plan is a multilateral document covering four aspects – humanitarian, human, social and economic issues – and seven instruments – neutral liaison mechanisms, neutral ID and travel documents, a pension fund, an investment trust, a cooperation agency, a financial institution, and a social and economic integration zone. The financial institution will be in charge of rolling out the humanitarian, public-welfare, exchanges and business projects, with a view to finding solutions to the problems that the people living across the separation lines are facing.
These measures also entail improving health and healthcare in Abkhazia and in Tskhinvali, South Ossetia, preventing infectious diseases and providing emergency transport service. There is also a lot of work to do on education, to put people back in touch with each other (families, in particular), and to allow people to reach cemeteries and holy places. This action plan also includes measures to protect the environment and promote trade by creating infrastructure (transport infrastructure, mainly), and to provide affordable broadband internet access. The Georgian government has also adopted an action plan to implement its State Strategy for Internally Displaced Persons, and thereby promote their social and economic integration, and improve their living conditions. Estimates suggest that the three waves of friction with Russia in the early 1990s, in 1998 and after the August 2008 war have displaced more than 300,000 people.
The Georgian government is still providing adequate support to the 220,000 registered displaced people in Georgia. The people rolling out the action plan are working hard to provide long-term solutions to house them and limit their reliance on the State, while providing public social welfare and support. There are clear and transparent criteria behind that welfare and support, and that will be the case until those people can return home.  

T.D.L.: The NATO Summit in Lisbon on 19 and 20 November 2010 reiterated the Bucharest 2008 decision to take in Georgia as a member in due course. How do you feel about that summit’s conclusions and what does your country still have to do under its Membership Action Plan (MAP)?

The decisions at the NATO Summit in Lisbon reinforced Georgia’s position. It confirmed the prospect of membership, which it had agreed on during the Bucharest Summit, even if the timeline for the process was not defined.
However, no decisions were made as regards whether or not we will be involved in a MAP. That is also a political decision. As you probably know, certain countries have joined NATO without specific MAPs whereas others have joined NATO – and indeed the EU – before fulfilling all the requirements. As the Lisbon Summit’s final release says, Georgia is considered to be on the right track. NATO encourages the reforms that we have already embarked on. The membership timeline will hinge on several political, economic and strategic variables, and on the situation in the region.
But the most important point today, from our angle, is NATO’s call to fully implement the agreement that President Sarkozy negotiated on 12 August 2008, i.e. that Russia fully withdraws its troops from the two occupied regions of Georgia and retracts its recognition of their independence. So NATO’s unbending position in Lisbon – along with the EU’s position – is reassuring.
This Summit also improved relations between Russia and NATO, which is also good news as it eases the Alliance’s concerns. NATO has said that it is keen on cooperating, especially on antimissile defence, on the Treaty on Conventional Armed Forces in Europe (CFE), and on common economic areas in the EU. Russia, it seems, is also showing signs that it agrees with NATO’s new strategic concept. And the more it behaves as a country that respects western values, the less it will be a threat to its neighbours. So Russia’s moves to cooperate with NATO and warm to the EU are also in our interest.  Joining the family of European nations is another strategic goal for Georgia’s foreign policy. Simply put, our goal is to become a European country like the others. That is what the Georgian people want. Our country, however, is not in the most stable part of the world. So NATO is possibly the only organisation that can guarantee our security now that part of our country is occupied. The EU does not yet have instruments such as NATO Treaty Article 5.

T.D.L.: US Secretary of State Hillary Clinton reasserted her country’s support for Georgia’s territorial integrity during her visit to Tbilisi in July 2010. How would you define cooperation relations between your two countries?

US Secretary of State Hillary Clinton was indeed in Tbilisi on an official visit in July 2010. And, more recently, on 6 October 2010, she reasserted the strong ties between Georgia and the US during a meeting to fine-tune the Strategic Partnership between the two countries. She stated that, “The United States will not waver in its support for Georgia’s sovereignty and territorial integrity,” adding that support was one of the “core principles” of the “bilateral partnership.” She also called on “Russia to end its occupation of Georgian territories,” and added that Russia should follow its commitments under the 12 August 2008 six-point ceasefire agreement.  She said that “Georgia has taken a constructive approach in our common efforts to address this challenge to the talks in Geneva,” encouraged Georgia to push ahead in that direction, and expressed support for Georgia’s state strategy on the occupied territories. She said that Washington was ready to contribute to “important objectives” laid out in the strategy and in its action plan.
Georgia’s NATO membership and the important role that Georgian armed forces’ are playing in the international coalition in Afghanistan were also on the agenda. She said that the US supported our NATO aspirations and encouraged our annual national plan to reform our armed forces, which provides a framework for our country’s cooperation with NATO.
Secretary of State Hillary Clinton also highlighted our country’s efforts to bolster democracy and sound governance, pointing out that “democracy in Georgia has made great strides over the last seven years.” Lastly, when President Barack Obama met President Saakashvili at the NATO Summit in Lisbon, he also restated his country’s support for Georgia’s sovereignty, territorial integrity and independence.
T.D.L.: Georgia has joined the EU27 Eastern Partnership, and started EU membership talks on 15 July 2010. Where, in your view, are the main milestones in those talks, and what does your country stand to gain from cooperation initiatives in the Black Sea Region?

EU integration, as I said, is our foreign policy’s top priority. Integration, however, does not mean membership: by integration I mean the association agreement we are discussing now. We have not mapped out the precise process yet, but it should put us in a position like the one the countries such as Norway and Switzerland are in today. We are obviously aware that the EU cannot keep our borders safe, but its presence would help to appease the situation. There is also a political point to this integration. The EU is all about influence and “soft power”, and what we find appealing is the fact that the common values of democracy, peace and freedom reflect our aspiration to become a peaceful European country. As you know, it makes a lot of strategic sense for the EU to promote stability, prosperity and democracy among its eastern neighbours. Georgia is an important partner country for the EU in this region. And the EU has thrown its full weight behind Georgia’s security, stability, sovereignty and territorial integrity. The European Commission has already pledged 97% of its €483.5 million post-war aid programme. The EU is also actively involved in Geneva talks on the region’s security and stability as co-chair (alongside the UN and OSCE). In that context, our bilateral relations are growing at a healthy pace. We started talks on an association agreement in July 2010, and the goal is to include a Deep and Comprehensive Free Trade Agreement (DCFTA), opening a door to the European single market for Georgia. These talks cover four areas: policy and security, justice and liberties, sector-specific agreements and free-trade. There are no major problems with the first three, at this point in our political and economic reform programme. As far as the free-trade agreement is concerned, however, we still have to persuade the EU that our market makes a lot of sense for Europe, even if it only counts 4.5 million people.
At this point, we are mapping out the timeline to start DCFTA talks. We have also signed an agreement to fast-track visas, which should start applying soon, with the readmission agreement. This is a big step for Georgian citizens, because it will bring them closer to the EU. Eventually, we are aiming to gradually phase out the visa system altogether.
Brussels is very aware of the importance of our country as a link in the energy supply chain. Diversifying energy sources and routes, and developing the Southern Energy Corridor, are two top priorities for the EU. The key to Europe’s energy independence is in our region.
José Manuel Barroso, the European Commission President, recently encouraged Georgia to officially apply for European Energy Community membership. Doing so would deepen our relations and attract investment in this sector.

T.D.L.: President Nicolas Sarkozy’s mediation during the Russian Georgian crisis in 2008 is one illustration of the close political ties between Georgia and France. Where would you like to see bilateral cooperation deepen in the wake of President Mikheil Saakashvili’s visit to Paris on 7 and 8 June 2010? How do you think economic exchanges between the two countries could grow? And, given the fact that Georgia is famously fond of the French language and culture, what initiatives are you planning to promote to build bridges between the two countries?  

France is a natural partner for our country, especially since 2008. As you remember, France – the EU Presidency at that point – stepped in straight away to negotiate the ceasefire we signed on 12 August 2008. President Nicolas Sarkozy effectively played a major role settling that conflict. He was there on the ground, negotiating the six-point agreement. In an interview with a French newspaper, the Georgian President thanked France for its efforts to stop the war and protect stability across the region, in the Caucasus and beyond it, in Central Asia.
France is still talking to Russia about gradually withdrawing its troops from our territory and about the pledges it made in the 12 August 2008 agreement. France and Germany insisted on that during the three-country summit in Deauville in October 2010. And France’s efforts, along with the EU’s and US’ efforts, are finally getting somewhere, as Russian troops started moving out in early November. That move is still ‘symbolic’ but it is nevertheless meaningful.
France is also keen on developing our bilateral relations and supports Georgia’s efforts to move closer to the EU. The conclusion of an association and free-trade agreement with the EU was very much at the centre of talks between President Nicolas Sarkozy and President Mikheil Saakashvili during his visit to France in June 2010.
As far as economic exchanges are concerned, as I may have said, there are plenty of opportunities waiting to be tapped. On 25 November 2010, Georgia’s Economy and Energy ministers met French top business executives at the MEDEF (“Movement of the French Enterprises”) HQ to talk about the prospects of new cooperation projects involving renewable energies and, more generally, to present the framework for investing in Georgia. As I see it, economic exchanges between Georgia and France are still modest because people do not know enough about our country. The war obviously did not help. But, if you ask French companies doing business in Georgia, they will tell you that they are broadly satisfied with the dynamic development they are seeing there, with life there in general, and with the cultural common ground.
The list of French companies in Georgia includes Société Générale (which became the third-largest bank there via Bank Republic) and Castel (brewery).  There are also transport projects on the table or actually on the ground with Alstom, Areva and, soon, Systra. Aéroports de Paris (ADPI) and Thales have been working on Tbilisi airport (refurbishing the runways and supplying an air traffic control radar, respectively). That contract also opened the door for other Georgian companies to place orders with Thales. Eurocopter is also involved in talks.
As you said, Georgia is also fond of the French language and culture. President Saakashvili attended the Sommet de la Francophonie in Montreux, Switzerland, in October 2010. Our ties with the French-speaking world date back to the Middle Ages. The Georgian people have always been very close to the West in general and France in particular. More recently, when the first Republic of Georgia was overthrown in 1921, its government found refuge in Paris. You can see that this bond with French culture and values is still alive today in institutions such as the Lycée Français du Caucase, which opened recently in Tbilisi. I would also like to point out that one-third of our government ministers, and President Mikheil Saakashvili himself, speak French.

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