Issue no: 1332
• JANUARY 28 - FEBRUARY 3, 2022 • PUBLISHED WEEKLY
FOCUS
ON WELLNESS Medical World Spa & Wellness is one of the most innovative companies in Georgia, introducing high-quality medical equipment PAGE and services to the country
9
PRICE: GEL 2.50
In this week’s issue... Corona Updates: Cases Hit Anti-Record in Georgia NEWS PAGE 2
The Sit Down: Paul Taylor and the Friends of Europe on the Complexities in the Black Sea POLITICS PAGE 4
Georgia is Not Doing Enough: Ian Kelly on the Russian Threat and What It Means for Georgia POLITICS PAGE 5
Hotel Price Dynamics in Georgia throughout 2021 BUSINESS PAGE 8
Holocaust Remembrance Day and World Zionist Organization's Support for Israeli House BY ANA DUMBADZE
I
sraeli House on January 27 celebrated International Holocaust Remembrance Day. The event was held in the Great Hall of the National Parliamentary Library of Georgia. Representatives of Georgian society, students, university professors, representatives of the Jewish community and the civil sector, participated. They were welcomed from the Israeli side by the Chairman of the Jewish Agency (Sokhnut) and the Head of the World Zionist Organization, Yaakov Hagoel, who thanked Georgia for their solidarity to the Jewish people, and named the activities of Israeli House in public diplomacy “very important.” It is noteworthy that the Jewish Agency (Sokhnut) has been playing a leading role in the history of Israel for almost a century. Before the creation of the new state, it had the function of government, although even after 1948, it played an important role in the consolidation of the Jews. The contribution of the World Zionist Organization to the history of modern Israel is no less. Continued on page 3
ISET GDP Forecast | Georgian Economy Continues to Recover from Covid-19 Impact, but Inflation Threatens Stability as Food Prices Soar by 17.7% BUSINESS PAGE 10
Film Center Director Discusses Joint Film Production with Iran CULTURE PAGE 11 CULTURE PAGE 11 Prepared for Georgia Today Business by
Markets As of 24ͲJanͲ2022
Price
w/w
GRAIL 07/28
99.99 (YTM 4.00%)
Ͳ0,0%
Ͳ0,5%
Bank of Georgia (BGEO LN)
GBP 14.18
Ͳ10,0%
Ͳ7,8%
GEBGG 07/23
BONDS
106.10 (YTM 1.87%)
Price
+0,1%
w/w
+0,1%
m/m
Georgia Capital (CGEO LN)
GBP 6.25
Ͳ7,4%
Ͳ1,6%
GEOCAP 03/24
100.73 (YTM 5.75%)
Ͳ1,2%
Ͳ1,9%
TBC Bank Group (TBCG LN)
GBP 14.26
Ͳ8,0%
Ͳ11,6%
SILNET 04/24
107.28 (YTM 7.32%)
Ͳ0,1%
Ͳ0,3%
TBC 06/24
104.94 (YTM 3.58%)
Ͳ0,2%
Ͳ0,4%
GGU 07/25
105.72 (YTM 5.92%)
Ͳ0,2%
Ͳ0,6%
STOCKS
CURRENCIES
Price
w/w
m/m
m/m
GEL / USD
3,0730
Ͳ0,4%
Ͳ0,0%
GEL / EUR
3,4802
Ͳ1,1%
+0,0%
COMMODITIES
Price
w/w
m/m
GEL / GBP
4,1452
Ͳ1,5%
+0,7%
Crude Oil, Brent (US$/bbl)
86,27
Ͳ0,2%
+13,3%
GEL / CHF
3,3594
Ͳ0,4%
+0,4%
1 843,06
+1,3%
+1,8%
Price
w/w
m/m
Gold Spot (US$/OZ)
INDICES FTSE 100
7 297,15
Ͳ4,1%
Ͳ1,0%
GEL / RUB
0,0390
Ͳ3,5%
Ͳ6,7%
GEL / TRY
0,2281
Ͳ0,5%
Ͳ21,5%
GEL / AZN
1,8121
Ͳ0,1%
+0,3%
GEL / AMD
0,0064
Ͳ0,3%
Ͳ0,2%
FTSE 250
21 452,50
Ͳ6,2%
Ͳ7,8%
GEL / UAH
0,1072
Ͳ1,7%
Ͳ4,8%
DAX
15 011,13
Ͳ5,8%
Ͳ4,7%
EUR / USD
0,8830
+0,7%
Ͳ0,0%
DOW JONES
34 364,50
Ͳ4,3%
Ͳ4,4%
GBP / USD
0,7413
+1,2%
NASDAQ
13 855,13
Ͳ7,0%
Ͳ11,5%
CHF / USD
0,9137
Ͳ0,0%
Ͳ0,6%
156,49
Ͳ11,4%
Ͳ14,0%
RUB / USD
78,7687
+3,5%
+6,9%
Ͳ2,6%
+0,1%
+0,1%
+26,5%
MSCI EM EE MSCI EM
1 222,16
TRY / USD
SP 500
4 410,13
Ͳ5,4%
Ͳ6,7%
AZN / USD
MSCI FM
2 629,21
Ͳ2,0%
Ͳ0,9%
AMD / USD
13,4548
Ͳ0,7%
1,6959
Ͳ0,1%
Ͳ0,2%
481,2500
+0,1%
+0,2%
2
NEWS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
NDI Poll: Deterioration of the Economy at the Forefront of People’s Minds; Majority Says Nobody Acts in their Best Interest
P
oll results released on Thursday by the National Democratic Institute (NDI) and CRRC Georgia show that Georgians see insufficient progress on the top national issues of concern and think the situation regarding poverty, crime, territorial integrity and education has gotten worse in the last 10 years. Public concerns are consistent across political affiliation, signaling opportunities for political parties to work together to address the common needs of Georgia’s citizens. The new poll finds that the majority of Georgians do not think anyone - neither government nor opposition parties - is acting in their best interest. Georgians also remain skeptical of the newly elected parliament’s willingness to address their concerns. More than half of the population (53%) does not believe parliament is passing legislation on issues that matter to them, while 52% do not believe an MP will take action if citizens tell them about problems in their district. Only a third believes that parliament regularly communicates with the public. “Economic insecurity remains a top priority for the Georgian public and provides a clear direction for government and political parties to respond. A renewed focus on the issues of top concern is required across the political spectrum through government, parliament and local councils,” says Alan Gillam, NDI Georgia Country Director. “The consistency of the public view on these issues should be seen as a call to action for political leaders who have lost the confidence of the public in representing their interests.” In light of extreme political polarization, Georgians are supportive of a wide
cross-party collaboration. 80% agree that their favorite political party should cooperate with all other political parties in the parliament, even if the views of some parties might be unacceptable to them. This perception is consistent across political affiliation. The majority of Georgians believe that domestic actors are best placed to facilitate mediation between the opposition and the government. A plurality (34%) thinks the Georgian political parties themselves would make best facilitators during negotiations, while 11% consider the president would be a suitable moderator. 18% would look to the international community, believing western partners are needed for negotiations. “The public have clearly stated that the political parties in Georgia need to work together to resolve these challenges,” Gillam notes. “The need for economic recovery, exacerbated by the pandemic, remains a fundamental challenge in the upcoming period and should focus the minds of government and opposition alike.” Although living in a democratic state remains important for the majority (92%), only 39% believe Georgia meets this criteria. Further, a plurality of Georgians think Georgia is no longer a beacon of democracy (34%), while 25% says Georgia was never a good example of democracy to begin with. Only 23% of citizens agree that Georgia is a good example of democracy for the neighboring states. Finally, as Covid-19 continues to dominate the lives of citizens across the world, Georgians praise the government for doing a good job handling the pandemic (50%). What remains alarming is the high level of vaccine hesitancy – 42%
The new poll finds that the majority of Georgians do not think anyone - neither government nor opposition parties - is acting in their best interest. Georgians also remain skeptical of the newly elected parliament’s willingness to address their concerns. Source: gov.ge
said they would not get vaccinated; 29% said they are already vaccinated, 25% said they intend to get a vaccine. Among those who are hesitant, the main reasons are concerns about the quality of the vaccine (38%) and possible side effects for those with pre-existing health conditions (20%). 34% of vaccinated individuals say they will not get a booster, or are undecided about it.
NDI surveys public opinion to help Georgian stakeholders diagnose and address issues of public concern by providing accurate, unbiased and statistically sound data. This poll aims to capture the most relevant information to foster the development of responsive policies and governance. The results reflect data collected between December 7-13, 2021, through telephone interviews
with a nationwide representative sample of Georgia’s adult population, excluding occupied territories, that included 2099 completed interviews. The average margin of error is +/- 1.4%. Respondents were selected using the random-digitdial method. This poll was carried out by CRRC Georgia. NDI’s survey work is funded by UK aid from the British people.
Corona Updates: Cases Hit Anti-Record in Georgia BY ANA DUMBADZE
T
his week, Coronavirus cases in Georgia hit an antirecord, with up to 17,500 new cases seen daily. Capital Tbilisi, along with the Adjara and Imereti regions, are the hotspots of the rapid virus spread. On January 23, Tbilisi’s renowned Gold Market was closed after a rise in employee Covid-19 cases and exposure. The Market’s doors are expected to remain shut until February 1.
THE STATISTICS Georgia reported 15,762 coronavirus cases, 5160 recoveries, and 42 deaths on Tuesday. Tbilisi recorded the highest number of 8357 Covid-19 cases, followed by the Imereti region with 1907 cases, and the Adjara region with 1608 cases. The country reported 17,530 new cases, 5087 recoveries, and 39 deaths on Wednesday. Tbilisi recorded 9487 cases, followed by Imereti with 1990 cases, and Adjara with 1958 cases. Georgia reported 17,484 coronavirus cases, 3699 recoveries, and 27 deaths on Thursday. Tbilisi recorded the highest number of 8989 Covid-19 cases within 24 hours, followed by the Adjara region with 2255 cases, and the Imereti region with 2222 cases.
THE VACCINES Georgians, in an NDI poll carried out mid-December, praised the government for doing a good job handling the pandemic (50%). What remains alarming, the NDI reports, is the high level of vaccine hesitancy: 42% said they would
not get vaccinated; 29% said they are already vaccinated, 25% said they intend to get a vaccine. Against this background, the Georgian authorities are trying to increase the vaccination rate, this week announcing that citizens over 50 who get Covid-19 booster shots will be gifted 100 GEL. Head of the National Center for Disease Control and Public Health (NCDC), Amiran Gamkrelidze, said that Omicron strain coronavirus cases were expected to increase in the next fortnight, and that, currently, 90% of confirmed cases are of the Omicron strain. He highlighted that of 1600 confirmed Omicron cases, only 16 patients required hospitalization. The majority of the infected patients were said to be young. The Minister of Refugees, Labor, Health and Social Affairs, Zurab Azarashvili stated that in the last two weeks, an average of 4300 to 4500 hospital beds have been occupied. “With Omicron, there is no hospitalization, and the hospitalization rate has reduced from 20% to 4.5%.” The minister noted there are more than 500,000 doses of Pfizer left in the country, as well as another million and a half doses of other vaccines. He recognized that they need to work more in this direction. “In regions where vaccination has been less available, 30 to 40 mobile groups will go and offer vaccination on the spot, simultaneously. We are also launching a communication campaign on vaccination and explaining the benefits of immunization. We have also started incentive measures. With all this, we think we will be able to use up the existing 500,000 doses of Pfizer,” he said. This week, it was also announced that
untested individuals who had had symptoms and were monitored by a GP will receive green passports and be registered on the coronavirus database. "The Ministry issued the relevant normative act - if a person was not tested but had symptoms and contacted 112, and had contact with the family doctor and was under supervision for a certain period, this will be reflected in the database for them to get a green passport," Azarashvili announced. Global health experts have said at least five to six billion doses are needed by poorer countries to help protect them against Coronavirus amid the ongoing pandemic. Importantly, Pfizer and BioNTech have started clinical trials of a new Covid vaccine which targets the Omicron variant. Based on the same source, the companies plan to test the protection gained from the new vaccine as a booster jab, and as three separate jabs in unvaccinated people. More than 1400 adults are expected to be enrolled in the trial, which is likely to be run in the United States. US company Moderna is planning to begin trials of its own Omicron-specific shot soon, while Oxford University and AstraZeneca have also started working on a new version of their vaccine.
THE CASES WORLDWIDE As of Wednesday evening, more than 361.4 million cases of Covid-19 had been reported worldwide, according to Johns Hopkins University's coronavirus tracker. The reported global death toll stood at more than 5.6 million.
GERMANY Germany is finding itself divided over
Image source: GETTY IMAGES
Covid, with the unvaccinated banned from restaurants, non-essential shops, leisure and arts facilities, and where politicians are considering compulsory vaccination. German Covid protests have been turning nasty in the row over rules and vaccinations, the BBC reported this week. It noted that some of the biggest protests this month have been in eastern Germany and that every week, tens of thousands of Germans take to the streets to demonstrate against the restrictions and vaccination. “Many protests are peaceful, but others explode into violence, and experts are increasingly worried by the aggressive language and threats aimed at politicians and public figures online,” the BBC wrote.
THE UK In England and Scotland, from February 11, Covid travel tests are to be axed for the fully vaccinated. People arriving in England or Scotland from abroad will no longer have to take Covid tests if they are fully vaccinated, it has been confirmed. Rules have also been eased for unvac-
cinated travellers, who will no longer have to take a “day eight” test or selfisolate. However, they will still need pre-departure and “day two” tests. Most coronavirus restrictions are being lifted in England after the government said its vaccine booster rollout had successfully reduced serious illness and Covid-19 hospitalizations, reported CBC News. According to the same source, face coverings are no longer required by law anywhere in England, and a legal requirement for Covid-19 passes for entry into nightclubs and other large venues has been scrapped.
AUSTRIA Austria's lockdown for people not fully vaccinated will end on Monday because the pressure on hospitals has eased, the government said.
RUSSIA Russia has expanded a domestically developed coronavirus vaccine for children aged 12-17 to include more regions, amid the country's biggest infection surge yet due to the spread of the highly contagious Omicron variant.
NEWS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
3
Holocaust Remembrance Day and World Zionist Organization's Support for Israeli House Continued from page 1 That is why the address of the head of these two influential organizations on Holocaust Remembrance Day was something of a historic event. "From Jerusalem, the eternal capital of the Jews, thank you, the Georgian people, for your solidarity to the Jewish nation and Israel,” Hagoel noted. “We address you from the building where the first government of Israel worked, and, today, on International Holocaust Remembrance Day, we remember the 6 million Jews who were killed for just one crime - being Jews. We must remember this horrific event in the history of Mankind every day, every hour, and learn what scale of disaster we are dealing with. “I would like to thank the mayors (Oni, Tbilisi), universities (four universities) in Georgia, who honor the memory of the victims of the Holocaust, teach the new generation the history of the Holocaust. They understand that only in this way can the Holocaust be prevented from happening again. Special thanks to Tbilisi City Hall and the City Council (Municipal Assembly) for the construction of the "Israel Park", where a monument to the victims of the Holocaust and Georgian Schindlers will be erected. Thank you for remembering the Holocaust and remembering the righteous who saved the Jews. “I will also highlight the very important activities of Israeli House in Hasbara in the direction of public diplomacy, which means supporting Israel and world Jewry and promoting Georgian-Israeli relations. “I would like to thank my close friend Mr. Itsik Moshe for his 32 years of significant and tireless work for Israel since he became the first representative of our World Jewish Agency in the Soviet Union. It means so much to Israel, and connects
Israel with friendly countries. I wish you good luck,” ,” Hagoel concluded. The tragedy of the Holocaust, the importance of international solidarity, and the deepening of Georgia's ties with the Jewish world and Israel are among the topics that have become the focus of the 32-year work of the Head of the “Israeli House”, Itsik Moshe. Itsik Moshe, starting from 1989, as the first official representative of Sokhnut in the Soviet Union, began to create a platform for Israeli relations with the countries, on the implementation of which Israeli House has been working for years. Through public diplomacy, it shares true Israel and world Jewry in friendly countries and promotes bilateral ties. As Moshe noted at the event, the Holocaust must not only be remembered, it is a tragedy to push us towards peaceful coexistence and friendly relations between peoples and countries. This is one of the cornerstones of the Israeli House concept, which has the full support of Israel and influential international organizations. It is as a result of such activities that Israeli House has become a leading figure in the Israeli political spectrum, the European Association for the Preservation and Promotion of Jewish Culture and Heritage (AEPJ), the World Zionist Organization, European Parliamentary Union "European Alliance for Israel" (EAI), and others. Itsik Moshe also spoke about the success achieved at the UN, according to which the UN considers the non-recognition of the Holocaust a crime. The memorial evening was attended by David Bitan, a member of the Knesset from Israel, the head of the friendship group with Georgia, and a lobbyist for World Jews in the Knesset. He greeted the participants of the event and called the annual celebration of this day in Georgia organized by Israeli House “a great human act.”
Former Deputy Speaker of the Knesset, Hilik Bar, who came to Tbilisi especially for this day, also addressed the audience. According to Bar, today, as per traditional, the voice of Georgia has once again joined the voice of the civilized world, which unanimously condemns the great tragedy of the Holocaust, and the persecution and destruction of people on ethnic or other grounds. The Jewish people appreciate the merits of the Georgians who saved the Jews from death during the difficult years of the Holocaust. At the event young Georgian singer, Kristi Japaridze, performed several musical numbers dedicated to Holocaust. It is noteworthy that with the initiative or support of Israeli House, the history of the Holocaust is being taught in four Georgian universities, Israeli cabinets have been opened, and a monument to the victims of the Holocaust and Georgian Schindler, Sergi Metreveli, has been erected in Oni. With the initiative and significant support of the MP of the Municipality of Samgori, Revaz Sokhadze,
Tbilisi City Hall set up “Israeli Park” in the capital, with the support of Israeli House a picture of Anne Frank has been drawn and in May of the current year Memorial of the victims of the Holocaust and Georgian Schndlers will be placed in Tbilisi. Under the leadership of the organization, an unprecedented number of representatives of the Knesset and world Jewry visit Tbilisi every year. Among the Israeli House’s upcoming plans is a forum against Anti-Semitism to be held in Jerusalem in March; With partner organization the Israel-Georgia Chamber of Business to participate in the London Business Forum on March 14, where one of the main topics is cooperation with Georgia; Under the auspices of the President of Israel and co-organized by Israeli House, April 27 marks Holocaust Remembrance Day in Albania. Further, a memorial to the victims of the Holocaust will be erected in Tbilisi. With the participation of Israeli House, a memorial will be erected in Israel in memory of the Babiar victims and the "Righteous Gentiles" (Hassidei Umot
Haolam). Representatives of 10 countries, including the Government of Georgia, will be invited to the event. Israeli House recently received further international recognition. Itsik Moshe was elected Vice-President of the European Alliance for Israel (EAI), and Israeli House became a member of the board. Further, the European Association for the Preservation and Promotion of Jewish Cultural Heritage (AEPJ) within the Council of Europe has offered Israeli House membership on the board. The issue will be resolved at the next meeting in Paris in the coming days. At the suggestion of the Ministry of Culture of Georgia and under the auspices of the Council of Europe, the Jewish Cultural Heritage Route in Georgia is being successfully implemented undersupervision of Israeli House. According to Itsik Moshe, such multifaceted activities are the future of largescale bilateral relations and he says he looks forward to the development of closer relations between Georgia, Israel and world Jewry.
POLITICS
A Coalition Government in Georgia – Merits & Flaws
Image Source: Legends Bank
OP-ED BY NUGZAR B. RUHADZE
T
here is currently a lot of ) talk about having a coalition government in Georgia. Frankly, I haven’t the faintest clue why the presidential republic wasn’t good enough, having been, without any serious exigency, substituted by parliamentary rule. Rumor
had it that the then president of the country yearned to stay in power so much that he came up with a ruse to establish a parliamentary government which meant he could, but even today it is not clear how much we benefited from the change. We’ve had this form of government for almost 10 years, and we’re still unhappy- so much so, that we want to try a coalition government instead, although still parliamentary. Let us first look into the advantages
and disadvantages of a typical parliamentary republic, within which no political party can find itself in absolute power. This means that governmental tyranny, as happened in the Georgian presidential republic, can never be established. Another good thing might be that a coalition government allows many parties to be united around one universal agenda, which makes the government’s blueprint cogent and transparent for us, the people. A coalition govern-
ment is usually formed by opposing parties, who must honor a jointly accepted program, thus assisting the electorate to understand the government’s doings. A coalition government will not let one particular person grab a dominant position and impose it on the people. A coalition government allows political groups with various ideological bases to work together to the benefit of the nation. This is all good for Georgia! But let us now have a look at some of the features of a coalition government that might not be so good for us. To have a coalition government work successfully, there must be a certain amount of acceptance between the political parties, otherwise, the government will be weakened. How much mutual understanding can we expect within our current political spectrum? Zilch! Coalitions work only in the able hands of a strong leader capable of creating consensus. In Georgia, many politicians claim to be strong leaders, but that is often true only within their own parties, never with the entire political diversity that we have here. The most salient feature of a coalition government is its unstable character, and this, in Georgia, might pop up at any time due to the utmost disparity of our political forces: No matter how prepared they are to be part of a coalition, there will always be the risk of that coalition falling apart, triggering such an imbalance that we might never again be able
to put ourselves back together. Let’s picture a coalition government in Georgia, where one of the smaller parties gains so much power that it decides to blackmail the government by threatening to bring it down. This will be just about enough to render the government weak and unable to take care of the nation. But in Georgia, the opposing parties can’t come to a consensus on any issue, especially economic ones, thus badly affecting the process of governance. An additional negative is that we Georgians are prolific creators of political parties, and it is likely that regional parties might also multiply and acquire power. If this happens, they will likely present more regional demands, coming to the detriment of national ones. Plus, decisions in a coalition take a lot of time to be made, which risks Georgia’s procrastinating the solving of many critical problems. And finally, in Georgia today, the politicians are busier with conciliation issues than with developmental ones, and it is likely that a coalition government might deepen this negative vector. Of course, many Western-European nations successfully practice a coalition rule, but Georgia is still at a distance from the standards of that political culture. We are certainly growing, but we are not yet done acquiring the wanted political maturity needed to make it work.
4
POLITICS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
The Sit Down: Paul Taylor and the Friends of Europe on the Complexities in the Black Sea
Paul Taylor. Source: Reuters via Flickr
EXCLUSIVE INTERVIEW BY MICHAEL GODWIN
L
ying between the Europe and Asia divide, the Black Sea has a long history of changing hands and playing a pivotal role in the region's geopolitics. In a newly released study, Paul Taylor takes a look at the role this region and the nations around it have played, and currently play, in the events that have brought us to the current crisis. With increasing tensions between NATO and Russia, as well as the lingering questions over Ukrainian and Georgian acceptance into NATO, the Black Sea is once again in the globe’s sights. Paul Taylor is a Friends of Europe Fellow and long-time veteran Reuters EU Affairs Editor. In his new report titled “Murky waters – the Black Sea region and European security,” he takes an in depth study of what he calls one of the most bitterly contested strategic zones around Europe since the end of the Cold War. In addition, he analyzes its role in the escalating Russia-Ukraine crisis and the risk of armed conflict. In presenting his study, the Friends of Europe hosted a panel discussion with guests MEP Viola von Cramon, the ViceChair of the European Parliament’s Delegation to the EU-Ukraine Parliamentary Association Committee; Igor Yurgens, the Chairman of the Institute of Contemporary Development in Russia; and Alina Frolova, the Deputy Chairman of the Center for Defence Strategies in Ukraine and former Deputy Minister of Defense of Ukraine. Jamie Shea, Senior Fellow and former Deputy Assistant Secretary General at NATO, guided the discussion as moderator. Prior to the panel discussion, Paul sat down with GEORGIA TODAY to discuss some of his findings.
YOU MENTIONED THE ECONOMICS OF THE REGION, AND THE INCREASED FINANCIAL AND POLITICAL INCENTIVE FOR BLACK SEA STATES TO SEEK INCREASED ECONOMIC RELATIONS WITH THE EU RATHER THAN WITH EACH OTHER. COULD THIS BE A KEY PRESSURE POINT FOR RUSSIA, OR ANOTHER ACTOR, TO DESTABILIZE THE REGION AND SHIFT CONTROL IN THEIR FAVOR AWAY FROM
NATO/THE EU? IF SO, WHAT IS THE BEST WAY TO PREVENT THIS FROM HAPPENING? It’s possible, but I think you have to look at a country like Georgia in terms of attracting investments and becoming a hub for energy and transportation, telecommunications, and sea trade. There are a lot of things Georgia could do for itself that have been obstructed for domestic reasons that are not always clear to an outsider. If you look at the combination of the failure of the Anaklia Deep Sea Port project and the Namakhvani Hydropower dam project, almost a billion-dollar project the government let fall through, as well as the very opaque dealings surrounding the fiber optic network that Georgia seems to be letting slip, while it could be a really important fiber optic hub between Central Asia and Europe. Those are domestic things. Whether there was a Russian hand in any of those things, I don't know. If there was, it seems that it has to do with this backsliding in Georgia’s political culture and the rule of law. Georgia had made itself a pretty attractive place to do business when you look at all the indexes such as the World Bank and Transparency International. It still figures high on those indices, but it’s slipping, and it is less attractive, less legally secure, and less transparent for people to invest in long term projects than it was. There was interest from China in investing in Georgia too. As such, Georgia is in a position to play the West and China against each other, or bring them together, for its benefit. For me, it’s not Russia that’s ruining these things but rather Georgia itself.
SINCE THE COLLAPSE OF THE SOVIET UNION, RUSSIA HAS INCREASINGLY BECOME THE ONLY REAL NAVAL POWER WITH AN UNCONTESTED HOLD ON THE BLACK SEA. IS THERE ANY WAY TO COUNTERBALANCE THIS THROUGH THE DEVELOPMENT OF UKRAINIAN, GEORGIAN, OR OTHER NAVAL DEPLOYMENTS? The international naval presence is regulated by the Montreux Convention, and I don't think the West has an interest in calling that into question. It may tie our hands, but it also ties everyone’s hands. Within those constraints, Bulgaria, Romania, Ukraine, Georgia, and Turkey are entitled to develop their maritime forces. Mostly, these are of a coast guard
nature, and there’s not a lot more. I think Romania is the country most looking into acquiring more, and the UK has now signed an agreement with Ukraine for development of the Ukrainian Navy. We have to look at what our partners and allies are achieving in the Black Sea and the Sea of Azov with their own naval forces. Then, what further value can NATO add and where should they not go. When I saw that UK destroyer going on a freedom of navigation patrol through Crimean territorial waters, it seemed like that was bordering on provocation. It was a demonstration for the media, and they brought a media crew along. My own sense was that not everyone in the NATO maritime sphere was particularly happy with that. The number of NATO ships operating in the Black Sea has tripled since 2014, so they are certainly more present there and they're getting Russian attention. That type of “showing your flag” provides reassurance for our Black Sea allies and partners and is worth doing. What the risk is is the erosion of maritime rights. There’s been a big erosion of maritime rights by way of the Russian annexation of Crimea. They’ve taken Crimea’s territorial waters, their Exclusive Economic Zone, and are operating Ukrainian offshore drilling platforms. There’s a real issue about access to the Sea of Azov, as Russia is continuing to delay, although not prevent, the passage of Western commercial shipping through the Kerch Strait. It’s clear, however, that none of the littoral states are going to be able to build a navy that can match the Russian Black Sea Fleet. It’s more about coastal defense, patrolling, and protecting those maritime rights.
UKRAINE AND GEORGIA, AS WELL AS OTHER REGIONAL STATES, HAVE RECEIVED SIGNIFICANT MILITARY SUPPORT IN THE FORM OF ISR, MATERIALS, AND TRAINING. GIVEN THAT THERE IS CERTAINLY A DIFFERENCE BETWEEN PROVIDING SMALL ARMS AND AMMUNITION, AND LARGER MISSILE OR AIRCRAFT PLATFORMS, IS THERE A RED LINE THAT YOU SEE IN THIS AS WELL? I think the second red line I see is the matter of permanent basing of US or other NATO forces in Georgia or Ukraine. I know there was a discussion in the Georgian government about whether or not to offer the United States use of a base in Georgia. Countries that are looking to join NATO are trying to make themselves as useful as possible, and particularly to the most important ally, the US. I think it was wise not to offer it, as you don't want to offer it if you don't think that’s what they want. I also think it comes down to the nature of the weaponry. You want to be able to provide weaponry that enables a country to defend itself. You want to be wary of providing a country with things that provide a real offensive capability, such as things that have the range to reach into Russia. That’s the destabilizing nature of the matter.
IN YOUR PIECE, YOU MENTIONED “ONE REGION - FOUR CATEGORIES” AS A WAY TO DESCRIBE THE BLACK SEA AND HER SURROUNDING STATES. DOES THIS OUTLINE A POTENTIAL FOR A SPECIAL DIRECTORATE OR COMMISSION FOR THE REGION, WITH REPRESENTATIVES FROM
ALL FOUR CATEGORIES TO COMPARTMENTALIZE DECISION MAKING? I think that if you had a senior enough EU special representative for the Black Sea region, then that person would be in a position to galvanize all the different departments together on a particular strategy. I think the EU would gain from having that overall strategy. That overall strategy would help it to work between the countries that are member states, the countries that are associated with the EU, an applicant country like Turkey, and an outreach to Russia if and when Russia is willing to do that. The idea, unfortunately, can't work now as we are in a zero-sum period. Any idea of working with Russia on anything right now is a very hard sell. However, Russia is a neighbor and has certain common interests; fighting climate change, keeping the Black Sea clean for fisheries. There are also certain projects that Russia will not allow, such as the “middle corridor,” because that's a way of getting around Russia. I think the EU, if it could use its own toolbox in a more holistic way to support the region, that would be a big win. Appointing someone as a special representative whose briefing is to look at that whole area holistically, I think that would be progress. *** Paul, in his introduction to the panel discussion, reiterated his stance on Ukrainian and Georgian integration into NATO, noting that the two must realize that the prospect of joining either NATO or the EU is not realistic in the foreseeable future. To complement this further, he added that the original promise to both countries that they would eventually be allowed in was misplaced and should not have been said. Comments from Alina Frolova were in more of a rebuttal format, stating that it is Russia who is acting provocatively. In addition to their continued occupation, she states, they have taken subversive measures to undermine the legitimacy and readiness of the government and military, respectively. She insists that NATO and other allies cannot allow larger states, such as Russia and China, to dictate the futures of smaller nations. In her closing statements, she said, “Russia has nothing to offer the world but aggression.” Igor Yurgens made a statement that has been at the center of much of the Kremlin’s statements for quite some time. From the Russian perspective, they do not believe that NATO and the West as a whole are taking them seriously and giving due consideration to their con-
cerns. In addition, he reiterated the requirement that NATO exclude Ukraine and Georgia from any membership opportunity, and a complete removal of NATO heavy military equipment from the western border region. A long-time supporter of Georgian integration with Europe, Viola von Cramon remained firm on the West’s position that Russia is acting as the primary aggressor. Stating that Putin is making an attempt to reunite the former USSR states, the need for dialogue and deterrence is more important now than ever. Additionally, she outlined that Putin has been unjustly interfering in Georgian affairs, namely the recent cancellation of the Anaklia Deep Sea Port project. This project stood as an immense step towards further economic and political connections between Georgia and Europe. When asked about the potential of removing Russia from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, she answered that it has been considered but no decision had been made as of the time of writing. Shortly after this presentation and panel discussion, the United States Ambassador to Russia John Sullivan visited the Russian Foreign Ministry. Leaving two formal documents, responses to Russia's demands from NATO, he left their offices after only half an hour. Shortly after this, both United States Secretary of State Anthony Blinken and NATO Secretary General Jens Stoltenberg held separate emergency press conferences. In both of these statements, they repeated the stances the US and NATO have outlined in recent weeks. Both Georgia and Ukraine, they say, have the right if they so choose to join NATO, or not join, like Finland and Sweden. Calls for additional avenues of civilian and communication and mutual briefings on military exercises were made, in addition to the final statement that it is the position of NATO that they reinforce the right of other nations to seek selfdetermination. Jens Stoltenberg closed saying, “a political solution is still possible” but also stated that “tensions are increasing.” More high-level meetings are being scheduled in the coming days to expand on these statements, while Russia has only reiterated its position on NATO’s actions. In turn, it is unlikely NATO will bend to these demands despite threats of “the gravest of repercussions” if the Kremlin is not answered satisfactorily. As more NATO and Russian military units filter into the larger Eastern Europe and Western Russia region, only the “cooler heads” can walk this back from the brink of armed conflict.
Secretary General Jens Stoltenberg has stated that Ukraine and Georgia can make their own self determined decisions to join NATO, without Russian interference. Source: NATO
POLITICS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
5
Georgia is Not Doing Enough: Ian Kelly on the Russian Threat and What It Means for Georgia limiting factor on what he does in terms of scale and the length of any military action, but he was certainly willing to spill Russian blood in Georgia in August 2008.
INTERVIEW BY VAZHA TAVBERIDZE
I
don't think US support will be affected, but I would pay very close attention to what European leaders are saying, and I think Georgia needs to really step up its diplomacy with Brussels, Berlin and Paris, - former US Ambassador to Georgia and the OSCE, Ian Kelly, told RFE/ RL, commenting on the possible impact of the critical situation in Ukraine on Georgia and its increasingly forlornlooking Euro-Atlantic aspirations.
SPEAKING OF GEORGIA - WHAT IMPACT IS ALL THIS GOING TO HAVE? WHERE DOES IT LEAVE GEORGIA WITH ITS ASPIRATIONS OF GETTING OUT OF THE KREMLIN’S BACKYARD?
FOREIGN MINISTER LAVROV SAYS THEY HAVE NO PLANS TO INVADE UKRAINE. WHY DON'T WE BELIEVE THIS? We don't believe it because if they don't have plans to invade Ukraine, why are they setting up exactly the kind of force that they would need to invade Ukraine? What we're seeing now are the enabling assets like medical facilities, logistical units, all the kinds of things that you would need to support a large over-theborder force. If they really aren’t going to invade Ukraine, why are they spending so much on resources? And there are still more forces moving in, there's a buildup going on. We can't know what their intentions are, but their statements in the past, to put it mildly, have not been entirely truthful. We have to look at what the capabilities are, and assume what their intentions are.
IF NOT INVASION, WHAT? Well, that's the big question. I think there's a large menu of options that Putin can choose from - this is not just a force at one point of the border: He has forces arrayed from the north east and the south; basically, the kind of force that can easily divide Ukraine in two. And then you have all these voices in Moscow who are hell-bent on regime change in Kyiv.
I HESITATE TO TRY AND GUESS WHAT'S ON PUTIN'S MIND, BUT IF YOU LOOK AT EVERYTHING THAT HE’S TRYING TO DENY, AND THE UKRAINIAN’S WITH THEIR WESTERN ORIENTATION, IT SEEMS PUTIN WANTS TO SUBORN UKRAINE TO RUSSIA. I don't think he wants to necessarily annex Ukraine, but he certainly wants to be sure that he has a regime in Kyiv that isn't going to integrate with Western institutions; one that instead, will integrate with Putin's Eurasian institutions, as Belarus and Kazakhstan have, for example. He was happy with the regime that was in Ukraine until 2014, under Yanukovych, so I think that's more the kind of model regime he's looking for.
Former Ambassador of the US to Georgia, Ian Kelly. Source: trend.az
THEN BY THE PRESIDENT HIMSELF. THE EXTENT OF THAT CONFUSION WAS BIG ENOUGH TO LEAD US TO ASK HOW THAT PRESS CONFERENCE ACTUALLY REFLECTS THE US POLICY AND STANCE. I think that the President was thinking out loud, which is very dangerous when the cameras are rolling and you're the president. There are allies who are looking for ways not to have the gas shut off, for example. Central Europe, in particular, relies almost completely on Russian gas. So he was simply answering the question in his own head, about the difficulty of having a package of what we call “massive and painful” sanctions if it is just a small incursion. His mistake was thinking out loud what we know. So, I don't think it's really a reflection of the policy, it's a reflection of reality. The definition of a gaffe is a government official speaking the truth. He was speaking the truth about the situation, that what kind of package it could be, the pain it could inflict, could very well depend on the size of the military action by Putin. The reason his comment caused such consternation is because it appeared to, and I don't think this is what he meant, but it appeared to say that if Putin chooses
on just a minor incursion, there would not be serious consequences. But I think in the United States, there is bipartisan support for very painful sanctions.
UKRAINE SEEMS UNHAPPY WITH THE FACT THAT THERE MIGHT BE LAYERS OF WESTERN RESPONSE, IF ANYTHING HAPPENS. SO WHAT DO WE TELL PRESIDENT ZELENSKY? You know, I think it's not so much what we tell him, it's what we do for him. We have been working with a number of European nations to provide the kind of defensive weaponry that Ukraine would need to repel a Russian invasion. You have the US providing anti-tank systems, anti-aircraft systems, the UK is, the Baltic states are, the Czech Republic too. The thing is deeds, not words, when it comes to Ukraine.
REGARDING THE WEST’S THREAT OF “UNPRECEDENTED SANCTIONS” - THERE ARE QUITE PERSISTENT VOICES WHICH CLAIM THAT RUSSIA HAS ALREADY BUILT ITSELF UP AGAINST POSSIBLE SANCTIONS, SO IT WON’T DEFLECT PUTIN TO INCREASE THEM.
That's a very fair point, and it's a concern that all of us have. Putin knows what his sovereign wealth fund and strategic reserves are. That's one of the reasons we have to be concerned that sanctions are not going to deter him. Putin has been able to exploit this idea of the West trying to undermine Russia, that they want to destroy Russia with sanctions, and he's exploited that politically, to rally the nation against aggression from the outside. I think the message we're sending, or at least I hope we're sending, to Russia, is that this is not 2014. The reason Crimea was such a triumph for Putin in 2014 was because it was bloodless. The Ukrainians did not fight back- there were no Russian casualties in the annexation of Crimea. This is a fundamentally different situation. If he goes in now, obviously, it's all Russian troops, and there will be casualties. So it's not going to be the same kind of triumphal atmosphere, because young Russians are going to die.
DO YOU THINK PUTIN WILL SHY AWAY FROM SPILLING RUSSIAN BLOOD TO ACHIEVE HIS OBJECTIVES? The very short answer is no: I don't think he will. I think it'll be something of a
THERE WAS ALSO A BILL INITIATED BY THE COMMUNIST PARTY IN THE DUMA THAT DONETSK AND LUHANKS SHOULD BE DECLARED INDEPENDENT. HOW LIKELY IS THAT TO HAPPEN? As I say, Putin has a menu of options, and I think that many people are concerned that he has really put himself in a corner now, where, unless he takes some kind of action, he's going to appear weak. President Biden said he expects him to move in, and I agree. I think he'll feel obligated to do something militarily. You know, I'm not a betting man. But I would bet that he does something.
THE US PRESIDENT'S BRIEFING CAUSED WIDESPREAD DISCUSSION AND, INITIALLY, CONFUSION. LATER, IT WAS CLARIFIED BY HIS STAFF,
Then-US vice president Joe Biden in Kyiv, Ukraine, December 7, 2015. By Sergei Supinsky/Pool Photo via AP.
They're never going to get out of that backyard, I’m afraid. But what we hope is that they can get away from the hegemonic, imperialistic designs that Russia has on the South Caucasus, not just on Georgia. If you look at some of the recent pronouncements from Washington and Moscow, the good news is that Anthony Blinken, the Secretary of State, whenever he talks about the unacceptability of Russia's demands that post-Soviet states not be allowed to join NATO, he always says, “we will never close the door to Ukraine.” And Georgia is always mentioned, and that's good news. The bad news is that Russia also mentioned Georgia when they said it is unacceptable for post-Soviet countries to join NATO. I don't think there's any possibility that the US would reduce its military cooperation with Georgia - Georgia can be confident that the United States will not reduce its presence there. If there's an invasion of Ukraine, it's going to affect everybody in Europe. And it'll affect Georgia just as it will the international community. And, of course, Georgia, is a heck of a lot closer to Ukraine than the United States is. It's going to really affect a lot of issues related to trade. Depending on the size of any kind of military action, obviously, the Black Sea is going to be affected, trade routes will be affected. But I don't think Putin is interested in a multi-front war, and I don't think Georgians should be concerned about further military actions. As for Georgia’s Euro-Atlantic aspirations, I don't think it would affect it in terms of US support. But I would pay very close attention to what European leaders are saying about it, and I think that Georgia needs to really step up its diplomacy with Brussels, Berlin and Paris.
IS WHAT GEORGIA IS DOING TODAY NOT ENOUGH? IS THERE MORE ROOM FOR MANEUVER? No, it’s not enough. Georgia could be doing a heck of a lot more, and I, frankly, am a bit disappointed that Georgia has not been more active diplomatically. I don't believe the Prime Minister has yet called his counterpart in Kyiv. That's extraordinary. I don't understand why the PM or President haven't reached out to Kyiv and said, “we will stand with you.” It's disappointing to any friend of Georgia to see Tbilisi keeping its head down in this way. Why? I mean, it shares a common goal with Kyiv. Why isn’t Georgia saying that? Why isn’t it asking Zelensky what it can do to help? I think it's an attempt to not draw attention to itself. That is one approach, but it’s not the kind of approach that a country should take when a strategic partner like Ukraine is under threat of military aggression. And I don't agree with that approach. That's a big mistake, staying silent. Keeping your head down actually encourages aggression from the Kremlin. Speaking out, offering help, being very visible in supporting Ukraine's Western orientation, that is a deterrence to aggression. So I would really hope that Georgia at least offers help. It’s not hard to do. I just don't understand why they haven't come out and said, “What can we do? You are our partners; you are being threatened by Russian aggression as we are. What can we do to help you?” I haven't seen it, and I don't understand why.
6
POLITICS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
Edward Lucas: The EU Should Accelerate its Talks with Ukraine for Membership LAST WEEK, THE WEST REBUFFED RUSSIA’S “SECURITY DEMANDS” IN NO UNCERTAIN LANGUAGE. YET, NOW FM LAVROV CLAIMS THAT THEY ARE EXPECTING A WRITTEN RESPONSE FROM WASHINGTON AND NATO. TO WHAT END? The reason Russia gets to send those demands in the first place is that NATO has not issued or made that long overdue Membership Action Plan for Ukraine, instead accommodating Russia's vision that its security depends on its neighbors’ insecurity. As to what end, there are two possibilities. One is there'll be something on the paper which Russia will package as a victory. And the other is that Russia will say, “Behold! This is a Western ultimatum and gives us no choice but to respond with force!” Putin doesn’t really mind the difference between “Pravda” and “Istina”, as long as he can twist the former to sell as the latter to Russians.
IF THIS SCENARIO WERE TO MATERIALIZE, WHERE DOES IT MAKE MOST SENSE FOR RUSSIA TO STRIKE – WHAT WOULD BE THE PRIORITY TARGETS?
Edward Lucas. Image courtesy of Vytautas Magnus University
INTERVIEW BY VAZHA TAVBERIDZE FOR RFE/RL
T
he fears in the West can probably be summed up in the statement of the Polish Co-Chair at OSCE’s last meeting: “This is the closest we’ve been to war with Russia in the last 30 years”. It is a sentiment that resonates with British journalist, author and analyst Edward Lucas, who spoke to RFE/RL to offer his insights on the ongoing West-Russia standoff and looming war in Ukraine. “In the end, I feel very angry and disappointed that my warnings over the last 15 years have not been listened to,” Lucas says. “Not just me, but people from the Baltic States and from other countries in the region have been complaining since the 1990s that Russia was going in the wrong direction. Nobody listened, and now we face a really serious European security crisis and the possibility of war.”
WHY DO YOU THINK IT TOOK SO LONG FOR THE WEST TO WAKE UP? The question is – Have they really woken up yet? There’s an idea that it’s all the result of NATO expansion or a failure to have a working dialogue with Russia. I think at least half the West is still asleep. We already have 14,000 Ukrainians dead because of the West's complacency, naivety and greed. And I've a fear that that that number is going to go up.
PLEASE ELABORATE IN WHAT ASPECT THE WEST WAS NAÏVE TOWARD RUSSIA. We assumed that the old Cold War was completely over and there wouldn't be a new one. And we didn't understand that a Chekist is still a Chekist, even if he doesn't have a hammer and sickle on his shoulder. And so that was a serious, serious mistake. And we didn't understand that Russian Imperialism is still Russian Imperialism, even if Russia is weak. So that was the naiveté. And the complacency was that we said “yes, there is a problem, but we can deal with it. We just need a bit more dialogue, maybe slower expansion of NATO in Eastern
Europe, but there's nothing serious.” The greed was that we thought we could continue to make money out of it. That, in a way, is the worst thing we did. Lenin said “When it comes time to hang the capitalists, they will vie with each other for the rope contract.” And Vladimir Putin has put that into practice: He's given us a great deal of rope, and we've tied a very effective knot.
THE “LET’S HAVE DIALOGUE WITH RUSSIA” MOTTO THAT SO MANY WESTERN LEADERS ARE STILL KEEN ON – WHAT WOULD BE RESULTS OF SUCH A DIALOGUE? I'm very much in favor of dialogue and of negotiations, but you have to have your own objectives very clear and know what it is you're willing to concede and what it is you're not willing to concede. If a mafiosi comes knocking on your door and says, “I want you to give me your business,” the response should not be “Okay, let's negotiate.” You should say, “I'm calling the police.” And this is this is what we failed to do. We should treat Vladimir Putin like a Tony Soprano from The Sopranos series – I found that series to be a very useful guide to Russian thinking, because the product is really very similar to Vladimir Putin.
But of course, by doing that, they actually guarantee that things will get worse.
THERE WAS NEWS THAT CANADA ALSO DEPLOYED A SMALL CONTINGENT OF SPECIAL FORCES OPERATORS TO UKRAINE. IS THIS A SIGN THAT THERE IS MORE TO COME BOTH FROM THE UK AND CANADA? No disrespect to Canada, but I don't think Putin will say, Oh, my goodness, the Canadians are coming, we have to change our plans! What we need is a major, immediate NATO reinforcement of the Baltic states, a snap NATO exercise, to show that NATO is ready to defend its members. We need strong bilateral support for Ukraine. And I would say the EU should accelerate its talks with Ukraine for Ukrainian membership. If I was running the EU, I would hold an emergency meeting of the European Council and issue a major political declaration saying we want Ukraine in the European Union as soon as possible, and I’d really speed up negotiations to send a signal to Putin that everything he does is counterproductive; that if you try and pull Ukraine away from the West, the West responds appropriately. But as I say, this is merely what I think should happen, not what I think will happen.
There are many options, and one possibility is they do something less that we fear. And then we would be so grateful that they haven't done what we really fear, that we don't mind what they've actually done- for example, some new arrangement in Belarus which will be very threatening for Ukraine and turn Belarus into an extension of the Russian Federation, at least in military terms. That could be one would-be result, at which many in the West would say “thank goodness, we didn't get a war.” Or Russia might try and secure the water supply in Crimea, which would be a major benefit for them if they can get hold of that canal. Or they might try and do something in the Sea of Azov or try and take Mariupol. They might end up formally incorporating the DNR and LNR into the Russian Federation. Putin’s got the initiative, he can choose. He's like a pianist staring at a keyboard and thinking what to play. What we should be doing is taking the keyboard away from him, rather than waiting to see what tune he chooses.
THE WEST IS THREATENING “UNPRECEDENTED” SANCTIONS. HOW “UNPRECEDENTED” DO THEY NEED TO BE TO ACTUALLY MAKE PUTIN CHANGE HIS MIND? I don’t think it should be just about sanc-
NEWS IS THAT THE UK JUST PROVIDED UKRAINE WITH ANTI-TANK WEAPONS. WHAT IS THE UK STAKE IN THIS CONFRONTATION AND THE EXTENT OF ITS INVOLVEMENT? The UK takes the Russian threat seriously, and supporting Ukraine is one of the principles of our strategy. I'm pleased about this. We've done quite a lot and I wish we'd done it earlier, but what we need is all European countries doing this. And I would like to see, in an ideal world, Mr. Scholz, the German Chancellor, together with President Macron, declare “we are on the side of Ukrainians, and we are not going to allow them to be intimidated, we're not going to allow any divide and rule game played in Europe,” and so on and so forth. But I fear it’s just wishful thinking on my part. If anything, the German government is pursuing the opposite approach of saying “we won't send any weapons because we don't want to escalate the situation.”
Putin’s like a pianist staring at a keyboard and thinking what to play. What we should be doing is taking the keyboard away from him, rather than waiting to see what tune he chooses tions, but about showing that we're willing to defend ourselves: The of accelerating Ukraine's accession to the EU, a big military reinforcement to the Baltic region, something in the Black Sea, and bilateral military assistance to Ukraine. And I'd also suggest that we make a very speedy offer to Finland and Sweden to get into NATO. Sanctions against Russia are okay, up to a point, but in the end, I don’t think they're decisive. We could have an embargo, refuse to buy Russian oil, gas or coal, but that's difficult. There's not much political appetite for that, because Europe is very short of gas already.
YOU MENTIONED THE EU SHOULD BE PUTTING FORWARD MEMBERSHIP ACCESS TO UKRAINE, WHILE NATO SHOULD PROVIDE A MAP TO KYIV. WHERE DOES ALL THIS LEAVE GEORGIA? I think Georgia is in a very difficult position, that it’s lost its reputation as an outpost of democracy, rule of law, media freedom and so on in the Caucasus, and there's been a lot of very justified concern about the way things have been going in recent years. So, I think that Georgia’s gone down the agenda. And I feel very sorry: Georgia hasn't gone down my agenda; I have many Georgian friends, and I care very much about what's happening there. But I think that the internal situation is not helping the country’s foreign policy, and when we talk about NATO and EU hopes, I think the danger is that Georgia is less of a priority than before. Many people in the West might say that Georgia has already for a long time been under Russian influence and it hasn’t got either the symbolic nor the strategic importance it once had, but I don't want to talk down Georgia's chances. I would certainly campaign very hard for Georgia to be treated as a case.
IS GEORGIA ITSELF CAMPAIGNING HARD ENOUGH TO BE INCLUDED?
Ukrainians hold a banner during a rally to thank the UK for supplying Ukraine with weapons, outside the UK Embassy in Kyiv. Source: STR/ZUMA PRESS
To put it crudely, Georgia's got to get its act together- I'm not sure that Mr. Ivanishvili and the Georgian Dream party fully realize the serious harm the damage to their reputation and these political shenanigans we’ve been seeing have been doing to the country's reputation. A major overhaul would be needed for Georgia to be taken seriously.
8
BUSINESS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
Hotel Price Dynamics in Georgia throughout 2021
A
ccording to the Georgian National Tourism Administration, in 2021, some positive recovery trends were shown both in terms of revenue from international travel and in the number of international visitors. In particular, the revenue from international travel reached 38% of the prepandemic (2019) level, while the number of international visitors amounted to 20% of the pre-pandemic level and recorded a 7.7% year-on-year (YoY) increase. Against this background, it is worth evaluating the dynamics and recovery trends of hotel prices in Geor-
gia throughout 2021. Over the course of 2021, the prices of hotels and restaurants increased significantly. The monthly dynamics of the YoY price increase fluctuated between 2% and 15%, with an average monthly price increase of 10%. Such trends are observable from a sample of Georgian hotels’ average monthly prices in 2021. Across the 2019-2021 period, the prices were lowest in 2020 due to the outbreak of the Covid-19 pandemic, however, since the beginning of 2021, prices have increased significantly. In 2021, the average monthly price of hotels exceeded both the pre-pandemic
(2019) level (129 GEL) and the 2020 level (115 GEL), to reach 159 GEL. Prices increased for all categories of hotels, with the price increase being highest in the most volatile category, namely 5-star hotels, for which the average monthly price peaked in June 2021 (500 GEL). 4-star hotel prices showed similar fluctuations, while 3-star hotels and guesthouse prices increased relatively steadily. To further evaluate the monthly hotel price dynamics, the YoY HPI index should also be analyzed. At the beginning of 2021, the hotel price index for Georgian hotels calculated in GEL was negative until June of 2021, meaning that
prices were lower compared to the corresponding month of 2020. Since then, the prices have been increasing each month. The magnitude of the YoY price increase was the highest in July 2021 (27% increase) followed by November 2021 (24%). However, when compared to pre-pandemic values, even though the HPI was positive throughout June-October 2021, in this period the magnitude of the month-on-month price increase was low at an average of 3%. It must also be noted that in the last two months of 2021, the HPI compared to 2019 again returned to negative values. Looking at the categories, in 2021 compared to 2020, the monthon-month price increase was higher in the case of 3, 4, 5-star hotels (with an average monthly HPI of 28%) than guesthouses (7%). Meanwhile, compared to 2019, the average monthly HPI for 3, 4, 5-star hotels was -3%, while the average monthly HPI for guesthouses was -1%. Moreover, the magnitude of price fluctuations was greater in the case of 3, 4, 5-star hotels compared to guesthouses. However, it must also be noted that the high inflation rate and depreciation of the GEL’s exchange rate against the USD could realistically render the HPI com-
pared to 2019 close to zero, thus making real decrease of prices higher than reported.
HOTEL PRICE INDEX In December 2021, in Georgia the hotel price index increased by 2.5% compared to November 2021. The 3-star, 4-star and 5-star hotel price index increased by 4.4%, while for guesthouses, the price index increased by 3.1%. In December 2021, compared to December 2019, hotel prices in Georgia decreased by 2.2%. The prices of 3*, 4*, 5* hotels decreased by 3.7% and the prices of guesthouses decreased by 5.5%.
AVERAGE HOTEL PRICES In Georgia, the average cost of a room in a 3-star hotel was 135 GEL per night in December 2021, while the average cost of a room in a 4-star hotel in Georgia was 246 GEL per night, and the average cost of a room in a guesthouse was 106 GEL per night. The average cost of a room in a 5-star hotel in Georgia in December 2021 was 423 GEL per night. In Kakheti, the average price was 548 GEL, followed by Tbilisi - 524 GEL, Guria – 398 GEL and Adjara - 391 GEL.
BUSINESS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
9
MEDICAL WORLD SPA & WELLNESS - Innovative Equipment
Levan Kobalia: We Aim to Develop wellness in Georgia and that Way, We Want to Support Tourism BY KETEVAN SKHIRTLADZE
M
edical World Spa & Wellness is one of the most innovative companies in Georgia, which is oriented to bringing high-quality medical equipment to the country and creating a prepared environment for exploitation. The team of Medical World Spa & Wellness has implemented a number of important projects. The service area of Medical World Spa & Wellness includes: Hotel, Health resort, Leisure, Baneological, and the fully equipped services of the resort complexes. Medical World Spa & Wellness is a new direction for Medical World, a medical equipment importer, which has 19 years of experience and is a leading importer in the country. “We are taking quite daring steps to be one of the most innovative companies in the field of spa and wellness. We are ready to openly share our experience with the most critical customers and fully meet their demands and interests,” said Levan Kobalia, Founder of Medical World in an interview with GEORGIA TODAY.
HOW DID YOU GET INTERESTED IN THE SPA AND WELLNESS DIRECTION? We have many years of experience working with resorts and hotels. We saw that our customers became interested not only in setting up medical equipment in a hotel and using it as a physiology laboratory but also in developing the spa and wellness area. They trusted us, and therefore, we started bringing health and relaxation equipment to the country.
WHAT SERVICE AREAS DO MEDICAL WORLD SPA & WELLNESS COVER? Our operating range is quite wide. We offer customers equipment such as massage couches, sauna, hydrotherapy baths, special showers that facilitate human blood circulation. We also have chronic disease rehabilitation facilities and many other devices to improve health. We also offer the installation of equipment.
TELL US ABOUT THE QUALITY OF YOUR PRODUCTS. Our company cooperates with the world’s leading European brands, therefore we have very high-quality equipment. We import German, Austrian, and Swiss equipment to Georgia, which is of the best quality and designed for long-term usage.
is important for us. We aim to develop the wellness direction in Georgia and we want to play a role in promoting tourism. We want to take the development of the country to a higher level. We play a big role in improving hotel services and helping them to offer higher quality services to customers.
Medical World Spa & Wellness is an innovative wellness company in Georgia, we have been working in this field for about two years, however, we have 19 years of experience operating in the medical field, and during this time, we have gained the trust of our customers.
WHAT ARE THE PRIORITIES OF YOUR COMPANY?
TELL US ABOUT THE PROJECTS YOU HAVE IMPLEMENTED.
TELL US ABOUT THE TEAM OF ENGINEERS AND THEIR TRAINING.
The main priority of the company is to offer customers the highest quality product and to create ready-to-use conditions with professional technical services. Long-term cooperation
Our company has implemented several important projects, including “Tbilisi Baneological Resort,” “Sairme Resort,” hotel-health complexes, “Borjomi Palace,” “Prometheus,” and others.
The company has a team of engineers trained in various European countries to further provide the full range of services, which includes the commissioning of each device, as well as maintaining
the subsequent performance of the required services.
AND YOUR FUTURE PLANS? The company continues to move forward, developing constantly. Our goal is to be a leading company in the field of wellness in Georgia. We are actively working on this, as evidenced by numerous training courses held outside Georgia. We sponsored a spa conference, inviting representatives of the resorts, where specialists spoke on the role of resorts in medicine. We want to not only offer health equipment to customers but also to raise awareness about the importance of health resorts.
Turkey, Russia, China Top Trading Partners of Georgia in 2021 BY ANA DUMBADZE
T
urkey ($2.1 billion), Russia ($1.6 billion) and China ($1.4 billion) are the top trading partners of Georgia in total external trade turnover in 2021, as shown by preliminary data from the National Statistics Office of Georgia (Geostat). In 2021, the external merchandise trade (excluding non-declared trade) of Georgia amounted to $14,315.6 million, 25.6% higher than 2020. The exports equaled $4,242.3 million (26.9% higher year-onyear), while imports stood at $10,073.3 million (25.1$ higher y-oy). The negative trade balance was $5,831.0 million in 2021, and its share in external trade turnover
constituted 40.7%, Geostat noted. In 2021, copper ore and concentrates claimed first place in the list of top export items, equaling $815.4 million and 19.2% of total exports. The export of ferro-alloys totaled $477.4 million, and their share in the total exports amounted to 11.3%. Motor car exports occupied third place, standing at $456.6 million and constituting 10.8% of the total exports. The top import commodities in 2021 were motor cars, whose imports equaled $898.8 million (8.9% of the total imports). Petroleum and petroleum oils followed in the list with $822.6 million (8.2% of imports). Copper ores and concentrates were third in the top import commodity list, with $736.1 million (7.3% of imports). Source: Geostat
10
BUSINESS
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
ISET GDP Forecast | Georgian Economy Continues to Recover from Covid-19 Impact, but Inflation Threatens Stability as Food Prices Soar by 17.7% INFLATION In November, the annual inflation of consumer prices amounted to 12.5%, which is notably higher than the targeted 3%. Approximately 4.9 percentage points of CPI inflation were related to higher food prices, which increased 17.7% annually (this was driven by the hike in food prices worldwide – FAO Food Price Index increased by 27.8% yearly). Furthermore, increased oil prices made a notable positive contribution (2.0 ppts) to the annual inflation measure. The latter trend is mostly a reflection of significantly increased oil prices on the global market (Euro Brent Spot Price (COP) increased by 89.9% yearly. The other important contributors were increased prices on healthcare (0.6 ppts), tobacco (0.2 ppt) and utilities (1.6 ppts) . Meanwhile, the measure of core inflation amounted to 6.1%. Overall, CPI related variables had a slight negative contribution to the GDP forecast.
WORLD PRICES
BY DAVIT KESHELAVA AND YASYA BABYCH
I
SET-PI has updated its real GDP growth forecast for the fourth quarter of 2021 and the first quarter of 2022. Here are the highlights of this month’s release:
HIGHLIGHTS • Recently, Geostat revised upward its real GDP growth for the third quarter of 2021 to 9.1% (by 0.1 ppt). • The real GDP growth rate amounted to 12% year-on-year for November 2021. Consequently, the estimated real GDP growth for the first eleven months of 2021 was 10.7%. • As a result of the update, the growth forecast for Q4 of 2021 increased by 0.1 ppt to 10.9%. ISET-PI’s second forecast for Q1 of 2022 puts GDP growth at 7.4%. • Based on November’s data, we expect annual growth in 2021 to be 10.8%, which is 0.1 percentage point higher than the previous forecast. Variables behind the GDP growth forecast:
MONEY SUPPLY All monetary aggregates except the narrowest, Narrow Money (M0), experience notable growth in annual terms. Monetary aggregates M2 and M3 experienced yearly growth of 19.7% and 12.1%, respectively. Meanwhile, currency in circula-
tion increased relatively moderately by 0.7% yearly. However, the Narrow Money (M0) decline by 2.4% in monthly terms. Overall, money supply related variables had a slight negative contribution to the real GDP growth for the last quarter of 2021 and the first quarter of 2022 based on our model.
MERCHANDISE TRADE In November, Georgia’s exports experienced an 42.9% annual growth, which was mainly driven by increased export/ re-export of copper ores and concentrates (contributing by 11.8 percentage points), mineral and chemical fertilizers (by 6.1 ppts), motor cars (by 5.0 ppts), natural grape wines (by 1.4 ppts), ferro alloys (by 1.2 ppts), hazelnuts and other nuts (by 1.1 ppts), alcohol spirits (by 0.9 ppt), and mineral and still water (by 0.3 ppt). During this period, the import of goods increased by 39.6%, driven by an increased import of copper ores and concentrates (contributing by 9.5 percentage points), petroleum and petroleum products (by 1.1 ppts), motor cars (by 1.1 ppts), and telephones (by 0.5 ppt). Consequently, the trade deficit widened dramatically by 37.3% yearly, and amounted to 576.9 million USD. Overall, trade related variables still had a small positive contribution to the GDP growth forecast.
REMITTANCES In November, remittances increased by 22.0% annually and reached 207.3
million USD (the growth was partially driven by increased use of bank transfers rather than physically carrying money via border due to COVID regulations ). The main contributors to this increase were Kazakhstan (by 309.3% YoY, contributing 4.1 ppts), Italy (by 26.6% YoY, 4.0 ppts), Kyrgyz Republic (by 315.2% YoY, 2.8 ppts), USA (by 22.1% YoY, 2.6 ppts), Germany (by 45.0% YoY, 2.0 ppts), Israel (by 23.7% YoY, 1.9 ppts), Russian Federation (by 8.0% YoY, 1.5 ppts), Azerbaijan (by 30.6% YoY, 1 ppt), France (by 34.2% YOY, 0.5 ppt), Greece (by 3.6% YoY, 0.4 ppt), Tajikistan (by 106.7% YOY, 0.4 ppt) and Poland (by 23.8% YOY, 0.3 ppt). Whereas money inflows decreased from Ukraine (by 21.8% YoY, -1.2 ppts), and Turkey (by 7.9% YoY, -0.4 ppt). Overall, the recovery of remittances flows made a positive contribution to the growth forecast.
TOURISM Tourism arrivals and receipts only partially recovered in November of 2021 after a sharp decline in 2020. In November, the number of international visitors increased by 267.2% yearly (decreased by 69.3% compared to the same month in 2019), while the increase in tourist numbers (visitors who spent 24 hours or more in Georgia) amounted to 283.2% (decreased by 55.3% compared to the same month in 2019). Overall, recovering numbers of visitors and tourists, along with a moderate increase in tour-
istic spending has made a small positive contribution to the growth forecast.
REAL EFFECTIVE EXCHANGE RATE (REER) REER appreciated by 2.3% monthly and 12.5% yearly in November. The Lari Real Exchange Rate (RER) appreciated monthly with respect to the currencies of the major partner countries: Turkish Lira (TRY) (by 10.7%) , Euro (EUR) (by 1.8%), Russian Ruble (RUB) (by 1.5%), and US Dollar (USD) (by 0.2%). Moreover, the GEL/TRY, GEL/EUR, GEL/ USD, and GEL/RUB real exchange rate appreciated compared to the same month of the previous year by 28.3%, 17.2%, 11.1%, and 3.3% respectively. Appreciation of the REER is typically associated with domestic export goods losing competitiveness on the foreign markets, but it also translates into less pressure on the prices of imported goods. Overall, REER-related variables had a small negative contribution to the real GDP growth projections.
The other variables of interest in our growth forecast were Metals Price Index (PMETA) and the Agricultural Raw Materials Index (PRAWM). Metals form a significant share in Georgia’s exports, while food and oil are among the main imports. Therefore, a global increase in the price of metal will likely cause improvement to the Georgian economy, whereas an increase in the price of agricultural products will be damaging. In annual terms, metal prices increased by 26.3% in November, while raw agricultural material prices increased by 3.5%. On the balance, adding the PMETA and PRAWM indicators to the model thus increases the growth forecast for both quarters.
CONSUMER CREDIT The other group of variables that had an important impact on the GDP growth predictions is related to consumer credit. In November 2021, the total volume of commercial banks’ consumer credit increased by 31.3% yearly and 4.3% monthly. However, the volume of commercial banks' short-term consumer credits decreased by 13.7% yearly and 5.7% monthly. The negative annual growth was driven by short-term consumer credit in both national (declined by 9.3% yearly) and foreign (declined by 31.4% yearly) currencies. Whereas, the volume of commercial banks' long-term consumer credits increased by 33.3% and 4.6% yearly and monthly respectively. Overall, the variables related to consumer credit have had a slight positive impact on the growth forecast.
Our forecasting model is based on the Leading Economic Indicator (LEI) methodology developed by the New Economic School, Moscow, Russia. We have constructed a dynamic model of the Georgian economy, which assumes that all economic variables, including GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces five consecutive monthly forecasts (or “vintages”), which increase in precision as time passes. Our first forecast (the 1st vintage) is available around five months before the end of the quarter in question. The last forecast (the 5th vintage) is published in the first month of the next quarter.
SOCIETY
GEORGIA TODAY
JANUARY 28 - FEBRUARY 3, 2022
11
Please, Not That BLOG BY TONY HANMER
I
t has now been 10 days since The Garage Fire which was the subject of my last week’s article. A time of ups and downs. It took me this long to remember something specific which was in the fire, something which no amount of money can replace, unlike everything else which burned to ashes and atoms. Lying awake at 6 this morning, I had to consider other possible locations for this thing, reject them, and finally let the grief wash over me. Then decided to move on, as a process. It took a while. I had been making a list of the other losses, all of which could be bought back, because they were all mass-produced items. I thought back to an apartment move which my friends in St Petersburg, Russia, made while I was away in Canada for a few months. They took my belongings, which I had already packed up in anticipation, and welcomed me with delight upon my return. The new place being much larger than the old, and I began rummaging through the things to find my own set of belongings, somewhat scattered as we had
upsized from 4 young men to 10. I found everything except, except… that which was most precious to me at the time. Not the container, which was just a canvas shopping bag on two wheels with a pullout handle: Its contents. All of my photographic negatives, slides and some prints from the previous 10 years or so. As that new apartment was also being renovated as my friends moved in, I imagine that one of the workmen liked the look of my very convenient wheeled shopping bag, and walked off with it. The materials inside? Worthless to him, likely dumped out. Gone forever to me, though. That gradual realization was very hard, and I almost left what I thought was a calling from God to serve people in some capacity overseas. My “children,” product of all my creativity, all stolen from me and scattered to the winds! Eventually, I worked through it and moved on, but it took time and determination. And prayer. The young people’s volunteer group were a huge help to my wife and me this last week after the fire. Before snow returned, we had to categorize everything left in the garage. Scrap metal to sell; salvageable tools or parts; garbage; salvageable wood to burn in the stove;
roof sheeting, now blackened but still useable to cover things with. Then they helped me take it all to new locations: barn, dumpsters, house. That kept me busy for quite a few days, and we all got blackened from head to toe with the whole messy business. And we bonded very closely, as well. Leaving, they cooked a “last supper” to share with us. After this they presented us with a spiral-bound book, titled “Beauty from Ashes”, Inside, along with restored pieces of some of my old postcards and other photographs, were handwritten letters from every team member about how special their time through our crisis had been. It touched us deeply. Now, that team has gone and another one come, for nearly a month. After their first night in the house, the early morning brought the memory of a nice large plastic storage box with a secure lid, safe from the small mice which had been known to inhabit the garage. Inside… all the next 25 years’ archive of my photographic negatives, slides, photograms and black and white prints. The negs and slides I had scanned for the most part, but these were the originals. The photograms and prints were unique and irrecoverable. So here I am again, at the same cross-
roads as in the early 1990s in Russia, facing the same terrible loss. My reactions remain the same. Go through the grief, don’t bury or try to ignore it. Then pray for the strength and faith to move on. I do this, letting it take the time it needs, and am through, out the other side, at least for now. The few burnt ceramic things in my photograph will stand in for the actual irreplaceables. It could still have been so much worse!
Tony Hanmer has lived in Georgia since 1999, in Svaneti since 2007, and been a weekly writer and photographer for GT since early 2011. He runs the “Svaneti Renaissance” Facebook group, now with nearly 2000 members, at www.facebook.com/ groups/SvanetiRenaissance/ He and his wife also run their own guest house in Etseri: www.facebook.com/hanmer.house.svaneti
CULTURE
Director of Film Center Meets with Advisor to Ambassador of Islamic Republic of Iran to Discuss Joint Film Production
D
irector of the National Film Center Gaga Chkheidze met with the Advisor to the Ambassador of the Islamic Republic of Iran to Georgia on Culture, Ahmad Ali Mehri Ardestani. The issues of concluding a memorandum between the two countries and concluding a bilateral agreement on joint ventures were discussed at the meeting. The importance for both sides was noted that Iranian and Georgian films be more widely represented at Georgian and Iranian festivals and in cinemas. Chkheidze noted that the attendees of the Tbilisi Film Festival are familiar with Iranian cinema, as there are Iranian films in the program almost every year. In turn, Georgian cinema and filmmakers are also often represented at the Fajr International Film Festival. At the professional level, there are connections between Georgian and Iranian cinematographers, but this was decided as “too little” by the parties, and it was agreed that good neighborly relations should be expressed not only in joint cinematographic events, but also in educational programs and industrial events.
PUBLISHER & GM
George Sharashidze COMMERCIAL DEPARTMENT
Commercial Director: Iva Merabishvili Marketing Manager: Natalia Chikvaidze
GEORGIA TODAY
EDITORIAL DEPARTMENT:
Editor-In-Chief: Katie Ruth Davies
Journalists: Ana Dumbadze, Vazha Tavberidze, Tony Hanmer, Emil Avdaliani, Nugzar B. Ruhadze, Michael Godwin, Ketevan Skhirtladze Photographer: Aleksei Serov
Gov’t to Set up Commission for Project of Georgian Cultural Center in Jordan
P
rime Minister Irakli Garibashvili said today that a Georgian cultural center is to be built near the site of the baptism of Jesus Christ in Jordan. The PM said before the government session that the project is planned “with the blessing of the Patriarch,” and a commission will be set up together with the Patriarchate to implement it. “For this purpose, we will set up a government commission and start working on the draft project and then move on to construction,” he said. Garibashvili thanked the King, Prince, Patriarch and Archbishop of Jerusalem for handing over the land near the Jordan River. The information about the transferring of the land to Georgia was spread on January 19: “Through the joint efforts of Georgian Prime Minister Irakli Garibashvili and
Website Manager/Editor: Katie Ruth Davies Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava
Catholicos-Patriarch of All-Georgia Ilia II, 4000 m2 near River Jordan, the place of the Savior’s baptism, has been granted to Georgia. “The Head of Government expressed his deepest gratitude to the King of Jordan and His Highness Prince Ghazi for this momentous decision, also pointing out the exceptional cooperation between Georgia and the Hashemite Kingdom of Jordan. According to Irakli Garibashvili, this marks an even of tremendous significance when, 300 years later, Georgia is returning to the Holy Land. “Zaza Kandelaki, Ambassador of Georgia to the Hashemite Kingdom of Jordan, briefed the Prime Minister on the location of the land, and the state of affairs on the ground, adding that an official ceremony of handing over the 4000 m2 parcel of land near the River Jordan to Georgia will be held in near future,” the Georgian government announced on January 19.
ADDRESS
1 Melikishvili Str. Tbilisi, 0179, Georgia Tel.: +995 32 229 59 19 E: info@georgiatoday.ge F: GeorgiaToday ADVERTISING & SUBSCRIPTION
+995 555 00 14 46 E-mail: marketing@georgiatoday.ge
Reproducing material, photos and advertisements without prior editorial permission is strictly forbidden. The author is responsible for all material. Rights of authors are preserved. The newspaper is registered in Mtatsminda district court. Reg. # 06/4-309
IWG plc, Level 4, 2 Leonidze str. Tbilisi, Georgia | +995 32 290 039
