Monthly Archives: September 2007

07TBILISI2439, GEORGIA BI-WEEKLY UPDATE SEPTEMBER 28

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Reference ID Created Released Classification Origin
07TBILISI2439 2007-09-28 13:23 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXRO1190
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DE RUEHSI #2439 2711323
ZNR UUUUU ZZH
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FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 7777
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS TBILISI 002439 
 
SIPDIS 
 
SIPDIS 
 
E.O 12958: N/A 
TAGS: PREL PGOV PHUM ECON GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE SEPTEMBER 28 
 
 
1. This cable contains current items of political, 
economic, and social interest concerning Georgia during the 
weeks of September 8-28. 
 
New CEC Chair to be Chosen Soon 
------------------------------- 
2. On September 23, a special Selection Commission under the 
President's administration completed acceptance of applications for the 
position of the Central Election Commission (CEC) chairman, vacant 
since previous Chairman Guram Chalagashvili was appointed head of the 
National Energy Regulatory Commission in August.  By all accounts the 
leading candidate is Levan Tarkhnishvili, chairman of the Supervisory 
Board of the Public Broadcasting Service (PBS), who is said to be 
associated with influential ruling party MP Giga Bokeria.  The other 
two candidates are obscure and listed as "temporarily unemployed" in 
their application materials.  The Selection Commission will recommend 
two candidates to the president by September 29, who in turn will 
choose one for the Parliament's approval within 7 days. 
 
Russian Ambassador Predicts Extinction of Georgian Nation 
--------------------------------------------- ------------ 
3. On September 21, at a meeting of the Georgia-Russia Friendship Fund, 
Russian Ambassador to Georgia Vyacheslav Kovalenko said Georgia was a 
"relict" nation "on the brink of extinction" in terms of demographics. 
The statement touched off a firestorm of criticism from Georgian 
officials and commentators.  Parliamentary Speaker Nino Burjanadze said 
"I would advise Kovalenko to worry about Russia and its demographic 
problems, and we will take care of Georgian problems ourselves." The 
Ministry of Foreign Affairs summoned Kovalenko for explanation, and 
Georgian students staged a rally outside Russian Embassy demanding 
Ambassador?s apology.  The comments even drew criticism from opposition 
figures who have themselves expressed concern in the past about 
demographic trends in Georgia.  Kovalenko refused to apologize, saying 
he was referring to the findings of a Georgian research institute and 
was truly concerned about Georgia's huge demographic problem, "which 
needs to be urgently addressed." 
 
Georgian Armed Forces to be Increased 
------------------------------------- 
4. On September 12, President Saakashvili began the process to increase 
the size of Georgia's armed forces, submitting to Parliament a bill to 
increase personnel from 28,000 to 32,000.  Members of the ruling party 
justified the decision as necessary given Georgia's participation in 
international peacekeeping missions, as well as to increase defensive 
capacities within Georgia.  Opposition spokesmen disagreed, arguing 
that current Georgian armed forces are fully capable to face present 
challenges.  They also argued that it would be more expedient to 
enhance the professionalism of the Georgian army instead of boosting 
its size.  On September 17, despite the critisism from the opposition 
parties, the Parliament approved the President's initiative. 
 
Improving Relations with Belarus? 
--------------------------------- 
5. Georgia's Interior Minister Vano Merabishvli paid an official visit 
to Belarus on September 17, meeting with President Alexander 
Lukashenko, who expressed hopes for restoring the positive relations 
Georgia and Belarus enjoyed in the Soviet era.  Lukashenko said 
previous confrontations between the two countries should be 
disregarded.  Georgia and Belarus agreed on opening diplomatic missions 
in each other's countries and on security cooperation, but put higher 
emphasis on boosting economic ties.  Lukashenko stressed that the level 
of trade did not correspond with the potential of the two countries and 
set a target of increasing the current USD 25 million trade turnover up 
to USD 100 million in the near future.  Lukashenko dismissed the 
ensuing speculation of some journalists that the visit was aimed at 
building an anti-Russian coalition, saying that "only people with a 
morbid imagination could conclude that Minsk and Tbilisi are getting 
together against Russia." 
 
Higher Price for Azerbaijani Gas 
-------------------------------- 
6. Sources in both countries have confirmed the intention of Azerbaijan 
to increase gas prices for Georgia.   Georgia's Energy Minister 
Alexander Khetaguri reported that talks on the issue have already begun 
and will be completed in a near future.  His Azerbaijani counterpart 
confirmed this shortly afterward.  Currently, Georgia pays USD 110 per 
1,000 cubic meters of Azerbaijani gas compared to USD 235 for Russian 
gas.  According to Georgian media, Azerbaijan's gas price could grow by 
up to USD 60, which would entail an inevitable increase in gas tariff, 
already increased significantly for two consecutive years.  Currently 
Azerbaijan is Georgia?s sole supplier, as deliveries from Russia were 
suspended in late spring due to low consumption level.  However, with 
Georgia's increased demand in late fall and winter and Azerbaijan's 
inability to fully meet the demand, Georgia will have to resume import 
from Russia.  Unofficial press report
s claim Russia is planning to 
demand a higher price as well. 
 
TEFFT

Wikileaks

07TBILISI2437, OKRUASHVILI DETAINED FOR CORRUPTION, OPPOSITION

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Reference ID Created Released Classification Origin
07TBILISI2437 2007-09-28 10:49 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO1024
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FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7773
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 TBILISI 002437 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR DAS BRYZA AND EUR/CARC 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM GG
SUBJECT: OKRUASHVILI DETAINED FOR CORRUPTION, OPPOSITION 
PROTESTS 
 
REF: A. TBILISI 2415 
 
     B. TBILISI 2424 
 
1. (U) Summary: Former Defense Minister Irakli Okruashvili 
was arrested in his office on the evening of September 27 by 
the criminal police and detained in the Special Operations 
Department (SOD) detention facility.  Charges leveled at 
Okruashvili by the Prosecutor General's office include: abuse 
of power, negligence, extortion, and money laundering. 
Okruashvili refused to acknowledge the charges and claimed he 
is a political prisoner.  A number of other opposition 
leaders jointly condemned Okruashvili's arrest as politically 
motivated.  They said the arrest, just two days after the 
announcement of his opposition party (ref A), confirmed 
Okruashvili's charge that the government is corrupt. 
Furthermore, they said he could not have undertaken illegal 
activity as MOD without President Saakashvili's explicit 
consent.  The opposition is calling for a public protest at 
Parliament this Friday (September 28) at 1400 hours.  End 
Summary. 
 
---------- 
The Arrest 
---------- 
 
2. (U) Okruashvili was arrested in his office on the evening 
of September 27 around 2030 hours and detained in the Special 
Operations Department (SOD) facility.  A special unit from 
the criminal police broke into Okruashvili's party's office 
and took him into custody without incident.  Imedi TV 
reported that its camera crews were present and recorded the 
arrest, but their cameras were confiscated by the police. 
One hour later, the head of Okruashvili's security, his 
driver, and approximately 10 supporters were also arrested in 
the party's headquarters.  Okruashvili's lawyer, Eka Beselia, 
said the arrest was "political retaliation." 
 
----------- 
The Charges 
----------- 
 
3. (U) The charges against Okruashvili were detailed on TV by 
Deputy General Prosecutor, Nika Gvaramia.  Gvaramia stated 
"the Georgian authorities' struggle against corruption is an 
irreversible process,"  and that Okruashvili's arrest is but 
another step in this struggle.  Gvaramia said that the arrest 
was the result of a joint investigation by the Prosecutor's 
Office, the Investigation Department of the Georgian Finance 
Ministry Revenues Service, and the Military Police. 
 
4. (U) The first two charges state that as Minister of 
Defense, Okruashvili had his friend Kibar Khalvashi establish 
a construction company in early 2005 and subsequently granted 
the company lucrative military construction contracts in 
exchange for kickbacks.  The extortion charge centers on the 
case and supposed testimony of former Presidential 
Parliamentary Secretary Dimitry Kitoshvili (ref B).  Both 
Okruashvili and Kitoshvili are now accused by the government 
of having extorted 2.6 percent of the shares of the mobile 
phone company Geocell from Jemal Svanidze.  The money 
laundering charge focuses on the recent acquisition of 
Okruashvili's new party headquarters.  Gvaramia said that 
Okruashvili "legalized his illegal incomes" by concealing the 
real value of the property, USD 1.8 million, when he bought 
it for USD 250,000. 
 
5. (U) Beselia later met with Okruashvili, who has refused to 
acknowledge the charges.  Beselia announced that "He says he 
is innocent; he also said he was a political prisoner." 
 
----------------------- 
The Opposition Protests 
----------------------- 
 
6. (U) Leaders from most other opposition parties (although 
not the New Rightists) condemned Okruashvili's arrest as an 
example of the government's heavy-handedness.  Former 
Georgian State Minister for Conflict Settlement -- and new 
member of Okruashvili's Movement for a United Georgia party 
-- Giorgi (Goga) Khaindrava was the most outspoken. 
Khaindrava said "The arrest is not a way out."  He said the 
government's response to the questions Okruashvili posed "was 
completely unintelligible,... and absolutely inadequate."  He 
continued, "I am absolutely convinced that under the regime, 
which he (Saakashvili) created in Georgia, nothing could have 
happened without him.  Therefore, he should serve a term 
together with Okruashvili, if the latter's guilt is proved." 
People's Party leader Koba Davitashvili stated that 
"Saakashvili confessed guilt, having detained Okruashvili, 
 
TBILISI 00002437  002 OF 002 
 
 
and he should be punished."  Zurab Tkemaladze, of the 
Industrialists, said "we will stand with the other opposition 
parties." 
 
7. (U) Republican Party leader Tinatin Khidasheli called on 
"every person who esteems freedom of speech, equality and 
pluralism to come to the parliament to defeat terrorism and 
overcome fears.  She and the other leaders are planning a 
public protest before Parliament at 1400 hours on September 
28.  The New Rightists, in contrast, kept their distance fro
m 
the demonstration, with faction leader Pikria Chikradze 
saying the opposition should find a more constructive 
approach to limit government overreaching. 
 
------- 
Comment 
------- 
 
8. (SBU) Coming on the heels of Okruashvili's sensational 
allegations September 25 against President Saakashvili, the 
arrest has rallied most of the opposition against the 
government's heavy-handed handling of this case.  Government 
officials are likely to continue to argue that Okruashvili's 
September 25 charges were timed in the hope of buying him 
some political protection from prosecution.  If so he was 
unsuccessful, but as a result of the sequence of events the 
Georgian government's image has taken a huge blow.  The 
government can also claim that testimony received from 
Okruashvili's recently arrested associates, implicating 
Okruashvili, provided the impetus for the timing of the 
arrest. 
 
TEFFT

Wikileaks

07TBILISI2424, OKRUASHVILI ALLY ARRESTED FOR CORRUPTION

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To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
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If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07TBILISI2424.
Reference ID Created Released Classification Origin
07TBILISI2424 2007-09-27 11:39 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO9745
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DE RUEHSI #2424/01 2701139
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FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7743
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002424 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/CARC 
 
E.O. 12958: DECL: 09/24/2017 
TAGS: PREL PGOV PHUM GG
SUBJECT: OKRUASHVILI ALLY ARRESTED FOR CORRUPTION 
 
REF: A. TBILISI 2291 
 
     B. TBILISI 1370 
     C. 06 TBILISI 2938 
 
Classified By: Ambassador John F. Tefft for reasons 1.4 (b) and (d). 
 
1. (C) Summary: On September 11 and 12 four local government 
officials from Gori District were arrested on corruption 
charges.  The same day, the presidentially-appointed Governor 
of the Shida Kartli region, Mikheil Kareli (ref A), led a 
public protest outside the government building, which was 
sealed off by police.  On September 13, Prime Minister 
Noghaideli decried Kareli's actions and announced his 
dismissal by President Saakashvili.  On September 23 Kareli 
was arrested for corruption while trying to board a flight to 
Turkey.  Few in the opposition voiced personal support for 
Kareli, who had a reputation for corruption, but many seized 
on the timing as an indication the government was targeting 
allies of former Defense Minister and likely presidential 
candidate, Irakli Okruashvili.  Saakashvili declared that the 
governments' anti-corruption drive would follow the evidence 
wherever it led.  On September 24 Saakasvhili's own 
representative in Parliament, Dimitry Kitoshvili, was 
arrested for corruption.  End summary. 
 
---------------------------- 
Arrests and Protests in Gori 
---------------------------- 
 
2. (U) On September 11 late at night, Gori Municipality 
Deputy Sakrebulo Chairman Nugzar Papunashvili was arrested. 
On September 12 three more local officials from Gori 
Municipality, including Mayor Vasil Makharashvili, were 
arrested on corruption charges.  Deputy Governor Khvicha 
Okropiridze and Kareli District Gamgebeli Gaioz Dzanadia 
completed the quartet.  Police sealed the Gori government's 
building in order to "protect evidence."  The arrests were 
carried out quite publicly, as in similar such cases. 
 
3. (U) Regional Governor Mikheil Kareli (ref A) led a public 
protest outside the government building on September 12, 
which was sealed off by police.  He was joined by Teo 
Tlashadze, an MP from the ruling United National Movement 
(UNM).  They protested the police's refusal to allow Kareli 
and the Sakrebulo (municipal council) to use the building's 
chambers to hold a hearing regarding the arrests.  Kareli is 
a known supporter of former Defense Minister Irakli 
Okruashvili, who is from the Gori region.  Okruashvili had 
stirred intense interest with his as-yet-unannounced 
presidential campaign (ref B), and following the arrests he 
went public with his opposition to Saakashvili in a harshly 
worded speech September 25 (septel). 
 
4. (U) On September 13, Prime Minister Noghaideli expressed 
anger and disbelief at Kareli's actions, and announced 
Kareli's dismissal by President Saakashvili.  MP Tlashadze 
publicly tore up her UNM membership card and announced she 
was leaving the party to join Okruashvili's party.  Media 
reported that Kareli spent the whole day of September 14 with 
Okruashvili. 
 
------------------- 
Kareli Arrested Too 
------------------- 
 
5. (U) Kareli was arrested for "taking bribes and illegally 
participating in private business activities" on September 23 
while trying to board a flight to Turkey.  He was sentenced 
to 2 months pre-trial detention.  President Saakashvili 
expressed regret at placing "excessive trust" in his former 
regional representative, Kareli.  Saakashvili said that 
Kareli's arrest was "part of the fight against the mafia in 
Gori" and reiterated no one in Georgia is above the law.  He 
said he has full confidence in the prosecutor's office and 
trusts their decisions.  The UNM strongly denied any 
political motives regarding Kareli's arrest. 
 
--------------------------------------------- --------- 
Equal Prosecution?  Parliamentary Secretary Kitoshvili 
--------------------------------------------- --------- 
 
6. (U) In a separate incident on September 24, Dimitry 
Kitoshvili, the President's secretary (or liaison) in 
Parliament was detained following an investigation by the 
Ministry of Finance Special Department and Procuracy.  The 
charges stem from October 2006, when Kitoshvili was head of 
the National Communications Regulatory Commission. 
Kitoshvili allegedly forced a shareholder in Geocell (a 
mobile phone company) to sell his shares to a fictitious 
party and profited from the transaction.  Kitoshvili denied 
the allegations, claiming that he merely introduced a buyer 
 
TBILISI 00002424  002 OF 002 
 
 
and seller.  Speaker of Parliament Nino Burjanadze and Deputy 
Speaker Mikheil Machavariani both publicly announced that 
Kitoshvili's arrest was further progress in the fight against 
corruption.  Furthermore, they claimed this latest arrest 
shows that the recent arrests are not politically-motivated 
and the government is unbiased against any political 
opponents, as Kitoshvili himself is a member of the UNM and 
advisor to the President.  While it is true that Kitoshvili 
(unlike Kareli) was not generally
seen as a political ally of 
Okruashvili, opposition commentators stressed possible 
financial links between Okruashvili and parties in the 
Geocell case. 
 
------- 
Comment 
------- 
 
7. (C) It is well-known that Kareli has a tarnished past and 
few knowledgeable observers doubt that the corruption charges 
will bear out.  A recent documentary, which received a 
Democracy Commission grant from the Embassy, shows that in 
2005 and 2006 Kareli and regional officials confiscated 400 
hectares of wheat grown commercially by a group of 10 farming 
families who had together legally leased the government land 
for 9 years beginning in 2000.  The farmers were not 
compensated for their crop, being told by Kareli that the 
land and its produce "belongs to everybody."  In 2006 Embassy 
officials observed another example of how business is done in 
Gori, meeting the director of a large enterprise who had no 
business credentials other than obvious connections to the 
regional government (ref C).  Nevertheless, the timing of the 
arrests has guaranteed that all discussion is about a 
possible political motivation.  Media report that Okruashvili 
himself is under investigation regarding his party's 
headquarters building, and that he may have purchased it 
below market price and evaded taxes in the process.  With 
Okruashvili now out in the open as an opponent of the 
government, any such investigations will be even more 
politically charged. 
TEFFT

Wikileaks

07TBILISI2423, IRI NATIONAL VOTER SURVEY: ECONOMY SLOWS

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Reference ID Created Released Classification Origin
07TBILISI2423 2007-09-27 11:39 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Tbilisi

VZCZCXRO2825
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FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7741
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002423 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/CARC 
 
E.O. 12958: DECL: 09/27/2017 
TAGS: PGOV PREL GG
SUBJECT: IRI NATIONAL VOTER SURVEY: ECONOMY SLOWS 
SAAKASHVILI 
 
REF: A. TBILISI 541 
 
     B. TBILISI 2415 
 
TBILISI 00002423  001.2 OF 002 
 
 
Classified By: Ambassador John F. Tefft for reasons 1.4 (b) and (d). 
 
1. (SBU) Summary: President Saakashvili's, and his 
government's, popularity have slipped since February (ref A). 
 According to a USAID-funded poll conducted in early 
September by the International Republican Institute (IRI) and 
the Gallup Organization, the highest percentage of 
respondents in 3 years believe the country is going in the 
wrong direction.  The ruling National Movement (UNM) remains 
the most trusted of parties, but by a narrower margin.  The 
UNM's slide is primarily due to economic concerns, as 
unemployment has surpassed territorial integrity as 
Georgians' most pressing issue.  Former Defense Minister 
Irakli Okruashvili was considered a strong Presidential 
candidate in opposition to Saakashvili.  60 percent of 
respondents said it would likely be good for Georgia if 
Okruashvili runs for President.  In a proposed first round 
election, Saakashvili received less than half of the vote. 
It is a statistical dead heat in a runoff match-up between 
the two.  Infrastructure development -- constant electricity, 
paved roads, and city appearances -- remain the top GOG 
achievements.  Unemployment, the conflict zones and bad 
relations with Russia are considered the GOG's biggest 
failures.  Confidence in the institutions of central 
government also decreased.  End summary. 
 
----------------------- 
Saakashvili and UNM Dip 
----------------------- 
 
2. (SBU) In the September 2007 poll, 58 percent of 
respondents -- the highest level in 3 years -- believe the 
country is going in the wrong direction.  The ruling National 
Movement (UNM) remains the most trusted of parties, although 
this trust has dropped from 38 to 27 percent of respondents. 
If the Parliamentary elections were held now, 45 percent of 
voters said they would vote for the UNM, down from 56 percent 
in February.  If a presidential contest were held tomorrow, 
33 percent of respondents said they would support 
Saakashvili, down from 47 percent.  21 percent said they 
would support Okruashvili, while the rest favored other 
candidates or were undecided.  Asked which candidate they 
would never vote for, 25 percent named Saakashvili, up from 
12 percent earlier this year. 
 
---------------- 
It's the Economy 
---------------- 
 
3. (U) The UNM's slide is primarily due to economic concerns, 
as unemployment has surpassed territorial integrity as 
Georgians' most pressing fear.  Creating jobs was almost dead 
even with restoring Georgia's territorial integrity as to 
what should be the GOG's first priority.  The economy once 
again was a clear winner in the category of which field the 
GOG should reform first.  Unemployment was considered the 
biggest failure of the current government, with 31 percent of 
respondents claiming they are unemployed. 
 
-------------------------------------- 
Okruashvili Rises above the Opposition 
-------------------------------------- 
 
4. (U) Former Defense Minister Irakli Okruashvili made a 
strong showing as a Presidential candidate against 
Saakashvili in the poll.  60 percent of respondents said it 
would probably or definitely be good for Georgia if 
Okruashvili runs for President.  If a first round contest 
were held tomorrow, 33 percent said that they would vote for 
Saakashvili and 21 percent opted for Okruashvili.  However, 
in a runoff match-up between the two, Saakashvili received 39 
percent to Okruashvili's 38. 
 
5. (U) 83 percent of Georgians believe it is important for 
the country to have an opposition, while only 5 percent do 
not.  The level of support for the individual opposition 
parties was largely consistent with February results.  No 
other potential opposition candidate for President received 
more than 8 percent of the vote in the survey. 
 
---------------------- 
Successes and Failures 
---------------------- 
 
6. (U) Infrastructure development -- constant electricity, 
paved roads, and city appearances -- remain the top GOG 
 
TBILISI 00002423  002 OF 002 
 
 
achievements, throughout Tbilisi and the country. 
Unemployment, the conflict zones and bad relations with 
Russia are considered the GOG's biggest failures.  70 percent 
of the respondents saw Russia as a threat to Georgia.  In 
Tbilisi, violation of private property is also seen as a 
significant failure by the mayor.  Confidence in the Church, 
Army, media, police, and Central Bank remained strong, 
consistent with the year's previous results.  However, 
confidence in the President's office, Cabinet of Ministers, 
and Parliament all saw double-digit decreases.  Satisfaction 
with regional governors' effectiveness decreased, while 
confidence in local government moved up two points to 37 
percent. 
 
7. (C) Comment: Support for both Saakashvili a
nd his party 
has noticeably decreased in this latest IRI poll.  Still the 
President and UNM remain the strongest game in town, despite 
the noticeable drag from economic issues and unemployment. 
The UNM continues to enjoy widespread support due to the 
undeniable visible progress they have made on infrastructure 
and daily security.  Now that the low-hanging fruit is 
largely picked, it appears that the ruling party now faces 
the more difficult tasks of economic development, job 
creation, and instilling longer-term confidence in 
government.  The poll, taken just before Okruashvili's 
dramatic attacks on Saakashvili put him openly in opposition 
(ref B), suggests that Okruashvili would be a strong 
challenger to Saakashvili, adding pressure to Saakashvili and 
the UNM.  Still, Okruashvili is not yet an announced 
candidate, and it is not clear whether the election will be 
before or after his 35th birthday on November 6, 2007.  If it 
is before, he be ineligible to run.  End comment. 
TEFFT

Wikileaks

07TBILISI2415, OKRUASHVILI THROWS DOWN THE GAUNTLET

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07TBILISI2415.
Reference ID Created Released Classification Origin
07TBILISI2415 2007-09-26 13:50 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
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FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7735
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002415 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR DAS BRYZA AND EUR/CARC 
 
E.O. 12958: DECL: 09/27/2017 
TAGS: PREL PGOV PHUM GG
SUBJECT: OKRUASHVILI THROWS DOWN THE GAUNTLET 
 
REF: TBILISI 1370 
 
Classified By: Ambassador John F. Tefft for reasons 1.4 (b) and (d). 
 
1. (SBU) Summary: On September 25, former Defense Minister 
Irakli Okruashvili made the long-awaited announcement on the 
establishment of his political party - Movement for United 
Georgia.  In his announcement and a subsequent television 
interview, Okruashvili for the first time harshly attacked 
President Saakashvili, accusing him of ordering political 
assassinations, personal corruption, "cowardice" in missing 
opportunities to retake the separatist regions, and other 
sensational crimes.  End Summary. 
 
--------------------------------------- 
Five Directions of Okruashvili's Attack 
--------------------------------------- 
 
2. (U) In his most dramatic accusation, Okruashvili claimed 
that, when he was in the government, on many occasions he 
received personal instructions from the President to 
"liquidate" prominent figures in the society.  One such 
figure was allegedly businessman Badri Patarkatsishvili. 
Okruashvili claimed that instead of carrying out this 
instruction, he mentioned it to other individuals who were 
well-connected to the U.S. government, and that he believes 
U.S. intervention led Saakashvili to stop mentioning the 
idea.  Okruashvili also raised the controversial carbon 
monoxide poisoning death of Prime Minister Zhvania in 2005, 
saying he had information to the effect that Zhvania's dead 
body was taken to the apartment, where it was later found. 
 
3. (U) Okruashvili's second line of attack was corruption in 
Saakashvili's government.  Okruashvili claimed that as the 
Interior Minister he had briefly detained Saakashvili's 
uncle, Temur Alasania, for taking a bribe, but had to release 
him due to the "insistent request" of the President. 
Okruashvili claimed that Saakashvili's family had accumulated 
billions of dollars, stressing in particular that 
Saakashvili's cousin, Nick Alasania, was involved in the 
import of arms from Israel. 
 
4. (U) The third direction was Saakashvili's alleged hatred 
and fear of the Georgian Orthodox Church, which Okruashvili 
said the President viewed as his "competitor" overshadowing 
his glory.  Okruashvili accused Saakashvili of attempting to 
collect compromising information on church leaders in order 
to undermine their authority. 
 
5. (U) The fourth direction was aimed at social and economic 
hardships, as Okruashvili questioned the necessity of 
building posh hotels like the Hyatt, when an "ordinary man 
from Kutaisi" had no means of staying in it, or of 
constructing new highways when ordinary people could travel 
on them "only in trucks loaded with vegetables." 
 
6. (U) The fifth direction, which may well become 
Okruashvili's strongest campaign theme, was on Georgia's 
unresolved conflicts and lost territories.  Okruashvili 
stressed that in his period as Defense Minister, Georgia was 
only "one step away" from regaining South Ossetia, but 
because of the "cowardice and indecisiveness" of Saakashvili, 
Georgia lost this unique chance.  As Okruashvili described 
it, the army was waiting for the order to carry out a small 
but effective operation, but a fearful Saakashvili failed to 
make this "political and historic decision."  Okruashvili 
said Saakashvili also failed to make up his mind to denounce 
existing agreements on Peacekeeping Forces (PKFs), which 
"legitimize the presence of Russian peacekeepers today." 
According to Okruashvili, the only result attained so far by 
Saakashvili's efforts is the "caricature figure" of Dimitriy 
Sanakoyev in South Ossetia, who is "a bluff and a fiction of 
Georgia's unification."  Okruashvili concluded that under the 
current leadership, which "moved in zigzags and was unable to 
demonstrate a principled position either to the international 
community or to Russia," Georgia was losing its chance to 
regain Abkhazia and South Ossetia. 
 
--------------------------------------------- 
Okruashvili Appeals to the Public, Opposition 
--------------------------------------------- 
 
7. (U) In conclusion, Okruashvili appealed to the opposition 
to forget old differences and start a new cooperation "from a 
clean page."  Okruashvili also called on the Georgian public 
to join him in his "campaign against fear."  "Join us if you 
believe that the country is going in the wrong direction, 
join us if you believe that Georgia is in the first place, do 
not be afraid of Merabishvilis, Adeishvilis, Bokerias and the 
like, do not be afraid of Saakashvili," concluded Okruashvili. 
 
 
TBILISI 00002415  002 OF 002 
 
 
-------------------------------------------- 
Reaction is Both Sensationalist and Tempered 
-------------------------------------------- 
 
8. (SBU) Okruashvili's comments created a sensation among the 
public, media and experts, though the initial reaction of 
politicians, both of the majority and opposition, was 
relatively low-key.  Most
 opposition leaders refrained from 
embracing Okruashvili.  Ruling party representatives did not 
go very far beyond characterizing Okruashvili's statements as 
"laughable, staid, or degrading."  Majority MP Giga Bokeria 
said Okruashvili's statements sounded like those made by 
Shalva Natelashvili, Igor Giorgadze, Jondi Baghaturia, or 
some "other mixture of pro-Russian politicians."  Bokeria's 
comment implied that as the government started a crackdown on 
corruption among his associates, Okruashvili made a 
preemptive step to secure his political immunity.  President 
Saakashvili himself, currently at the UN General Assembly in 
New York, has not yet commented on Okruashvili or his 
statements. 
 
------- 
Comment 
------- 
 
9. (C) Okruashvili's emergence in opposition had long been 
expected (reftel) but the scope and visceral nature of his 
attacks on Saakashvili shocked even long-time observers of 
Georgia's hyperbole-saturated politics.  While we cannot 
comment on the truth of all of Okruashvili's charges -- we 
have no knowledge of any plan to kill Patarkatsishvili, for 
example -- we know for sure that some are false:  USG 
participation in the Zhvania investigation made clear his 
body was not moved.  Okruashvili's claim that Saakashvili 
refused to order the military to retake South Ossetia is 
particularly significant and represents Okruashvili's attempt 
to outflank Saakashvili on the right on the emotional issue 
of Georgia's territorial integrity.  We strongly believe 
Saakashvili is right that there can be no military solution 
to the conflicts, but Okruashvili is likely to continue to 
hammer away at this theme. 
TEFFT

Wikileaks

07TBILISI2414, GEORGIA TO SUPPORT US CANDIDATE FOR UN CAT

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Reference ID Created Released Classification Origin
07TBILISI2414 2007-09-26 12:02 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXYZ0027
OO RUEHWEB

DE RUEHSI #2414 2691202
ZNR UUUUU ZZH
O 261202Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7734
INFO RUEHGV/USMISSION GENEVA IMMEDIATE 0844
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 4587

UNCLAS TBILISI 002414 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PHUM UNHRC GG
SUBJECT: GEORGIA TO SUPPORT US CANDIDATE FOR UN CAT 
 
REF: SECSTATE 130973 
 
1. Per reftel request, Poloff delivered demarche to Merab 
Manjgaladze, the Head of the UN Division at the Ministry of 
Foreign Affairs.  Manjgaladze said that it was in Georgia's 
interest to elect candidates from democratic countries to the 
UN Committee Against Torture, and therefore Georgia would 
support the U.S. candidate, Ms. Felice Gaer, for a seat on 
the Committee.  He said the Ministry will be sending 
instructions shortly to its mission in Geneva instructing 
them to vote for Ms. Gaer. 
TEFFT

Wikileaks

07TBILISI2413, DIPLOMATS TURN OUT FOR CONFERENCE IN SOUTH OSSETIA

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Reference ID Created Released Classification Origin
07TBILISI2413 2007-09-26 11:54 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXRO8268
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSI #2413 2691154
ZNR UUUUU ZZH
P 261154Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7733
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS TBILISI 002413 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV GG
SUBJECT: DIPLOMATS TURN OUT FOR CONFERENCE IN SOUTH OSSETIA 
 
REF: TBILISI 2266 
 
1.  Summary:  On September 21, the Georgian State Ministry 
for Conflict Resolution held a conference for the western 
diplomatic corps in the village of Tamarasheni, a 
Georgian-controlled village in the South Ossetian zone of 
conflict.  The purpose of the conference was to share 
information with diplomats and the population of the conflict 
zone about Georgia's reforms, with a particular focus on the 
European Neighborhood Policy (ENP).  State Minister for 
Conflict Resolution David Bakradze and head of the temporary 
administrative unit of South Ossetia Dimitri Sanakoyev 
co-hosted the conference.  Representatives from all of the 
major western diplomatic missions in Georgia, including the 
British, French, German, Dutch, Italian, and European 
Commission Ambassadors attended. (The Russian Ambassador, in 
contrast, publicly denounced the conference on Georgian 
television and refused to attend.)  The start of the 
conference was delayed when Russian peacekeepers stopped the 
convoy from Tbilisi at a checkpoint along the Georgian bypass 
road to Tamarasheni, claiming that the Georgian government 
had not notified the peacekeepers in advance.  After 20 
minutes, the convoy was allowed to proceed without further 
incident.  South Ossetian de-facto president Eduard Kokoiti 
issued a statement following the conference saying that he 
would not meet with Ambassadors accredited in Georgia who 
traveled to Tamarasheni.  End Summary. 
 
JPKF delay diplomats' access to Tamarasheni 
------------------------------------------- 
 
2.  The convoy of approximately 20 vehicles from the 
diplomatic corps and Georgian government were stopped at a 
Russian JPKF checkpoint on the bypass road leading to the 
Georgian-controlled enclave of Tamarasheni.  The Russian 
commander of the JPKF, Marat Kulakhmetov, reportedly claimed 
that the Georgians had not informed them in advance of the 
trip, and refused to let the convoy pass through the 
checkpoint.  After 20 minutes of negotiations with OSCE 
acting Head of Mission Veselin Nikolaev, the convoy was 
allowed through. 
 
Sanakoyev warmly welcomes ambassadors to conference 
--------------------------------------------- ------ 
 
3.  The Ambassadors and other diplomats, including a U.S. 
Embassy Poloff (attending because the Ambassador was in 
Istanbul at a regional COM conference and the DCM had another 
pressing commitment), were met by Sanakoyev at the front of a 
newly constructed theater, a symbol of the changes that the 
Georgian-backed administration is trying to bring to South 
Ossetia.  (Comment:  all of the major Georgian media outlets 
covered the conference, and made a particular point of 
filming Sanakoyev shaking hands with all the European 
Ambassadors.  End comment).  The conference participants, 
including prominent MPs, Deputy Foreign Minister Manjgaladze, 
and leading NGOs, gave the audience of locals and diplomats a 
broad overview of Georgia's Euro-Atlantic aspirations, 
including closer cooperation with the EU through the ENP and 
Georgia's entrance into NATO.  They discussed Georgia's 
social, legal, and military reforms aimed at bringing Georgia 
in line with NATO standards.  South Ossetian de-facto 
president Eduard Kokoiti issued a statement following the 
conference saying that he would not meet with Ambassadors 
accredited to Georgia who had traveled to Tamarasheni, adding 
that the Ambassadors "shared responsibility for Georgia's 
terrorist policy." 
 
Comment 
------- 
 
4.  Though the conference agenda presented nothing more than 
a broad (and widely known) overview of Georgia's aspiration 
to join western institutions, the attendance of the major 
western Ambassadors and their interaction with Sanakoyev was 
effective in conveying the perception of greater legitimacy 
for the Sanakoyev administration.  The conference also helped 
the Georgian government show the local population that the 
international community is interested in their situation and 
supports the government's path.  It remains to be seen 
whether de-facto president Kokoiti will follow through on his 
threat to refuse to meet with western Ambassadors attending 
the conference.  If so, it will cut him off from nearly all 
major western Ambassadors, including some who often support 
greater engagement with the de-facto authorities. 
TEFFT

Wikileaks

07TBILISI2401, IMF REPRESENTATIVE WARNS OF INFLATION, GOVERNMENT

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Reference ID Created Released Classification Origin
07TBILISI2401 2007-09-24 12:20 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO2427
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHSI #2401/01 2671220
ZNY CCCCC ZZH
R 241220Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 7717
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002401 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC AND EB/IFD/OMA 
COMMERCE FOR ITA/MAC DANICA STARKS 
TREASURY FOR OIA:WLINDQUIST 
 
E.O. 12958: DECL: 09/25/2017 
TAGS: EFIN ECON PGOV GG
SUBJECT: IMF REPRESENTATIVE WARNS OF INFLATION, GOVERNMENT 
INFIGHTING OVER CONTROL OF ECONOMIC POLICY 
 
 
TBILISI 00002401  001.2 OF 002 
 
 
Classified By: Ambassador John F. Tefft, reason 1.4(b) and (d). 
 
1.  (C) Summary: In a September 19 meeting with the 
Ambassador, the IMF's resident representative in Georgia, 
Robert Christiansen, told the Ambassador that he is concerned 
about a possible resurgence of inflation, which hit more than 
14 percent in mid-2006 but has subsided to around 7-8 percent 
since then.  Discipline in government spending is the only 
way to control inflation, in his opinion.  He sees an ongoing 
competition for control of economic policy within the 
government.  The future of the central bank, the National 
Bank of Georgia (NBG), needs to be decided, specifically 
whether it will retain its bank supervision role and even its 
monetary policy role.  His conversations with commercial 
bankers do not reveal concern about the recently experienced 
global contraction of credit.  End Summary. 
 
2.  (C) Christiansen told the Ambassador that the economy is 
heating up, with real GDP growth of 12 percent year on year 
in the first half of 2007.  He worries that the threat of 
inflation is increasing.  The cause, he said, is not foreign 
investment, which is surging, but the government's "fiscal 
mismanagement."  Although inflation is now running at 7.7 
percent, Christiansen said, all indicators including the 
producer price index and the growth of broad money (currently 
about 50% for the year) predict an upward spike in inflation 
in the near future.  He thinks the rate will be about 10 
percent by the end of the year.  He says the consensus among 
government officials is that so long as inflation is less 
than 10 percent, they will have no political problems as a 
result.  (Inflation is especially painful for the poor in 
Georgia.  While overall inflation has been relatively 
moderate, as Christiansen notes, there have been significant 
increases in the costs of foodstuffs such as potato (79 
percent), corn flour, chicken meat and eggs, according to the 
Department of Statistics.) 
 
3.  (C) The threat Christiansen perceives is manageable if 
the government takes the necessary steps, he said.  This 
mainly means reining in government spending and increasing 
interest rates to slow down growth.  But Christiansen is not 
optimistic that spending will easily be contained as Georgia 
moves into an election year.  The best that could be done, he 
said somewhat ironically, is to give the government a budget 
for election-related spending and hope they stick to it.  He 
believes there is competition going on for management of the 
economy between Presidential insiders led by Prosecutor 
General Zurab Adeishvili and Internal Affairs Minister 
Merabishvili on the one hand and Prime Minister (and former 
Finance Minister) Zurab Noghaideli on the other.  He sees 
Adeishvili gaining more control over the Ministry of Finance 
with the appointment of Nika Gilauri and the forced 
resignation of the Director of Taxation, Mindia Gadaevi. 
(Note: we have been impressed with Gadaevi's energy and 
sincere devotion to improving the revenue service. 
Christiansen brought the first news of his resignation to us. 
 We have heard separately that Gadaevi will soon be appointed 
the new head of Millennium Challenge Georgia.)  He thinks 
Noghaideli ally Aleksi Aleksishvili will not become president 
of the NBG even though he has been nominated to the post. 
 
4.  (C) In the meantime, Christiansen said, decisions must be 
made about the direction of the central bank, now that its 
poorly regarded former head, Roman Gotsiridze, is out. 
Adeishvili is concerned about corruption in the supervision 
of banks and apparently wants to strengthen it, possibly by 
establishing a entirely separate agency to handle the task. 
The NBG can then either retain an active role in monetary 
policy, or a currency board could be initiated, leaving the 
NBG with a very small role to play in the economy. 
 
5.  (C) Establishing a currency board, where money emission 
is strictly limited by the foreign currency reserves on hand 
at the central bank, is a pet project of the State Minister 
for Economic Reforms, Kakha Bendukidze.  Christiansen says 
that the banking sector must be "exceedingly strong" and it 
must have good supervision if a currency board is to work. 
The latter is now lacking, in his view.  Under a currency 
board, he adds, all shocks to the economy will have to be 
absorbed by impacts on the gross domestic product.  The 
government will have to be careful and disciplined in its 
spending.  He is not sure the government fully understands 
the implications and is really ready to take responsibility 
for the possible impact of a currency board on growth.  That 
said, Christiansen admits a currency board has worked well 
for Estonia, which is in many ways a model and mentor for 
 
TBILISI 00002401  002.2 OF 002 
 
 
Georgian o
fficials.  Bendukidze would like to see Georgia 
become an international financial center.  His advisors have 
told him that Georgia can only succeed in competing with 
other tax havens and offshore banking centers if it has a 
good and compliant money laundering law, and Bendukidze seems 
to be giving up his hitherto unsuccessful efforts to weaken 
the money laundering regime.  The Financial Monitoring 
Service has drafted stronger anti-money laundering laws based 
on recent MONEYVAL recommendations and is about to present 
them to the government. 
 
6.  (C) Christiansen told us that he has discussed the recent 
tightening of credit conditions in the global economy with 
local commercial bankers.  He said the bankers have told him 
there has so far been no noticeable adverse effects on their 
ability to raise capital. 
 
TEFFT

Wikileaks

07TBILISI2400, MINISTRY OF ENVIRONMENT VIEWS ON WIREC AND CLIMATE

WikiLeaks Link

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If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07TBILISI2400.
Reference ID Created Released Classification Origin
07TBILISI2400 2007-09-24 12:15 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXYZ0001
RR RUEHWEB

DE RUEHSI #2400 2671215
ZNR UUUUU ZZH
R 241215Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 7716
INFO RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS TBILISI 002400 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC AND EB/ESC/IEC 
 
E.O. 12958: N/A 
TAGS: ENRG PREL GG
SUBJECT: MINISTRY OF ENVIRONMENT VIEWS ON WIREC AND CLIMATE 
CHANGE 
 
REF: A. STATE 80334 
     B. STATE 75287 
 
1.  Post received the following letter from the new Minister 
of Environmental Protection and Natural Resources, David 
Chantladze on September 19, regarding the GOG's views on 
WIREC and climate change. 
 
2.  Begin text of letter: 
 
To: The Honorable John F. Tefft 
Ambassador 
Embassy of the United States of America 
Office the Ambassador 
Tbilsi, Georgia 
 
Excellency: 
 
Thank you for the invitation on the Washington International 
Renewable Energy Conference (WIREC 2008), March 3-7, 2008. 
 
Georgia supports the President Bush initiative to develop a 
new post-2012 framework on climate change by the end of 2008 
and to consider as part of this initiative sector based 
approach that will include renewable energy and fuels. 
 
It is vital for Georgia - the country with economy in 
transition, transfer of the environmentally friendly 
technologies to reach sustainable development goals. 
 
United States is a principal developer of the state of the 
art renewable technologies and fuels, and cooperation with 
U.S. in frames of the UNFCCC will be very useful for our 
country. 
 
Sincerely 
 
 
David Chantladze 
Minister. 
 
End text of letter. 
 
 
TEFFT

Wikileaks

07TBILISI2398, LABOR TRENDS IN GEORGIA

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Reference ID Created Released Classification Origin
07TBILISI2398 2007-09-21 12:50 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXRO4418
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSI #2398/01 2641250
ZNR UUUUU ZZH
R 211250Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 7709
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 06 TBILISI 002398 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC AND DRL 
COMMERCE FOR 4132 DANICA STARKS 
 
E.O. 12958: N/A 
TAGS: ELAB BEXP SENV EAGR ENRG GG
SUBJECT: LABOR TRENDS IN GEORGIA 
 
REF: (A) SECSTATE 40337, (B) TBILISI 927 (C) TBILISI 1624 (D) 
 
TBILISI 1456 
 
TBILISI 00002398  001.2 OF 006 
 
 
1.  Summary:  Post submits the following voluntary report on labor 
trends in Georgia.  Most Georgians work in agriculture and 
unemployment and underemployment are high, while wages in hired 
employment are relatively low.    Creating new employment 
opportunities is a key challenge for the Georgian government.  Its 
approach is to remove obstacles to doing business and encourage 
investment and economic growth, rather than providing payments and 
programs for the unemployed who are not indigent.  Part of that 
strategy is a new, employer-friendly labor code.  Unions are free to 
organize, but they are not strong, and strikes are very infrequent. 
End Summary. 
 
---------------------------- 
FEATURES OF THE LABOR MARKET 
---------------------------- 
 
2.  Employment in Georgia was drastically affected by the collapse 
of the economy after the fall of the Soviet Union, which reduced GDP 
to one third of its former level by 1994.  In 1979, 53 percent of 
the labor force was employed in industry.  The massive 
de-industrialization of the economy caused many urban residents to 
return to their places of origin, at least for part of the year. 
The transfer of agricultural land into private ownership accelerated 
the process, so that now 55.6 percent of the population works in 
agriculture.  Productivity is not high.  Georgians employed in 
farming produce only 11.7 percent of GDP, while the 6.8 percent of 
the labor force employed in industry produces 12.6 percent. 
 
3.  Only 12 percent of the labor force works in hired employment in 
the private sector.  Twice as many people, 22 percent of the labor 
force, work in the public sector, including state-owned industries. 
Fifty-six percent of the labor force is self-employed, at least 
nominally, compared to 16 percent in the EU.  The share of hired 
employees in total employment has been increasing lately while the 
share of the self-employed is decreasing, indicating more employment 
opportunities.  However, the official unemployment rate (ILO strict 
methodology) increased in the first quarter of 2007 to 15.3 percent, 
high even if seasonally adjusted.  The increase is partly 
attributable to restructuring of the public sector.  Official 
unemployment figures mask considerable under-employment and 
over-staffing. 
 
4.  Women play an important role in the labor force in Georgia. 
Proportionately more work in the public sector (117 women per 100 
men) than in the private sector (57 women per 100 men).  Women 
predominate in highly skilled employment.  There are 161 highly 
qualified women professionals per 100 men, and only 5 women per 100 
men in the unqualified labor force.  Overall however, women earn 
only 48.6 percent of a man's average salary.  Inadequate pensions 
keep Georgian workers in the work force longer, and lack of 
opportunity keeps younger workers out.  Fifteen percent of the 
economically active population is over 65, while 9.6 percent is 
under 25. 
 
5.  Since the Rose Revolution, the government has focused on 
reducing taxes (including employment taxes) and other general 
economic changes to promote employment.  Growth and investment 
(foreign and domestic) has occurred mainly in fields that do not 
produce large number of jobs, such as financial and other services, 
transport and communications.  Social programs are focused on the 
indigent and there is no unemployment compensation for newly 
unemployed persons.  Providing training for the workforce to find 
employment in the areas of the economy that are growing, such as 
tourism, is a task the government is beginning to address. 
 
 
---------------------------------------- 
Major Recent Developments in Legislation 
---------------------------------------- 
 
6. On May 25, 2006, Parliament ratified a new Labor Code, which 
entered into force in June 2006.  The new Code considerably 
liberalized employer-employee relations.  Most observers consider it 
very favorable to employers.  The code sets a minimum working age of 
16, a 41 hour work week, 24 calendar days of annual leave, and 
leaves everything else to employer-employee negotiations.  The 
Georgian Government adopted these amendments in order to create a 
more flexible labor force that would help achieve fast economic 
growth, make the labor market more responsive to changes in the 
economy and not least, attract foreign investors.  Prior to 2006, 
labor relations in Georgia were governed by the 1973 Labor Code of 
the Soviet Republic of Georgia, as amended in 1997. 
 
 
TBILISI 00002398  002.2 OF 006 
 
 
----------------------------------- &
#x000A;Tripartite Institutions--Government 
----------------------------------- 
 
7. The Department of Labor under the Ministry of Labor, Health and 
Social Security was abolished in 2006.  There is now a Department 
for Social Protection with only two office employees and one labor 
inspector working on labor related issues.  This department has the 
primary responsibility within the Government of Georgia (GoG) for 
labor issues.  In addition, one deputy minister focuses on labor 
issues and the Minister has a special advisor on labor issues. 
Other departments within the ministry deal with non labor-related 
issues.  The Ministry monitors adherence to accepted labor standards 
and drafts proposals for changes it deems necessary.  The 
Parliamentary Committee of Health and Social Security has general 
oversight over labor policy and considers labor related proposals 
submitted by the Ministry. 
 
8. The new Labor Code required the Ministry to create and maintain 
authority over a State Agency for Social Aid and Employment to 
implement state supported employment programs and find jobs for the 
unemployed.  In 2006 the Ministry managed a USD 29 million 
presidential initiative to pay companies to hire interns.  The 
program was not considered terribly effective however, and this year 
the remaining USD 17 million from the program will go to the 
Ministry for Economic Development for vocational training 
initiatives. 
 
9. The Civil Service Bureau is the President's deliberative body 
which establishes employment regulations and standards for state 
employees.  The Bureau is accountable to a Civil Service Board 
chaired by the President.  It is mandated to perform the following 
functions, but it is unclear whether it is in fact performing all of 
them.  The Bureau studies the effectiveness of the civil service; 
makes recommendations for improvement and structural change in 
government agencies; sets rules and methods for selection, hiring, 
and attestation; and issues recommendations on staffing patterns and 
additional qualifications for particular jobs in the public sector. 
The Bureau also designs training and re-training programs and 
maintains a database of all civil service jobs. 
 
10. The Division of Social and Demographic Statistics in the State 
Department of Statistics has a subdivision for labor statistics 
which collects labor-related data, mainly based on household 
surveys. 
 
--------------------------------------------- - 
Tripartite Institutions-Employer Organizations 
--------------------------------------------- - 
 
11. The Employers' Association of Georgia (EAG) has about 150 
employers as members.  Its president, Elguja Meladze, represents the 
organization at the ILO.  The Federation of Georgian Businessmen, 
headed by Badri Patarkatsishvili, and the American Chamber of 
Commerce (AmCham) are the two other major business organizations. 
In addition, there is another association which focuses on small and 
medium enterprise owners. 
 
------------------------------------ 
Tripartite Institutions-Labor Unions 
------------------------------------ 
 
12. The principal labor organization is the Georgian Trades Union 
Confederation (GTUC) which consists of 25 industrial unions and 
represents approximately 252,000 workers (about 42 percent of hired 
employment, but only 15 percent of the total workforce, much of 
which is self-employed in agriculture).  The Teacher's Union has 
approximately 100,000 members and plans to join the GTUC in late 
2007.  Outside the GTUC there is only the Cultural Tradeworkers 
Union, which exists on paper only, and the Independent Trade Union 
of Metropolitan Employees, which is close to dissolution due to 
personnel changes. 
 
----------------------------- 
State of Industrial Relations 
and the Role of Government 
----------------------------- 
 
13. The GTUC, the most active voice in the country for unionized 
workers, would welcome other organizations unionizing the remaining 
workforce and is not against having competition and/or 
collaboration.  GTUC representatives attend annual ILO conventions 
and describe their relationship with the GoG and the Employers' 
Association of Georgia in positive terms.  It has stressed that it 
shares the government's desire for a more prosperous, democratic 
Georgia (ref B).  However, it would like to see a more active social 
 
TBILISI 00002398  003.2 OF 006 
 
 
policy.  The trade unions, AmCham, the Federation of Georgian 
Businessmen, and the EAG all work with the Georgian government to 
help develop legislation that will enhance business development. 
Nevertheless, the GTUC claims the GoG developed the new Labor Code 
and its collective bargaining provisions without consulting with 
labor unions. 
 
---------------- 
Major Labor Laws 
---------------- 
 
14. The Labor Code of 2006 governs labor relations in Georgia.  In 
addition, the Georgian government is party to a number of 
International Labor Organization (ILO) conventions including the 
Forced Labor Convention of 1930, the Paid Holiday Convention of 
1936, the Anti-Discrimination (Employment and Occupation) Convention 
of 1951, the Human Resources Development Convention of 1975, the 
Right to Organize and Collective Bargaining Convention of 1949, the 
Equal Remuneration Convention of 1951, the Abolition of Forced Labor 
Convention of 1957, the Employment Policy Convention of 1964, and 
the Minimum Age Convention of 1973. 
 
--------------------------------------- 
Core Labor Standards and Workers Rights 
--------------------------------------- 
 
15. The Ministry of Labor, Health and Social Security sets the rules 
for compensation, leave, and allowances for temporary disability, 
pregnancy, and child care.  It also approves rules on unemployment 
registration.  It defines an unemployed person as one who is capable 
or semi-capable and is seeking employment and ready to work.  The 
new Labor Code provides for a 41-hour workweek and a weekly 24-hour 
rest period, unless otherwise specified in a labor contract.  The 
Georgian Labor Code mandates 24 calendar days of paid annual leave, 
together with 17 official holidays.  The law requires at least one 
month's severance pay in case of an employer-initiated dismissal. 
The labor code does not require premium pay for overtime, leaving it 
as a subject of the agreement between the parties to a labor 
contract.  Unless otherwise specified in the contract, employees 
should give one month's notice prior to quitting but employers do 
not have to give notice before dismissal.  The law provides 
employer-paid maternity leave for up to 126 days (4 months), with 
the option of an additional 12 months of unpaid leave.  It allows an 
employer-employee contract to prohibit the use of knowledge and 
qualifications obtained during employment in favor of any rival &#x0
00A;employer.  This provision may remain in force even after the 
termination of labor relations. 
 
16. The national minimum wage for public employees is now 115 GEL 
(USD 65.71) a month.  However, the minimum wage still does not 
provide a decent standard of living for a worker and family.  The 
official minimum subsistence level for a single person is 158.1 GEL 
(USD 87.80) and 275 GEL (USD 152) for a family of four.  The 
mandated minimum wage for private sector workers is unchanged for 
many years at 20 GEL (USD 11.11). 
 
17.  The average wage in private enterprises is 255.6 GEL (USD 
153.5) monthly; in government employment it is 205.4 GEL (USD 130). 
Minimum monthly pensions are 38 GEL (USD 22.75).  Unreported trade 
activities, assistance from family and friends, and the sale of 
homegrown agricultural products often supplement salaries. 
 
---------------------- 
Freedom of Association 
---------------------- 
 
18. The constitution and statutes provide for freedom of 
association, and the government generally respects this right in 
practice.  Authorities grant permits for registration of 
associations without arbitrary restriction or discrimination.  The 
law allows all workers, including government employees, to form and 
to join unions of their choice, and they do so in practice. 
However, there are certain restrictions with regard to law 
enforcement agencies and employees of the general prosecutor's 
office. This right is guaranteed by the Constitution of Georgia and 
the law on trade unions and international conventions; however, the 
new labor code limits the mechanisms for trade unions to implement 
its rights. 
 
--------------------- 
Collective bargaining 
--------------------- 
 
19. The law allows unions to conduct their activities without 
interference but the new code repealed the former Law on Collective 
Agreements.  In the view of the GTUC leadership, the lack of a 
 
TBILISI 00002398  004.2 OF 006 
 
 
detailed law on collective bargaining -- which they say runs counter 
to ILO principles -- is the biggest problem with the new Labor Code. 
 The concept still exists, though, as Georgia is a signatory of the 
International Labor Organization (ILO) 98 convention which set forth 
standards on collective bargaining.  According to the Labor Code, a 
collective agreement can be concluded between an employer and two or 
more employees and is based on the same principles as an individual 
contract.  Employees negotiate through a representative, who 
according to the code can be a physical person.  However, the ILO 
convention requires collective bargaining between the employer and 
the workers union or trade union -- not the employees themselves. 
The law prohibits discrimination by employers against union members, 
and employers may be prosecuted for such discrimination and forced 
to reinstate employees and pay back wages. 
 
--------------- 
Right to Strike 
--------------- 
 
20. The law provides for the right to strike with some restrictions 
on employees in law enforcement and emergency services, and on 
strikes that could pose a threat to life.  The new code sets a 
maximum time limit of 90 days for strikes.  The GTUC believes this 
renders strikes ineffective because the employer has a guarantee a 
strike would end after a certain period of time.  Employees must 
give the employer three days notice of a strike and then perform a 
warning strike lasting one hour.  As a practical matter, strikes are 
rare in Georgia and nearly unknown in the private sector. 
 
------------ 
Forced Labor 
------------ 
 
21. The law prohibits forced and compulsory labor, including by 
children. However, the new labor code permits compulsory labor in 
cases of emergency and natural disaster.  The ILO convention also 
allows compulsory labor in such situations, but requires 
remuneration, which is not the case in Georgia's code. 
 
----------- 
Child Labor 
----------- 
22. There are laws and policies to protect children from 
exploitation in the workplace.  With high unemployment resulting in 
a large pool of adult workers willing to work for low wages, child 
labor is uncommon in the country.  The Ministry is responsible for 
enforcing laws regulating child labor.  Although official data is 
not available, child labor is not considered a serious problem. 
However, in tourist areas, children are commonly seen peddling 
goods, and children work with their parents on family farms. 
23. The minimum employment age is 16. In exceptional cases, children 
may work with parental consent at ages 14 and 15.  Children under 
age 18 may not engage in unhealthy or underground work, and children 
15 and over are subject to reduced working hours.  The Labor 
Inspection Department at the Ministry of Labor, Health and Social 
Security was the only mechanism for monitoring enforcement of the 
minimum age requirement; however, the department was dissolved in 
2006.  At the end of 2006 a small group of labor inspectors ensured 
compliance with the law by checking personnel records at 
organizations, because problems were not likely to be documented in 
official company records.  The only organizations believed to 
strictly follow minimum age rules are the railroad and aviation 
sectors. 
 
---------------------------- 
Discrimination in Employment 
---------------------------- 
 
24. The Constitution of Georgia prohibits discrimination of any 
kind, and the law specifically prohibits discrimination against 
persons with disabilities.  In practice, however, discrimination in 
employment against persons with disabilities and age discrimination 
still exists.  Older job seekers -- trained under the Soviet system 
-- have a more difficult time obtaining employment than younger 
workers.  Even so, the new Labor Code leaves some room for 
discrimination.  As provided by Article 38, employers now can 
dismiss employees without explanation other than the employer's 
desire to do so.  Despite this provision the GTUC and its national 
unions reported frequent cases of management warning staff not to 
organize trade unions. 
 
------------------------------ 
Occupational Safety and Health 
------------------------------ 
 
25. In accordance with the new Labor Code, the Ministry has 
 
TBILISI 00002398  005.2 OF 006 
 
 
determined what constitutes hard, hazardous, and dangerous labor and 
developed a list of related jobs.  It has not, however, identified 
what benefits employees should receive from employers for working in 
these types of jobs.  The law requires the employer to pay for 
periodic medical checkups of employees working in hazardous 
conditions.  The Ministry is responsible for monitoring the 
implementation of health and safety standards.  In the event of a &#x00
0A;claim, Article 42 of the Administrative Code gives the courts 
authority to impose sanctions on an employer.  However, enforcement 
is a problem since there is only one inspector and the special 
advisor to the Minister on labor issues.  The law permits higher 
wages for hazardous work and gives workers the right to remove 
themselves from situations dangerous to their health or safety 
without jeopardizing their employment status.  In practice these 
protections are rarely, if ever, enforced.  The law allows trade 
unions to assist workers in compensation cases.  Within the past 
year, three such cases have come before the courts with the 
assistance of trade unions.  In two cases the victims' families 
received compensation for work-related deaths.  The third case is 
still pending. 
 
---------------------- 
Trafficking in Persons 
---------------------- 
26. Georgia is a source and transit country for women and girls 
trafficked primarily to Turkey and the U.A.E. for the purpose of 
commercial sexual exploitation.  Women and girls from Ukraine, 
Moldova, Russia, and other former Soviet states are trafficked 
through Georgia to Turkey, Greece, the U.A.E., and Western Europe. 
Men are trafficked for the purpose of forced labor; victims are 
trafficked for the purpose of forced labor in the breakaway regions 
of Abkhazia and South Ossetia. 
27. The Government of Georgia fully complies with the minimum 
standards for the elimination of trafficking.  Over the past year, 
the government made considerable progress in the prosecution and 
punishment of traffickers, protection and assistance for victims, 
and prevention of trafficking. Georgia developed and implemented a 
victim-centered national referral mechanism, provided a building for 
the country's first trafficking victims' shelter, dedicated on-going 
funding for victim assistance, passed comprehensive trafficking 
legislation, aggressively prosecuted and toughened penalties for 
traffickers, and initiated multiple proactive prevention programs. 
Georgia was moved from Tier 2 to Tier 1 on the State Department's 
Trafficking in Persons report in 2007. 
--------------------- 
Migrant/Expat Workers 
--------------------- 
 
28. Georgia allows foreigners to work freely on the local market, 
but generally does not have a sizable immigrant worker population. 
Although Chinese migrants are arriving in increasing numbers, most 
are self-employed (ref C).  Economic hardship has encouraged a 
significant out-migration of Georgians in recent years.  Emigration 
of qualified workers contributes to low labor productivity. 
 
--------------- 
Social Security 
--------------- 
 
29. Employers are legally required to make social security 
contributions for employees at a rate of 20 percent of the gross 
salary.  The employee portion of social taxes was abolished in 2004. 
 The social tax does not directly fund pensions but provides general 
revenue to the government, which pays pension benefits to retirees. 
In 2007 the Government eliminated the 20 percent social tax on 
employers effective January 1, 2008.  However, to make up for some 
of the lost revenue, the GoG increased the personal income tax to 25 
percent from 12 percent effective January 1, 2008 (ref D).  The 
state social security system provides very modest pension and 
maternity benefits.  Moving from a state-financed, defined benefits 
system to a privatized, defined contributions pension system is a 
priority of the GoG.  There is one pensioner for every 0.7 hired 
employees in Georgia (optimal would be 3-4), illustrating the 
difficulties the government faces in its task. 
 
---------------------------------------- 
Foreign investment potential, agreements 
---------------------------------------- 
 
30. Georgia's liberal labor code is intended to make Georgia more 
attractive to investors.  On June 21, 2007, Georgia signed a Trade 
and Investment Framework Agreement with the U.S.  In addition, 
Georgia has a Bilateral Investment Treaty with the U.S., signed on 
March 7, 1994, and entered into force on August 17, 1997. 
 
------------------- 
 
TBILISI 00002398  006.2 OF 006 
 
 
Key Labor Contacts: 
------------------- 
 
31. Key labor contacts include: 
 
A. Minister of Labor, Health, and Social Affairs David 
Tkeshelashvili.  http://www.molhsa.ge/eng/index.php; 
 
B. Department of Social Protection at the Ministry of Labor, Health 
and Social Affairs.  Tel: +995 32 381139, Fax: +995 32 387863; 
 
C. David Tsiklauri, Head of the Civil Service Bureau, Tel: 399302; 
 
D. Paata Shavishvili, - Statistics Department, subdivision of labor 
statistics under the Social and Demographic Statistics Division; 
Tel: +995 32 367210, ext 600; 
 
E. Irakli Petriashvili, President of the Georgian Trade Unions 
Confederation; Tel: +995 32 323 545, email: gtuc@geo.net.ge; 
 
F. Gocha Aleksandria, Vice-President of the Georgian Trade Unions 
Confederation; Tel: +995 32 323 545, email: gtuc@geo.net.ge; 
 
G. Elguja Meladze, President of the Employers' Association of 
Georgia; Tel: +995 32 222467, email: employer@employer.ge 
 
--------------------------------- 
Key Sources Used in Drafting this 
Foreign Labor Trends report: 
--------------------------------- 
 
32. Most of the information contained in this report was obtained 
through face-to-face and email communication.  In addition, Post 
used information from three reports for the relevant sections: 
 
A. 2007 Trafficking in Persons report 
http://www.state.gov/g/tip/ 
rls/tiprpt/2007/82805.html 
 
B. 2006 Human Rights Report 
http://www.state.gov/g/drl/ 
rls/hrrpt/2006/78813.htm 
 
C. 2006 Worst Forms of Child Labor Report 
 
 
PERRY

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