VZCZCXRO5707
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHSI #2708/01 2841325
ZNY CCCCC ZZH
O 111325Z OCT 06
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4312
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002708 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR DAS BRYZA AND EUR/CARC 
 
E.O. 12958: DECL: 10/10/2016 
TAGS: PREL PGOV EAID GG
SUBJECT: SUCCESSFUL LAUNCH OF SOUTH OSSETIA ECONOMIC 
REHABILITATION PROGRAM 
 
 
Classified By: Ambassador John F. Tefft for reasons 1.4(b) & (d). 
 
Summary 
------- 
¶1. (C) International donors, OSCE, Georgia, and South Ossetia 
kicked off the new economic rehabilitation initiative for 
South Ossetia with the first steering committee meeting in 
Tskhinvali October 6, much of which was open to Georgian and 
 
SIPDIS 
South Ossetian media.  DCM signed a memorandum with OSCE to 
make available USD 2 million of USG funding to support 
implementation this year.  Georgia reiterated its pledge to 
match the total contribution of all other donors, and 
suggested joint police patrols as a step to build trust 
between the sides.  The South Ossetians, despite some 
political comments aimed at the Georgians, expressed strong 
support for the economic program and a willingness to work 
with the Georgians and other donors.  This event was a 
positive change in the climate of increasing tensions between 
the sides, and many of the participants are now aiming to 
continue the dialogue at the Joint Control Commission (JCC) 
meeting scheduled for Vladikavkaz October 13-14.  End Summary. 
 
Helping the People 
------------------ 
¶2. (U) Representatives of a broad range of donors traveled to 
Tskhinvali for the event, filling the JCC conference room to 
 
SIPDIS 
capacity.  OSCE Acting Head of Mission Veselin Nikolaev 
stressed that donor support was aimed at helping the people 
in the region; he called for Georgian, South Ossetian, and 
international experts to work as a team, and stressed the 
importance of security and freedom of movement.  Frank 
Geerkins of the Belgian MFA stressed the support of the OSCE 
Chairmanship for the program.  Speaking for the USG, DCM said 
our assistance aims to support just and democratic 
governance, at national and region levels, to encourage and 
assist leaders to invest in the needs of the people, and to 
expand opportunities for economic growth.  Following the 
meeting, DCM and Nikolaev signed a memorandum on the USG 
contribution of USD 2 million to support an economic 
development center.  DCM stressed that further USG support 
would depend in large part on the commitment and progress 
demonstrated by the sides to improve conditions for the 
region's inhabitants and to further the peace process. 
 
Civility Breaks Out Between the Sides 
------------------------------------- 
¶3. (U) Both the Georgian delegation, represented by State 
Minister of Conflict Resolution Merab Antadze, and the South 
Ossetians, represented by JCC deputy co-chair Leonid Tibilov, 
expressed strong support for the program and a willingness to 
work with each other, as well as with OSCE and other donors. 
Antadze stressed that next year's Georgian budget will 
include a sum for the program equal to the amount contributed 
by all the other donors combined, expected to be USD 10 
million.  Ruslan Abashidze, Antadze's deputy, called for the 
revival of an old practice of joint Georgian-South Ossetian 
police patrols in the region.  Tibilov reacted positively to 
the police idea, and suggested further discussions, including 
perhaps at the JCC in Vladikavkaz.  Tibilov took a generally 
supportive, cooperative tone during the meeting, although he 
did veer off onto pointed political comments on occasion, for 
example blaming Georgia for a deadly September shootout in 
the conflict zone.  The Georgians refused to be drawn in, 
arguing that the steering committee meeting was not the right 
format for such exchanges.  The Russians, whose Embassy in 
Tbilisi remains drawn down, were represented at the meeting 
by Murat Tkhvostov, North Ossetian JCC co-chair, who stressed 
that economic success will strengthen work in the political 
sphere. 
 
Comment 
------- 
¶4. (C) The most significant fact about this meeting was that 
it took place at all, given the deteriorating relations 
between the sides, including the reported October 2 statement 
by South Ossetian "president" Kokoity that he was breaking 
off talks with Georgia.  It now appears that statement was 
not meant to be taken literally.  The Georgians tell us OSCE 
is working to organize the JCC meeting as scheduled in 
Vladikavkaz October 13-14, despite the logistical hurdles 
caused by the Russian flight ban and closure of the Upper 
Lars-Kazbegi land crossing.  The Georgians understand that 
Russia will likely allow a charter flight from Tbilisi to 
Vladikavkaz and back.  The Georgians and South Ossetians 
appear to have found avenues to renew the dialogue, but we 
will need to ensure that the positive remarks in light of a 
10 million dollar donation by the international community 
become real steps forward in the process of finding a 
political solution, including by using the expanded format to 
increase the participation of the international community in 
 
TBILISI 00002708  002 OF 002 
 
 
the political dialogue.  Both sides have now committed 
themselves very publicly to the economic rehabilitation 
program, and we will want to use this success in 
internationalizing the political process so we can move 
forward toward a solution. 
 
TEFFT