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DE RUEHSI #3005/01 3341335
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R 301335Z NOV 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 8348
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TBILISI 003005 
 
SIPDIS 
 
SIPDIS 
 
E.O 12958: N/A 
TAGS: PREL PGOV PHUM ECON GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE NOVEMBER 30 
 
REF: TBILISI 2964 
 
¶1. This cable contains current items of political, 
economic, and social interest concerning Georgia during the 
weeks of November 10-30. 
 
Last Russian Troops Leave Batumi 
-------------------------------- 
¶2. On November 15, the last train cars loaded with 
military equipment left the Russian military base in 
Batumi, marking the closure of the final Russian 
military facility in government-controlled Georgia.  The 
transfer was finalized ahead of schedule, as the Russians 
had committed to complete withdrawal in 2008.  The Russian 
Foreign Ministry stressed this fact in its public 
comments, noting that Russia had fulfilled its 
pledge despite what it called Tbilisi's heightened 
anti-Russian policies.  In Georgia the long-awaited 
departure passed almost unnoticed, overshadowed by 
the internal political turmoil.  In the past, Georgian 
officials have indicated that they intend to develop the 
former base, which includes a significant stretch of 
Black Sea coastline, by building hotels and other tourist 
facilities. 
 
Last Minute Change in Education Minister Candidate 
--------------------------------------------- ----- 
¶3. Parliament approved a new Prime Minister and a slightly 
"refreshed" Cabinet of Ministers November 22 (reftel), but 
the cabinet included one late change from the nominees 
initially announced November 19.  One November 21, Deputy 
Education Minister Bela Tsipuria was replaced as the 
nominee for Education Minister by Maia Miminoshvili, Head 
of the National Assessment and Examination Center, which 
is also part of the Education Ministry.  Tsipuria told 
journalists that she did not want to abandon the ongoing 
projects in the Ministry she was supervising.  The 
new Minister of Education Miminoshvili holds a PhD in 
physics and mathematics and is a Ministry insider who 
successfully managed the reform of nation-wide university 
enrollment started in 2005. Miminoshvili said on her 
confirmation day that she would "ensure the continuity 
of reforms" launched under the previous Minister Lomaia. 
 
Turkey, Georgia, and Azerbaijan Launch Rail Construction 
--------------------------------------------- ----------- 
¶4. The presidents of Georgia, Azerbaijan and Turkey 
attended a groundbreaking ceremony for construction of 
the Georgian section (Akhalkalaki-Kars) of the railway 
link between Azerbaijan and Turkey on November 21 in the 
village of Marabda, Georgia.  The project is expected to 
facilitate trade and tourism along the Caucasus, attract 
rail cargo from the Central Asia, open an alternative route 
to Trans-Siberian rail in Russia for rail cargo from China, 
and create new jobs in the remote Samtskhe-Javakheti 
region in southern Georgia.  The project envisages the 
construction of twenty-nine kilometers of railroad from 
Akhalkalaki to the Turkish border, and rehabilitation of 
192 kilometers of the existing railroad on the territory 
of Georgia. In January 2007 Azerbaijan agreed to lend USD 
200 million to Georgia to finance the construction of its 
portion of the railway.  Georgia will have to repay the 
loan at 1% interest within 25 years.  Construction of 
the Baku-Akhalkalaki-Kars railroad is schedule to finish 
by 2010. 
 
New Free Trade Agreement with Turkey 
------------------------------------ 
¶5. The presidents of Georgia and Turkey signed a Free 
Trade Agreement (FTA) and a treaty on eliminating double 
taxation on November 21 during a Turkish-Georgian business 
forum in Tbilisi. The FTA is expected to further facilitate 
the already growing trade between the two countries, 
which is especially important for Georgia in light of 
the continuing Russian embargo on Georgian agricultural goods. 
According to the FTA, Georgia and Turkey will waive import 
tariffs on manufactured goods and on some agricultural 
goods. In addition, Turkey will decrease tariffs by 50%-100% 
within certain quotas on some Georgian agricultural goods. 
For example, tariffs will be completely eliminated for 
Georgian wine imports to Turkey (within a quota of 1 
million liters), citrus (up to 4,000 tons), and vegetables 
(up to 1,200 tons). To protect their farmers, both countries 
excluded some agricultural goods from the waiver. The 
FTA will take effect after both countries' parliaments 
complete ratification. 
 
Success Claimed for Grape and Citrus Harvest 
-------------------------------------------- 
¶6. The Agriculture Ministry positively assesses the 
results of the 2007 vintage.  According to the 
Ministry, over 200 thousand tons of grapes 
were gathered in Kakheti, the main wine producing 
 
TBILISI 00003005  002 OF 002 
 
 
region of Georgia, exceeding last year's figure by 
67 percent.  Out of the total volume, wineries in 
Kakheti bought 58,000 tons, which is 2.3 times more than 
last year.  Up to 50,000 tons were used for winemaking 
in local households, 15,000 tons were sold to local food 
businesses, while 110,000 tons were delivered to other 
regions of the country.  Racha, another wine producing 
region, also marked a high yield.  Wineries bought 1,070 
tons of grapes there for producing red wine.  Meanwhile, 
the citrus harvest is estimated to yield over 100 
thousand tons of citrus in the western part of Georgia, 
three times more than last year.  The government has created 
an ad hoc headquarters to assist local farmers with finding 
markets for the produce.  Last year Georgia exported around 
16 thousand tons of citrus, mostly to Ukraine, Azerbaijan, 
Armenia and Russia.  Unfavorable weather conditions in 
citrus growing countries such as Turkey and Iran have 
increased Georgia's export potential this year. 
TEFFT