R 141156Z DEC 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 8439
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLASSIFIED SECTION 01 OF 02 TBILISI 003096 
 
SIPDIS 
SIPDIS 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ECON KDEM GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE DECEMBER 14 
 
 
¶1. This cable contains current items of political, 
economic, and social interest concerning Georgia during the 
weeks of December 1-14. 
 
Georgian Politicians React to Medvedev 
-------------------------------------- 
¶2. Georgian political figures reacted immediately -- and unanimously 
-- to Russian President Putin's endorsement of Dmitry Medvedev to be 
his successor.  Both ruling party and opposition leaders agreed that 
Medvedev could not be expected to change Russia's current policy 
toward Georgia.  While no one predicted a major change in 
Georgian-Russian relations, several politicians, and especially 
opposition presidential candidates, used the opportunity to call for 
improved relations with Russia.  Statements from candidates 
included: 
 
-- David Gamkrelidze, New Rightist leader, pledged that if elected 
he would make an effort to normalize Georgian-Russian relations. 
-- Levan Gachechiladze, United Opposition leader, said that under a 
new president, Georgian-Russian relations should become respectful, 
although Georgia should strictly stick to its principles. 
 
Nino Burjanadze, Acting President of Georgia, gave a typically 
balanced statement, saying "Georgia is interested in normal 
relations of partnership with Russia.  In this case both countries 
will win." 
 
Employment Program Backfires 
---------------------------- 
¶3. The government was forced to suspend a pre-election plan to 
assign people to three-month job training opportunities, because the 
number of positions available was far short of the demand.  Eleven 
registration offices had opened, starting December 5, to register 
jobseekers, but the offices could not cope with the number of 
applicants who crowded into them, sometimes leading to angry 
complaints from would-be applicants.  The first day of the program 
was also plagued with the death of a 55-year woman, a displaced 
person from Abkhazia, who suffered heart attack while jammed in the 
crowd.  Patrol police were unable to enforce order outside several 
of the offices, as the number of applicants exceeded both the number 
of positions and the staff's ability to process their paperwork. 
Dissatisfied applicants gave critical interviews to journalists on 
the scene.  Georgia's Minister of Health and Social Security 
announced the temporary suspension of the program to allow time for 
satisfying the needs of those jobseekers already registered and to 
find more vacancies for other applicants. 
 
New Jail Opens in Tbilisi 
------------------------- 
¶4. The government took a step to reduce overcrowding and to improve 
conditions in prisons -- in accordance with Council of Europe 
recommendations -- when it opened a new jail in the outer Tbilisi 
neighborhood of Gldani.  The complex comprises five cell blocks, a 
hospital and an administrative building and has the capacity to hold 
4,000 inmates.  The facility is equipped with central heating and 
other amenities, including a library and a shop.  More than 2,000 
inmates have already been moved to the new facility from the more 
centrally located but ramshackle Prison #5.  At the same time as the 
opening of the new jail, public television began airing public 
service announcements stressing the rights of prisoners to decent 
living conditions. 
 
Prime Minister Predicts FTA with EU 
----------------------------------- 
¶5. On December 4, Lado Gurgenidze made his first official visit as 
Prime Minister to Brussels, where he met with a variety of European 
and NATO officials.  Commenting on the visit, Gurgenidze told 
Georgian media that a comprehensive Free Trade Agreement (FTA) was 
expected to be signed between Georgia and EU in 2009.  Gurgenidze 
predicted progress would be made toward the FTA in 2008, which would 
then be finalized the next year.  Gurgenidze stressed that Georgia 
already had the so-called GSP+ trade system with the EU, covering 
over 7,000 products.  The new agreement would, however, be a step 
forward, "boosting Georgia's exports and encouraging Georgian 
companies." 
 
Government's "Cheap Credit" Initiative 
-------------------------------------- 
¶6. On December 11 Prime Minister Lado Gurgenidze met representatives 
of commercial banks to discuss the pre-election initiative of 
Mikheil Saakashvili to extending "cheap credit" to businesses and 
individuals through Georgian commercial banks.  According to the 
Prime Minister, the government launched a special group, which will 
develop rules and procedures for commercial banks to serve and 
extend credits within this program starting in early 2008.  The goal 
of the project is to ease access to the credit resources for 
businesses and individuals, to encourage domestic production and 
export.  Participation of the commercial banks in this project is 
voluntary.  Reportedly, the government of Georgia will allocate USD 
300 million for the project and interest rates of the credit 
resources extended by the commercial banks will be fixed at 4-10% 
(compared to the present 16% and up for the commercial projects). 
The National Bank of Georgia will monitor the project. 
 
TBILISI 00003096  002 OF 002 
 
 
 
Patriarchate Warns against "Sect" 
--------------------------------- 
¶7. According to a report by the Georgian TV company Mze, the 
Georgian Orthodox Patriarchate has issued a warning about  the 
recent intensification of the activities of what it called the 
"Moonist Sect," or the Federation for World Peace, founded by 
Reverend Sun Myung Moon.  The warning was prompted by the poster 
released by the organization which displayed the photo of a Georgian 
priest, apparently without the priest's knowledge.  Mze reported 
that supporters of Reverend Moon established the organization in 
Georgia in 2005, but became active more recently.  The Mze story 
alleged that a number of scandals were associated with the 
organization, including questionable mass marriages, but provided no 
further information. 
 
Georgia's TBC Bank Expands in Azerbaijan 
---------------------------------------- 
¶8. Mamuka Khazaradze, the head of TBC Bank supervision board, 
announced on December 11 the acquisition of 75% of the Azeri credit 
company SOA Credit, a daughter company of the U.S.-founded Share 
Bank, which still holds 25% in SOA Credit.  TBC intends to invest 
USD 30-50 million next year in SOA Credit to reorganize it into a 
serious financial institution, offering a broad range of banking 
service to consumers in Azerbaijan.  Special attention will be paid 
to the retail market and small and medium business credit in 
Azerbaijan, with financial resources for SOA Credit to be attracted 
from international finance institutions.  TBC Bank intends to start 
activity in other CIS countries within the next two years as well. 
At his stage countries are not specified, but the bank mentions that 
the initial volume of investment will be the same $30-50 million in 
each country.  In terms of assets and liabilities TBC ranks as the 
second largest bank in Georgia. 
 
Grants to Support Scientific Innovations 
---------------------------------------- 
¶9. On December 10 Georgia's Research and Development Foundation 
(GRDF), a partner organization of the U.S. Civilian Research and 
Development Foundation (CRDF), held its third annual grants 
competition to support commercialization of scientific innovations. 
For the first time the Georgian Government through its National 
Science Foundation (GNSF) supported GRDF's initiative and provided 
80 percent of funding for the grants.  Five winners were chosen out 
of twelve short-listed project proposals, and each was awarded with 
up to GEL 60,000 (USD 37,500) to develop and market their respective 
products.  GNSF further singled out three other proposals and 
committed to attract additional funding for their implementation. 
The initiative is intended to spur scientific development in 
Georgia, which due to a lack of funding has suffered considerable 
decline and brain-drain.  Among the winners institutions were 
Tbilisi State Medical University, Institute of Metallurgy and 
Material Science, Institute of Medical Biotechnology, Caucasian 
Institute of Mineral Resources and Georgia's Technical University. 
 
 
TEFFT