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SUBJECT: SCENESETTER FOR CODEL PRICE'S VISIT 
 
 
Post-Election Standoff 
----------------------- 
 
¶1. (SBU) Your visit to Tbilisi comes during the most 
politically significant period in Georgia since the 2003 Rose 
Revolution brought Mikheil Saakashvili to power.  The January 
5 presidential election was judged by the U.S. Embassy, the 
OSCE and the Council of Europe to be the most competitive in 
Georgia's history and in essence consistent with most 
international standards for democratic elections.  None of 
these observers found the election to be problem-free, 
however, and Saakashvili's inauguration took place against 
the protest of a vocal and increasingly assertive opposition 
that accuses him of stealing the election.  An important 
message to the opposition will be the need to focus on the 
future and gaining seats in the upcoming parliamentary 
elections in May. 
 
¶2. (SBU) Behind-the-scenes negotiations are taking place 
regarding these parliamentary elections, which were called 
six months early as a concession to the opposition and in 
line with a plebiscite held during the January 5 election. 
Parliamentary Speaker Nino Burjanadze and the United National 
Council of Opposition (UNC) are leading the talks.  Although 
not officially members of the UNC, the New Rightists and 
Labor parties are coordinating with the UNC regarding the 
negotiations.  Meanwhile, the opposition factions in 
Parliament continue to boycott all proceedings except the 
ongoing negotiations (and any unforeseen national security 
crises.)  This has not impeded Saakashvili's ruling National 
Movement (UNM) party, which holds a constitutional (super) 
majority in Parliament.  On January 31, Saakashvili's new 
cabinet of ministers was approved by a vote of 141 to none 
(out of 235 total MPs), with no opposition MPs participating. 
 Most other issues in Parliament, including some reforms, are 
largely at a standstill due to the coming election.  We would 
encourage you in your dinner with ruling party members to 
urge the current Parliament to clear the decks and pass 
reforms before the elections, such as a revision of the 
Election Code and the U.S.-backed Criminal Procedure Code. 
 
¶3. (SBU) On January 28, UNC leaders called a meeting with the 
international diplomatic corps to present 17 demands, which 
they presented to the Georgian government on January 29.  The 
UNC was joined in their statement by the New 
Rightists/Industrialists and Labor party.  The statement 
calls for further investigation into alleged violations 
during the January 5 presidential elections, the release of 
political prisoners, electoral code reform, and greater 
transparency and balance in the media.  It also calls for the 
resignation of Minister of Internal Affairs Vano Merabishvili 
and the restructuring of the MOIA and Prosecutor General's 
office.  During the meeting, the UNC stressed that the 
statement constitutes a basis for discussion with the 
government and is not an ultimatum.  They are committed to a 
peaceful and constitutional resolution of the crisis, they 
said, and would resort to further protests only if dialogue 
fails.  They also said they welcomed guidance and input from 
the international community as the talks proceed.  The 
Republican Party's David Usupashvili said he hoped a 
political agreement could be reached on all issues by 
February 15, but acknowledged that practical, fundamental 
changes, such as electoral code reform, would require more 
time.  Our position has been to support these negotiations in 
order for both sides to come to a compromise. 
 
¶4. (SBU) To some extent, the uncovering of some problems in 
the January 5 election was due to the higher level of 
transparency in the election process that Saakashvili has 
introduced, such as the display of precinct protocols on the 
Central Election Commission  (CEC) website.  Despite some 
hope that the negotiations will allow Saakashvili to hold 
office without further controversy, and permit the opposition 
to focus on parliamentary elections, such a resolution of the 
current political situation is not yet assured.  The UNC 
continues to threaten additional public protests (beginning 
February 15), while the organization itself faces internal 
pressure between its more radical and mainstream members. 
Nevertheless, the opposition's ability to campaign, to gain a 
significant share of the vote in the election, and to express 
its concerns peacefully afterward shows Georgia's progress 
toward Western-style democracy.  This progress, however 
imperfect, far outstrips that in other countries of the 
former Soviet Union outside the Baltics. 
 
Changes Coming to Parliament 
---------------------------- 
 
¶5. (SBU) The current size of Parliament, 235 members, will be 
 
TBILISI 00000188  002 OF 005 
 
 
reduced in the coming Spring election to 150 total seats. 
The UNM hopes that by reducing the number of seats in 
Parliament, the body will become more efficient and 
productive.  Of these 150 seats, 100 will be chosen by a 
nation-wide party list system.  Each party will submit a 
rank-ordered list of candidates, and each voter will select 
one party on their ballot.  For each party that reaches the 5 
percent threshold, they will receive the number of seats that 
corresponds to the percentage of votes they win.  Those 
parties who do not reach the 5 percent threshold will receive 
no seats, and the remaining seats will be distributed among 
those parties that met the threshold.  In 2007 the UNM met a 
key opposition demand by reinstating the 5 percent threshold 
(from 7 percent.) 
 
¶6. (SBU) The other 50 seats will be chosen through the 
so-called "majoritarian" system.  This will be similar to a 
regional party list system.  However, there is no residency 
requirement for candidates and the regions/seats are not 
distributed equally per capita.  Currently, the system is 
designed so that a voter chooses one candidate, and that 
candidate's party - with the accompanying one to four names - 
gets his vote.  Even though there will be multiple seats in 
the region, it is impossible to vote for more than one 
candidate or to split your vote across parties.  This 
majoritarian system also represents a key opposition 
complaint for more fairness and accountability in electing 
MPs.  The details of re-working this system are still under 
negotiation. 
 
¶7. (SBU) Regardless, the composition of Parliament will 
change after the election.  Though the UNM likely will do 
everything they can to maintain a large (constitutional if 
possible) majority, it is unclear if they will be able to do 
so.  Saakashvili's narrow first-round win in the presidential 
election suggests there is considerably more support for his 
opponents than when the current Parliament was elected in 
¶2004.  Whether the reduction in seats will lead to more UNM 
Parliamentarians being squeezed off the party list, and 
therefore running on a separate ticket, also remains to be 
seen. 
 
Georgia's Strategic Importance 
------------------------------ 
 
¶8. (SBU) When Saakashvili and his ruling National Movement 
party (UNM) took office in 2004, Georgia was nearly a failed 
state, but it is much changed now.  Georgia is a 
strategically significant country to the United States 
because of its government's commitment to democracy, 
independence from Russia, free market economic reform, 
control of corruption, NATO and EU membership, and support 
for the War on Terrorism.  Notably, Georgia has the third 
largest contingent of troops (2,000) serving in Iraq with 
coalition forces.  Georgia's success or failure sends a 
distinct message to other countries of the former Soviet 
Union, and in the Middle East as well, about the wisdom of a 
Western-oriented, democratic, free market orientation. 
Additionally, Georgia sits astride the main alternative 
corridor for trade in oil, gas, and other goods to Europe 
from Central Asia and farther East.  Without Georgia's 
cooperation, no strategy for bringing additional Azeri, 
Kazakh or Turkmen oil and gas to the world market without 
passing through Russia can succeed.  These facts begin to 
explain as well why Russia is openly hostile to Saakashvili's 
vision of an independent Georgia. 
 
¶9. (SBU) Since Saakashvili took office, Georgia has 
substantially reduced the corruption that was bleeding its 
treasury dry under his predecessor.  Saakashvili famously 
fired the entire Georgian traffic police force in 2004, but 
he has also made arrests for corruption among all levels of 
government common news as well.  As a result, government 
revenues are up, electricity flows 24 hours per day, and 
government investment in repairing and replacing 
infrastructure that had badly deteriorated since the fall of 
the Soviet Union has increased.  With few natural resources 
to rely on other than manganese and agricultural products, 
Saakashvili and his economic team have begun to fashion a 
Georgia that seeks to attract investment by cutting taxes, 
eliminating tariffs and reducing red tape and corruption. 
Their express models are Singapore and Hong Kong. 
Saakashvili intends to continue reforms in his second term, 
and work is especially needed to create a truly independent 
judiciary.  We would encourage you to commend his reform and 
encourage Saakashvili's and the ruling party's intention to 
introduce new reforms that would strengthen the Parliament 
and improve the independence of the judiciary. 
 
 
TBILISI 00000188  003 OF 005 
 
 
Economy and Public Discontent Both Grow 
--------------------------------------- 
 
¶10. (SBU) Recent political problems have some economic roots. 
 Inflation has made many staple food and consumer items more 
expensive for all Georgians.  Only a wealthy few are able to 
take advantage of the new, glittery housing developments 
across Tbilisi, despite the fact the economy grew 9.4 percent 
in 2006 and 12 percent in 2007.  Growth will likely slow in 
2008 as political turmoil has caused investors to hesitate. 
The emphasis in government spending has already begun to 
shift from infrastructure and defense to education and public 
health, as Saakashvili moves to enact his campaign slogan of 
"Georgia without Poverty." 
 
¶11. (SBU) In contrast, the opposition primarily blame current 
discontent with Saakashvili and his ruling party on 
injustice, rather than economic reasons.  Property owners 
were disturbed in 2007 by the government's willingness to 
evict long-term tenants from state-owned buildings, challenge 
corruptly procured ownership rights in privatized property, 
and even to destroy some buildings in Tbilisi that were 
allegedly built illegally.  Saakashvili's own unshakable 
belief in the rightness of his cause contributed to a 
widespread perception of aloofness and unwillingness to 
listen to outside voices, which hurt him in the polls.  Since 
the election Saakashvili has made extra effort to reach out 
to various alienated sectors of society.  For example, 
Saakashvili went to the Ombudsman's office to meet him and 
publicly announced a renewed effort to protect Georgians' 
human and civil rights. 
 
¶12. (SBU) We estimate U.S. investment in Georgia at about USD 
770 million since 2000.  The United States and Georgia signed 
a Trade and Investment Framework Agreement in June 2007. 
U.S. assistance to Georgia in 2008 will be more than 100 
million dollars, directed to strengthening democracy, rule of 
law, free markets, and energy security, among other 
objectives.  Georgian officials would welcome a free trade 
agreement with the United States, which would attract 
investment and support jobs, stability, and growth in this 
friendly and strategic country. 
 
The HDAC Relationship 
--------------------- 
 
¶13. (SBU) As we enter the legislative elections and meet the 
subsequent Parliament, there will be an opportunity to 
strengthen the contribution of Parliament and to work with a 
possibly more diverse and representative body of MPs.  The 
HDAC can play an influential role with the new Parliament to 
help it get off on the right foot and guide first-time MPs on 
multiple fronts, including bi-partisan parliamentary 
procedure.  In addition, ongoing HDAC staff training and 
exchange opportunities continue to provide high value 
peer-to-peer support to career staff within the Parliament. 
 
Conflict Regions 
---------------- 
 
¶14. (SBU) Georgia's long-simmering problems with its 
separatist regions of South Ossetia and Abkhazia could erupt 
in controversy in February when Kosovo will likely declare 
independence.  Russia has threatened to recognize the 
independence of Abkhazia and South Ossetia if the U.S. and 
Europeans recognize Kosovo.  Such a move, if taken by Russia, 
which has long supported the separatist regimes, will be 
destabilizing to the government of Georgia.  We believe the 
government is sufficiently committed to its NATO membership 
drive that it would not jeopardize that goal by taking 
military action.  It will, however, have to resist internal 
pressure to do so. 
 
¶15. (SBU) Whatever happens, solving the Abkhazia and South 
Ossetia disputes will take time.  Regaining the separatist 
regions lost in the early 1990's during intense internal 
conflicts is considered a national priority by a great 
majority of Georgians.  The political leadership's focus on 
this goal reflects that fact.  Moreover, official U.S. policy 
supports Georgia's sovereignty and independence within its 
internationally recognized borders, which includes Abkhazia 
and South Ossetia.  We reject any parallels with Kosovo, as 
well. 
 
Themes for Your Meetings 
------------------------ 
 
¶16. (SBU) The parliamentary elections will significantly 
impact Georgia's political culture for the foreseeable 
 
TBILISI 00000188  004 OF 005 
 
 
future.  You will first meet with opposition leaders over 
coffee.  Afterward, you will meet ruling party MPs for 
dinner.  You will see that the political polarization has 
increased substantially since your last visit.  Both sides 
need to be encouraged to continue negotiating in good faith 
toward a much better election this Spring.  In Georgia, 
compromise is often seen as weakness, and both sides are 
under pressure to win a perceived zero-sum game.  You will 
want to urge the Parliamentarians to take immediate action to 
prevent the recurrence of the election irregularities that 
were noted by international observers and dulled 
Saakashvili's victory.  The election code will need to be 
simplified and set well in advance of the election.  Workers 
at the Central, District, and Precinct level need to be 
better trained.  Precinct Election Commission chairmen need 
to be better trained and empowered to follow the electoral 
code to prevent intimidation and vote count fraud.  The 
process of counting ballots needs to be more organized and 
transparent.  U.S. assistance is working with the Georgian 
authorities and NGOs to address all these issues.  It would 
be useful if you could demonstrate how both parties, despite 
party differences and whether or not they are the majority, 
routinely work together in Congress. 
 
Members of the Opposition, with Bios 
------------------------------------ 
 
¶17. (SBU) The following opposition members have been invited 
to meet with you over coffee: 
 
- MP Levan Gachechiladze.  Mr. Gachechiladze ran for 
President in the January 5 election.  He officially received 
25.69 percent of the vote, although he believes the real 
number was 30 percent or more.  A businessman and former 
Saakashvili campaign manager, he leads the UNC and may run 
again for Parliament.  It is still unclear if he is a strong 
enough leader to keep the disparate members (from far left to 
right) of the UNC united. 
 
- MP David Gamkrelidze.  Mr. Gamkrelidze is Chairman of the 
New Rightists (NR) party, which is not an official member of 
the UNC.  He also ran for President and won 4.05 percent of 
the popular vote.  A doctor by profession, Gamkrelidze is a 
long-time fixture of Georgian politics.  He recently has 
joined in UNC protests and criticized the U.S., both somewhat 
uncharacteristic for him.  Gamkrelidze believes that the UNM 
has forced out the moderate opposition, leaving him and his 
party in a quandary.  He does not want to become more 
radicalized, and he continues to denounce violence or 
overthrow as a means for change. 
 
- MP Kakha Kukava.  Mr. Kukava, of the right-wing 
Conservative party, has been the UNC's public firebrand 
recently.  He has taken the lead, quite vocally, in 
presenting the UNC's criticisms and demands of the government 
to the public.  Reportedly, he is still in lockstep with the 
UNC leaders. 
 
- David Usupashvili.  Mr. Usupashvili, Chairman of the 
centrist Republican party, is also a long-time presence in 
Georgia's opposition.  One of the most moderate, 
forward-thinking opposition leaders, Usupashvili has been 
leading negotiations with Parliamentary Speaker Burjanadze. 
 
- Salome Zourabichvili.  Ms. Zourabichvili is a dual citizen 
of France and Georgia.  She came to Georgia following the 
2003 Rose Revolution and served for a time as Saakashvili's 
Foreign Minister.  After being let go, she formed her own 
political party in opposition, Georgia's Way, which is a 
member of the UNC.  Publicly very critical of the government 
and Saakashvili, she maintains a cadre of connections and 
supporters in France. 
 
- MP Zurab Tkemeladze.  Mr. Tkemeladze is with the 
Industrialists party and is a businessman by profession.  His 
is usually a moderate voice, and his party runs lockstep with 
the New Rightists in Parliament.  However, he too has 
denounced the government as "illegitimate" and recently 
publicly quarreled with Saakashvili's key advisor on economic 
reforms. 
 
UNM Parliamentarians, with Bios 
------------------------------- 
 
¶18. (SBU) The list of ruling party MPs that will meet you 
over dinner has not yet been confirmed by the Speaker's 
office.  A list with biographical information will be 
provided to you on arrival.  However, the guest list could 
include: 
 
TBILISI 00000188  005 OF 005 
 
 
 
- Speaker Nino Burjanadze.  Burjanadze was the Acting 
President during the presidential election campaign.  She 
leads her own faction within the UNM, but has consistently 
towed the UNM line in public.  Good at speaking to Western 
audiences, Burjanadze is the one UNM representative with whom 
the UNC will negotiate at this time.  However, Burjanadze may 
be in the U.S. during your visit. 
 
- Deputy Speaker Mikheil Machavariani.  Machavariani will 
likely host the dinner if Burjanadze is not present. 
Similarly, he will fill in for her during any negotiations 
with the opposition.  Machavariani works closely both with 
Burjanadze and the UNM power brokers, including Giga Bokeria. 
 
- MP Giga Bokeria.  Bokeria is one of the most influential 
members of Saakashvili's inner circle.  Little legislation 
passes in Parliament that he does not approve.  Due to his 
blunt style, Bokeria's influence is perhaps greater than his 
popularity. 
TEFFT