VZCZCXRO1917
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSI #0665/01 1091428
ZNR UUUUU ZZH
P 181428Z APR 08
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 9300
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TBILISI 000665 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/CARC 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ECON KDEM GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE APRIL 18 
 
 
¶1. (U) This cable contains current items of Political, 
Economic, and social interest concerning Georgia during the 
weeks of April 4-18. 
 
New Director of Public TV 
------------------------- 
 
¶2. (U) Levan Kubaneishvili, the new Director of Public Television, 
is the former head of TBC Studios, an independent production 
company, which produces news shows as well as providing a monitoring 
service. Kubaneishvili is widely viewed as a media professional 
connected to the government but having friends in the opposition as 
well.  He is being quite careful to avoid even the slightest 
appearance of favoring any party.  Despite opposition parties 
wanting to debate the government directly, Kubaneishvili insists on 
giving equal time to every party. Beginning April 21, every week the 
station will air two debates and three political parties will go on 
air to promote their platforms. A new analytical program, Seven 
Days, produced by former members of Imedi recently began on Public 
TV.  The first show featured two pieces quite critical of government 
actions' on November. 
 
Tevdoradze Talks about Ombudman's Annual Report 
--------------------------------------------- -- 
 
¶3.  (U) Elene Tevdoradze, Chairman of Parliament's Ethics Committee, 
said that the Ombudsman's annual Human Rights Report will be heard 
by the new Parliament after the May 21 elections.  She told Pol off 
that the Ombudsman's presentation, originally slated for December 
2007, was postponed due to November events and was rescheduled for 
February 15, 2008.  Tevdoradze said it was Subari himself who 
proposed then to move the date to March, at which time Speaker Nino 
Burjanadze recommended waiting until after the May elections. 
Subari maintains that the government is delaying his presentation as 
it does not want to address the human rights issues included in the 
report. 
 
Larsi Crossing 
-------------- 
 
¶4. (U)  On April 8 representatives from the U.S. Border Security and 
Law Enforcement and the U.S. Army Corps of Engineers traveled to 
Kazbegi to determine if road conditions would permit the resumption 
of traffic on the highway bordering Georgia and Russia (Larsi) which 
Russian officials announced on March 25 "would open soon." Ongoing 
road repairs appear to be able to support both the opening of the 
road to personal and commercial vehicular traffic and the resumption 
of construction activity at the port of entry.  Although Georgian 
Border Police are present now, there are no customs officials at the 
checkpoint. Georgian customs officials would need 10 days prior 
notice to have personnel in place to permit vehicles and persons to 
cross. 
 
Talking Turkey--TIP 
------------------- 
 
¶5. (U) An official delegation from Georgia visited Turkey to discuss 
bilateral cooperation in the combat of trafficking-in-persons (TIP) 
March 25-27.  Ms. Lali Papiashvili, a jurist on the Constitutional 
Court of Georgia and former MP who has championed Georgia's anti-TIP 
efforts and legislation, headed the delegation.  Both the Georgians 
and their Turkish counterparts called the visit a success in 
furthering their mutual understanding.  It is hoped that the visit 
will lead to increased cooperation and more efficient communication 
between the two countries in their mutual drive to eliminate 
trafficking in persons. 
 
Adjara's Head Criticizes the Minister of Finance 
--------------------------------------------- ---- 
 
¶6. (U)  On April 7 Levan Varshalomidze, Chairman of the Adjara 
Autonomous Republic Government, in a televised meeting with his 
cabinet, openly criticized Minister of Finance Gilauri for failing 
to solve the region's unemployment problems or to obtain cheap loans 
for Adjara residents.  Varshalomidze attributed the high rate of 
local unemployment to outsiders, foreigners and those from Tbilisi, 
who are given priority for jobs over locals.  This is the first time 
Varshalomidize publicly criticized another minister.  Such sessions 
are usually closed to the public and the heated exchange was widely 
publicized. 
 
Free Economic Zone (FEZ) Project--Poti 
-------------------------------------- 
¶7. (U) On April 15, 2008, Georgian President Mikhail Saakashvili 
inaugurated a FEZ in the west Georgian coastal town of Poti. 
Georgia sold a 51% stake of Poti port to the Investment Authority of 
the UAE's Ras Al Khaimah (RAK) emirate.   RAK will develop a FEZ 
zone in Poti and build a new port terminal.  The new port terminal 
will have triple the capacity of the current terminal.  Over the 
next 4 years, over $200 million will be invested in the new Poti 
industrial zone.  President Saakashvili said that the government 
 
TBILISI 00000665  002 OF 002 
 
 
will increase pensions and expand cheap credit program for the newly 
established Georgian businesses associated with the port. 
Georgia Sells Eurobonds 
----------------------- 
 
¶8. (U) The Georgian government's first ever Eurobond issue was a big 
success; there was more interest than bonds available.  The $500 
million fixed rate Eurobonds were priced at 7.5% when issued on 
April 8 and the price immediately rose from 101.66 to 102.375. 
Fitch Ratings awarded a BB-rating to the bond.  Fitch approved of 
Georgia's sovereign ratings which are a moderate 25 percent of GDP 
government debt burden and the outlook for 9 percent GDP growth in 
¶2008.  It sees risks in Georgia's high current account deficit and 
separatist conflicts.  The government said that the proceeds of the 
bonds may be placed in two recently created sovereign wealth funds, 
or spent on a new electric power transmission line to Turkey and a 
gas storage project. 
 
GIOGIE Conference 
----------------- 
 
¶9. (U)  The Georgia International Gas, Infrastructure and Energy 
Conference (GIOGIE), held in Tbilisi April 3-4, featured speakers 
who discussed the capacity of the various oil and gas transport 
systems through Georgia.  SOCAR, Azerbaijan's state oil company, and 
major organizer of GIOGIE, is a significant investor in Georgia. 
Participants expressed optimism that Trans-Caspian transit will be 
realized soon by using existing and new pipeline and terminal 
infrastructure.  Despite concerns about the potential for Azerbaijan 
to monopolize cross-Caspian transit systems, this issue was not 
discussed.  Presenters indicated that Georgia has a large hydropower 
potential, and if developed, could become the "battery" for the 
entire region.  GIOGIE participants were interested in the 
government's plans to offer dozens of hydropower sites for 
development. 
 
TEFFT