A deal under which the Georgian opposition will take the
chairmanship of a commission on constitutional reform could
break the political deadlock in Tbilisi, prime minister Nika
Gilauri said yesterday.
We are already making progress, Gilauri told
Emerging Markets. One of the streets barricaded this
week by opposition protesters against president Eduard
Saakashvili had been unblocked, he said.
We have made a very good offer to the opposition: to
have a broad inter-party group to decide on a new election code
and other constitutional changes, which can be headed by a
member of the opposition. I think its a very fair offer,
and dialogue is ongoing.
The Georgian opposition continues to demand
Saakashvilis resignation, though. Thats not
going to happen, Gilauri said.
Gilauri admitted that the political conflict in Georgia had
impacted economic recovery, especially in April. I can
feel the economic pulse pretty well through such indicators as
budget revenues and the foreign exchange market, he told
a seminar at the EBRD business forum. January and
February were difficult, there were very good indications in
March, and in April the situation deteriorated.
The stand-off with the opposition could have been
serious, but serious conflict has been averted, he said.
We made some mistakes, and we learned from them. We
showed that Georgia is working as a democracy. Police
control of demonstrations could be favourably compared with
western Europe, he said.
Georgia watchers generally believe the political crisis with
the opposition. Some see national independence day on May 26 as
a crucial date: Rustaveli Avenue, the traditional route of
military parades, has been blocked this week by a
protesters tent city.
Gilauri said that friction between Georgia and Russia
which has risen again this month, with NATO exercises in the
Caucasian republic eliciting hostile comments from Russian
president Dmitry Medvedev was a big concern for
[Investors] love our tax system, they love the
regulation or rather the lack of it and they love
our fight against corruption. But Russia is the issue they
always ask about.
There are three reasons why the relationship should not
obstruct inward investment, he said: the amount of
international attention focused on Georgia since the military
conflict with Russia in August last year, which meant it would
not be repeated; the EU monitoring mission and the USs
recent strategic agreement with Georgia; and the fact that
Europe had woken up to the need for a southern
energy corridor, in which Georgia would play a crucial
Gilauri told the seminar that the support of international
donors, who have put together a $4.5 billion package for
Georgia, was a crucial factor in economic recovery.
Diversification of exports, and business environment changes
including the fight against corruption, have been crucial, he
The August conflict with Russia had put Georgia two
months ahead of other nations in terms of crisis
management, Gilauri claimed.
Badri Japaridze, deputy chairman of the board of TBC, one of
Georgias largest banks, told the seminar that the banks
had stayed open through the military conflict and clients had
later repaid them with loyalty.
Although there had been a sharp outflow of deposits in
September, this had then stabilised. The quality of the
loan portfolio deteriorated in the second half of last year,
and we have not seen foreign private investors coming in since
that time, he said. Since the August events, TBC switched
from an expansionary strategy to aim for stabilisation.