Wednesday, 31 May 2006

WILL GEORGIA LEAVE THE CIS?

Published in Field Reports

By Kakha Jibladze (5/31/2006 issue of the CACI Analyst)

The CIS has not been a shining example of achievements by former Soviet countries since it was founded in 1991 by Russia, Ukraine and Belarus. Originally intended as a format to help ease the countries’ transition into the free market economy, by 2005 even Russia was distancing itself from the alliance; Russian President Vladimir Putin once called it a ‘civilized divorce’ for the former Soviet states.

Georgia has always had a tense relationship with the alliance.

The CIS has not been a shining example of achievements by former Soviet countries since it was founded in 1991 by Russia, Ukraine and Belarus. Originally intended as a format to help ease the countries’ transition into the free market economy, by 2005 even Russia was distancing itself from the alliance; Russian President Vladimir Putin once called it a ‘civilized divorce’ for the former Soviet states.

Georgia has always had a tense relationship with the alliance. It was the last of CIS’s 12 members to join and did so more out of desperation than a sense of fellowship. Over the past 15 years, that bond has grown weaker. According to Georgian authorities, the country has nothing to show for its membership: it is the only CIS country whose citizens are required to obtain Russian visas, the territorial conflicts in Abkhazia and South Ossetia are still not resolved, higher gas prices have been imposed on Georgia and other CIS countries, and Georgia is now facing a triple embargo from Russia – on citrus, wine and mineral water.

On May 13, a high-ranking government commission was formed in Georgia to consider the county’s future in the CIS. After the session, Georgian Foreign Minister Gela Bezhuashvili remarked that politically the decision was ‘clear’ but other issues still needed to be worked out. Three weeks later, tensions are still high. On May 25, state minister for European Integration and newly appointed Deputy Prime Minister Giorgi Baramidze noted that there is ‘no sense’ in remaining a part of the CIS. Baramidze was attending the annual CIS summit in Dushanbe. According to him, while Georgia became a member of the organization with the best of intentions to work with fellow former Soviet countries on economic and territorial issues, nothing was accomplished.

While Russian politicians are downplaying Georgia’s threat of withdrawing from the CIS, members of the government are busy making threats about the potential consequences of such a decision. “Georgia should weigh the advantages and disadvantages before making a decision,” Sergei Mironov, the chairman of the Council of Federation of Russia, said on May 26. “We do not welcome such intentions, discussions, and furthermore, real actions.” He noted that Georgia’s withdraw would affect the country’s economy and people first.

Georgia recently met with the members of GUAM, a practically forgotten alliance between Georgia, Ukraine, Azerbaijan and Moldova, in the hopes that a stronger GUAM can help shield the countries from Russia’s wrath. The members signed a free trade agreement and renamed the alliance the ‘Organization for Democracy and Economic Development (ODED) – GUAM.’ However, Moscow seems unimpressed.

For all its rhetoric, Georgia is still heavily dependent on Russia for energy supplies. Georgians are not used to paying market prices for their electricity; news of new, higher tariffs to combat the raising natural gas prices sent citizens to the street. The new tariffs which raise the price 70% for rural customers are slated to come in effect June 1st. However, even the new price is lower than international market prices.

While the trade embargos on wine, citrus and mineral water take a large bite out of the exports from Georgia to Russia, Russia remains one of the country’s largest trading partners. In addition, Georgians working in Russia account for the bulk of the millions of dollars of remittances the country receives annually.

It is no secret that the CIS federation has not given Georgia the benefits the country anticipated when it joined 13 years ago. While the alliance is not actively helping the country, it is also not hurting it. Common wisdom suggests that Russia is using its economic strength and natural resources in an attempt to weaken Georgia and stir up internal unrest. If this is true, leaving the CIS could give Moscow even more ammunition to harm the fragile Georgian economy.

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