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The Moscow Times, January 23, 2004

A Coming Out Party at Davos

By Lynn Berry

DAVOS, Switzerland -- Before the three almost-oligarchs walked in out of a snowy night, Georgian President-elect Mikheil Saakashvili was addressing a small dinner at the World Economic Forum of about two dozen people, including some involved in a pipeline being built across Georgian territory and other potential investors.

His voice growing hoarse, he continued making the case that he had been making all day Wednesday -- at a press conference, in a panel discussion before hundreds of the political and business elite attending the annual forum, and in many private conversations and interviews -- that Georgia is rooting out corruption and wants to become a good place to do business and a democratic role model for the entire Caucasus and Central Asian region.

Earlier in the day, he announced that George Soros and the United Nations Development Program were creating a fund to provide money to pay government salaries and remove the temptation from police and government bureaucrats to take bribes and steal state funds. (Click here to read story)

"It is one thing to prosecute these people [who have been engaged in corruption] and another to change the system," he said.

Saakashvili then moved on to his second major message -- that repairing ties with Russia is essential but that it will not be easy after so many years of hostility between Moscow and Tbilisi during the rule of Eduard Shevardnadze.

During the dinner, Saakashvili and Grigory Yavlinsky, the Yabloko leader, who was sitting across the table, traded thoughts on what had gone wrong between their two countries and what needed to be done. They talked about how Shevardnadze had provoked Russia to create an external enemy and how this had helped him hold on to power at home.

Later, when asked to speak again to the whole group, Saakashvili borrowed a sound bite first spoken by his Russian dinner partner: "He [Shevardnadze] needed Russia as an enemy, I need Russia as a friend."

It was a phrase he would repeat Thursday morning to waiting journalists after having breakfast with presidential economic adviser Andrei Illarionov.

From his arrival in Davos on Tuesday, Saakashvili, perhaps a little giddy from the company he is keeping at the age of 36, has delighted in listing the meetings he has had with various presidents, including Iranian President Mohammad Khatami. He also said he has met with British Foreign Secretary Jack Straw and U.S. Commerce Secretary Donald Evans. But at an opening reception, he said his most important meetings would be with Russian businessmen.

"If there are serious economic relations, if Russian capital seriously enters Georgia, then this allows us to move from being guided by emotions and impulses to real actions. This is because, where there is serious capital, there is less place for adventurism and aggression."

Saakashvili met with LUKoil CEO Vagit Alekperov: The discussions were "very preliminary," but "he wants to begin working in Georgian territory." He also met with Anatoly Chubais, head of Unified Energy Systems, which recently bought the energy distribution company in Georgia from its U.S. owner, and Saakashvili said he believes the electricity supply now will be better.

At Wednesday night's dinner, just before the main course was served, Andrei Bugrov, managing director of Interros holding company, David Yakobashvili, chairman of the board of Wimm-Bill-Dann, and Vladimir Yevtushenkov, chairman of the board of Sistema, walked into the hotel restaurant and sat down at an empty table.

"Mr. Saakashvili is our big hope," Bugrov said in an interview afterward. He said the new Georgian president has the potential to ensure stability, which is good for business. "We would like to support him as much as possible."

As for what interests Interros in Georgia, he said the country has mineral deposits, manufacturing that could be updated and a good climate for agriculture. "If not a bread basket, it could be a fruit basket," he said, a view that may be shared by Yakobashvili, whose company makes fruit juices.

Also, like many Russians, Bugrov said he has a "serious affection" toward Georgia, where he spent his honeymoon, and would like to see it once again become a tourist destination.

Saakashvili, who joined the three leading businessmen at their table for a while, said they had a good conversation. "They are interested, but we'll see how it works."

George Arveladze, Saakashvili's press secretary, said Russian businessmen are "ahead of their own government." They see that business is the only way to improve relations and want to "exploit the region for its natural potential," he said.

Saakashvili also has gotten some support at Davos from Russians outside the business world.

"As a Russian nationalist, I am very happy that Mikheil Saakashvili has been elected, and that Shevardnadze is gone, which shows that Russia was right," said Sergei Karaganov, who heads the Council on Foreign and Defense Policy, speaking Wednesday at a panel discussion on geopolitics that was introduced by Saakashvili.

"Russia should stop its policy of negligence, or even negative negligence, and be helpful," Karaganov said.

Asked afterward how specifically Russia could help, his first suggestion was to "open the railroad, even if Georgia doesn't want it open."

The railroad runs from Russia to Abkhazia, the separatist Georgian region on the Black Sea, but stops at the Abkhaz-Georgian border, Arveladze said. Most freight between Russia and Georgia must now be moved by truck along the Old Georgian Military Highway, which is a rugged narrow road often closed by snow or avalanches.

Saakashvili has wanted his first foreign trip after his inauguration Sunday to be to Moscow, and he said Thursday that he expects a visit to be arranged for early February. President Vladimir Putin, who waited for 11 days after the Jan. 4 election to congratulate him, has invited him to Moscow, but no date has been set.

The primary issue for Putin, and the main thing Saakashvili should address if he hopes to get off on the right foot, is Chechnya, several prominent political figures at Davos said. Russia accuses Georgia of harboring Chechen fighters and their foreign supporters, and in the past has demanded the right to send in Russian troops to go after them but has been turned down.

Saakashvili said in an interview Tuesday that he is ready to work with Russia on this. "We are telling high-placed people on the Russian side: Let's begin joint patrols. Why don't you train our border guards? Why don't we exchange information on a continual basis? We will completely coordinate the actions of the prosecutors so that no one suspected of crime appears either on our territory or on Russian territory."

Mikhail Margelov, chairman of the foreign affairs committee in the Federation Council, said in an interview that Saakashvili needs to tell Putin that "Georgia does not want to become the base of a threat to Russia."

Another important issue for both Saakashvili and Putin is the future of the two remaining Russian military bases in Georgia.

Margelov said it is largely a "technical issue" that can be worked out by both sides. He said there needs to be a bilateral agreement on how and when the troops will be withdrawn and where they will go.

Karaganov, however, called them "beacons of stability" and said Russia could help Georgia by keeping them there.

Other Russians here have expressed the opinion that since all but several hundred of the 3,000 troops on the bases are Georgians, Saakashvili should allow Russia to keep paying his citizens and not worry too much about bases that pose little real military threat.

Margelov said Saakashvili, "who is neither pro-American nor pro-Russian but pro-Georgian," is the kind of leader Putin needs in Georgia. "After the inauguration and after Putin's re-election, I think the two presidents can do a lot together."

Illarionov said that Russia wants good relations with Georgia and wants to see it become "a stable, prosperous and secure place."

Strobe Talbott, president of the Brookings Institution and a U.S. deputy secretary of state in the Clinton administration, was more skeptical. He said there is a lot of ambivalence in Russia about Georgia.

"I believe we will see [U.S. President George] Bush, especially in exchanges with Putin, put the stress on supporting Georgian sovereignty and independence. We want to make sure Russia is part of the solution and not part of the problem in the South Caucasus," Talbott said in an interview.

Talbott's former boss, former President Bill Clinton, also put in a plug for Saakashvili in Davos. At the opening lunch Wednesday, Clinton called for global support for politicians who are willing to take great risks to promote democracy, such as Saakashvili.

"Are you just going to pat him on the back?" Clinton said. "Or can we give him help in some systematic way so that all those other countries of the former Soviet Union want to get in line?"


See also:

the original at

Relationships between Russia and Georgia

The Moscow Times, January 23, 2004

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