05.08.2014 Author: Seth Ferris

Georgia-Russia Relations: Smoke and Mirrors of EU-Georgia-Russian Trade

2342344Georgia has been trying to join the EU and NATO for many years as have Romania, Moldova and Ukraine. This had been undeviating policy vector of the Saakashvili government, which spent nine years building up a reputation as a pro-European force.

Trade Imbalances

On June 27 Georgia signed an Association Agreement with the EU, which gave it various hypothetical trade privileges. The new government showed its usual equanimity, declaring that the agreement would not fundamentally affect trade with Russia. It is also clear that Russia has been exceedingly careful not to seem retaliatory for Georgia having signed the Association Agreement.

Now Russia has suspended its 1994 trade agreement with Georgia, just under two years since reopening its market to an array of Georgian products. This will mean that Georgian imports will probably not be given customs preferences, as before, and various products will thereby be priced out of some sectors of the Russian market. This would seem to fundamentally affect Georgia’s trade relations with Russia and its internal revenue situation, at first impression.

So what is going on here? What are we not being told about relations between these two countries, and why are we not being told it?

Trading in smoke and mirrors

These efforts are now bearing fruit, as European leaders are now falling over themselves to defend the record ofSaakashvili’s murderous government in the face of all reality, as in the case of the Hungarian Prime Minister (Viktor Orban) looks like he has a bit of a conflict to resolve there, because his people are opposed to their brethren in Ukraine getting killed in Saakashvili’s push for war with Russia, which he is giving tacit approval to it by siding with Saakashvili.

Like Saakashvili, Orban is a member of the European People’s Party (EPP) – who have proved themselves to be the scourge of the EU. They control it much the way that the Nationals controlled Georgia – with a sense of impunity.

It is funny how some of the same birds of feather are objecting to Georgia prosecuting Saakashvili for state crimes which could only have been committed with his authorisation and involvement. It is a gross miscarriage of justice and the persecution of a holy prophet and saint, as Catherine Ashton and Victoria Nuland would have us believe.

However, European leaders actually know what Saakashvili was and continues to be all about. Despite all his determination, he was never actually allowed to sign his cherished EU Association Agreement because Georgia still needed to make “improvements”. This seemed a sensible request, but when you looked at the differences between the improvements deemed necessary and the actual problems facing Georgian businesses, it didn’t seem so sensible.

Business Model and UNM

A repeated pattern of business practices emerged during the Saakashvili years. The government went out of its way to make companies easy to establish and operate, but in return you had to pay very punitive dues to the United National Movement, in terms of political support, monetary contributions, and places in the company for UNM supporters.

If you didn’t want to play ball, and sometimes even if you did, there were harsh to grave consequences. The usual trick was to make unwarranted tax demands, suddenly discovered by the Georgian Revenue Service under the iron grip of Saakashvili, which the company would never be able to meet. If these taxes had really been owed that would have been the fault of the Revenue Service for allowing such a discrepancy to develop in the first place, but no matter.

On the basis of these demands companies were closed and seized by order of the government and their owners threatened with further asset seizures and very long prison sentences. The only option they were left with was to make a lesser payment and hand the company over to a third party. Oddly enough, this third party was almost always a government minister. Even UNM MPs saw their businesses seized in this way, and then saw them reopened for trading, with liabilities written off, the profits lining the minister’s pocket.

Georgia’s businesses now operate according to the laws of business, the police behave like police and the courts behave more or less like judicial rather than political bodies.

The EU has noted this, and therefore declares Georgia ready to associate with it. If the EU had told the truth about the situation in Georgia from the beginning, Georgia would have been obliged to reach this point years before. But then Saakashvili would have told the world what he knew about EU activity in Georgia, and that’s another story.

Political smoke and mirrors

Signing the Association Agreement is of course a political move first and foremost. Unlike Ukraine, which tried to gain assistance from both the EU and Russia and saw its country torn apart, Georgia is squarely allying itself with the EU, even if that means damaging relations with Russia.

In this respect the present Georgian government is following the same ostensible course as the previous one. However, the deposed UNM doesn’t see it that way. It continually positions itself as the only genuinely pro-European force in Georgia, a group of enlightened democrats dragging the country out of the Dark Ages, and derides the Georgian Dream government as a bunch of Russian stooges who want to reverse the “reforms” of the Saakashvili era and hand the country over to Russia.

The UNM is well aware that the founder of the Georgian Dream, Bidzina Ivanishvili, was parachuted in by the West with the express purpose of removing Saakashvili. This Western connection, rather than what he actually did as Prime Minister before he stepped down, accounts for most of his enduring popularity. To the Georgian electorate Ivanishvili represents the “real” West, rather than the fake democracy of Saakashvili. Whatever the Georgian Dream itself has failed to deliver, it remains the way to the West Georgians want to go, for now.

UNM was never really pro-European

203736152By signing the EU Association Agreement the Georgian Dream government has outflanked the UNM. But the Georgian Dream knows very well that the agreement itself will not give Georgian people what they really want: more money and the right to work freely in the EU to get it. Such changes are unlikely to happen, even if all sides want them, within the term of this government, and the gap between hopes and reality might persuade people to conclude, over time that the UNM really was never pro-European after all.

In this context, Russia’s suspension of its liberal free trade agreement with Georgia is very convenient for the Georgian government. Of course, a technical explanation has been given for it: the agreement with the EU may lead to EU products entering Russia through Georgia unchecked, negatively impacting on Russia’s economy. But all the consequences of the agreement have been discussed by both sides, in a series of meetings, for many months. It is only after these discussions that Georgia said it expected no fundamental change in its trade relations with Russia if it signed the EU agreement.

Georgia was never unaware of Russia’s public threats to retaliate if the Association Agreement was signed. Indeed, it commented on each one as they were made. But it nevertheless told the public Russia wouldn’t do anything significant. Now it has done, the Georgian government is playing both sides. On the one hand, it is saying that this measure was, after all, expected, but doesn’t matter because it has a plan to deal with it. Then it is saying that it is disappointed that Russia has taken this step, as if it has broken some previous promise, which nobody heard Russia make.

The present Georgian government cannot present itself as a victim of Russian aggression for its EU ambitions, just like the previous one. Business comes first as there is very little Russia or Georiga can do to punish each other in terms of trade. Even if it was possible Energy would be Russia’s biggest weapon, but Georgia doesn’t use much Russian gas or oil anyway.” The electric grid of all Georgia is still almost 100% owned by Russia.  Even the CIA and the former US-owned AES distribution Company not change this since 2003, they did not want to spend this much money for a democratic transition.

The new government has outflanked the UNM again. Is it unreasonable to suggest that this is what was actually agreed in advance, and this is what both governments expected?

Who Russia and Georgia have free trade agreements with matters little in real economic terms. Both are members of the World Trade Organisation and bound by its rules. The WTO was established to spread the free trade gospel. Though some tariffs between member states are acceptable, for some purposes, there is very little Russia or Georgia can do to punish each other in terms of trade. Energy would be Russia’s biggest weapon, but Georgia doesn’t use much Russian gas or oil anyway.

The problem Georgia now faces is one already evident. Since the UNM lost the 2012 parliamentary elections its control of the state mechanism has gradually been stripped. However its criminal mechanism is alive and well, as it has not been broken but merely detached from the state structure.

Notorious Mafia Clans in Zugdidi Region

A significant number of UNM figures had criminal pasts before they entered politics, including the Rurua brothers, notorious gangsters who were exiled from the country before Saakashvili brought them back specifically to work for him, and the Akhalaia brothers, whose experience of controlling West Georgia by racketeering and extortion was put to good use in making the armed forces compliant.

This is especially true in West Georgia and with the mafia networks of UNM patron Roland Akhalaia, head of a notorious clan family that long ago became the backbone of the state. Perhaps the UNM really was never pro-European after all.

For instance one need only to look at some of the local partners of the upcoming Kazantip music festival planned for Anaklia Georgia in August, and those that stand behind the main hotels there, on paper owed by those subservient to local mafia bosses, Sergey Gvarama, owner of the Golden Fleece Hotel, and Guliko Kurchilava, so-called owner of the Palm Beach Hotel. Both these gentlemen have love hate relations with the UNM and local mafia groups, and were forced to invest in the construction of hotels for the pleasure and profit of Roland Akhalia and Mikhel Saaskashvili.

Brothers Revazi and Murtazi

Of course, a technical explanation has been given for the suspension of the 1994 trade agreement, that being that the agreement with the EU may lead to EU products entering Russia unregulated through Georgia, negatively impacting on Russia’s economy. However that is not necessarily the case; quite a number of pairs of Georgian brothers may be closer to the real reason. Exports out of Georgia, especially exports to Russia, could without much detection be micromanaged by the Narmania brothers influence on Poti port and the nexus to international arms and weapons trafficking.

Revazi and Murtazi, and their alleged links to US intelligence services are now the center of focus and their nexus to drug processing and trafficking.

There are also human intelligence concerns over shipments of weapons and drugs into the Georgian border regions of South Ossetia and Abkhazia

Local sources tell that some of these acts and activities are being executed under the cover of US government humanitarian and development projects. Various deals have been made under the auspices of USAID and organizations that have diplomatic protection under international agreements; these are centered in West Georgia, near the city of Zugdidi.

Main selling point

Take away the UNM’s main selling point, its reformist pro-European character, and it has nothing left but its criminal structure. If the Georgian Dream gets Georgia closer to Europe, and as far away from Russia, as the UNM did with its anti-Putin hysteric, the UNM is dead, and along with it a lot of livelihoods and civil liberties. Its only lever will be to distract the population through its criminal network. If the GD brings chaos, no matter what its political orientatio, deals and new institutions, the UNM will swiftly become credible once again.

On July 30 the worst fire in Tbilisi in over 14 years broke out at the Gulf Oil facility that is mostly an Israeli oil operation. Some suspect insurance fraud or a warning shot. Five cisterns full of oil exploded and the fire spread over 2000 square metres. Much more is involved here than meets the eye.

An investigation has been launched into possible safety breaches. The fire is currently being treated as arson, but that may prove an asset rather than a loss. There is likely to have been something wrong with safety procedures because the UNM wound the inspection service down. Paradoxically, if anyone set fire to the oil facility deliberately, the former system and its inspectors, rather than the arsonist, will have to bear responsibility in a calculated blame game designed by the cabal that set the fire.

The more the UNM is marginalised, the more such faked and staged incidents we can expect. Trade balances will hardly be an issue when everyone is waiting for the next explosion, war, or murder, in their neighbourhood, in a world that unravels as quickly as Ukraine.

Many companions can be made, like in a cheap Indian movie, oil fire, arms and who are the official owners of Gulf in Georgia, and much is documented on various websites. One thing is certain in the final analysis, it is hard to openly find the Israeli connections to the current agenda but it is there for those willing to dig deep enough, cluster bombs, arms shipments, and drones.

As in Indian, the Brothers Hinduja could be in the same Bollywood movie with Brothers Rurua and Brothers Akhalaia and Brothers Narmania and the audience would see them all as kissing cousins or something along those lines.

The story that is yet to be told is how all what is now transpiring impacts on the possible outcomes of an uprising planned for the Samegrelo region of West Georgia.

Seth Ferris, investigative journalist and political scientist, expert on Middle Eastern affairs together with Dutch National, On Special Assignment, Marcel Marie Brandsma, Holland  exclusively for the online magazine “New Eastern Outlook”. 


×
Please select digest to download:
×