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Georgia Today: Wine, Energy and International Politics 06.11.2006 Hanna Smith Aleksanteri-instituutti.

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Presentation on theme: "Georgia Today: Wine, Energy and International Politics 06.11.2006 Hanna Smith Aleksanteri-instituutti."— Presentation transcript:

1 Georgia Today: Wine, Energy and International Politics Hanna Smith Aleksanteri-instituutti

2 Georgia in International Politics ”The principal concerns of small states are not the unwanted attentions of the Great Powers but the fear of being marginalised” - Especially important for countries searching for their place in the international order to be heard and seen. Small States’ diplomacy Protest diplomacy – stresses political sovereignty, attracts attention and espouses principled positions Niche diplomacy – stresses individual distinctiveness, division of diplomatic labour, links between internal and external policies

3 Georgia in International Politics Georgia-Russian relations – Russian WTO membership? Frozen conflicts – long term project. Can not be solved without outside help – EU Geopolitics, economy and energy – Turkey ( free trade zone ), Iran, Israel NATO – symbol of political sovereignty more than anything else USA – sympathetic supporter

4 Wine and the Nation: the Mood in Georgia Today Jeremy Smith Aleksanteri-instituutti

5 ”What does not kill us makes us strong” Life as normal Mood of defiance Positive gloss Resigned over EU role Growing nationalism of youth

6 History and Culture Georgia an ancient Christian nation Traditions of Friendship and Hospitality Ambiguous attitude to Russia and Europe Links to North Caucasus Independent Rebellions or protests in 1905, 1924, 1956, 1978, 1989

7 Georgia Today: Some Statistics Population, total (millions) 4.5 Population growth (annual %) -1.0 Life expectancy at birth, female (years) 74.5 Life expectancy at birth, male (years) 66.7 Poverty headcount ratio at $2 a day (PPP) (% of population) 25.8 GDP (current US$) (billions) 6.39 GDP growth (annual %) 9.3 GNI per capita, Atlas method (current US$) 1350 Inflation, consumer prices (annual %) 8.2 Foreign direct investment, net inflows (% of GDP) 9.7 Unemployment (% of total labor force) 11.5 Time required to start a business (days) 21 Internet users (per 1,000 people) 39 Source: World Bank: World Development Indicators (2006)

8 Wine in Georgian Culture Possibly first winemaking in Armenia or Georgia According to Legend, introduced along with Christianity by Saint Nino Important part of Georgian culture Distinguished from Slavic drinking culture Distinctive methods and taste

9 Wine in the Twentieth Century Increasingly popular in Russia Under Stalin, emphasis on fulfilling plans and expanding production Under Khrushchev, emphasis on quality, exposure to international competition Still suffering from poor quality control by end of Soviet period EBRD loan of €4.8 to Georgian Wines and Spirits, 1999 New wine law passed in 2000

10 Exports Structure By Commodity Group Total Natural Ferroalloy Walnut Flying Black Mineral Unprocessed Other Exports Grape Wine Apparatus Metal Scrap Waters Gold Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ %Mill. US $ % ,09,013,64,219,36,07,12,239,012,19,42,9-0,0205,363, , ,310,217,65,59,83,135,711,233,110,411,73,712,53,9165,052, , ,29,615,54,56,82,041,111,936,510,517,35,028,68,3167,048, , ,69,226,15,712,62,728,16,160,113,019,74,320,34,4252,054, , ,77,542,56,617,72,784,013,095,914,819,33,018,82,9319,949, , ,39,430,29,370,38,169,48,084,29,732,53,734,74,0413,647, (1st Quarter) 221, ,59,719,68,917,07,715,57,013,56,111,25,011,15,0111,650,5

11 . Wine Exports from Georgia, January- September 2005/2006 (Decalitres) Source: Samtrest Importer2005 (1 st nine months) % Change Russia Ukraine Kazakhstan USA Belarus Latvia Poland Lithuania Estonia Israel China Japan Canada Germany Czech Rerpublic UK Finland Total Bottles

12 Georgian Commodity Exports and Imports 2005/06, first quarter only (%) Source: GEPLAC 2006 Exports TurkeyRussiaAzerbaijanBulgariaUKTurkmenistanUSAOthers ,2 ImportsTurkeyRussiaAzerbaijanUkraineGermanyOthers

13 Georgia’s Response Georgian wine industry being restructured to give more say to associations and greater quality control German assistance in wine testing laboratories EU regulations make wine exports difficult EU and Far East the main targets Most wine producers not suffering so far Georgian government insists embargo will be permanent Good opportunity to reorientate export markets Similar with other embargos Energy the only area where huge problems are likely Likely to benefit in long-term from reducing dependence on Russia

14 Georgia Today: Wine, Energy and International Politics 6th November 2006 Aleksanteri Institute Mikko Palonkorpi

15 Energy consumption of the South Caucasus states in 2003 OilNatural GasNuclearHydro Georgia18%27%-53% Armenia49%28%12%10% Azerbaijan42%54%-4% Source: EIA Country Analysis Briefs, “Caucasus Region”,

16 Georgia as a transit hub for energy Time Importance to the West WREP 1998 North-South Soviet BTC 2005 SPC 2006 SPC I 2012 SPC II ? Trans Caspian ? Ir-Ar-Geo Ukr-Eur ?

17 Link between energy dependency and political dependency Without naming Russia, the National Security Concept of Georgia (NSCG) warns against the threat posed by dependency on Russian energy sources for Georgian national security. The National Security Concept states: “Dependence on energy imports from mainly one country, where free market and property rights are not secured, as well as underdevelopment of local energy sources, unstable energy supply and poor technical conditions of energy infrastructure render Georgia vulnerable and create conditions for foreign leverage. Energy related challenges, if not addressed in a timely and efficient manner, may endanger not only economic development, but also the national security of Georgia.” Source: the National Security Concept of Georgia


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