Transcript Georgia Today: Wine, Energy and International Politics

Georgia Today: Wine, Energy
and International Politics
06.11.2006
 Hanna Smith
Aleksanteri-instituutti
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
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
 Protest
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
Wine and the Nation: the
Mood in Georgia Today
06.11.2006
Jeremy Smith
Aleksanteri-instituutti
”What does not kill us makes
us strong”
 Life as normal
 Mood of
defiance
 Positive gloss
 Resigned over
EU role
 Growing
nationalism of
youth
History and Culture
 Georgia an ancient Christian nation
 Traditions of Friendship and Hospitality
 Ambiguous attitude to Russia and Europe
 Links to North Caucasus
 Independent 1918-1921
 Rebellions or protests in 1905, 1924, 1956, 1978, 1989
Georgia Today: Some Statistics
 Population, total (millions)
 Population growth (annual %)
4.5
-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)
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
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
Exports Structure By Commodity
Group
Total
Exports
Natural
Grape Wine
Ferroalloy
Walnut
Flying
Apparatus
Black
Metal Scrap
Mineral
Waters
Unprocessed
Gold
Other
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
Mill.
US $
%
2000
322.8
100
29,0
9,0
13,6
4,2
19,3
6,0
7,1
2,2
39,0
12,1
9,4
2,9
-
0,0
205,3
63,6
2001
317,6
100
32,3
10,2
17,6
5,5
9,8
3,1
35,7
11,2
33,1
10,4
11,7
3,7
12,5
3,9
165,0
52,0
2002
345,9
100
33,2
9,6
15,5
4,5
6,8
2,0
41,1
11,9
36,5
10,5
17,3
5,0
28,6
8,3
167,0
48,3
2003
461,4
100
42,6
9,2
26,1
5,7
12,6
2,7
28,1
6,1
60,1
13,0
19,7
4,3
20,3
4,4
252,0
54,6
2004
647,0
100
48,7
7,5
42,5
6,6
17,7
2,7
84,0
13,0
95,9
14,8
19,3
3,0
18,8
2,9
319,9
49,5
2005
866,2
100
81,3
9,4
30,2
9,3
70,3
8,1
69,4
8,0
84,2
9,7
32,5
3,7
34,7
4,0
413,6
47,7
2006
(1st Quarter)
221,0
100
21,5
9,7
19,6
8,9
17,0
7,7
15,5
7,0
13,5
6,1
11,2
5,0
11,1
5,0
111,6
50,5
Wine Exports from Georgia, JanuarySeptember 2005/2006 (Decalitres)
Source: Samtrest
Importer
2005 (1st nine months)
2005 (1st nine months)
% Change
Russia
2407794.63
814280.60
-66.18
Ukraine
156067.40
230548.80
32.30
Kazakhstan
13911.30
84751.25
83.58
USA
84425.08
30657.20
-63.70
Belarus
13213.50
27281.62
51.56
Latvia
19509.67
24918.15
21.70
Poland
6366.60
15037.85
57.66
Lithuania
12156.75
7394.40
-39.17
Estonia
4593.30
6507.45
29.40
Israel
2953.50
5843.75
49.50
China
4902.30
3257.60
-33.50
Japan
1778.70
2554.65
30.40
Canada
1060.35
2451.80
56.70
Germany
4738.65
2101.40
-55.65
Czech Rerpublic
1822.50
2021.40
9.80
UK
21.60
2005.55
98.90
Finland
0.00
495.00
100.00
Total
2750360.67
1271459.92
-53.77
Bottles
36671475.6
16952799
-
Georgian Commodity Exports and Imports
2005/06, first quarter only (%)
Source: GEPLAC 2006
Turkey
Russia
2005
23.8
16.1
2006
7.8
19.8
Exports
Azerbaijan
Bulgaria
UK
10.1
7.6
3.7
6.5
-
-
Turkmenistan
USA
Others
-
-
38.7
11.6
7.1
47,2
Imports
Turkey
Russia
Azerbaijan
Ukraine
Germany
Others
2005
12.0
17.3
6.7
7.5
9.7
46.8
2006
11.4
18.8
7.4
7.5
10.0
44.9
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
Georgia Today: Wine, Energy and
International Politics
6th November 2006
Aleksanteri Institute
Mikko Palonkorpi
Energy consumption of the South Caucasus
states in 2003
Oil
Natural Gas
Nuclear
Hydro
Georgia
18%
27%
-
53%
Armenia
49%
28%
12%
10%
Azerbaijan
42%
54%
-
4%
Source: EIA Country Analysis Briefs, “Caucasus Region”,
http://www.eia.doe.gov/emeu/cabs/Caucasus/pdf.pdf
Georgia as a transit hub for energy
Importance to the West
Time
North-South WREP
1998
Soviet
BTC
2005
SPC SPC I SPC II Trans Ir-Ar-Geo
2006 2012
? Caspian ? Ukr-Eur ?
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