EurasiaNet Business & Economics - Russian Economic Pressure Has Georgia Thinking About Life Outside the CIS

BUSINESS & ECONOMICS

RUSSIAN ECONOMIC PRESSURE HAS GEORGIA THINKING ABOUT LIFE OUTSIDE THE CIS
John Mackedon 5/09/06

First it was wine. Then it was mineral water. Russia’s punitive moves to cut off imports of Georgian products have policymakers in Tbilisi thinking about withdrawing the country from the Commonwealth of Independent States.

Over the past few days, Russia has imposed an import ban on two prominent Georgian brands of mineral water � Borjomi and Nabeghlavi. As with an April move to prohibit imports of Georgian wine, Russian officials cited safety concerns in justifying their actions. [For background see the Eurasia Insight archive]. Georgian officials dismiss such explanations, insisting the bans are politically motivated and designed to punish President Mikheil Saakashvili’s administration for pursuing a Western-oriented policy course. [For background see the Eurasia Insight archive].

Gennady Onishchenko, Russia’s chief sanitary inspector, called for the import ban after tests carried out on nearly 20,000 liters of Borjomi water during April supposedly showed that much of it was unsafe for consumption. The sanitary concerns are intertwined with a counterfeiting problem: in recent years a significant amount of the mineral water sold in Russia under the Borjomi brand has been determined to be fake. According to the Georgian Glass and Mineral Water Co., Borjomi’s bottler, the company has cut counterfeiting down from 95 percent over a decade ago to just about 2 percent today. "They [Russian officials] are fighting against everything that is Georgian, which has nothing to do with fighting counterfeiting," Georgian Prime Minister Zurab Noghaideli said on May 5, the day after the Borjomi ban was announced. On May 6, Moscow added Nabeghlavi mineral water import ban list.

Borjomi is among the best known brands of mineral water in the former Soviet Union. Figures released by Georgian Glass and Mineral Waters Co. show that, prior to the ban, Borjomi had an 11 percent share of Russia’s mineral water market, ranking third among the roughly 700 brands sold in the country. Of all the Borjomi water bottled in Georgia, 80 percent is exported, with 60 percent of exports heading to Russia. Thus, Moscow’s import ban represents a severe blow to the company, which is one of Georgia’s major exporters. Nitsa Cholokashvili, a public relations manager for Borjomi’s bottler, vigorously disputed the Russian quality-control findings. "This came as a little bit of a surprise for us," Cholokashvili said. "We conducted simultaneous test and we can give you a 100 percent guarantee that our product is of a very high quality."

The bans on wine and mineral water represent merely the latest turns in what can best be described as the downward spiral that is Georgian-Russian relations. Bilateral acrimony has reached new heights in 2006, with Tbilisi and Moscow accusing each other of skullduggery in connection with the "frozen conflicts" in Abkhazia and, especially, South Ossetia. [For background see the Eurasia Insight archive]. In addition, the two countries clashed in January over energy issues after a mysterious pipeline explosion interrupted natural gas supplies to Georgia. [For background see the Eurasia Insight archive].

The signs coming out of Tbilisi these days indicate that Georgian officials are prepared to take radical action � cutting ties with the CIS. On May 8, the Russian Itar-Tass news agency carried a report quoting Georgian State Minister for Euro-Atlantic Integration as saying it was "highly likely" that Georgia would pull out from the Russian-dominated grouping of former Soviet states.

An overwhelming number of Georgian legislators appear to support the notion of a CIS pullout. The general feeling is that Georgia has nothing to lose from formalizing the break with Russia. Parliament’s Deputy Speaker, Mikheil Machavariani, suggested that the political and economic cost of withdrawing at this stage wouldn’t be so high, as Russia has already done much of what it can to punish Tbilisi. "What is left to cancel?" Machavariani told Channel 1 television. "Unfortunately, Russian authorities have unilaterally decided to do all that could have been done."

Other senior MPs said a decision on the CIS membership question could be linked to parliamentary consideration of the future of Russian peacekeepers in Abkhazia. A legislative resolution adopted last October assailed Russia for blocking, rather than promoting peace in both Abkhazia and South Ossetia. The resolution called on parliament to reassess the Russian peacekeepers’ performance in Abkhazia no later than July 1. Another negative assessment would prompt a demand for the pullout of Russian troops.

"The possible timeframe [on a CIS withdrawal] could be linked to the decision we must take [on Russian peacekeepers] in June," Channel 1 quoted Givi Targamadze, chairman of parliament’s Defense and Security Committee, as saying. "Making a decision on leaving the CIS in parallel [with the peacekeeper issue] would be appropriate."

Such action seems to have broad backing from leaders of Georgia’s political opposition, who say that cutting ties now with Russia would offer the least painful route forward. "A horrible end is better than endless horror," said opposition MP Kakha Kukava. "It is better for us to put an end once and for all to this, and for Georgia to begin pursuing a new economic policy ... than for us to be eternally dependent on Russia’s wholly politicized economics."

Editor�s Note: John Mackedon is a Tbilisi-based writer who works for the online publication Civil Georgia.

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