PHOTO FOCUS STORY PROMISES VS. RESULTS AT A GLANCE RELATED STORIES
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Kakheti, the region most famous for Georgian wine, has seen grape production decrease by as much as two-thirds from the Soviet era. Given the overall importance of wine for Georgia and the region’s agricultural potential, the Saakashvili government has begun implementing policies to revive this sector. What are the chances for success? Check out four of the government’s biggest promises and their results.

PROMISE / RESULT   1 of 4

PROMISE: “We have adopted a very important tax code with the lowest tax rates on the entire territory of the former Soviet Union within the Black Sea basin. Now, our business should learn how to profit by this code. The businessman should learn how to work, because nobody will do it instead of them.”

- President Mikheil Saakashvili
State of the Nation Address
December, 29 2004

RESULT: “[T]he [increase of] excise taxes is flawed. . . putting the burden on the beer and wine industries, sectors that are just in the nascent stages of development, forces them to restructure their current business plans. This will seriously hinder development in these sectors.”

- Giorgi Isokadze
Executive Director of the Federation of Georgian Businessmen
American Chamber of Commerce Magazine
January 2005

PROMISE / RESULT   2 of 4

PROMISE: Recognizing the potential for tourism in Georgia, including agricultural and wine tourism in Kakheti, the authorities in Tbilisi have promised to boost their efforts in promoting interest and development in this sphere.

RESULT: Outlets for Georgian tourism are already being developed in places like Ukraine and a conference on rural tourism, under the sponsorship of the European Union, has been scheduled in Yalta in September that will include displays from the Georgian wine industry and tourism companies to help promote travel to Georgia.

PROMISE / RESULT   3 of 4

PROMISE: 2005 - Each year, hundreds of thousands of counterfeit bottles of Georgian wine hit world markets, costing Georgian wine companies and the government considerable sums in lost revenue. To curb the practice, the government has promised to pass anti-falsification laws and introduce regulating committees.

RESULT: 2005 - In January, the government introduced the Wine Quality and System Formation Fund, a group meant to oversee ways to revamp quality control for Georgian wine. A wine testing laboratory, run under the auspices of the Agriculture Ministry and the first of its kind in Eastern Europe, was opened in late 2004. Local officials in Kakheti, however, report that a local so-called “control unit” promised by the Agriculture Ministry to combat falsification of Kakheti wines has not yet been established in the region.

PROMISE / RESULT   4 of 4

PROMISE: 2005 - Georgia is slated to receive as much as $1 billion from the United States’Millennium Challenge Fund this year. The government intends to use a certain amount of the fund as equity capital for investments in agriculture and tourism in the country’s rural regions.

RESULT: 2005 - Projects proposed for Kakheti, should it receive a portion of the Millennium Challenge Fund money, include railway reconstruction, road construction, and the opening of a brick factory and oil recycling factory. None of the perspective funds will be directed towards the development of Kakheti’s main source of income – wine.

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