Press Digest 26.11.2014
We are really in deep trouble today and the only thing that we can sell to Russia is our European course – Ramaz Sakvarelidze
We cannot break all ties with Russia – Zurab Abashidze
If GEL devalues even further, the price on our products will increase
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We are really in deep trouble today and the only thing that we can sell to Russia is our European course – Ramaz Sakvarelidze
“Nationals aren't even ashamed of trying to take after Georgian Dream. If they don’t remember I will remind them how they went through the dark days of 1990s when they closed the railway of Samtredia and set sanctions against Russia. Now even an intention to impose sanctions on Russia seems immensely ridiculous. Generally, the only purpose of raising sanctions against an aggressor country is to make it stop taking aggressive steps. However, neither Europe nor the U.S. has succeeded in curbing Russia’s overwhelming aggression thus far. The actions of Russia strongly suggest that this country is not going to back down despite the fact that its economy has already been severely battered. As for our hapless Georgia, what kind of steps can it take against the Russian bear? I don’t really think that any resources to deter Russia’s incessant aggression are in our hands today,” declares political expert Ramaz Sakvarelidze in his interview with the Alia gazette.
“Europe really appreciates rationality and they cannot even understand what makes us take such irrational steps. If our government really dares to kick off an anti-Russian campaign, this would be something absolutely irrational and insane. Actually this campaign will not bring any change and Russia will not even pay attention to it. However, this coin has two sides. Tell me has Azerbaijan involved itself in the anti-Russian campaign? No, it has not. And do you know why? The leadership of Azerbaijan can feel their responsibility before their people. As for us, we purposefully jeopardize our safety and have our oar in everyone’s boat. Think for a while, what kind of repercussions can these sanctions bring to us? We will simply be subjected to the Russian Bear’s unrelenting aggression – If this huge country proves unable to best the West it will give a full vent to its anger and will direct its overwhelming aggression against our tiny country again,” contends Mr. Sakvarelidze.
“In addition, today we get a large amount of products from Russia and our people are in desperate need of these products. All right, let’s assume that we closed our border and stopped importing these products to our country. What will this move bring to us? We will simply refuse to export our products to Russia and all our plans will instantly blow up in our face as a result of this. Therefore, an extremely logical question immediately pops up here. Who will be injured most of all thanks to our own irrational steps? Us and only us! So, what is the logical conclusion of all this? We are simply setting sanctions against our own country and our own people. That’s it. And now, I am turning to our immensely wise and shrewd politicians by posing them the question as follows: what were they thinking when they raised this issue?” asks the respondent.
“If we take a look at world history, we will see that all countries around the world are straining to maintain diplomatic relations with one another. Today, we are involved only in two formats – Karassin-Abashidze negotiations and the Geneva talks. If we reverse these two formats, what will be left to us? Will we ever be able to contact Russia again? By doing this, we will only surprise the entire world due to the fact that thanks to our irrational behavior we will voluntarily refuse to pursue our own interests. I would understand this, if we had occupied the territories of Russia, but today… this is something absolutely irrational and insane,” claims Mr. Sakvarelidze.
“By breaking diplomatic ties with the occupant, we will only serve Putin’s interests. We are really in deep trouble today and the only thing that we can sell to Russia is our European course,” concludes the respondent.
We cannot break all ties with Russia – Zurab Abashidze
"As Zurab Abashidze, special envoy of Georgia's Prime Minister for relations with Russia announces, Georgia must calmly respond to Russia’s move to complete an agreement on “Alliance and Strategic Partnership” with its breakaway enclave of Abkhazia. However, according to him, while responding to this step from Russia, Georgia must not deny its principles. If we believe Zurab Abashidze, the Government will make every effort to pull some strings and involve all international organizations in this process. As for the Karassin-Abashidze format, in his words, this is the only communication channel between Russia and Georgia and it must be maintained under any circumstances,” reports the Rezonansi gazette.
“The Georgian Prime Minister has already given an adequate evaluation to this agreement, and I do absolutely share his position. In the PM’s words, the government intends to mobilize all its diplomatic leverages and contact all international organizations. In his announcement, the Prime Minister also did not forget to call upon the International Community to adequately evaluate the actions of Russia that are clearly another step towards the annexation of Georgia,” declares Mr. Abashidze.
“Our key levers are precisely our international relations. The Foreign Ministry is taking extremely active steps today. Yesterday, Tamar Beruchashvili gave us detailed information regarding the steps they are going to take in the UNO, NATO, European Council as well as other European organizations. We will involve ourselves in active negotiations with our partners; in addition, we have already held meetings with our diplomats to elaborate a systematic, complex and well though out action plan that will be realized in the immediate future. This flagrant move by Russia must not break us to peaces. We must calmly respond to it,” states Mr. Abashidze.
“Next meeting with Karrasin is not really being planned at this point in time. The situation for this has not matured yet. In my opinion, meeting him now will bring us only counterproductive results. However, it’s also a fact that this format is the only communication channel between the two countries and we cannot really afford to lose it now. Our western partners, with whom we have developed extremely close relations, have offered us the same advice. You cannot find even a single country around the globe that has broken all ties with this aggressor country. Even Ukraine that has recently become a victim of its aggression has maintained diplomatic relations with Russia,” contends the respondent.
“Over the last two years, we have tried our best to adopt a constructive approach to this country, and we will keep doing this; while seeking to build up relations with Russia, we will always pursue the interests of our country and our people,” concludes the PM’s special representative.
If GEL devalues even further, the price on our products will increase
The National Bank has laid out as much as 40 million USD to keep the value of our currency stable. However, recently the GEL has been devalued against the USD by around 4 percent. The volatility in GEL value has not resulted in an increase in product prices at our market but the specialists think that this will stoke inflation soon. If the value of the GEL drops by more than 5 percent, the price of imported products will go up immediately. Therefore, the National Bank must strain to ensure the value of lari is stable,” reports the Rezonansi gazette.
“Georgia’s consumer market is fraught with imported goods. Consequently, the volatility in the value of our national currency causes inflation which is why an unexpected devaluation of the GEL instantly results in a hike in product prices,” says the article.
“As expert Soso Archvadze maintains, a sharp drop in the GEL value fuels inflation and has a negative impact on our market. On top of that, inflation differs from other economic indicators since it is interlinked with the people’s disposition to the future. “Today, everything is dependent on the policy of the National Bank. It must choose between two options: either it must swim with the tide or bring about some changes in the ongoing processes,” declared Soso Archvadze in his interview with the Rezonansi gazette.
“The fate of our currency also depends on the dynamics of investments from foreign countries. The flow of money from foreign states has been decreased recently, and this has, naturally, resulted in a drop in GEL value, declares the expert and adds that our consumer market is mainly dependent on import. In the wake of this, strengthening of the U.S. currency automatically results in the increase of prices on imported goods and this also negatively affects the value of the GEL and fuels inflation. Taking all this into account, the National Bank will make an inexcusable mistake if it refuses to us its levers to improve the present situation in our country,” contends Soso Archvadze.
The other expert Irakli Lekvinadze also shares Mr. Archvadze’s position and claims that the devaluation of the GEL causes inflation. “Today, we face inflation of 3.4 percent. This figure is expected to increase and this, by all odds, is not auspicious for our people whose financial position is extremely bad even without this. Hence, the National Bank is obliged to intervene in this process under any circumstances,” concludes expert Lekvinadze.
