12. GEORGIA: TBILISI, KYIV SEEK ENERGY ALLIANCE WITH WEST

By Julie A. Corwin, Radio Free Europe/Radio Liberty (RFE/RL)
Washington, D.C., Saturday, December 17, 2005

Georgia has reacted swiftly to recent Russian announcement of higher
natural-gas prices this winter. Georgian Foreign Minister Gela Bezhuashvili
recently traveled to Brussels and Washington to enlist support for a joint
strategy to reduce European energy dependence on Russia. According to
Bezhuashvili, Georgia is acting in concert with its “strategic ally,”
Ukraine.

Washington, 17 December 2005 (RFE/RL) — Russia’s Gazprom announced
earlier this month that it wants to almost double the price of natural gas
to Georgia, raising tariffs from around $60 to $110 per 1,000 cubic meters.
The new price would take effect on 1 January.

Russia insists that the reason for the price increase is not political.
After all, Gazprom wants to charge Armenia, a close Russia ally, the same
price as Georgia. The Georgian government, however, remains skeptical.

Kakha Bendukidze, the Georgian state minister of in charge of economic
reforms, has asked what suddenly happened to Russia’s economy that
requires such a dramatic price rise. In an interview with “Kommersant-
Daily” on 16 December, he wondered if there was such economic
necessity before 1 January, then that must mean politics prevented the
prices from being increased earlier.

Yesterday, Georgian Foreign Minister Bezhuashvili told an audience at
Washington’s Carnegie Endowment for International Peace that Russia
wants to “send a message” to the new democracies, Ukraine and Georgia,
with the price hikes. And together, the two strategic allies are ready to
form a common front.

“We need to confront these issues. And, we are saying and this is a
common voice — we had consultations with Ukrainians — if this is the
price for independence, we are going to pay this price. But we need
to stay together.

My message here in Washington — speaking in the White House, in the
State Department and other institutions — will be to elaborate a very clear
strategy, short-term, mid-term and long-term strategy how we will
altogether face this problem, because this is not a problem and issue only
for Georgia,” Bezhuashvili said.

Bezhuashvili is seeking not only U.S. support for a common
Georgian-Ukrainian energy policy but also European. He stopped in
Brussels on his way to Washington. There, he said he found support for
diversifying sources of energy supply.

“The understanding in Europe is growing that there is a need for a
trans-Atlantic energy-security strategy. One that will secure Europe from
energy dependence that is taking place in the Eurasia and Europe in
particular. Here we are facing a very tough policy of Russia, playing on
the energy dependence of Europe and its neighbors,” Bezhuashvili said.

The response from the Washington audience was not entirely sympathetic.
Nikolai Zlobin, the director of Russian and Asian programs at the Center
for Defense Information, said he was sympathetic to Georgia, but he
wondered whether its current foreign-policy strategy was too focused on
the West.

“What strike[s] me about your presentation [is that] you address your
relations with the West and the United States and European Union, and I
think Georgia really needs to improve drastically its relations with the
near abroad. Your relations with Russia [are] going very bad[ly]. Your
relations in the region with your neighbors [are] not so good and I would
like to know what [is] your strategy — not to blame Russia, not to blame
anyone else — but what is your strategy to improve these relations.
Because I doubt the West or United States or European Union will want to
fight or confront Russia over Georgia,” Zlobin said.

However, Bezhuashvili insisted that energy dependence on Russian gas
supplies is a problem facing not just Georgia and Ukraine but also “stable
democracies” in Western Europe.

In the meantime, Georgian economists estimate that the doubling of gas
prices in January could chop off an estimated 1.5 percent of Georgia’s
annual gross domestic product next year. -30-

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