Wednesday, August 8, 2007, #150 (1417)

Trading a power station for territorial integrity? Rumors of economic concessions to Russia prompt fear of misguided Tbilisi tactics

Media in both Georgia and Russia continue speculating over the possibility of a deal between the two countries that would see Russia purchase the Engurhesi electrical power station on the condition it stops supporting the South Ossetian region.

A deal may result in presidents Putin and Saakashvili meeting to discuss the South Ossetian issue in August.

Caucasus analyst Mamuka Areshidze told Russian Nezavisimaia Gazeta that Moscow stipulated three preconditions if it is to cease support for the South Ossetia separatists: Georgia should not create problems for Russia in its bid for WTO accession; it should agree to transit Iranian natural gas to Russia; and lastly, it should allow Russian energy giant RAO EES to buy the Engurhesi power station.

Areshidze remarked that while before Russia has called on Georgia to withdraw its NATO integration bid, today Moscow limits itself only to economic demands. Areshidze suggests these issues were discussed by Putin and Saakashvili during a July 10 meeting in Saint Petersburg.

These claims could be taken in four different ways: first, the political expert may be inaccurate; second, such negotiations really did exist; third, there have been some negotiations but they are so confidential that it is rather premature make anything of them; or fourth, it could be a step to put psychological pressure on the separatists.

Russian Minister of Foreign Affairs Sergei Lavrov very clearly excluded the second possibility, and tried to alleviate separatists' concerns. He suggested that the rumors were nothing more than disinformation meant to cause a rift between Moscow and secessionist forces.

The Georgian Foreign Ministry, in a rare concurrence with its Russian counterpart, agreed that such a subtle issue should not be fodder for media speculation. The complex conflict resolution process should be handled responsibly, it suggested.

But questions remain over the source of the reports. If they have any basis in reality, we see Tbilisi faltering in a tactic of giving economic concessions to Russia in exchange for pulling the rug out from underneath the separatist regimes. National privatizations have, some say, been carried out with an open invitation to Russian interests. And so another question arises-why are we giving so many economic levers to a country which already is applying political and military pressure to Georgia?


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