Weekly Review of Ministries’ Activities. July 7-14, 2001

Ministry of Finances

Last week the Ministry of Finances, together with President and ‘economic team’ of the Government tried to prove that the country is recovering from the crisis and started to issue allowances and aids to IDP’s. On July 11th, State Treasury transferred sums to cover the debts for two months to IDP’s (6,5 million laris in total).

The Government showed desire to increase the minimal salary level as well to prove the end of the crisis. As the Finance Minister Zurab Nogaideli has announced on July 11th Government meeting, relevant expenditures would be included in the next year’s budget.


In order to fill the budget and meet IMF requirements, Finance Ministry introduced certain privileges in taxation. Under the bill on amendments to the Taxation Code, limit of VAT will be increased to 100 000 laris from present 24 000 lari level. “Economic Team” of the Government expects that this would facilitate to the development of small and medium business. Increase of VAT level also should be a good stimulus for small and medium business to pay other taxes.

The bill is a first point of the agenda of the Parliament’s July 18th Session. Delegation of he IMF arrives to Georgia on the same day to decide if the Fund should continue to implement the program of “Poverty Overcome and Economic Development” in Georgia. Increase of incomes to the budget would be crucial criteria for the positive decision. Therefore the Government is keen to show to the Fund that everything is being done (including the changes into the Taxation Code) to improve the process of mobilization of the incomes to the budget.

Ministry of Justice

On July 12th Prosecutor’s Office executed a complex inspection of Kutaisi (Western Georgia) prison. Ministry of Justice had certain objections against the broadcasting of this procedure by the “1st Channel” (central TV channel). News program of the channel as said that technical inspection has not been done for last 5 months in the prison. As the Chairman of the Department for Reforms in Penitentiary System Giorgi Arveladze has stated, this information is not right and “representatives of the Prosecutor’s Office, who inspected the facility would confirm my words. We are having daily technical inspections and all relevant acts and protocols do exist”.


Improvement of professionalism of the penitential system employees remains as a high priority to the Ministry of Justice. Last week Chairman and several staff members of the Punishment Execution Department visited London together with the member of non-governmental organization “Ex-political Prisoners – for Human Rights” Nana Kakabadze. The delegation has been introduced to the system of punishment execution in the Great Britain. The visit was financed by “Open Society – Georgia” foundation (member of the Soros Foundations Network). As the Ministry says, participation in such trainings brings extremely important results because there are not any facilities for training of penitential system workers in Georgia.

Events are developing positively in this regard. Center for preparation of the specialists for Georgian penitential system will be established in Georgia in September with EU funding. American specialists will visit Georgia in August to prepare instructors for this center.

Ministry of Internal Affairs

Despite the special investigative operations of the Ministry in Kakheti (Eastern Georgia), crime situation has worsened dramatically. Internal Affairs Minister himself visited Telavi city (center of Kakheti region) and established special headquarters there.

Everything started on July 12 night when four unidentified persons kidnapped employee of State Guard Service Mamuka Arabuli. Law enforcers presume that he probably has been brought to Pankisi valley (region in Kakheti, near Telavi, mostly populated by Kists – ethnic Chechens, historically residing in Georgia, and Chechen refugees). Villagers of Laliskuri, embarrassed by this fact took 8 Kist men in hostage with demands to free Mamuka Arabuli.

It is remarkable, that the case took place after the Ministry of Internal Affairs launched on (July 2) special investigative operations in whole Georgia and especially in Akhmeta region. According to the information by the press center of the Ministry, as a result of these operations 5 out of 5 murder cases, 17 out of 18 robber cases, 11 out of 13 economic crime cases have been solved. However, there are no cases of kidnappings in this list. Furthermore, despite the operations, new kidnapping case has occurred. It appears that the Ministry is incapable of fighting against human kidnapping or does not wish to fight. Chairman of the Committee for Human Rights of the Parliament Elene Tevdoradze mentioned, that it is very possible that some law enforcers are involved in these cases and they have created Pankisi valley problem for this purpose as a suitable place for kidnappings and drugs smuggling.

Nowadays there are two businessmen from Spain, brother of soccer player Levan Kaladze, Arab businessman, father of the owner of restaurant “Nikala” and, now, Mamuka Arabuli, in kidnappers custody. We may also add 8 Kist hostages, detained by Laliskuri villagers to this list.

Ministry of Defense

Session of Military Council of the Ministry of Defense was held at the Military Academy on July 12. Defense Minister David Tevzadze, Finance Minister Zurab Nogaideli, Chairman of the Parliament’s Defense and Security Committee Giorgi Baramidze and Secretary of National Security Council Nugzar Sajaia attended the meeting.

Along with the other issues, the meeting discussed the results of military drills held in the framework of NATO program “Partnership for Peace” and project of year 2002 budget. Special attention has been paid to the financing of the Ministry for the 6 months. According to the Ministry’s information, the central budget’s debt to the Ministry is 15%. Militaries themselves say, that if not the mutiny of the National Guard, this debt definitely would have been higher. On May 25t up to 1000 servicemen of the National Guard deliberately left their location places during the military drills and occupied Mukhrovani base, belonging to the Ministry of Internal Affairs, with demands for improvement of their social conditions.

Issue of the May 25th mutiny was once again invoked during July 12 session. Defense and Security Committee’s Chairman Giorgi Baramidze stated, that the National Guard is being financed less than other military units in the country and this causes certain tensions within the armed forces. Defense Minister David Tevzadze did not agree to such explanation and said, that it is not correct to put these issues before the military council.

Ministry of State Security

Last week long-lasting court process against representative of Irish company David Gelashvili has ended. Investigations Service of the Ministry of State Security has been accusing Gelashvili for large scale smuggling of ethylene spirit and causing the central budget 13 million laris loss. The Supreme Court sentenced David Gelashvili to 2 years of detention and reimbursement of 12,5 million laris.

The case probably would not have divulged to such extent, if not one circumstance: David Gelashvili is a cousin to majoritarian member of the Parliament from Khashuri District Valeri Gelashvili. The Parliamentarian appeared deeply involved in the case. Valery Gelashvili blamed State Security Ministry and Minister Vakhtang Kutateladze for money extortion. Valeri Gelashvili states, that Kutateladze proposed himto free his cousin for 1,5 million USD. Then Security Minister reduced the sum to 300 000 USD after Gelashvili’s refusal. The Parliamentarian says, that the head of the Ministry’s Investigations Service has made the same proposal to him as well. Head of the Investigations ServiceShengeli Pirtskhelauri hold a press conference on July 11th during which he categorically refused Gelashvili’s accusations. However, he also mentioned, that the Service suggested to the parliamentarian to repay at least a part of loss the budget has suffered in order to enable the Service to mediate with the court to change his cousin’s punishment. But it is strange, why did the Service make such proposal to the parliamentarian, who is not the suspect in this case. The Service has interrogated the Parliament’s only member once as a witness. However, Pirtskhalauri does not exclude the possibility that new details might appear in connection with Gelashvili after arrest of another convicted Pridon Babuadze.

Meanwhile, the Ministry is not going to appeal in the court against Valeri Gelashvili for blunder.As Pirtskhalauri has stated, david Gelashvili’s sentence by the court already has confirmed that Valeri Gelashvili’s accusation are not true.


On July 12 the Parliament’s Defense and Security Committee discussed the problems, which hinder effective functioning of the special services of the Ministry of State Security. Trustees of the National Security Council and the Parliament participated in the meeting as well. Financial difficulties have been recognized as a most important problem in this regard. It has also been mentioned that there is no adequate legal base for functioning of these services.

Ministry of Foreign Affairs

During the past week the Ministry continued to stress at international arena the issue of violation of 1999 OSCE Istanbul Agreement by Russia (looks like Georgia does not have other means of influence on Russia in this regard and the Ministry agrees to this as well). The Russian Federation did not fulfill its obligations under the agreement and did not have withdrawn Gudauta (Abkhazia) military base for July 1st.
Meeting of the representatives of Georgia and NATO member states has been held on July 12 in Brussels in the framework of NATO High Level Task Team. As the Ministry has announced, Georgia’s strict position did have proper support and feedback at the meeting. Representatives of NATO member states uttered the necessity of immediate liquidation of Russia’s military base in Gudauta.

Meanwhile, Kremlin does not seem to proceed with execution of its duties and liqudate Gudauta base. As announcement of July 10 by the Ministry of Foreign Affairs of the Russian Federation says: “Abkhazian population is against the withdrawal of remaining servicemen and armaments and is ready to block the future reduction of Russia’s presence”. Official Moscow names resistance of the local population as a reason of suspension of the withdrawal of Gudauta base. However, the Georgian side is confident, that the piquet of separatists, which hindered troops withdrawal, has been provoked by Russians themselves to have an ‘excuse’ for delay of base’s liquidation. It is also remarkable, that the Defense Committee of Russian Duma (parliament) is clearly against the liquidation of Gudauta base. On July 9th, Chairman of the Committee General Nikolaev has stated, that withdrawal of Russian bases form Georgia will seriously harm Russia’s interests and it will cause the loss of Russia’s positions in South Caucasus.


On July 10th first meeting of inter-structural commission of the Government, dedicated to the election of Georgia as a member of UN Economic and Social Council (ECOSOC) has been held at the Ministry of Foreign Affairs. Minister of Foreign Affairs Irakli Menagarishvili chaired the meeting.

Minister talked about the functions of the commission, briefly overviewed general directions of ECOSOC’s activities and its place in UN structure. Social and economic policy of the UN is being elaborated in the framework of this organization. Georgia will be a member of ECOSOC for 3 years.


On July 12th Second Session of the Commission for Cooperation between Georgia and European Union has been held in Tbilisi. Deputy Foreign Minster Tamar Beruchashvili chaired the session. PCA (Peace and Cooperation Agreement) was among the main topics of the agenda.

It has been mentioned at the session, that Integration in EU is a priority of Georgian foreign policy. Committee discussed the present investment environment of the country, fiscal policy, development of privatization process and aid programs of the EU. Session emphasized the issue of adoption of Georgian legislative base to EU standards.




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