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Georgian businessmen held hostage by politicians

28.12.2012  |  19:20

Georgian businessmen held hostage by politicians. 28892.jpeg

After introduction of embargo on Georgian products by Russia, Mikheil Saakashvili has repeatedly stated that the farmers and winemakers had been actively cooperating with alternative markets in Ukraine, Kazakhstan, Europe, USA and China. But ordinary people, who live through trade, cannot agree with him. Georgian winemakers also do not agree with him. They understand that only the Russian market was the most promising for them. Even new government understands this. One of the priorities of the government is to return agricultural goods to Russia. What is the future in this area?

Every day at six in the morning Natela Gelashvili gets up to milk the cows. A resident of a small village of Nagebi in eastern Georgia jokingly calls it "going to the theater". She has only four cows, but she gets enough milk to send to the grandchildren to the city, to make yoghurt - also for the grandchildren, and, of course, to make her signature product - cheese suluguni that Natela then brings to the market, also in the city, and sells it. A bit of earnings remain, plus a pension. In general, it's enough to live.

"I thought to buy another one or two cows, but I don't know what to do with that amount of milk, and sometimes it's very difficult to sell the cheese. Especially in the summer, when there is a lot of milk - the cheese price reduces by 3-4 GEL. In addition, I need to feed the cow, to treat it - it is difficult", Natela Gelashvili says.

The issue of ready market for agricultural goods has become especially relevant to the Georgian farmers in recent years. The main market for them has always been the former Soviet Union. Russia in the first place, of course. Georgian wine, mineral water "Borjomi", citrus fruit - this is a part of list of goods from Georgia, popular in Russia since the days of the Soviet Union.

In 2006, due to the extremely aggravated Russian-Georgian relations, Russian market was closed for "Borjomi", wines, and later other Georgian products. The official reason was its poor quality. After that, President Saakashvili said that Tbilisi would seek alternative markets.

If we believe Saakashvili, the Georgian businessmen, especially winemakers needed only two years to find alternative markets - Ukraine, Kazakhstan, Europe, USA, China. "We are even grateful for Russia's embargo", said Saakashvili. "We have redirected production to other countries and now we have no problem", the president proudly asserted.

However, Georgian farmers do not really agree with the president's optimism. Winemakers are particularly affected. Even after entering the alternative market they still have a large reserve for increasing the production of wine. In the warehouses there is wine made several years ago, but it does not make sense to pour it into the bottle - its sale would fail.

"We are interested in the opening of the Russian market", the representative of the company "Kindzmarauli" says. "Today, we sell wine in Ukraine, Kazakhstan, and China. Now we produce 5-6 tons of wine, but we can produce more by 2-3 times. We will purchase fertilizer, thus increasing the grape harvest. Today, when the Russian market is closed, it does not make sense to increase the production of grapes".

After the coalition Georgian Dream won in the parliamentary elections, its leader Ivanishvili called the return of the Russian market one of the government's priorities. Today, it is almost the main task of the Ministry of Agriculture. David Kirvalidze, Minister of Agriculture, who held the post under Eduard Shevardnadze, is well aware of how promising Russian market is for Georgian products and knows that the fight for this market is taking place throughout the world. Kirvalidze used to work in the U.S.

The Ministry of Agriculture has established a special group that would help Georgian farmers to sell their products, especially to Russia, where some restrictions have remained.

"Russian market is interesting for Georgia", the representative of the Ministry of Agriculture of Georgia Levan Davitashvili said. "Residents of Russia are long acquainted with our products - wine and mineral water. So there is a good prospect, and we are working in the direction".

After a six-year ban, "trial" agricultural goods have begun to arrive to the Russian Federation. A few days ago, the first batch of citrus fruit was delivered to Russia from Georgia. The Ministry of Agriculture of Georgia reported that the container arrived in Russia through Belarus. In the near future another two trucks will be sent same way. Bidzina Ivanishvili said that Georgians had sent to Russia a trial batch of mandarins "at our own risk". "We'll see how and what will happen to them", he said.

In turn, at a press conference on December 20, Russian President Vladimir Putin announced that Russia fulfills its obligations under the WTO on admission of Georgian goods. On December 21, First Deputy Foreign Minister of Russia Andrei Denisov said that "politically" the issue of admission of Georgian agricultural goods and wine to the Russian market had been settled, "there have left only purely technical procedures".

Meanwhile, skeptics in regard of the return of Georgian products to the Russian market say that business should consider the risk factors associated with such a decision. And what if the embargo repeats, they say. After all, the Georgian-Russian relations are far from normalization, and businesses can once again become a political pawn.


Mikhail Vardzelashvili


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