Last weekend I finally got the time to catch up on a number of projects that were hanging over my head, and among the things that I desperately needed to get done was to write a column for the Faster Times on the biggest drama of the summer: photographer spies and terrorist patsies.

Were several freelance photographers secretly spying for the Russian government? Did Russia plant a bomb at the U.S. embassy and other locations? We don’t know, what we do know is that these two much ballyhooed cases have provoked serious questions about the Georgian government’s credibility.

When I first contacted journalists and NGO workers in Georgia about coming to this country in the summer of 2009, most said that it was poor timing.

“Everyone’s on vacation, it’s too hot to work, so, nothing really happens in Georgia in the summer,” they said, “except the occasional war.”

Still that was enough for me to buy the one-way ticket and I am now moving into my third eventful summer in the South Caucasus.

This year, while the Western world was gearing up for barbeques and summer movie blockbusters, Tbilisi was host to a fascinating spy scandal involving three freelance Georgian photographers. Two of them worked directly for the government, including one who was the president’s personal photographer. They were accused of being paid to transmit sensitive government documents – including the minutes of ministerial meetings, blueprints of government buildings, official itineraries, etc. to another country.

Meanwhile, more details emerged about a series of mysterious explosions the previous fall that had rocked Tbilisi – actually “rocked” is a bit of an overstatement. All of the devices were small, causing hardly any damage and no one in Tbilisi seemed to pay much attention to them.

Either way, it has been an interesting, if swelteringly hot, couple of months.

On the explosions, I actually happened to be at the U.S. embassy in Tbilisi to interview the ambassador the day after the strange explosion occurred outside their walls. Although I was there to discuss IDP issues, I asked every aide and employee at the place what they thought it was all about. Most shrugged, figuring it was some local digging for copper, who accidentally struck a natural gas line, or perhaps some sort of odd practical joke. Who knows.  These things happen in Georgia (in March, a Georgian pensioner allegedly cut off the internet for a significant portion of the South Caucasus – including nearly all of Armenia – while scavenging for buried cables).

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While the Georgian government has tried to get back in business’ good graces, the perceptions of the general public has also gradually become more positive towards the economic elite. But why?

Despite a rocky relationship with business in the past, the government is working hard to create better ties with the private sector.

New state intiatives – including a business ombudsman to advocate for tax-payer rights and a business council in parliament – are easing tensions between the government and business.

Last December, President Mikheil Saakashvili said in a speech that there were “many deficiencies” in the relationship between the government and the private sector, admitting that business leaders felt that “the State does not listen to them appropriately and treats them unfairly”.

The speech marked a step in the president’s year-long campaign to repair the frayed relations – damaged, in large part, by a period of increasingly aggressive raids and hefty punishments for tax crimes at the hands of Georgia’s Financial Police.

Giorgi Pertaia

Lawrence Sheets, International Crisis Group’s Caucasus project manager, said in an interview with Investor.ge that the government’s ballooning foreign debt, which is projected to reach 43.2 percent of GDP in 2011, put pressure on the authorities to increase tax collections, resulting in a soar in both the frequency of tax raids and amounts of the eventual fines. Georgia’s economy also contracted by 3.9 percent in 2009 following its 2008 war with Russia, further straining tax revenues.

The government responded to the growing gulf of distrust between the public and private sectors by first hiring former AmCham customs specialist Giorgi Pertaia to advise the prime minister’s office and serve as a “bridge” between business interests and government authorities.

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courtesy of wikicommons

In this month’s issue of Investor.ge I reported on a couple of bits of news — first, the transfer in owner ship of Georgia’s main cargo port, Poti.

Flipping the Poti port has been one of the government’s major development goals, and is a key to increasing Georgia’s potential as a logistics and transit hub for East-West goods trade. APM Terminals, a subsidiary of the Maersk Group bought the port earlier this year and it says it has already begun to assess its renovation plans aimed at increasing its safety, efficiency and cargo capacity.

All good news, but they have a long way go to. Read more below.

Since acquiring an 80 percent share of the Poti port earlier this year, APM Terminals now plans to invest $100 million on upgrading the port facilities, and is eyeing additional investment projects in the region, company officials said.

APM Terminals, part of the Moller-Maersk Group, announced that it had acquired an 80 percent share of the Poti Sea Port in April, and officially took over from UAE-based RAKIA, in May.

APM Terminals’ Senior Vice President and Head of New Terminals, Peder Sondergaard, said APM intends to “add value” to the port, meeting the demand for a “high-quality port infrastructure in the Black Sea.” In the same press release, he also said APM would be investing $100 million in the port facilities over the next five years.

RAKIA continues to operate the Poti Free Trade Zone (FTZ), which occupies about 100 hectares adjacent to the port. RAKIA, which bought the zone in 2008, hopes to develop it into a major logistics and industrial center, pledging a $200 million investment.

APM Terminals’ Vice President for Business Development, Hans-Ole Madsen said in an interview with Investor.ge that the first stage of APM’s development plan has already begun, with engineers surveying the port’s existing equipment and determining which terminal cranes will be updated and which will be scrapped.

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Until then, check out the fabulous new site and tell your friends. While you’re there, register and start a blog. Already the posts by the two experts we’ve lined up have been the most popular content on the site, so you guys should join in too! You’ll get a heck of a lot more hits than Three Kings gets!

Settling into a new job, starting new projects, still teaching, still freelancing and working through the most eventful week in Tbilisi all year has forced Three Kings to fall by the wayside. But if you’ve fallen behind, let me catch you up!

First off, I had what was perhaps my most high-profile piece in terms of publication in covering the Tbilisi protest that was violently dispersed in the early hours last Thursday morning. I saw it as a great opportunity to focus on some of the narratives of Georgian society and politics that rarely get covered, and it was clear by the way that this crisis rolled out that the real story would once again be lost in the trees.

A protester lies handcuffed on the sidewalk in the aftermath of the police dispersal. REUTERS

The protest had been written off as a (possibly Russia-backed)  futile, rambunctious effort to disrupt the peace by a marginal politician and her hooliganish followers. But the story that was lost amid all the absurdity of this past week’s politics was that it all represented a persistent and unaddressed problem in the new Georgia — that the revolution had left many behind.

TBILISI, Georgia — In the wee hours this morning, in heavy rain, Georgian riot police closed in on a crowd of protesters who had appropriated a bandstand in front of parliament — the spot where the president was to speak just hours later.

It was the deadly end to a five-day protest led by two Georgian opposition parties demanding the resignation of President Mikheil Saakashvili. At its peak, an estimated 10,000 people took part in the protests, which blocked a major thoroughfare in front of the headquarters for Georgian State TV in the capital, Tbilisi. On Wednesday, about 3,000 demonstrators marched on to the bandstand, where they hoped to disrupt the annual Georgian Independence Day parade.

The opposition parties claimed they were marching for democracy. The government said they were Russia-backed provocateurs bent on sewing disorder. Both positions miss the point.

As footage of the protest’s violent dispersal trickled out, it became clear that the majority of those who had taken to the streets were not young radicals, but middle-aged workers and retirees, huddled together gasping for air through the tear gas and rain, frantically avoiding the swinging billy clubs and rubber bullets. A protester was reportedly killed in the violence while 37 people were wounded.

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Be on the lookout for more Faster Times stuff from me, covering protests across the Caucasus.

In recent years, internet security has become an issue of increasing concern for governments around the globe, but in the turbulent South Caucasus, local experts say the threats against both the physical internet infrastructure and cyberattacks against governments and organizations are a reality.

The fragility of the South Caucasus internet infrastructure was underlined this March when a 75-year-old Georgian woman allegedly shut off the internet for 90 percent of Armenia as well as large parts of Georgia and Azerbaijan, by accidentally cutting a fiber-optic cable while digging for copper wire.

Network monitors in Western Europe alerted Georgian authorities to the source of the disruption, and the internet was restored five hours later.

Currently, most internet coverage in the three South Caucasus countries, Georgia, Armenia and Azerbaijan, comes from a single fiber optic line that traverses the Black sea into Georgia. From there, the system is neither properly protected, nor properly backed-up said Thomas Van Dam an internet expert who worked with online marketing firm, MatchCraft, in Georgia until 2010.

“There is zero redundancy in the system,” he said. “This is strange because the concept of ’99 percent uptime’ is only possible when you have fully redundant systems.”

Representatives from Georgian Railway Telecom, which owns Georgia’s fiber optic lines, said the company is currently “undergoing reorganization” and were unable to respond to media queries.

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I’ve had a lot of good work in the pipeline that just hasn’t made it out quite yet so keep tuning in, the backlog is about to rush forth.

But first, a quick explanation of my new job: Monday is my first official day in the position of Senior Editor of PIK Television’s English Service. I will be disseminating my own multimedia journalistic work as well as managing and supervising the content of the soon-to-be-launched English version of the website. I’ll no doubt have plenty of updates on PIK as I settle and will be sure you let you all in on some of the exciting new projects I know are on the horizon.

Bon voyage?

Following the massive upheaval of the “Arab Spring,” opposition groups across the South Caucasus have been calling for revolution in their respective countries. This is part I of a three-part series @ The Faster Times, wherein I will be looking at Georgia, Armenia and Azerbaijan individually with an eye to the conditions that could be fertile for major political changes, and also the factors that are likely to hold it back.

Since taking power in 2003 in a revolutionary wave of popular support, Georgian President Mikheil Saakashvili’s government has faced a number of tests. Following a widely denounced crackdown on peaceful demonstrations in 2007, a disastrous war with Russia in 2008, and months of sit-in protests paralyzing downtown Tbilisi in 2009, Saakashvili appeared to be on his political deathbed. But after a successful campaign in the 2010 local elections, the ruling United National Movement (UNM) party is once again back on solid footing, even if the country still is not.

Many Georgians remain deeply discontented with the Saakashvili government, and several opposition leaders have called revolution “inevitable.” Michael Cecire, political analyst and founder of Tbilisi based news-zine Evolutsia.net, said that primary cause of this is the naggingly sluggish economy. Despite all the talk of the Georgian economy rebounding from the double-barreled crisis in 2008 caused by the war and the global economic meltdown, Georgians have seen little real improvement in their own economic situation, and the bad economy could become tinder to the revolutionary fire, he said.

“Inflation is high, prices for energy and food are rising, and income inequality seems to be getting worse, not better. In many ways, it’s a perfect storm for a smart opposition candidate to run on a forward-looking, policy-oriented platform,” he said.

Furthermore, after enacting radical and effective democratic reforms in the early years after the 2003 Rose Revolution, Saakashvili’s reforms seem to have run out of steam – a situation that is not lost on the public — said political analyst and Tbilisi State University professor Kornely Kakachia.

“The Georgian public is kind of disoriented at this stage,” he said. “It supports the government’s Euro-Atlantic integration policy and democratic reforms, but at the same time it also realizes that this particular government has already exhausted its progressive ideas. The only aim of the current authorities is just to maintain stability and the current status quo.”

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When I wasn’t running around Abkhazia or teaching English over the last couple of months, I have been looking into this trend for Investor.ge.

Georgia has seen few industries boom in the   years since its independence like the casino industry. While neighboring countries banned or tightly limited gambling throughout the 1990’s, Georgia allowed it to flourish; as a result there are more than 500 slot clubs currently operating in Tbilisi. But the gambling business is now facing new threats. In the last several years, Georgian casinos have increasingly been the target of proposed tax legislation as the government vied for a bigger slice of the industry’s traditionally murky profit pie. Furthermore, although Georgia once occupied the title of the Las Vegas of the region, it is no longer the only game in town.

In Azerbaijan gambling has been illegal since 1998; however, as of January this year state-run gambling houses are now allowed to operate. In the same month Armenia issued licenses to dozens of gambling organizations, which, once relegated to the outskirts of Yerevan, are now working their way into the city.

But Vedran Bajat, General Manager of Casino Adjara, said that he has been closely watching these changes in the market and in his opinion they will not have a significant impact on the Georgian casino business.

Despite the fact that a steady stream of Armenian and Azeri thrill-seekers has traditionally been a boon for the Georgian casinos, Bajat estimated that Casino Adjara, which attracts an average of 1,000 players per day, has a clientele that is 90 percent local. In addition, he pointed out that Azerbaijan has only legalized sports betting and lotteries, so Azeri crapshooters and card-players will still have to make the trip west to Tbilisi or Batumi to get their fill.

Still, the increased competition, high taxes and a steep 5 million GEL ($3 million) annual licensing fee for casinos seems to have made it difficult to break into the market. Currently, only two casinos operate in Tbilisi: Casino Adjara and Iveria Casino. A third, Grand Sakartvelo closed recently.

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Turkish sailors in Sokhumi beside their ships adorned with both Turkish and Abkhazian flags in February 2011.

Anyone who has been following my writing on Abkhazia over the past couple of months, will not be too surprised by the conclusions of my piece published in the English edition of Tabula magazine yesterday. In it, I talk to one of the very few analysts who have dug deep into Turkey’s quietly deepening trade ties with Abkhazia, Argun Baskan, a researcher with the Economic Policy Research Foundation of Turkey.

Although Georgia continues to officially maintain an embargo on the breakaway republic of Abkhazia, experts and local observers now believe that the Georgian Coast Guard may have backed off enforcing the embargo and is no longer seizing Turkish ships bound for Abkhazian ports.

Abkhazia has been under an official blockade and a ban on all economic activity imposed by the Commonwealth of Independent States since 1996. Although Russia began progressively lifting economic sanctions on Abkhazia in 2000, causing land trade to increase, Georgian navy patrols continued to make sea trade with Abkhazia sparse and treacherous.

More than 60 ships were reportedly captured by the Georgian navy between 1999-2009. Often times the ships were later auctioned off and their crews briefly imprisoned. But, Argun Baskan, a researcher with the Economic Policy Research Foundation of Turkey said that since Russia recognized Abkhazia as independent in 2008, economic and cultural ties between Turkey and Abkhazia have greatly increased.

Baskan, who co-authored a report on the issue in December 2009 entitled “Abkhazia for the Integration of the Black Sea,” said that the Abkhaz diaspora community in Turkey, numbering about 500,000 people, has been very active in lobbying Ankara for a restoration of transit links and deeper economic and political ties with Abkhazia.

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