Bloomberg News

Putin Wants Me Dead or Caged, Georgia President Saakashvili Says

August 26, 2013

Georgian President Mikheil Saakashvili

Georgia's outgoing President Mikheil Saakashvili won plaudits from international organizations for reducing corruption and eliminating red tape. Photographer: Daro Sulakauri/Bloomberg

Georgia’s outgoing President Mikheil Saakashvili said his Russian counterpart Vladimir Putin wants him jailed or dead and urged the U.S. to help curb what he says is Russia’s rising influence over his country.

Saakashvili, a 45-year-old American-educated lawyer who allied Georgia with the U.S. after gaining power in 2003 and whose nation was routed in a war against Russia in 2008, said billionaire Prime Minister Bidzina Ivanishvili wants to arrest him on trumped-up corruption charges at Putin’s request. Ivanishvili, who gave up his Russian passport to focus on Georgian politics, funded the coalition that beat Saaskashvili’s party in elections last year.

“The Russian deal was very clear: the Russians want me either killed or arrested, that’s what Putin said,” Saakashvili, who’ll lose immunity when he steps down in November, said in an interview Aug. 22 in the Black Sea resort of Batumi. He spoke on the rooftop of a residential building guarded by snipers, who aimed at the street as his convoy left.

Putin’s spokesman Dmitry Peskov declined to comment.

Putin threatened to hang Saakashvili “by the balls” during the 2008 war, which was sparked by Georgian efforts to regain control of a breakaway region backed by Russia, and refused any contact with him. Russia welcomes the “positive signals” sent by Georgia, Putin said Dec. 20. Ivanishvili’s victory means “there will be more constructive and responsible forces in parliament,” Russian Prime Minister Dmitry Medvedev said Oct. 2 in Dagestan, a region neighboring Georgia.

Volatile Region

The Caucasus region, which separates Russia from Turkey and Iran, has been volatile in the past two decades with wars between Armenia and Azerbaijan as well as the Georgian conflict and an Islamist insurgency in southern Russia.

Georgia’s fate may add to tensions between Russia and the U.S., which have increased over the war in Syria and Russia’s decision to harbor fugitive U.S. security contractor Edward Snowden, prompting President Barack Obama to cancel a planned summit with Putin next month.

“There is a competition also for this region,” Saakashvili said. “If we don’t pay enough attention to Georgia, the Russians might come in and take over.”

Saakashvili may face prosecution for corruption, Ivanishvili, 57, said in an interview at his Black Sea estate near Batumi on Aug. 22, brushing off U.S. warnings against using the courts to exact political retribution.

$6.4 Billion

“Investigators must prove it and the courts must decide, but there are issues with him,” the billionaire said of Saakashvili. Saakashvili rejected the allegations as politically motivated, calling them “ridiculous.”

Ivanishvili, who made most of his money in Russia, said he sold the last of his assets there for about $1.3 billion in 2011-2012 and now only wants to restore traditional ties between the two countries. His $6.4 billion fortune, according the Bloomberg Billionaire’s Index, is equal to about 40 percent of Georgia’s economy.

“I’m sure we can reach an understanding with Russia and live as neighbors,” Ivanishvili said. “We musn’t insult them.” Ivanishvili says he is now worth about $5.4 billion.

The U.S. and the European Union, which backed Saakashvili’s Rose Revolution in 2003 and Ukraine’s Orange Revolution a year later. Ukraine is now ruled by Viktor Yanukovych, who was defeated by Viktor Yushchenko nine years ago. Georgia, which also serves as a route around Russia for Caspian Sea energy flows to Europe, angered Russia by seeking NATO entry.

NATO, EU

Ivanishvili campaigned on a promise to improve living standards, partly by securing an end to the trade sanctions Russia imposed to punish Georgia for Saakashvili’s pro-western policies. The premier said he remains committed to the former government’s goal of joining NATO and the EU, saying both may happen within four years.

While Ivanishvili had promised to make the U.S. his first stop as head of the new government, he canceled the planned visit in November, saying he didn’t have time. He met Russian Prime Minister Dmitry Medvedev on the sidelines of the World Economic Forum in Davos, Switzerland, in January, and Russia has since lifted its ban on Georgian wine and mineral water and on Aug. 15 agreed to restore road links.

“He has not been invited to Washington for all these months in government, he has not been invited to any of the western European capitals,” Saakashvili said. “No leader of Georgia can afford to isolate his country.”

Doing Business

Saakashvili, who disbanded the traffic police to root out graft, won plaudits from international organizations for reducing corruption and eliminating red tape. The country of 4.5 million people ranks 9th in the World Bank’s annual survey on the ease of doing business. That’s compares with 126th in 2006 and ahead of Australia, Finland and Sweden.

Still, about 20,000 complaints have been filed by Georgian citizens against former government officials, according to Ivanishvili. A former premier, Vano Merabishvili, has been charged with abuse of office and embezzlement, which he denies.

The surprise defeat of Saakashvili’s party in last year’s elections and the arrest of dozens of former officials have created political uncertainty that contributed to a decline in investment. The economic-growth rate has averaged more than 6 percent annually since Saakashvili came to power. It may drop to as low as 3 percent this year, according to the central bank.

As western cash pulls back, Ivanishvili’s government says it’s open to Russian investment, with billionaire Mikhail Fridman buying the iconic Borjomi mineral-water brand for an undisclosed sum earlier this year.

‘Need More’

“There is already some evidence of a pick-up in trade and tourism flows from Russia, which might make up for a slowdown in investment from the West, but they need a bit more to alleviate their slowdown,” Tim Ash, chief emerging-markets economist at Standard Bank in London, said by e-mail.

Ivanishvili said in an editorial in the Wall Street Journal on Aug. 5 that his government “remains firm” on regaining the breakaway territories of Abkhazia and South Ossetia. Russia, which has military bases in both territories, recognized them as independent states after the war.

Talks over the regions should take place in line with international law and with the assistance of multinational organizations and Georgia’s western partners, Ivanishvili said.

‘Balancing Act’

“Most of Washington welcomes the warming of relations between Georgia and Russia, in part because this helps reduce at least one headache in U.S.-Russia relations,” Thomas de Waal, an analyst at the Carnegie Endowment in Washington, said by e-mail.

Four months before the 2008 war, NATO rebuffed bids by Georgia and Ukraine to be put on a fast track toward membership, with Germany and France leading opposition to the U.S.-backed initiative.

While Ivanishvili hasn’t turned his back on integration with the West, he knows he must avoid antagonizing Russia, according to Lilit Gevorgyan, senior analyst for Russia and the Commonwealth of Independent States at IHS Global Insight.

“As a small nation with serious foreign policy issues, Georgia will continue pursuing multilateral relations with the outside world,” Gevorgyan said by e-mail. “It involves a balancing act between the West and Russia.”

To contact the reporters on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net; Henry Meyer in Tbilisi at hmeyer4@bloomberg.net; Hellmuth Tromm in Tbilisi at htromm@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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