Georgian Times, Georgia
July 10 2006

Address By Georgian President Mikhail Saakashvili To The American Enterprise
Institute

Moderator: Christopher Demuth, President Of The American Enterprise
Institute

PRESIDENT SAAKASHVILI: Well, thanks a lot for this very warm introduction. I
really regret I didn’t bring my mother and my grandparents here so they
could hear how well — how good I am. (Laughter.)

(Chuckles.) But you know, certainly I’m very pleased to be here at American
Enterprise Institute and to talk to all of you.

We — I had very interesting almost two hours spent at the White House
yesterday, where we had good conversation with President Bush and a joint
press conference. But this morning I had breakfast with Vice President
Cheney and some of the Cabinet members, with chairman of the Joint Chiefs of
Staff. And I’m meeting Secretary Rice immediately after my — after our
encounter here.

I think I’m coming to Washington at a very interesting time. The world and
my region is going through very interesting fundamental transformation that
will affect the whole environment in my part of the world and maybe the
world entirely, in its entirety, for generations to come.

What Georgia’s example and the example of other countries, Ukraine and some
others, in our part of the world proves: that the long existing myth that
democracy and efficient government are incompatible or even impossible in
this part of the world, or just a myth invented by some people who just
wanted to avoid such developments.

Well, it is there, it works, and it is the most efficient system of
government.

I want just to focus on the facts without, you know, broad generalizations,
but just on the facts. Two and a half years ago, three years ago, Georgia
was basically what amounted to a failed state. It could not control its
territory. We got in, and we saw that, you know — and we knew that police
had not been paid for many months. Pensioners would not get their meager
pension for more than a year in most parts of Georgia. We would not — I
mean, nothing has been done in terms of building anything for — since
independence. People were very cynical about their institutions and the way
government functioned. There was strong pessimism about future of our
country. There was this absence of faith that something could change.

And still people took responsibility in their hands and said it should end,
we should do something about it.

And people’s power, with only one window broken in Parliament, brought us to
power, brought us to the government, brought us also to the world stage
because this was first-ever televised revolution in world’s history, at
least since the Dutch Revolution of the 16th century.

But then, as you rightly said, Mr. President, we had this hard work ahead of
us. And the figures are there. Our state budget went up from 370 million
U.S. dollars — 350 to 370, it was roughly, under last year of my
predecessor’s rule — to, the income part, which is almost $3 billion this
year. You can see the change. It’s almost eight times or maybe nine times
increased.

Well, it didn’t come only from GDP increase. That’s an index of corruption.
And the main story for Georgia is that Georgia has been transformed from
these years from being one of the most corrupt countries in our part of the
world into what the European Bank of Reconstruction and Development says is
one of the three most non- corrupt countries — based on survey on doing
business in Georgia — in Europe. Not in Eastern Europe; in Europe.

Georgia has been attracting hundreds of millions of dollars of investments.
Already this year — we started very bad. Last year we were begging people,
"Please take over our energy system. For one U.S. dollar, we’ll sell it to
you. And run it. It’s so inefficient that I don’t believe the government can
run anything, including the energy system." Nobody wanted it. This time
there was a bidder, and we have bidding with many companies bidding for it.
And part of it was sold for around $320 million, with hundreds of dollars of
committed investments only in this part of the economy. We have other
privatization schemes and we have now hundreds of millions of dollars coming
into the economy.

When we look at how the situation changed, we’ll cite the fact that the
portfolio of PBRD for Georgia already for this year is bigger than that for
Romania, which is a much bigger economy in the Black Sea region to which we
belong. And this also shows how far did we go. This year Georgia is
constructing two new international airports, in Tbilisi and Batumi on Black
Sea Coast. Now, it’s also a big change in a short period of time, and we are
already finishing the construction. This year we are building more roads,
more hospitals, more schools than have been built in Georgia for the last 15
to 25 years, depends how we count, exactly estimate it. But that’s the
reality. This year there’s big construction going on, and it will only
increase.

We had enormous change in terms of, you know, the structure of investments.
You know, we are getting many new sectors of economy that emerge as a result
of this transformation, and the most spectacular development for me is
emergence of new class of entrepreneurs in Georgia.

When I first met Georgian entrepreneurs as one of my first deeds as
president in my office — well, I went out to see them at some big
gathering. And I told them very bluntly — you know, I was at that time even
more outspoken and radical than now, much more outspoken and radical than
now. I got wiser since then and I know that I should watch my tongue and not
say things that might cause problems. But then I was very much more
straightforward, and I told them, you know, "I look at you now, and my
biggest achievement will be that if in two years time most of you will be
gone from this room, that will be it. I mean, I will be happy."

But I told them, "I’m not going to destroy you. I’m not going to —
(inaudible word) — you. No, you have all the conditions. You will have a
whole freedom. Nobody is going to bother you. Nobody is going to extort
money from you. Nobody is going to harass you. Nobody is going to impose
extra taxes on you.

We are going to decrease taxes. But I think when there is really a free
competition, new guys will come in and fill their shoes and make the economy
move, because the only way money was earned before was through, you know,
these shadow dealings and government contracts and you know, all kind of
things. Because when I met them, the first thing they were telling me,
"Look, please remove my (competitor ?) from the market, raise tariffs, you
know, give us monopoly because that’s the only way our company can survive,"
et cetera.

And that’s happened because now I’m meeting with the businesses, and they’re
telling us, "Look" — when I ask what do you want me to do for you, they
say, "Nothing. Nothing. Just keep the rules of the game." These are young
people, self-made, self-efficient. They’re telling us, "Look, we don’t have
problems with the government." I mean, we still have problems. We don’t have
enough qualified people. We don’t have enough information. We still have to
improve our own work culture and ethics, but for you — from you, "Just
leave us alone and keep the rules of the game." And this is a big change.

Another big change which emerged, people are talking about democracy and
saying, "Well, you know, elections and media," and we have diverse media. We
have several sets of regional — you know, by elections, which were deemed
free and fair and no problem. But the biggest change for me, which got
unnoticed even by Georgian media, was election of school board a few days
ago in Georgia. You know, in the Soviet system, nobody asked people what
kind of education system they wanted to have. You know, nobody had saying
that this was out of question. And I was thinking, you know, let’s
experiment with that, but when I was thinking about it, first as chairman of
Tbilisi City Council when I first tried to introduce the reform together
with my friends, we were saying, "You know, one thing is to have really
assertive, efficient tough government. The other thing to, you know, entice
people — join us, do it yourself — do things for yourself."

Educational institutions. And you and I were saying — and some of my
friends were disagreeing, but I was, like, being skeptical — people have so
many other problems why would they would show up. And we had these
elections. They were not really advertised or publicized wisely and widely,
and in a country of less than 5 million people, more than 600,000 people
showed up on one Sunday morning to elect school boards and to be a part of –
to take over the education process of their children. And after they did it,
in some places they had quite a fight — who should be on the board, how it
should be organized, and how it should be done. This is real change. This is
a real change that tells me things are irreversible, things are going to
move, because those people who already tested that sense of freedom, you
cannot take it away from them no matter what government wants tomorrow. And
that’s my vision of how societies can develop in our part of the world.

Now, the reforms are a never-ending process. The main institution, legacy,
which we should be leaving behind us is trusting institutions, not poll
figures or the politicians because they change and they look for every time
people get tired of concrete faces and politicians. That’s normal process.
But the fact that police in Georgia enjoyed only 5 or 6 percent confidence
rate, and then now it has more than 70, this is quite something. And if we
can keep it this way for a couple of years, that would become totally
irreversible.

The fact that, you know, in Georgia we have introduced this culture without
corruption, it’s an amazing thing. I just received a group of Central Asian
businesses in Georgia, and they were telling me, "Look, we are investing
here not only because it is profitable — and it is profitable — but
because it’s such an amazing thing to have a country in our part of the
world where nobody’s asking for the bribes, where the institutional
investor, where we have the real estate investor coming into — I mean, from
one of the CIS countries and saying, "Look" — I mean, he was investing
several hundred million dollars in real estate development in downtown
capital of Georgia, in Tbilisi. And you know, my prime minister met him and
Georgian partners took him all over the ministers and — to get insured
because it’s a big investment.

And then in the end, he says, "Everything looks fine, everything is great. I
am going to invest. We are starting the building. And how much shall I give
to these ministers? What is their percentage rate?" (Soft laughter.) And his
Georgian partner said, "Well, we don’t do such things here. I mean, we don’t
do anything there." He says, "But how do they live? How do they survive? How
do they earn their living?" I said, "They have high salaries. And plus, they
enjoy what they are doing for their own country." "You know," he said, "I’ve
heard about it before, but I couldn’t believe it until I saw it, experienced
it myself."

And that that is the change. That is — because when I got into my office,
you know, I first got this envelope after one month of work, and I opened it
and what was — what — the sum I found was there was roughly 40 U.S.
dollars in our currency. And that’s what it was. And they told me, It’s your
presidential salary, your wage. You are getting $40 a month."

And the same evening — I was traveling to Davos and they give me an
envelope with $20, and they said, "It’s your per diem for five days."
(Laughter.) I said, "In Switzerland, you cannot even drink coffee for that.
Please." But my predecessor was never interested. And all these ministers
were getting even lower salaries because — and they were still the
wealthiest people in the country, very wealthy, basically, and some of them
still are. (Laughter.)

And, you know, we said, "No, I’m not going to settle for that." I mean,
immediately raised my salary. But — (laughter) — the point is I went first
to UNDP and I told them, "Look, give me some money to pay public officials,
because we have nothing." The budget was empty when I came in. And they paid
me — they gave me enough millions to pay several dozen anti-corruption
officials, a few hundred customs officials and government members. And
within three months, we raised taxes — increased tax collection budget by
40 percent. And then we could start to broaden the circle. And now not a
single official in Georgia gets a salary on which they cannot survive. They
are all above minimum acceptable wage, that they can live on it, and most of
the people are getting one of the highest wages in Eastern Europe, even if
our GDP is still by far inferior to most of the Eastern European countries.
This has changed.

And of the buildings they are sitting in, we are really heavily investing in
premises, in buildings, in offices, to let them look good and to have this
appearance of, you know, decency, of respect for the institution, of people
enjoying where they are, that they should respect their office. It’s also a
matter of transparency. You know, with our police — we have this show
called — like equivalent of "Cops," where our policemen are themselves
heroes. You know, people know them because they are on television. You know,
they like it, and they — but they like it, but they certainly also respect
their office because they are also respected and they would like to be
respected even more.

So it’s a very complex issue. And, of course, lots of people got persecuted
for corruption from the previous government, and they had to — some of them
had to pay back the damages they inflicted upon the country, like head of
railway paid enough money to build nine new railway stations in Georgia; the
head of the road department paid back enough money to build tens or maybe
hundreds of kilometers of roads. But, you know, there are some new officials
which whom we appointed were also prosecuted, but there we changed the law
and this kind of bargaining is no longer possible because, you know, we are
not that poor anymore. We can afford to have — you know, to without their
funds, and somebody should know that they will always be held responsible if
things go wrong. And that’s our approach and that’s our system.

Of course, it’s still a long way to go. And, of course, you know, it’s
always — when everything was bad, people were, you know, desperate even for
small size of improvement. And right now, you know, for all these years they
would say, "We have two main problems in life: absence of constant supply of
electricity, and corruption."

This was the first winter when nobody in Georgia had problems with
electricity. And people don’t are anymore. They don’t appreciate it, as
simple as that. They have it and that’s it, period. They have more time to
watch television that’s criticizing us. (Laughter.) And the same thing with
other, I mean, issues. Ninety-seven percent, 96 percent of Georgians said in
Gallup/IRI poll that they haven’t paid a bribe for the last year. Before, it
would be 20 percent. So what? We are used to living in a non-corrupt
society.

You know, when we first started to change things, (the first facades ?) in
downtown Tbilisi, the whole country was happy, things are moving, finally.
Now we are building all over the country. We are, you know, making roads
everywhere. And everybody is so much used to it and nobody notices it
anymore. That’s what government is all about. They should fix things, of
course. And we are here to criticize them.

I recently was watching a television and somebody said, "What the hell is
this new road in front of my house? I don’t like it because cars are fast
and it’s not safe." And I really wanted to go and shout at him, you know,
like — (laughter). But that’s the main thing in democracy. The better
things get, the more people want. And that’s a good thing because that’s
what moves society forward.

And you know, it’s not about only — we still have our government with a
high degree of support, but it’s not about those figures, it’s about the
sense that we are on the right track and it’s about the sense in the end to
rise above the occasion; that, you know, it’s part of history, after all.
That’s the final consolation of every politician that, you know, doesn’t
feel too appreciated. But in a real sense, without kidding, it’s really
something you should know, that if we are on the right track, if you are
changing, like, (irreversibly ?), that’s where you should get, that we will
get there.

And of course, Georgia is not only a small country in the Black Sea region,
but it’s also larger than that, fortunately or unfortunately for us, because
some of the successes — you know, we had double-digit, almost 10 percent
growth last year, we’ll have double-digit growth this year. Some of those
successes attract lots of unwanted attention. We also like that it serves as
inspiration to Ukrainian democrats, who are all our friends, to Belarussian
oppositions, that whose leader I met recently on the way here to Washington.
But also, people who want us to fail. And that’s also fair, but, you know,
we know it, they know it, and it’s just like it’s inevitable. But that’s why
the challenge is even more exciting.

And then, of course, Georgia is also key to new emerging energy systems that
would enable Europe to have alternative supply of gas and oil. Already
neighbors need to have alternative supply of oil, and we will soon get it
alternative gas. And if Georgia fails, then we will have a bottleneck for
all these energy flows, and then there is monopoly and there is no
alternative. And if we succeed, then there is alternative, Europe is (on
safer side ?), so this our sort our natural function, to keep stability,
safety, peace, prosperity and development.

And that’s why I’m here That’s why we discussed all those things with
President Bush at the White House. And I can tell you, I mean, in a way, he
is somebody who has this strong sense of history as well. You know, I don’t
I have to make it clear, we have support as a country on both sides of the
aisle. We have lots of Democratic senators that are very enthusiastic about
Georgia and whom I respect greatly, and, you know, who I think understand
the region very well. On the other hand, there is a president in the White
House who has the sense of history, who is not afraid to go against the
tide, and in a way has some kind of (rebel style ?) in order to make things
happen. Because after all, values are something that matters.

You know, we should never sacrifice anything for whatever pragmatic ends are
there if we lose our — to be sacrificed or, you know, we should never allow
that, because if you just make pragmatic deals at the expense of values, you
are treating disease — you are just treating symptoms of the disease, but
you are not treating the roots.

When you go down to the values, you are going to the roots. You are starting
from the very beginning. And that’s so important.

That’s why, you know, whenever somebody talks about freedom agenda, I
believe freedom agenda is alive, well and has future. I believe when you
approach things like, you know, nuclear proliferation, or indeed missile
tests — I was joking today with friends, you know, the leader of North
Korea is a reputed movie-goer, I mean, or he’s maybe the only movie-goer in
North Korea, but — (laughter) — but he likes movies. And apparently he has
seen "Independence Day" movie, and he wanted to have sequel or something of
it.

But to take — to treat those things more seriously.

This is not about particular incidents, issues that aren’t — should be
handled, but this is all about the fundamentals of how it should be handled.

When I came here, I delivered to President Bush a present — well, it wasn’t
a present. It was some symbolic thing for me to do. Seventy years ago, group
of freedom fighters from mountainous region of Georgia, Khevsureti, sent a
letter to the U.S. government telling them, "Look, Bolsheviks are harassing
us. They forbid us to practice our religion. They impose taxes. They want to
include us into kolkhoz. And we want freedom, and we’ll fight for our
freedom, whatever it takes. We don’t have weapons, but we have swords and
daggers, and we will resist with swords and daggers, until the last one of
us is alive. But you are the strongest government of the world, and you —
everybody abandoned us, and please come and help. And if you don’t help us,
then nobody can, nobody will."

And this letter was sent to the U.S. government. It was of course
intercepted by KGB. And 42 people that had something to do with this letter
were arrested and killed by the Soviet regime.

We recently discovered this letter in KGB archives, what was the old KGB
archive, and we put it in occupation — Museum of Soviet Occupation of
Georgia.

And I delivered a copy of this letter to President Bush yesterday. And I
told him, "Look, Mr. President, if people who killed authors of this letter
had one day imagined that — had imagined that one day this letter would
make it to the White House, and not only it would be read by the American
president, but it would be delivered by a president of independent Georgia,
they would have thought that the world is upside down."

Well, I think that’s exactly the opposite. The world is in right position.

And what I told yesterday to President Bush as well is, look, I mean, I’m
sure Korean missiles are not going to reach the United States. We all hope
they won’t. But there are lots of people out there in Korea — in North
Korea that are writing these kind of letters, and these letters will reach
you, eventually, sooner or later, because this is an irreversible process
and irreversible tide of freedom and liberty all around the world. And
that’s what matters more than any other political events and pragmatic
considerations of today.

And that’s also my message for upcoming G-8 summit in St. Petersburg. And we
want this message to be heard. That’s why I’m here. That’s why I’m talking
to you. And let’s make it heard, all of us together. Thank you. (Applause.)

Please. (Continued applause.) I am willing to take any questions you want to
ask.

MR. DEMUTH: If you could wait until the microphone comes around and
introduce yourself and ask a brief question.

Q Hello. My name Nate Young (sp), and I — well, I just quickly wanted to
mention that, like you, I was once an intern at the International League for
Human Rights with Scott Horton, and it is a real privilege to be able to
finally hear you speak.

I was wondering if you could elaborate a bit about Georgia’s relationship
with Russia right now, as it is a topic that you didn’t mention in your
speech. And in light of the upcoming G-8 Summit, what steps do you think
Georgia could take to provide an alternative for engagement on the
decreasing or worsening relationships between the U.S. and Russia right now?

PRESIDENT SAAKASHVILI: Well, Nathan, first of all, I’m glad to meet a
colleague. You know, Scott Horton was one of the persons who taught me how
to move away from very pragmatic things in the world, even if you are
working for blue-chip New York law firm, and get more idealistic, and you
can keep still your idealism on the 36th floor, on the 42nd street and still
believe that there is a better world out there besides, you know, all the
litigation and the — all this corporate stuff there.

And this is important because — when — you reminded me of my time in New
York when I studied at — started as a poor student in Astoria, Queens, in a
basement, and within a few years, less than three years of hard work,
studies, I had to — we had, together with my wife, nice apartment on
Central Park West, you know, nice job, good prospects, unlimited
opportunities. That’s the sentiment, sense you get in America and nowhere
else in the world, and this is amazing. And that’s something that you — I
kept until now, and I know what freedom really brings — real freedom, I
mean, real open society, real opportunities. This is — remember, this is
the only country in the world where we forget what it is to be a foreigner.
After a while in New York, I forgot that I was a foreigner, and I would go
and argue with police just like, you know, what the hell! (Laughter.) And et
cetera.

So this is just — you just reminded me of that.

Going back to the subject of Russia, well, we wish Russia well. I think
Russia is a great nation. I just had a meeting with President Putin in St.
Petersburg. It was on our initiative, didn’t produce much of a result yet,
but the whole thing, the dialogue exists there is already positive. And you
know, it’s very clear. You know, on the one hand, Russia is going through a
difficult transformation. They are defining themselves, they want to be
great again, they have all this — all money, and they want to get notion of
what being great again means.

And sometimes it’s misplaced. We know sometimes it’s misplaced. You know,
it’s defining where Russian borders are; where — you know, what should be
the relations with their neighbors; you know, is there — can something can
like independent Georgia really exist. I mean, President Putin made a good
thing when he went to the memorial of people killed in 1968 uprising in
Prague and honored them, and we accept it and we like it. But you know, the
same thing happened in Georgia in last century. I mean, Bolsheviks came in
and take over, and I will be really glad when he comes into Georgia and also
attends the Museum of Soviet Occupation of Georgia because this was our
shared grief.

You know, hundreds of thousands of Georgians died in gulag. I told yesterday
President Bush I was really — when I sat in the — you know, I was standing
next to him on Freedom Square in Tbilisi when he was speaking to more than a
hundred thousand people there, I remembered my family members who died in,
you know, in gulag or who perished in gulag or who were exiled in Siberia. I
remembered hundreds of thousands of Georgians, and I felt, "This is
vindication for them." If they had seen that at that time, I mean, they
would have been happy — standing — I mean, the president of the
independent Georgia standing in front of the whole country next to the
president of the United States.

And so it’s a difficult transformation. Russia already accepts that Prague
was wrong, 1968; that Budapest was wrong in 1956. There is still a debate
about Baltic countries’ takeover, about Georgia’s takeover. I mean, they
still have doubts about it because it’s in dialectic process.

On the other side, you see that Russian middle class is emerging, which is
stronger, which is Internet-savvy, travels a lot, another kind of people. I
mean, and they have lots of information. They want to have say in their
society.

So I’m pretty optimistic in long run. We’ll have short-run problems; that’s
definite. But we should never despair and give up on Russia, and that’s why
I think — what President Bush understands very well. Well, it’s one thing
not to be confrontation. The other thing is to uphold the principles, to
stick to them, because, as I told you, this cooperation will be based on
principles. You cannot do something that will go beyond those principles.
That’s what is the matter. I think Russia, you know, does (sic) want to be a
rogue state. Of course they are not. They don’t want to be a pariah in
international relations. They can never accept this, and they should not,
and they should not be like this. Of course not.

This is a great nation. But this nation wants to be respected, they want to
be respected by President Bush; remember that. So — and by the people of
the United States and by the next president of the United States. So this is
the moment to use — well, engaging them, but engaging based on principles.
That’s my only recipe — engaging based on principles. And when it works —
and it — as it can work, I am sure all of us will be much better off.

Thank you.

Q Thank you. I’m Vladimir Kara-Murza with RTVI Television.

Mr. President, when you talked to President Bush yesterday, did you discuss
the conflicts in Abkhazia and South Ossetia?

PRESIDENT SAAKASHVILI: Absolutely.

Q And do you feel that you have President Bush’s support for whatever
actions you might be taking?

PRESIDENT SAAKASHVILI: We have sought — yeah —

Q And secondly, you mentioned that you have contacts with Ukrainian and
Belarusian democrats.

PRESIDENT SAAKASHVILI: Sure.

Q Do you also have contacts with Russian opposition? I know our buddy
Nemtsov came to Tbilisi for the anniversary of the Rose Revolution.

PRESIDENT SAAKASHVILI: Well, I don’t know how active — to start with
Nemtsov, how active is he in politics. As far as I know, he’s in private
business. He was in Tbilisi, and I took him out for tea. But I’m certainly
watching the political processes in Russia. And you know, there are lots of
smart people. And maybe they are not that visible, but there are lots of
smart people in Russia, and you know, we should keep track of them.

But with regards to the conflicts, it’s obvious. We are talking about a
conflict in Abkhazia that was kind of Soviet — post-Soviet attempt to keep
at least part of the territory — not to lose part of the territory. This
was the case with Transdniestria and Abkhazia. South Ossetia is a very small
place. I mean, it’s really — it’s beyond my understanding why it’s so
well-known because we are talking about less than 20,000 ethnic Ossetians
that have no ethnic conflict with the rest of the population, except that
it’s now a military base taken by peacekeepers. And the same thing in
Abkhazia — we are talking about around 40,000 ethnic Abkhaz.

But we are talking about a situation where there was a widespread ethnic
cleansing. They threw out absolute majority of the population there in a
very brutal way. There were mass killings, mass executions and there are
still sites of mass burials. And when I hear from some Russian officials
that, you know, this is the same as Kosovo. We should give them
independence; you know, that there is this principle that applies to
anybody. Well, this is just immoral because we are talking about attempts to
legitimize results of ethnic cleansing.

The idea here is that once there is ethnic cleansing, the world should act.
Once there was already ethnic cleansing; world should not forget.

And the problem there is that, you know, I see articles appearing in the
press — "Oh, there is this nice place, Abkhazia. It looks beautiful. These
people are there. They’re miserable. Nobody wants to recognize them, and we
should recognize them fast. If Kosovo can be recognized, why they’re not
being recognized?"

Yes, they should be respected, but respecting the situation when people who
belong there, who have houses there, and who cannot go back to their houses
and we are talking about more than 450,000 people, maybe 500,000 people —
they cannot go back to the houses. Most of them are Georgian, but also other
ethnicities. I don’t diversify. For me, Georgia is all about diversity, all
about multiethnicity. Those people cannot go back to their houses because
they — because of threat of being killed on the spot, even today. Is that
fair? It’s not fair.

We — you know, there is a no man’s land in the place — in the boundary
between Abkhazia and the rest of Georgia, and there are some ethnic Georgian
population living there. They are not officially allowed to study in their
own language, but they still study their own language, illegally. And we had
talks recently there, under auspices of the U.N., with some of the Georgian
television crews present that are also here with me.

And a kid looked out from school and shouted when he saw a Georgian flag. He
shouted, "Long live Georgia," and, you know, went back.

And in front of these peacekeepers, Abkhaz militia came in, arrested every
single teacher in that school and took them to prison. I cannot accept this.
And if somebody in the world wants to accept and legitimize this, well, I’m
not — I will certainly do my best that it doesn’t materialize, because
there are — the main principle here is not efficiency or pragmatic things,
or let’s finish with the job and let’s just do it and — if you do — if you
legitimize injustice, you will generate new injustice. And that’s what we
should never allow, I think.

Q Thank you, Mr. President. My name is Annelise Canty (sp). I lived in
Georgia for some time a few years ago. It’s a privilege to hear you speak
today.

You’re quite passioned — you speak very passionately about the situation in
Abkhazia, and earlier you noted that working with Russia requires a lot of
engagement. From my understanding, the Russians had been involved in some
degree in the war with Abkhazia, and today it seems like they’ve been
provoking the Georgians a little bit with the ban on wine and the Borjomi
mineral water as well. So how do you reconcile these two things here? Like I
said, you’re quite passionate about the situation in Abkhazia, finding a
peaceful resolution. But how do you do that when, as you see —

PRESIDENT SAAKASHVILI: Look, I mean, what they did on the mineral water and
wine is that they deprived 70 percent of Russians — because it took — it
had almost 70 percent of Russian mineral water market, of their favorite
water. You know, taste of Borjomi is very different from taste of Perrier.
And Russians have been — (soft laughter) — Russians have been drinking
Borjomi for the last 150, 200 years.

Now, old habits die hard. I mean, overnight their government told them, "We
don’t care what you like." You know, it’s just not allowed.

And the same thing with wine, you know. It’s not a big production, but it’s
still — you know, it was the favorite wine of the Russian elites, that can
afford good European wines but still was almost addicted to the Georgian
wines.

And the most interesting indication for me was that when I went to summit in
St. Petersburg, some members of our delegation, some of our journalistic
corps went with their Russian colleagues to a restaurant in a nearby hotel.
And the waiter, without knowing that they are Georgian, told them, "Look,
you know, we have all this French and Italian and Spanish and Chilean wines,
but we have really good smuggled Georgian wine under the counter."
(Laughter.)

And Georgia is cradle of wine. First wines in the history of mankind were
produced of Georgia. It’s a matter of fact, of history. It’s like Georgia is
well, Georgia has many branches. Like, you know, Prometheus was tied into
the mountains in Georgia. Unluckily so, he escapes, and we can no longer
show tourists his location. I mean, the Golden Fleece came from Georgia. And
one of the things is wine. Wine is, like, part of culture. I mean, it’s part
of cultural relations. These things should not be sacrificed to political
expediency.

Now, the good news is that we are selling more and more of it to other
markets. And when I was discussing it with President Putin at a press
conference in St. Petersburg, and when reporters asked a question about
Georgian wines, President Putin was explaining that, you know, this was done
for technical reasons, and, you know, of course, maybe there is hope that it
won’t be reversed. I said, "Hurry, because we don’t have much wine, and we
will sell it all to the West, to Europe. And, you know, we are worried about
you." (Laughter.)

I mean, certainly we are not crazy. We want to get back Russian markets. But
one thing it provided is more efficiency. Because these things happened
before. These things happened to Baltic countries. Estonia had 90 percent of
its trade in destination of Russia, now it has less than 6 percent. And they
are the fastest-growing economy in Europe.

And you know what? This year, after all these embargoes and things, the
Georgian economy will be, after doubling of gas prices, Georgian economy
will grow at double-digit figures. And in September, the World Bank will
inaugurate us in Singapore as the world’s fastest- reforming country. I
mean, they have this qualification that they give. And that’s it. We should
hurry up. We should be more efficient.

You know, they are no longer allowing us — in our fresh vegetables, so now
we have agreement with the European Union to freeze them and sell them
frozen for higher prices to Europe. Good thing. We even started to produce
broccoli. I mean, we had all the other vegetables but we never had broccoli.
Now we’re producing lots of broccoli and freezing it and selling to Europe.
And, you know, before, we couldn’t sell other fruits because we didn’t have
enough processing facilities to put in proper shape to fit the requirements
of European and other markets. Now we can. We have new processing
facilities.

So we are learning. It’s like dropping us in the middle of the sea and
telling us, "Learn to swim." We are learning to swim because we absolutely
need to reach the shore. And certainly we want to get there. We will get
there eventually.

Q Hi, Mr. President. Miles Popper (sp) from Arms Control Today magazine.

PRESIDENT SAAKASVILI: Sure.

Q I had a question, two questions, actually. One was about Gaudauta.

PRESIDENT SAAKASVILI: Sure.

Q The two governments have been trying to agree on what will happen, some
sort of outside inspection for peacekeepers at the base. Has there been any
progress on that? And what do you think will happen?

And also the discussion about a joint terrorism center with Russia somewhere
in Georgia.

PRESIDENT SAAKASHVILI: Well, we told the Russians we are willing to discuss
the joint fight against terrorism. We still are. I mean, whatever is
beneficial. We don’t have an interest in having terrorists in our territory
in proximity of our borders. While this cooperation has not been always as
good as we would wish to, we are looking for several people that are in
Russia, that are indicted or accused of terrorism, and they are there at
large — not at large, they are free, and they have Russian passports, and
nobody ever investigates them. And this is a pity.

But if — whatever we can do to fix it, we will do, and all the options are
open there.

With regards to the Gaudauta base, it’s in Abkhazia, and it recently has
been getting new weapons system, which is not a good development. And the
place is getting more militarized, and we are working now within the CFE
Treaty framework to get it closed, to get it — to shut it down together
with Europeans. Hopefully it will work.

MR. DEMUTH: Let me see if there are some questions.

Yes, sir.

Q Thank you very much, Mr. President. It’s been a pleasure to hear you
speak. It’s very heartening to hear about all the reforms and changes that
are going on in Georgia, but it’s still in a very unstable neighborhood, and
I was wondering if you could talk about Georgia’s relations with Armenia and
Azerbaijan, in particular the issue of — items such as Nagorno-Karabakh has
come up. How is Georgia handling its relations with both of those countries?

PRESIDENT SAAKASHVILI: Well, we have excellent relations with both of them,
and by the way, I mean, despite the problem that you mentioned, Azerbaijan
is growing amazing pace partly because of oil income and partly because they
are pulling things together and then making things gradually but more
efficient. With Armenia, they have spectacular economic growth and
spectacular modernization of economy, and they are already doing well in
many things. Now we have excellent relations with both of them, and we have
perfect relations with Turkey. You know, we now have — we have better
relation with Turkey, and we are working on free trade agreement with that
country and so are the other neighbors as well as some Central Asian
countries.

Now, the whole thing is that — the whole issue there is that we — I mean,
these conflicts are frozen because of lots of external meddling and
manipulations as well, and we need to finish first with — I mean,
understand that these countries have to do with each other directly without
extra, you know, adverse involvement. Of course, we should always inform the
international community as a whole, but kind of hostile environment —
involvement always destroys things there. Whenever we tell that we are close
to solution on Nagorno-Karabakh, it turn out to be futile, and it’s a pity
because these are like chains that are holding back these countries,
including my own country.

And — but it’s — they will not last forever, I’m sure. I’m sure. I mean,
people in this region are developing, lots of old prejudices are collapsing,
and economic development and prosperity will bring more wisdom and more
pragmatic approaches.

And also I believe that NATO entering this region more tightly — I mean,
you maybe heard yesterday that President Bush openly encouraged Georgia’s
membership in NATO, very, very openly, without any reservations. This is the
first time ever American president or any other major Western leader
expressed himself that openly, in those — that — those terms.

And NATO being already involved in Black Sea, with Bulgaria and Romania,
once it gets involved in Georgia, once it gives the promise of prosperity to
everybody, security to everybody; once it creates conditions for inclusive
society, which is the keys to solving those conflicts, then they will just
melt like, you know, kind of snow in the spring, you know, I’m sure.

But that will take some time and patience, and meanwhile we needs lots of
education, lots of contacts, lots of civil society kind of interaction, and
things will start to move. That’s my — I mean, I’m talking from the country
where we — in my country, conflicts are not ethnic, really. I mean, they
are result of civil war. And I mean, the last thing Georgia ever would
advocate or have is ethnic hatred or even indeed ethnic differentiation. You
know, this is — we introduced positive — you know, we — affirmative
action programs for minorities — indeed, educating them, special quotas in
public service — because we believe that — you know, we are a small
country. We have so few people anyway, I mean.

The good thing about Georgia is that last year — I mean, first year after
the revolution, we had positive balance, but slightly positive. More people
came than left, but it was maybe difference in thousands.

This time — I mean, in 2005, 70(,000) to 80,000 people came back to
Georgia. I mean, more people came back than left. So people are voting with
their feet.

But the good news is that among that almost 85(,000), 80,000 people, there
are many ethnically diverse people. I mean, it’s not only ethnic Georgians,
ethnic Armenians, ethnic Azeris, ethnic Jews. You know, I was very pleased
when the chief rabbi of Israel told me somehow, you know, maybe regretting
it, saying, "Look, 700 Jewish families this year only came back to Georgia."
Of course, Israel also doesn’t want to lose population, and I fully
understand and share that. But I was very, very pleased and told him about
that.

So the idea is that our society is based on these values. It’s all about
multicultural. Those of you who have visited Tbilisi — and I invite all of
you to come — this is an amazing old beautiful city, as the country —
whole country is, I mean, amazingly beautiful.

But in Tbilisi you find, in small square, synagogue, mosque and several
denominations of Christian church, together.

And not only you find all those religious sites, you find people — and this
is the most amazing thing — who speak Armenian, Azeri, Yiddish, Georgian,
and who don’t know what their ethnicity is, who tell you, "We are just from
the state, we are Tbilisi inhabitants," but who don’t know what’s their
ethnic origin. And that’s the most special thing about Georgia.

And, you know, Jews will tell you it’s one of very few countries in the
world that has no anti-Semitism ever in history. And we are very proud of
it. But also, Muslims were always welcome. And also, you know, Greeks have
always lived there. Greeks founded Georgia. Georgia was part of Greek
civilization and culture for many, many thousands years.

And I’m always appalled by the fact that sometimes when European delegations
come in for the first time, they always say, "Oh, this place looks like just
Europe." What do you mean, just like Europe? It is Europe! It has been
Europe for the last 3,000 or 4,000 years already, in case you didn’t know.
(Laughter.)

Q (Name inaudible) — Russian-American daily Novoroska Swavant. (ph). Mr.
President, what would you like to say to Georgians who live in the United
States, read our newspaper?

PRESIDENT SAAKASHVILI: Well, come back! (Laughter.) But I’ll tell you, I’ll
tell you, you know, we have this brilliant New York doctor, who had
brilliant practice, you know, head of cardiovascular clinic, lots of
operations, lots of — you know, he was pretty rich, he dropped everything
and came back and started to rebuild the main Republican Hospital. Not only
he came back, but he is bringing back a group of very gifted Georgian
doctors practicing in the U.S.

And this is the real thing. This is happening. You know, we had Nina
Ananiashvili, the top ballet dancer of Bolshoi Theater, coming back and
setting up her ballet school in Georgia. We had Kakha Bendukidze, who looks
like a Sumo wrestler but who was one of the leading not only — he combined
he was this rare combination of being an oligarch and liberal at the same
time in Russia, and now he came back. He is not much of an oligarch anymore,
but he is really a liberal and committed economic reformer.

And so we are attracting all these people back. And this is important
because, on the one hand, Georgia has now unemployment problem which is
still pretty acute, but on the other hand, we have a huge deficit of
knowledgeable people because nothing has been going on for 15 years or for
20 years. I mean, even in the Soviet period, it was very — I mean, you
cannot compare it with — you know, Soviet Union left us. I mean, it was the
myth.

Soviets were at least building something. They were not doing anything. Most
of — I mean, 90 percent of our cities don’t have any normal water or sewage
systems. That’s the point. We have to build it all now, and we need lots of
qualified people, lots of professionals. You know, we have a construction
boom and — (inaudible) — construction companies they say the main problem
we have is people. We don’t have enough people who know how to do modern
construction business. The same is for food processing, the same thing in
textile industry, the same thing in tourism industry. We have now the
residents boom. Tourists boom started. Not enough people, I mean, that know
how to do it in really modern ways. We need to modernize our agriculture. We
need new professionals. We need doctors. I mean, we have lots of doctors,
but very few of those who know how to run modern medical practice.

And so that’s exactly what we need from you. And that’s why, you know, maybe
if I can take with me a couple of people from this audience, I will be more
than happy because I am leaving soon.

Okay. Time is up. They are telling me Secretary Rice is waiting, and she’ll
be extremely disappointed if — (inaudible). (Light laughter.)

MR. DEMUTH: Will you take one more question?

PRESIDENT SAAKASHVILI: No, no, no.

MR. DEMUTH: If I could say a word, sir?

PRESIDENT SAAKASHVILI: Sure.

MR. DEMUTH: President Saakashvili, I want to thank you for your marvelous
and very moving presentation, and on behalf of AEI, extend to you not just
our gratitude, but our great appreciation and fervent best wishes.

Thank you very much.

PRESIDENT SAAKASHVILI: Thank you. (Applause.) Thank you. Thank you. Thank
you. (Continued applause.)

————————————- —————————————

Senior Administration Officials Hold A Background News Briefing On The
President’s Trip To The G-8 Summit [excerpt]
Political Transcript Wire

QUESTION: Saakashvili was here yesterday. What will President Bush convey to
President Putin about that meeting, about Georgia?

SENIOR ADMINISTRATION OFFICIAL: Our policy on Georgia is pretty
straightforward, and that is defense of the territorial integrity
independence and Georgia. We support moves to consolidate democracy in
Georgia, market reform. President Saakashvili has taken a number of
important steps in that direction since the Rose Revolution.

Again, I don’t know whether this issue will be raised specifically or how,
but the policy will be the same, no matter how it is raised.

The American Enterprise Institute

From: Emil Lazarian | Ararat NewsPress