GEORGIA-RUSSIA CONFLICT ‘WAS COSTLY’

PRESS TV
Sept 4 2008
Iran

A study by the Vienna Institute for International Economic Studies
says the Georgian-Russian conflict has cost Tbilisi about $2.8 billion.

The amount is equivalent to 2 billion euros according to the institute
also known as ‘WIIW’ which published the report on Wednesday.

The report said the final figure takes into account the material
damage, which the Georgian President Mikheil Saakashvili had estimated
as well as future losses in production, exports and investment,
AFP reported.

"Georgia has experienced a real boom in recent years, noticeably from
the construction of an oil and gas pipeline. (But) investor confidence
risks being dented following the crisis," said Vasily Astrov, one of
the report’s authors.

Astrov added that violence could return to the unstable region,
namely the Nagorny Karabakh area which is close to the area where an
oil pipeline is located.

The report also noted that the crisis might put at risk an EU project
to avoid Russia for natural gas supplies because of investors’ concern
over the reliability of Georgia as a transit country for gas supplies
into Europe.

The EU is hoping that the construction of a 3,300 Km pipeline, running
from the Caspian Sea through the Caucasus via Turkey and the Balkan
states to Austria will reduce its dependence on Russian supplies.