[lbo-talk] Russia's State-Controlled Gas Firm Announces Plan to Double Price for Georgia

Chris Doss lookoverhere1 at yahoo.com
Fri Nov 3 06:42:40 PST 2006


There are actually two separate issues.

(As an aside, given its well-known financial connections to Gusinksy and personal links to the current fascoid Polish government, the Washington Post is preobably the absolute worst place to look for coverage of Eastern Europe.)

1. Russia is raising gas process for ALL of the former republics to which it sells gas at below-market prices. That is, it is destroying the Soviet-era system of economic subsidies, regardless of whether the country in question has a pro-Russian government (Belarus, Armenia), an anti-Russian government (Georgia) or a more-or-less neutral (Ukraine posy-Timoshenko). This was costing the Russian budget billions of dollars a year. As a matter of fact this is required for Russian WTO membership.

2. What IS targeted against Georgia is the deportations of illegal Georgian immigrants/guest workers (which is most Georgians in Russia) and cracking down on illegal Georgian businesses (which is most Georgian businesses, indeed by some standards many or most businesses in general, in Russia). This is tied in to the Georgian government's sabre-rattling over Abkhazia and South Ossetia, which is itself linked to the fact that the latter is holding a referendum on joining Russia. If this continues, the affect on the Georgian economy is going to be brutal. Remittances sent home by relatives working in Russia are the largest segment of the Georgian economy. Going by memory, the Georgian budget for 2005 was $2.1 billion; the amount of remittances from Russia was $2 billion. Moreover, troubling from the viewpoint of Tbilisi is that an attack on Georgian illegal business in Russia is a direct attack on the Georgian "thieves in law," that is, the Georgian Mafia, which according to police statistics is 33% of the Moscow criminal world. The amount of business they control just in Moscow is probably larger than Georgia's entire GDP. They are going to be very, very angry at the government in Tbilisi.

__________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com



More information about the lbo-talk mailing list