PM Sacks Economy Minister

• PM Gilauri said “dissatisfied” with Zhvania’s work;
• Zhvania described Gilauri as “weak PM”;
• Zhvania: disagree with Bendukidze’s allies;
• Zhvania: remain Saakashvili’s strong supporter;
• PM also criticized some other ministers.

PM Nika Gilauri said on August 21 he had dismissed Lasha Zhvania from the post of Economy Minister.

“I am dissatisfied with the work of the Economy Ministry and the Economic Minister and from today he has to quit his post,” PM Gilauri said.

Decision did not come as a surprise as recently Imedi TV aired series of reports on persisting disagreements between PM Gilauri and Lasha Zhvania. Reports of this type on the national television stations involving insider stories about differences between the government members are extremely rare. The reports on the Imedi TV, which is now headed by President Saakashvili’s long-time ally Giorgi Arveladze, immediately triggered speculation on anticipated reshuffles in the cabinet.
 
After the PM Gilauri’s announcement, Zhvania convened a press conference and in his opening remarks he said that few days ago he was contacted by a journalist of Imedi TV, who “told me that she was deeply sorry about assignment, which she had received and which involved preparing a negative story about me.”

He said that there were "very important issues" on which he disagreed with the Prime Minister, including on the need “to speed up comprehensive free trade agreement with the European Union.”

“Unfortunately this opinion is not shared by PM Gilauri and his team, involving some of those persons, who were deputy economy ministers and who were sacked by me after I became the Economy Minister,” Zhvania said, apparently referring to Vakhtang Lezhava, now an economic aide to the Prime Minister.

“I have a conceptual disagreement with this team, which is Kakha Bendukidze’s team,” Zhvania said, referring to claims that former government member Kakha Bendukidze’s “libertarian approach” is at odds with “the regulatory approach” of the EU.

Kakha Bendukidze, a leading figure behind Georgia’s economic reforms of recent years, was the state minister in charge of reforms from 2004 to 2008 and then briefly held the post of head of the government’s administration. Although he quit the official post in February, 2009, it is largely believed that he has not been sidelined from the government’s economic policies.

Speaking at a news conference earlier on August 21, PM Gilauri listed number of issues over which he was “dissatisfied” with the Economy Ministry, including a failure to sign an investment protection agreement with the Czech Republic. PM Gilauri said that because of absence of this agreement two Czech companies had failed so far to implement additional investments – one EUR 125 million by Block-Georgia for the rehabilitation and construction of hospitals project. For the same reason, PM Gilauri said, the Czech company, Energo Pro, the largest electricity distributor in Georgia, had failed to invest additional USD 80 million.

“I am not saying that that I am dissatisfied about the Economy Ministry for not attracting new foreign investors – although there are problems in this regards as well. The Economy Ministry has failed to create conditions for already existing foreign investors to fully implement their projects,” PM Gilauri said.

In response ex-Economy Minister said that although he regarded PM Gilauri as “a very good person”, he also believed that Gilauri was “a weak Prime Minister”.

“He [Gilauri] does not know elementary principles of management. It was a mistake to task Healthcare Minister [Sandro Kvitashvili] to negotiate with the Czech side,” Zhvania said.

He also said that after he took over the task a visit by the Czech Finance Minister was planned, now scheduled for August 27, when Georgia would sign the investment protection agreement with the Czech Republic.

Gilauri also criticized the Economy Ministry for “absurdly minimal” income from the privatization process; only GEL 15 million has been received from privatization in the first seven months of this year, the Prime Minister said. The figure, he said, does not include income from issuing licenses for the use of natural resources.

But Zhvania said that in the first eight months the state budget had received GEL 117 million from the privatization process, instead of initially target of GEL 76 million.
 
He also said that he would remain a strong supporter of President Saakashvili and denied speculation that he intended to join Irakli Alasania’s opposition Our Georgia-Free Democrats party.

“Irakli Alasania is my close friend and a godfather of my son; but I do not deem it right to change political views based on friendship,” Zhvania said.

“Wherever I am, whatever position I may hold – whether in the government or in private sector – I will remain President Saakashvili’s supporter,” he added.

Lasha Zhvania, who was Georgia’s ambassador to Israel before becoming a lawmaker in May, 2008, was appointed on the post of Economy Minister in December, 2008. Grigol Mgaloblishvili was the Prime Minister at that time.

PM Gilauri said he would name new Economy Minister within next two weeks.

During the press conference on August 21 PM Gilauri also criticized some other ministers.

He said he was dissatisfied with the Healthcare Ministry, because of a failure to fully implement project of ‘100 hospitals’. Gilauri said the Finance Ministry should improve the work of tax service and the Agriculture Ministry – to pay more attention to upcoming grape harvest. On the Energy Ministry PM Gilauri said it should foster speeding up of the process of installing individual electricity meters for households in the provinces.

The Georgian daily, Rezonansi, reported recently that major cabinet reshuffle was anticipated involving most of the ministers, except of interior and justice ministers, Vano Merabishvili and Zurab Adeishvili, respectively.