Estonia and Georgia

25.08.2010

Georgia recognized the restored Republic of Estonia on 27 August 1991. Diplomatic relations between the Republic of Estonia and the Republic of Georgia were established on 17 June 1992.

Estonian Ambassador to Georgia Toomas Lukk presented his credentials to Georgian President Mikheil Saakashvili on 18 September 2008. The Estonian Embassy in Tbilisi was opened in December of 2006. Georgia opened its embassy in Tallinn in April 2007. The Georgian Ambassador Ruslan Abašidze presented his credentials to President of the Republic Toomas Hendrik Ilves on 28 May 2009.

Relations with Georgia are a foreign policy priority for Estonia, and Estonia’s political support for the country has been consistent. Estonia supports Georgia’s territorial integrity and is contributing to rebuilding Georgia after the war.

As an EU member state, Estonia was in support of the Eastern Partnership initiative, which went underway in the first half of 2009 and gave Georgia additional integration opportunities with the EU. Within the framework of Eastern Partnership and the Association Agreement, Georgia has the opportunity to conclude a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU. Georgia is interested in Estonia’s expertise and experiences in both the free trade and agricultural realms.

Georgia-NATO relations began in 1992 when Georgia joined the North Atlantic Co-operation Council (now the Euro-Atlantic Partnership Council), and from that point on Georgia has tied itself more and more closely to the alliance: in 1994 it joined the Partnership for Peace (PfP) programme; in 2004 Georgia began to fulfil a NATO Individual Partnership Action Plan (IPAP); in 2008 the NATO-Georgia Commission was created. One important milestone in Georgia’s security policy aspirations was NATO’s Bucharest summit in April 2008, where in the final communiqué a clearly worded membership promise was achieved and Intensified Dialogues began with Georgia and Ukraine.

Georgia submitted its application for membership in the Council of Europe in 1996. Georgia joined the Council during Estonia's Presidency, on 27 April 1999.

Estonia has been prepared to share its reform experiences through development co-operation projects. Georgia has been and will remain in the near future the recipient of the largest portion of Estonia’s bilateral aid and one of four development co-operation priority countries, along with Ukraine, Moldova and Afghanistan. Many development co-operation projects have been carried out or are currently being carried out—some which can be highlighted are the training of Georgian police officers, state officials, young diplomats and college students, the reform of vocational education, and projects improving the administrative capabilities of the state. Estonia is prepared to introduce its experiences in the agricultural sector, which has low productivity in Georgia.

Visits

Agreements

The agreement basis between Estonia and Georgia is as follows:

• Agreement on Economic- and Culture-related Co-operation (came into force 27 Nov 1990);
• Protocol on Co-operation between the Ministries of Internal Affairs (came into force 24 Apr 1992);
• Protocol on Co-operation between the Foreign Ministries (signed 19 May 1994);
• The Agreement on Customs Co-operation and Mutual Assistance (signed 22 Aug 2000);
• The Memorandum on Co-operation between the Foreign Ministries (signed on 5 Oct 2000);
• Joint Declaration by President of the Republic of Estonia Arnold Rüütel and President of Georgia Mikheil Saakashvili (came into force 12 Oct 2004);
• Agreement on Co-operation in Culture, Education, Research, Youth Activities and Sports (came into force 21 Feb 2005);
• Mutual Understanding Memorandum on Temporary Business Trip Rules for the Civil Security Advisor between the Ministry of Defence of Georgia and the Ministry of Defence of Estonia (came into force 16 Apr 2005);
• Agreement on Customs Co-operation and Mutual Assistance (came into force 12.07.2005);
• Agreement Allowing Georgian Government to Use Free of Charge the Estonian-made Computer-based Simulator System for Training Officials (came into force 09.09.2006);
• Agreement for the Exchange and Mutual Protection of Classified Information (came into force 29.05.2007);
• Agreement for the Avoidance of Double Taxation and Fiscal Evasion with Respect to Taxes in Income and on Capital (came into force 27.12.2007);
• Agreement for the facilitation and protection of investments (signed 24.11. 2009).

Economic Relations

Despite the good political relations between Estonia and Georgia, economic relations have been quite modest. Estonia is interested in closer contacts with Georgia and in developing sales opportunities for Estonian goods in the Georgian market. As a country in the Baltic Sea economic region, Estonia is interested in transit-related co-operation with Georgia and providing services and know-how. The recently opened Embassy is sure to contribute to the promoting of economic relations.

TRADE

Estonia-Georgia economic relations, which saw moderate growth after 2005, received a significant blow from the global economic crisis, the events of August 2008, and the 2009 street protests, and fell back down to their 2004/2005 levels. Despite all these factors, Estonian entrepreneurs still show great interest towards Georgia, which can be seen from the numerous business visits made by entrepreneurs and close contacts with the embassy. Currently investments have been made primarily in real estate and construction, but also into agriculture (wine and nut production) and retail sales. Trade between Estonia and Georgia makes up only a small part of Estonia’s total foreign trade (about 0.01%). In addition to the crisis and the armed conflict of 2008, goods trade was also affected by the lack of diversity in imports (about 70% of imports is wine and about a quarter is nuts). Since Estonia is situated far from the Georgian transit corridor, it is difficult to develop balanced foreign trade relations.

Source: Statistical Office

Main export articles in 2009:

• Machinery and equipment - 46.1%
• Optical instruments - 10.7%
• Chemical products - 7.8%
• Other industrial products - 7.8%

Main import articles in 2009:

• Food products and beverages - 53.8%
• Fruits, berries, nuts - 45.4%

INVESTMENTS

Georgia, which belonged to the group of nations with rapid economic growth before the crisis, was an attractive destination for the investments of Estonian businesses—they did not wait for legislation protecting bilateral investments or the implementation of the Lisbon Treaty and put down their capital in real estate and the processing industry of agricultural goods (wine and nuts). Estonia’s direct investment position in Georgia was 32.8 million kroons at the beginning of 2009; Georgian investments in Estonia are extremely modest (2.2 million kroons). In order to facilitate investments, in November of last year an agreement for the protection of investments was concluded, which will hopefully come into effect in 2010. Estonia entrepreneurs are also discovering the potential in, for example, Georgia’s IT and communications sectors.

Development aid

According to the Estonian development co-operation strategy for 2006-2010, Georgia is one of the four priority partner countries for Estonia. Estonian development co-operation with Georgia concentrates on education, good governance and democracy-building, as well as support for economic development and environmental sustainability.

In 2006, the Foreign Ministry allocated ca 172 000 EUR, representing 38% of the Foreign Ministry’s resources for bilateral development aid, to Georgia. In 2007, the allocated amount was ca 192 000 EUR and in 2008 the bilateral envelope for Georgia already increased to ca 428 200 EUR. Due to the budgetary cuts in 2009 the sum decreased to 287 600 EUR; however, many of the projects approved in 2007 and 2008 continued also in 2009.

Together with the aforementioned resources from the Foreign Ministry, there are also activities funded by state institutions and municipal governments (primarily training and consultation projects).

Projects in 2010

• Construction of Children and Youth Playgrounds in IDP (Internally Displaced Persons) villages of Shida-Kartli and Mtskheta-Mtianeti
• Development of European Union-Georgia Mobility partnership
• Diplomacy, international relations and European integration related training for developing democracies.

Projects in 2009

• Diplomacy, international relations and European integration related training for developing democracies
• Support to Gali Psycho-Rehabilitation Center

Projects in 2008

• Public Service Academy’s project “Developing police training in Georgia”
• Tallinn University’s project “Competency training for specialists of the Georgian social sector public services and non-profit organisations”
• Estonian School of Diplomacy’s project “Introducing Estonia’s EU and NATO integration experiences to young diplomats, government officials and teachers of Ukraine, Moldova, Georgia, and Armenia (short training and a European Neighbourhood Policy conference)”
• Estonian School of Diplomacy’s project “Scholarships for young diplomats and government officials of Moldova and Georgia” (for the 2008/2009 and 2009/2010 academic year)
• Introducing the creation of Estonia’s support structures and the functioning of its technology transfer to Georgia’s officials, representatives of development and research institutions, and representatives of businesses
• Consulting for the reform of Georgia’s public broadcast TV and radio station (GTVR)
• Increasing the capabilities of the Interior Ministry of the Republic of Georgia for preventing the illicit trafficking of stolen vehicles in the Caucasus
• Visit of the Georgia opposition leaders to Estonia, 10-12 March 2008

Cultural Relations

Cultural exchange has grown from year to year. The last cultural event of 2009 was the Estonian Embassy in Tbilisi in co-operation with its Swedish colleagues opening an exhibit of Ilon Wikland’s drawings. In relation to Tallinn becoming the European Capital of Culture in 2011, a Georgian culture week is being prepared at the initiative of the Georgian Embassy. A performance by talented jazz singer Nino Katamadze and a Georgian film week enriched Estonian cultural life the week before Christmas in 2009.

Estonians in Georgia

Within the Georgian territory of Abkhazia are villages established in the 1880s by emigrants from Estonia. Best known are the villages of Ülem- and Alam-Linda, Salme, Sulev and Punase-Lageda. These settlements spurred the development of Estonian and Georgian consular relations during the pre-World War II period.

At the beginning of the 1920s, an Estonian consulate operated in Tbilisi and for a short period, vice consulates in Batum and Suchum. The consulates were closed down in 1923, because the Soviet government in Georgia withdrew its recognition of Estonian diplomats.

At the beginning of the 1990s, the situation in Abkhazia, where the Estonian villages are located, grew turbulent. Since 1992, about 500 people have been repatriated to Estonia. Solving the problems faced by the Estonians in Abkhazia is still an Estonian foreign policy issue in its relations with Georgia.