Money for the Needy, by Dmitry Babich

Mikheil Saakashvili Won the August War with Russia – Economically

The decision of the international donor conference in Brussels to donate $4.55 billion for the reconstruction of Georgia’s infrastructure, damaged during the five-day-long war at the beginning of August, sparked controversy both in Russia and in some of the EU countries, since no funds were allocated to the actual battleground – South Ossetia.

The most striking aspect of the conference’s decision is the sheer amount of Western aid to Georgia, which obviously exceeds the country’s most hopeful expectations. Although representatives of 67 countries attended the conference in Brussels, it is obvious that most of the aid comes from EU-member states and from the United States, presently supposed to be dealing with the effects of the financial crisis. Besides, the first observers from the European Union who came to Georgia right after hostilities around Tskhinvali and Gori ended estimated the damage to be worth just $4 million. However, as new commissions from the EU and the United States were sent to Georgia, and the retreat of the Russian troops continued getting postponed, the estimations of Georgian losses soared to new heights.

“We estimate the damage to be worth $3.5 to $3.6 billion,” Henrietta Fore, the administrator of the U.S. Agency for International Development (USAID) was quoted by the Vremya Novostei daily as saying at a meeting with journalists in Brussels. The European Commissioner for foreign relations Benita Ferrero-Waldner said that $3.7 billion of the total aid amount were “state subsidies,” while the remaining $850 million were “private donations.” Thus, economically, the five-day-long war turned out to be advantageous for Georgia, since the volume of the allocated aid exceeds even Western estimations of Georgian losses. An average Georgian is expected to receive almost $1,000 from American and West European donors, since only 4.6 million people officially live in Georgia, with many actually staying outside the country. In a letter to Brussels, the Georgian opposition expressed doubt that this aid will be properly used by Mikheil Saakashvili’s regime, and lambasted the latter for having succumbed to the Russian “provocation” and launched hostilities in the first place.

As for the Georgian region of South Ossetia, which first came under the attack of Saakashvili’s troops on August 7, the EU and the United States did not earmark a single penny for it, obviously relying on the aid the republic will get from Russia, which recognized South Ossetia as an independent state in late August.

“This is strange, because the amounts of Ossetian and Georgian refugees fleeing from South Ossetia were quite comparable. In fact, the Ossetian contingent initially outnumbered the Georgian one, with about 34,000 leaving South Ossetia in the first days of the fighting,” said Alexander Brod, a member of a special commission on South Ossetia formed by the Public Chamber of the Russian Federation. “The boldest estimates of Georgian refugee population do not exceed 30,000 people. The desire to channel all aid to Tbilisi shows that the EU and Washington decided to distribute the aid to their allies and not necessarily to those who need it most.”

Valentin Gefter, the director of the Moscow-based Institute on Human Rights, argued against the self-righteous posturing of the Russian authorities, pointing out the fact that most of the Ossetian refugees were able to return to their homes when the hostilities ended, while Georgian refugees cannot do so for fear of violent revenge on behalf of the South Ossetian paramilitaries.

“Out of the 34 thousand Ossetian refugees who fled to North Ossetia, no more than 2,000 stayed,” Gefter said. “Meanwhile, only a few Georgians returned. The other big question is the fate of the people who lost their homes. So far, only one person among Ossetian refugees got a certificate enabling him to buy housing.”

Substantial as it is, the Russian government’s aid to South Ossetia cannot be compared to the amount of Western aid to Georgia. Until the end of the year, 1.5 billion rubles ($58 million) is supposed to be spent on repairing the damage the Georgians caused in South Ossetia, and next year the amount is going to reach ten billion rubles ($384 million).

“It is good that aid is provided, but I would prefer to see it provided along humanitarian and not geopolitical lines,” Brod said. “Right now both sides support their clients. Russia had no choice since Georgia would not accept aid from Moscow. As for the European Union, it preferred Realpolitik.”




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