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RIA Novosti

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Russia considers annulling benefits for Georgia, Ukraine, if they quit CIS

17:11 07/05/2006

MOSCOW, May 7 (RIA Novosti) - The government of Russia is considering canceling benefits for Georgia and Ukraine, if they decide to withdraw from the Commonwealth of Independent States, a government source said Sunday.

Georgian foreign minister Gela Bezhuashvili said Sunday Georgia had started consultations with Ukraine on their withdrawal from the CIS, a loose association of former Soviet republics.

"In the wake of statements made by the leaders of Georgia and Ukraine about the possibility of their withdrawal from the CIS, the government of Russia is considering canceling a number of benefits, which these states enjoy within the CIS," the source said.

"No doubt, in this case Russia will review many agreements and accords concluded within the CIS, including in the social sphere," the source said.

Russian experts say Georgia's withdrawal from the CIS will mean for most of the republic's population a rupture or a considerable weakening of traditional economic and humanitarian ties with Russia and other CIS countries.

Experts say Georgia could sustain the greatest losses in this case in the economic sphere, in particular, in agriculture, which employs half of the republic's able-bodied population and sells its products mostly in the CIS countries.

According to experts, it would be difficult for Georgia to find alternative markets because its products are frequently of low quality. The search for alternative markets would reduce the republic's export revenues and would lead to agricultural product overstocking and the bankruptcy of agricultural producing and processing businesses. This would also lead to a higher unemployment rate.

According to official figures, there were 370,000 unemployed people in Georgia in mid-2005 or 18% of the workforce. According to unofficial figures, the unemployment rate was as high as 40%.

Georgia's withdrawal from the CIS would also affect the republic's energy sector, which covers only 40% of the country's energy needs while 60% of electricity is largely supplied from Russia, experts say.

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RIA Novosti Russia considers annulling benefits for Georgia, Ukraine, if they quit CIS

17:11 07/05/2006 The government of Russia is considering canceling benefits for Georgia and Ukraine, if they decide to withdraw from the Commonwealth of Independent States, a government source said Sunday. >>

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