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Romania: Georgia Seeks To Jump-Start Economic Cooperation

Georgian President Eduard Shevardnadze today concludes a two-day official visit to Romania during which he and Romanian President Ion Iliescu signed deals meant to improve economic cooperation between the two Black Sea nations. Shevardnadze and Iliescu said Romania and Georgia must work together to revive the ancient Silk Road trade route between Asia and Europe and welcomed the reopening of a Black Sea ferry link between their countries.

Prague, 7 September 2001 (RFE/RL) -- Georgian President Eduard Shevardnadze today ended a state visit to Romania during which he held talks with Romanian President Ion Iliescu, Prime Minister Adrian Nastase, and other top officials.

Shevardnadze's two-day visit (6-7 September) marked a new attempt by the two Black Sea countries to boost their dwindling economic and trade cooperation. Shevardnadze and Iliescu signed a series of railway transport agreements, which they hailed as a first step toward establishing transport routes that will link Asia with Europe via the Caucasus and the Black Sea.

Iliescu also welcomed the reopening of a ferry link between the Romanian Black Sea port of Constanta and the Georgian port of Batumi. He said the link -- to be commonly exploited by Romania and Georgia -- is also important for other countries in the southern Caucasus and Central Asia that seek access to Europe.

"We regard this [reopening of the ferry line] as being an important development not only in bilateral relations, but also a big step toward expanding trade and economic relations with south Caucasus states -- Armenia and Azerbaijan -- and with states from the Caspian region and Central Asia. In turn, we believe that for these states, this is a way of connecting themselves with Europe through Romania."

Shevardnadze went even further, saying that the ferry line is part of a plan to revitalize the ancient Silk Road connecting China with Europe. He called it "a gigantic project" to which both Romania and Georgia could contribute.

"There is an issue of common interest and of great perspective -- our action toward revitalizing the great Silk Road with all its ramifications, beginning from China and ending with the European countries," he said. "I believe that Romania and Georgia -- as well as other states -- can do a lot for the completion of this gigantic project."

The two heads of state also reiterated their countries' determination to expand participation in the EU-funded TRACECA and INOGATE programs. The two programs are aimed at opening additional transport routes to Europe for Central Asian oil and gas.

The TRACECA (Transport Corridor Europe-Caucasus-Asia) program -- launched in 1993 by the European Union together with eight Central Asian and Caucasian states -- is meant to establish an alternative west-east transport corridor from Europe, across the Black Sea, through the Caucasus and the Caspian Sea to Central Asia.

The EU-funded INOGATE (Interstate Oil and Gas Transport to Europe) -- a 10-country project -- has as its stated objective the development of an oil and gas pipeline network from Central Asian oil fields to Europe across the same route.

Georgia is a member of both the TRACECA and INOGATE programs, while Romania participates only in INOGATE. However, both countries have so far enjoyed limited benefits from the two projects, despite their strategic position along the east-west corridor.

Political instability in Georgia -- a former Soviet republic marred by separatism -- as well as a lack of economic reform in both countries, have apparently made them unattractive for foreign investment. Romania over the last decade attracted only some $7 billion in direct foreign investment, while in Georgia, the figure stands at a mere $800 million since 1993.

Political and military relations between Romania and Georgia have been generally good, with several official state visits on both sides and with regular contacts between the two defense ministries.

Shevardnadze was the first foreign official to visit Romania in January 1990, shortly after a violent uprising toppled communist dictator Nicolae Ceausescu in December 1989. During his visit, Shevardnadze -- at the time the Soviet Union's foreign minister -- met with Iliescu, a former communist apparatchik who had become the leader of the newly formed Romanian power structure.

A steady friendship between Iliescu and Shevardnadze subsequently developed, contributing to the good relations between the two countries.

However, economic cooperation between Romania and Georgia remains largely symbolic, with bilateral trade declining from some $44 million in 2000 to $16 million in the first half of this year.

The ferry line between Constanta and Batumi -- whose reopening is now being hailed by both sides as a great achievement -- was closed in 1998 due to a lack of trade. The decision to reopen it was apparently based more on political interests than on sound economic judgement, since Romanian transport officials admit the ferry will operate at a loss, at least for the time being.

Iliescu yesterday announced that he and Shevardnadze have decided to establish a common body to explore ways to develop Romanian-Georgian economic relations. Iliescu: "We decided to form a joint Romanian-Georgian economic committee, which is to meet for the first time this fall and which will work out a concrete program of action."

Shevardnadze insists the bilateral economic situation will improve and points out that the two countries want to develop much closer ties. He said Romania is Georgia's window to Europe.

Iliescu also deplored the current political difficulties in Georgia, mentioning the disputes with the separatist regions of Abkhazia and North Ossetia. He announced that Romania's government will finance a humanitarian aid project to help the children of some 300,000 Abkhaz refugees living in Georgia.

Shevardnadze also had talks with Prime Minister Adrian Nastase and the speakers of Romania's two chambers of parliament and met with the head of Romania's Orthodox Church, Patriarch Teoctist. The Georgian head of state formally invited Iliescu and Patriarch Teoctist to visit Georgia.