Georgian Prime Minister Nika Gilauri dismissed Economic Development Minister Lasha Zhvania on August 21 on the grounds that his work was unsatisfactory. Specifically, Gilauri charged that Zhvania's ministry failed to create appropriate conditions for foreign investors, including signing an agreement with the Czech Republic on the mutual protection of investments, a failure that according to Gilauri delayed the construction of planned small hydroelectric power stations. Gilauri also accused
Zhvania of failing to fulfill targets for generating budget income from privatization.
Zhvania retaliated by telling journalists the same day that he disagreed on key strategic issues with Gilauri, whom he branded as "a good person but a weak premier." At the same time, Zhvania denied he plans to align with any Georgian opposition party and publicly affirmed his loyalty to President Mikheil Saakashvili, who on August 22 characterized Zhvania
as a friend and "a talented specialist" for whom another position should be found where his experience is "most needed."
Zhvania, who is 35, is an international lawyer who previously served from 2004-2005 as deputy foreign minister, from March 2005-June 2008 as ambassador to Israel and Cyprus, and from June-November 2008 as chairman of the Georgian parliament Commission on Foreign Relations. He was named minister for economic development in November 2008.
Rumors of serious tensions between Gilauri and Zhvania surfaced earlier this summer. Zhvania explained on August 21 that he had "conceptual differences" with Gilauri's team, which he said included a number of economists who favored "a libertarian approach" at odds with the "regulatory approach" espoused by the European Union. Zhvania listed among the "liberal" camp Georgian-born former Moscow-based businessman Kakha Bendukidze, who served for four years as Georgian state minister for economic reform before being named in February 2008 to head the state chancellery.
That standoff between the two camps, Zhvania implied, hindered the signing of the free trade agreement with the European Union that Zhvania had described one month earlier as "vital" insofar as it would open up "a huge market" for Georgian goods. The "Financial Times" on August 4 quoted Gilauri
as defending the liberal approach as crucial to attracting the foreign investment needed to galvanize economic revival.
Several opposition figures, including Manana Nachkebia of the New Rightists, have predicted that Zhvania's departure will prove to be only the first of a far broader wave
of dismissals beginning this fall. Eka Beselia of former Defense Minister Irakli Okruashvili's Movement for a United Georgia argued
that Zhvania's dismissal shows that Georgia is suffering not just from a political crisis, but from a government crisis resulting from internal confrontation.
Republican Party head David Usupashvili said that instead of trying to distract attention from their own failings by dismissing subordinates, Gilauri and Saakashvili should step down themselves. Former Prime Minister Zurab Noghaideli predicted that firing Zhvania will not have any positive effect, as "Georgia's economy is disintegrating." Only pre-term elections and a change of leadership can guarantee real change, Noghaideli argued
Economic expert Emzar Jgerenaia pointed out that the odds were stacked against Zhvania from the beginning, given that he had to contend simultaneously with both the aftermath of the August 2008 war with Russia over South Ossetia and the global economic crisis, either of which would have served to deter foreign investment. At the same time, Jgerenaia conceded that the charge of lack of coordination between Zhvania's ministry and other government department and the resulting failure to elaborate a single over-arching strategy was justified. "Georgia still has no economic compass," he complained.
Neither Gilauri nor Saakashvili has given any hint of who might be named to succeed Zhvania. The new minister must be named within two weeks, and the candidacy does not need to be formally approved by the parliament.
RFE/RL's Georgian Service cited the first channel of Georgian Public Television on August 22 as identifying Zurab Pololikashvili, currently Georgian ambassador in Madrid, as the most likely candidate. But the daily "Rezonansi" suggested
that the entire cabinet, including Gilauri, may be dismissed, and that Davit Tqeshelashvili, currently first deputy prime minister and minister for infrastructure and regional development, may be name to head a combined ministry of economic development and energy.