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  • Frederick Kempe, President and CEO, Atlantic Council
  • H.E. Mikheil Saakashvili, President of Georgia

FREDERICK KEMPE:  Good afternoon.  President Saakashvili, I think if you see the size of this crowd and the level of this crowd, I think it will just confirm yet again that the importance of your country in so many respects is so much larger than its size.  Good afternoon.  I am Fred Kempe, president and CEO of the Atlantic Council.  And I am delighted to welcome you to this Atlantic Council Global Leadership Speaker Series event and to be hosting the president of Georgia, his excellent President Mikheil Saakashvili, who I have known for many, many years through a great deal of history.

We look forward to hearing your views, Mr. President, on your agenda for the country and for the U.S.-Georgian relationship during your first visit to Washington since President Obama’s inauguration.  We have many distinguished guests this afternoon.  So in the interest of time, I am not going to acknowledge you all.  But I am going to welcome the members of the Georgian delegation.  It is wonderful to have you here.  And, of course, the Georgian ambassador, His Excellency Batu Kutelia.  It is wonderful to work with you here in town.

We are also happy to see so many members of the European diplomatic corps and also members of the Atlantic Council board.  I want to extend my special thanks to our board member, Ian Hague and to JSC Liberty Bank for their generous support of this event and of our work concerning Georgia.

President Saakashvili’s speech marks the launch of the council’s new project on Georgia’s Euro-Atlantic integration and is the first in our Tbilisi dialogue speaker series.  We are also delighted to host President Saakashvili as our guest speaker this afternoon at the end of the Nuclear Security Summit, which he has been attending.  I have come to know President Saakashvili well, first, as editor for the Wall Street Journal Europe and now in my current job as a leader with an incredible sense of courage, conviction, commitment and determination.  I am honored to welcome you back to Washington and to the Atlantic Council.

In 2008, we hosted you, President Saakashvili, shortly before the NATO Bucharest summit as the momentum grew around the membership action plan, a MAP for Georgia.  At the time, you presented MAP as a fundamental question and I quote about quote, “the borders of the Euro-Atlantic space that would change geopolitics of the region.”  And while allied leaders at Bucharest could not agree on MAP, they did agree on a much further-reaching statement that Georgia would become a member of the alliance.  By the summer of that year, however, Georgia’s Euro-Atlantic aspirations seemed more distant than ever in the wake of Russia’s invasion of Georgia.

Shortly after that trauma in September 2008, we hosted President Saakashvili once more for a session in which he issued an ominous warning about Russia’s intentions toward its neighbors claiming quote, “Crimea is the crown, while Georgia is the jewel in that crown.”  While many factors have altered Georgia’s course since these events, one thing remains the same, President Saakashvili’s unwavering resolve to lead Georgia on an ambitious path of Western integration.

Here at the council where our mission is to renew the Atlantic community for global challenges, we want to take this opportunity to provide a platform for President Saakashvili to bring us up to date on the issues that are critical not only for his country, but how the Atlantic community, the U.S., Europe, the European Union perceives itself and its priorities in the years ahead. 

There are new burdens of Tbilisi in the wake of the war and in the wake of the domestic political upheaval that President Saakashvili will address.  As you well know, some in this town, as well as in Europe, continue to question the strength of Georgia’s democratic institutions.  As your country heads into the first ever municipal elections, we look forward also to hearing about your agenda for reform.  At the council, we are committed to fostering this debate on Georgia’s future. 

Since 2008, the council has been at the forefront of this debate and has called for trans-Atlantic leadership to support Georgia’s post-conflict recovery.  This year and next, we will be intensifying our efforts with the launch of this new project on Georgia’s Euro-Atlantic integration through a speaker series, periodic analysis and reports and our collaboration with Georgian civil society partners, we will continue to shine a spotlight on Georgia to encourage its Euro-Atlantic aspirations to support the strengthening of its democracy, free markets, incredibly successful free markets and civil society, and to nurture the West’s readiness to welcome a democratic Georgia into Euro-Atlantic institutions.  We look forward to hearing your remarks on Georgia’s path forward.  Please join me in welcoming the president of Georgia, Mikheil Saakashvili.  (Applause.)

PRESIDENT MIKHEIL SAAKASHVILI:  Thank you, Fred, so much.  And I am honored and I am being very humbled to see such a big audience here with some friends and very important figures also of our recent history attending.  Ladies and gentlemen, it is an honor and pleasure, obviously, to address you.

I have come to Washington to participate in Nuclear Security Summit that President Obama hosted last week, this week.  I was honored to join with him and three dozen other world leaders to address the great dangers posed by nuclear weapons, materials, proliferation, trafficking.  I want to commend President Obama for underscoring the urgency of this universal threat, for his personal leadership of this effort, particularly whole time when he faces such a demanding domestic agenda.  His vision of a nuclear-free world is one that I personally share and that summit was a first step toward a long-term goal.

Some may wonder why this week’s summit includes not only large nuclear powers, but countries like Georgia with no nuclear weapons, no nuclear energy and no nuclear materials.  Answering this question requires a short journey through the recent history of my country.  While Georgia’s deep transformation after 2003 is important to our own people, they are also relevant to global efforts to address such crucial challenges as nuclear proliferation and international terrorism.

To understand Georgia’s role in a global challenge like nuclear proliferation, it helps to understand how Georgia is evolving and how Georgians see their place in the world.  Just a decade ago, Georgia could not seriously speak of playing any constructive role in the world.  We were, to be perfectly frank and accurate, a failed state.  Major areas of our country like the Adjara region along the Black Sea were effectively run by warlords.  In major cities, the only security and order name from brutal local protection records called – (unintelligible) – law.  The police system was corrupt beyond description with state police extorting payments from prisoners’ families and shakedowns by traffic police at almost every corner.

Yet people with talent and ambition sought to join local gangs or they simply fled the country.  Those with less promise retreated into drug addiction, which was rampant.  Our economy was literally in the dark ages.  Even Tbilisi, people had their electricity for only five few hours today, especially during the winter, if any electricity at all. 

Real civil liberties didn’t exist because there was no one to enforce them.  Chaos and corruption like the predecessor communist driven in a sense that merit mattered or that individuals could take responsibility for solving societal problems.  In that chaos, any traffic could flourish.  For a country located in a region like ours between a nuclear superpower in deliquescence and a country wishing to become one soon, nuclear smuggling was a very actual challenge, a challenge that a failed state with its corrupt police and its even more corrupt customs could not address.

This failed state could not address any challenge.  But our society, our people decided to change the fate of Georgia.  Rose Revolution 2003 was not about waving flags and storming the parliament.  It was not simply a bid to change leaders, to bring new people into government offices.  It was – it is still a long effort to move out from state from failed to functioning.  Even more, it was an attempt to change the very relationship between our citizens and their state and amongst citizens themselves.  It was an experiment designed to show that in a region organized around clans, corruption and authoritarianism it was possible to have both freedom and order, both liberty and stability.

It was, in other words, the start of an audacious process to create a new Georgian society.  Convinced that true freedom was not possible without the rule of law and that no order was real if it was not based on the free choice of the people, we tried something different.  We opted for a third way turning Georgia into a kind of laboratory for the whole region.  Seven years later, we are far from declaring any final victory.  Our people continue to face hard times, even as poverty was reduced by half.  But we have far more – too much unemployment power still.

The 2008 invasion and continuing illegal occupation of our country exacted a terrible toll.  The global economic downturn, of course, squeezed also on our economy and domestic growth during 2009, although I think growth has really returned now to my country.  And while we made huge revolutionary changes, we also made mistakes.  As one of my favorite laws from Emmanuel Kant said, you cannot really be free until you are – you cannot be ready to be free until you are really free, which means that there is no book teaching you how to behave one you conquer your freedom and that you can learn how to behave as a free nation only be trying, making mistakes, analyzing them and correcting them. 

I remember when I was living in Washington, I was doing my doctorate here at George Washington University.  And my research – I had this dissertation.  It was very, very complicated, Latin name, in international law.  And my dissertation advisor, Professor Tom Buergenthal, told me drop this long Latin name.  It is not really worth it.  Why don’t you write a dissertation on the other topic, building a new state from scratch?  And, of course, I never brought back my dissertation.  I never got my degree from George Washington University.  (Laughter.)  So it will take some time before I finally deserve it.

And, of course, no government, especially in a period of radical transformation, can avoid mistakes.  But it can avoid making the same mistake twice.  That is precisely what was achieved.  There was no big book to teach yet – there is no book to teach yet how to build a European state from scratch. 

Yet the changes that Georgia has – (inaudible) – are sweeping.  We have set of universal – (inaudible) – transformation.  In just six years, we have gone from near feudalism to an emerging and modernized market economy.  A status of dramatic liberalizing reforms catapulted Georgia to number 11 in the world in terms of ease of doing business according to the World Bank and number one across Eastern and Central Europe.  The closest Eastern European country that close comes after is 24th.             

We are now fourth in the world on Forbes tax load index.  We have the fourth lowest tax burden in the world according to Forbes.  We are third least corrupt European economy according to the EBRD survey.  And, you know, if you look at where we are in terms of corruption:  Transparency International also ranked us as number one fighter of corruption for the five-year period.  No country had moved up so fast and so much in that five-year period.  Georgia moved on Transparency International’s list, which is very conservative.  And I still don’t agree with our present position.  I think we should be much higher like EBRD puts it.  But still we moved up 77 positions.

Coincidentally and curiously enough, Russia moved the same for the same period, 78 positions down, so exactly the opposite movements.  We met in the middle.  They didn’t say hello – (laughter) – in their usual manner.  But anyway, we got there.  And, you know, of course, from the point of the situation where Georgia lived, no electricity, no number for police and ambulance to be called.  Basic services were not provided by the state.

If you come to Georgia now – and I have been gone for five days.  I have continued my travel through Europe and then back to L.A., so I will be absent for 20 days.  I can tell you without exaggeration when I go back in 20 days, some place in the country will be changed quite substantially from the last time I was there.  We have 24-hour construction – virtually 24-hour construction.  It is not a hyperbole.  I mean, most of the big investment projects are on 24-hour working schedule. 

And, you know, Georgia was the same thing as Palermo was to Western Europe was same thing to Eastern Europe and former Soviet Union.  We were hotbed of mafia.  And now for the last several years, especially after Russia introduced full-blown energy embargo on Georgia products in 2006, only two products we have successfully or, you know, fortunately or unfortunately export to Russia were electricity and our mafia bosses because 90 percent of them in Russia.  Unfortunate for Georgia, unfortunate for them, unfortunate for us because we got rid of them. 

And the point here is that, you know, that is a remarkable transformation.  And if you look at what this economy has went through, you know, in 2005, Russia switched over electricity and gas lines and we had full blackout because we got 80 percent of our electricity and 100 percent of gas from Russia.  Now we learned our lessons and since then, we doubled our hydropower capacity.  We are exporting now energy to Russia.  And we will again double it within the next five years and we will become major exporter for the whole region to the countries like Iraq, Turkey, Gulf countries, Russia, Ukraine, Armenia, Azerbaijan. 

And we also in 2006, as I said, we had full-blown economic embargo.  We diversified our exports that year.  We had 10 percent growth that year.  After that, we had 14 percent growth.  And first three months of this year, we have 50 percent growth in our experts in all different directions.  And again, that is a great lesson how we can survive and how we can come back.  And the only thing that was left, again, and it was, by the way, predicted by our friend, Dick Holbrooke, in his brilliant article in the Washington Post, every means was exhausted.  He said the only thing that is left is military confrontation and that might come.

Unfortunately, he proved to be right.  But again, this confrontation was supposed to kill Georgia.  Well, we survived again because we are back.  We are back in business.  Here in America, I appreciate that, you know, the American support also helped us to survive for all these – and it has been a bipartisan project.  I am coming from the Hill yesterday.  I saw what kind of support I have there.  These relations that I had with the American administration began under President Bush, sustained by leadership of President Obama and by very close involvement and engagement and totally unprecedented one by Vice President Biden – I mean unprecedented for our region for many U.S. leaders.

I particularly want to express my thanks to Congress – and I did yesterday for generosity – and taxpayers for their generosity at the time when we had dire need and it really worked when Americans gave $1 billion to bridge a gap in our economy, to stop it from meltdown. 

You know, lots of things have changed.  We have done important police reforms.  And if you want to understand how police reform went, you should understand I have here Eka Zguladze, who basically has been – I mean, Eka maybe can show up.  (Laughter.)  I mean, she is in charge – she has been in charge of Georgian police for the last four years since the age of 28.  This is one of many others that were in charge of the police reforms.  She was leading it together with minister of interior.  But, you know, it was the most successful police reform.

Police went from confidence rate of 5 percent in 2003 to 87, according to last polls.  They are universally loved.  And if in the polls five years ago, 80 percent of Georgia said that it first had encountered corruption.  It is now less than 1 percent.  Corruption is gone from Georgia, believe it or not – the only country maybe in that region, a very unique one.  And, you know, to be put in some special red book for countries that try to do that. 

But also we are working on judiciary.  We have moved away from presidential controls.  An institution that is independent from the president.  And you could see the change again.  Of course, police approval, it is very high.  But it was very high since 2004.  Judiciary last year was, I think, around 30 percent.  Now confidence has gone up all the way between 55 and 60 according to different polls.  It is a very important change.  And we are introducing jury trials this year, American style.  And I am sure it works. 

It also means – democracy also means stronger protection for dissent.  When protesters took to the streets of Tbilisi in April 2009, we not only let them speak their mind, we stood aside with no recourse to force as they shut down the city’s main streets for nearly three months, as they shut me out from president’s office, shut down the parliament and paralyzed the government.  Well, I couldn’t come into president’s palace not because it was blocked by thousands of people, but it was blocked by basically 20 to 50 protesters depending on the time.  I ordered police not to do the routine procedure of this – (inaudible) – that would be in normal situations because I thought let people try it also this way.  Let some people try.

You know, we had strong approvals even in the capital, but said let’s try.  Let’s let people see what will come out of that.  After three months, people simply – I mean, those people that were protesting – still they were a minority of our society – got tired and went back home.  It harmed us economically.  I think we lost a couple of percent in our economic development, but it was very helpful for long-term development of Georgian democracy because when a country can afford, when you have Russian artillery over the hills targeting the center of the capital, when you are building a democracy at gunpoint, to tolerate this kind of demonstrations without reacting to them.  That is a big sign of maturity and big help for society to mature in general.

I think we are all working to transform the way individuals in Georgia consider their relations to the state and to each other.  We are trying to create something that has never existed in our region, a place where there is a tolerance and respect for all types of people as long as they have respect for the law.  We have created protections against discrimination on account of race, religion and sexual preference and – (inaudible) – for the Caucasus.  Although Georgia is a predominantly Orthodox Christian country, I am proud.  We also thriving communities of Catholics, Armenian Apostolics, Muslims, Jews and many others.  I have been berated for ensuring Jehovah’s Witnesses can practice freely and for ensuring Armenian culture can thrive.  I want you to know I wear those attacks as a badge of honor.

At the same time, we are trying to inculcate – (inaudible) – initiate the mark of departure from the clan-based authoritarian culture that Caucasus has mostly known.  One example is our education system.  Six years ago, admissions to the university was often a function of political connections and sizable bribes.  We instituted a radical change, so that all university applicants take one test on a blind basis and are assigned to their preferred universities based only on their scores. 

By 2014, we will have a totally new system of primary and secondary education with teachers who tolerate openness, far from the Soviet model of memorization and mindless obedience.  Every school child will be getting starting from this year a laptop, one laptop per child and English will become mandatory at every school from day one at every school for every school child. 

These changes certainly cannot just – you know, the whole thing of social transformation has not been well-detected in Georgia.  I think this is the only country with all due respect to the others, the other country so far of former Soviet Union, which totally moved away from everything Soviet in terms of political class, in terms of educational system at certain levels at least, and in terms of market economics and free economics.  You don’t call it market economics.  I think Steve Forbes is right.  You call it real-world economics no matter who says what today in the world because of crisis.   

And these changes cannot be just about me because I am already in my second term and I will end my time as president in 2013.  It is all about Georgia being another kind of country.  Our goal is rather to create strong institutions and defend the values that will be necessary to ensure that Georgia continues moving forward and never again sits back into being a state that fails its own people.

Ladies and gentlemen, failed states do not only fail their own people, they also tend to fail responsibilities to the broader world.  I think that has been addressed by this summit.  The fact that natural world is changing today, the old threat of cross-border aggression remains – (inaudible) – I can testify to the first hand.  But the world also increasingly confronts a range of more diffuse challenges like, you know, non-state actors, terrorists, et cetera, non-state actors in all kind of illicit activities.  In such a world that calculations that underline security change, we need not only balance of power, but also balance of cooperation.  We need formal alliances and informal networks of countries that act in close concert to defeat the ever – (inaudible) – threat.

The balance of cooperation begins with likeminded states that bring the greatest capacity and leverage to the table starting with those in the trans-Atlantic community.  This is why all countries have an interest in seeing strong, thriving and respectful relationship between the U.S. and all of Europe, indeed, between all the NATO countries, between U.S. and Russia based on principles.  But a balance of cooperation requires more.  It requires that we minimize the number of failed states where global threats can breed and maximize the number of functioning states that care for both their own people and, you know, those outside their borders.

And so from that point of view, what we have been doing in Georgia, that is also our country.  We should solve global problems and bear global responsibilities.  And so, you know, very early in my presidency, the responsibility was clear from day one of Rose Revolution.  Very early in my presidency, then-President Putin called me to say that he would be ready to accept the new Georgian government as long as I was willing to agree to just one small innocuous provision that he could name our ministers of interior and security.  (Laughter.)  In other words, that we agreed to be something less than a fully independent, sovereign, functional state.

I knew that agreeing to those terms would mean we would never stand up for what we believed was right either inside or outside our borders.  And so I told Mr. Putin.  Since then, we were under permanent threat.  We determined that as we nurtured personal responsibility among our own people, we would also show responsibility in the global community.  That is why we are undertaking a range of steps to do our fair share in addressing pertinent global problems.

It is why then even though we are not a member of NATO, we send second highest per-capita contingent to Afghanistan and we strongly believe in success of that mission and we have stake in success of that mission.  And (Alfred ?) is here.  I am happy to see him.  We have also taken in some of the Guantanamo detainees.  And this same predisposition towards responsible cooperation explains our participation in this week’s Nuclear Security Summit.

All this may seem unexceptional, a normal and responsible state expressing normal and responsible values.  Yet for some states, these normal, responsible values are indeed profoundly threatening.  Ideas of individual liberty, responsibility and merit pose a real danger to any regime that maintains its power for repression, intimidation and cronyism.  Until now, there was two models more or less known or accepted or even deemed possible for post-Soviet space.  This was Yeltsin some type of so-called democratic chaos or Putin type of authoritarian stability. 

It was easy to write off some of the color revolutions that happened, although I don’t know what color it was; the Rose Revolution was misperception.  Rose Revolution wasn’t about rose color, but about flower rose that by accident I was carrying at CNN, described as Rose Revolution.  But then basically, that is what they decided it should connect to the color.  But anyway, it easy to write of some of the color revolutions as kind of democratic chaos that failed their peoples. 

But I think what Georgia has created is something third.  We have freedom of speech, democracy, free elections, economic boom at this stage, 70 percent-plus confidence of people in their future, according to the latest polls, which is unusually high for Europe and for our region, and three times less crime rate than Russia has.  It is a safe country.  And it is a free country.  And basically, freedom that is as efficient as possible in a former Soviet space.  And I am not believing those people who say, even some in this town, we should stop all this crap talk about values.  You know, it is just detrimental to our foreign policy goals.  You know, values is the most pragmatic thing you can get when you approach your foreign policy goals because values matter.  Values enforcement existence has concrete results for peoples, for foreign policy, for international cooperation, for security.

So from that point of view, I think Georgia will stick to its values.  And we are proud that – you know, we have to develop them.  I mean, we are not there yet, as I said.  In my office in Tbilisi hangs a portrait of Ilia Chavchavadze, one of the greater champions of Georgian nationalists and founding spirit of the United National Movement, the party, which I lead today, nationalists, in good sense, not in terms of ethnic nationalists:  patriot.

Chavchavadze was a writer, a poet and a romantic and a man who recognized the tragedy of Georgia’s hard circumstances, but still dreamt of a secure Georgian state and a bright Georgian future.  He once wrote of his desire to communicate to his countrymen that as he put it, there are many countries poor, much unhappier than we, but living in much happier way.  And he said his mission was quote, “to gather each spark, which is not possible, that is not flickering in everyone is a great fire in order to warm the chilled heart of my country.”  Idealistic?  Perhaps.

It is kind of idealist that believes strong human values can elevate a country’s quality of life.  It is the idealist that believes certain universal principles can form a basis for democratic tranquility and international peace.  And it is idealist that tells me it is our obligation, even as a small country, to do what we can do to help solve huge problems beyond on our own borders.  That is what we are trying to build.  That is why I have come here this week and that is kind of world I hope that my country and many other likeminded states can build in the years to come.  Thank you and I will be willing to take any of your questions.  (Applause.)

MR. KEMPE:  Thank you, President Saakashvili, for that significant statement, important speech.  I am going to ask very quickly two questions building off that and then go straight to the audience.  The first is I may ask you to write another mini dissertation and this one may be on the color revolutions.  With recent elections in Ukraine and the changes of Kyrgyzstan and, of course –

PRES. SAAKASHVILI:  You want me to write obituary?  (Laughter.)

MR. KEMPE:  Well, I guess that is my question.  Is what has become of these revolutions – you seem to be the last color revolutionary leader standing.  What is your assessment?  How would you write about this period of time?  And what makes yours more unique and sustainable or is it not?

PRES. SAAKASHVILI:  Well, I mean, I think the whole term, revolution, is not applicable to just, you know, waving flags and storming buildings.  That is exactly what the misperception was that, you know, because it was a media-created revolution and, you know, I mean, ours was the first ever televised revolution in world history.  We were four-and-a-half hours on CNN without commercial break the last day – (inaudible) – in parliament.  So basically, that is the perception was the cameras are off and the flags are folded and basically the revolution is over.

But that is exactly when the whole thing started in Georgia.  And actually the whole social transformation I was talking about is precisely the event after that.  And I think that is maybe what makes Georgia unique, unfortunately, that we did profound reforms and we had to face challenges all the time.  But because, you know, the things you have seen arise in the center of Tbilisi, that is natural.  And every time, the cliché was, you know, two months after Rose Revolution, of course, the first big news was we were great heroes.  Of course, once there is big news that you are, it stops to be news.  Then you need other news.  And then other news was that we were big failure.

And, of course, in two, three months’ time, we already got articles that, you know, that wilted roses, like roses are trying to show their – you know, all kind of thing.  And, I mean, but the reality was – and, of course, when you get rallies in the center of capital, of course, we get rallies in the center of capital.  You know, all the corrupt classes of that basically whose monopoly and power that was – all monopoly, it was not even limited to Soviet period, but starting from (such ?) time. 

We broke – I mean, they would not be happy.  We did not send them to labor camps for education.  We didn’t arrest them.  We didn’t even, you know, harass them in any way.  They kept their property, the value of which went up dramatically.  One has to say that, you know, President Shevardnadze’s family owns Georgia’s biggest cell phone company, right?  Its value was $200 million when I became president.  Now it is 1.5 billion I heard lately.  So this means they are there and they demonstrate.  But approval of my government has never been less than 50 percent according to every poll for all this period.

So all these clichés – you know, even now you get, of course, they lost most of their popularity.  First, it was because of whatever.  Then now it is because of war.  It is not true.  Our government, despite all the reforms, has as much approval rating as we had, say, six months after the revolution, but maybe less euphoric one, but more realistic one based on what we have achieved and the way people expect realistic to deliver to them. 

And obviously, it is no longer – it is not like big love (ph) or something because big love maybe is like – they say lasts three years.  I don’t know.  But then you have very nice family life.  People still like each other and stay together.  But, of course, different people have different spans for that.  (Laughter.)  I don’t claim to know everything. 

So anyway, but that is what we are.  And basically, Georgia has done all those reforms.  You have seen all those rallies, protest movement.  But I think it has become now irreversible.  I think society has matured.  And I think what we have achieved is that people know at least now that, you know, what their long-term goal is, what their short-term goal is, how society can be empowered to participate in it.  And in many ways, we have built a meritocracy.  And that was quite something that was – we moved away from post-Soviet model, building a real meritocracy.

MR. KEMPE:  Russia – when you spoke at the Atlantic Council March 2008, which seems like such a long period of time ago, you noted quote, “NATO is a value-based alliance,” and you suggested that quote, “engaging Russia based on principles is very important.”  Two things to point to.  One of them is the START agreement within the context of the so-called reset button, U.S. toward Russia.  And the second is the Russian very interesting response both to the anniversary of the Katyn massacre, but then also to the terrible tragedy and the death of the Polish president and the delegation.

How do you read this?  Are you seeing any shift of interest here to Russia?  Are we going forward in the principles-based way that you suggested or not?

PRES. SAAKASHVILI:  Well, if you noticed, I still said Russia based on principles.  I didn’t change my position.  I mean, with regard to our region, my country, Russia does recognize our borders.  Does it recognize our government once it is officially out?  And does it recognize cease-fire agreement?  So we did see a change of principles with regard to Georgia, for sure.  That is what I can say very shortly.

I know that, you know, there is President Medvedev coming to this town and people having high expectations or some hopes about another liberal trend emerging.  Let’s see, you know.  I also remember that who was president of Soviet Union under Stalin or over Stalin, Mikhail Kalinin.  I do recall his name.  Very nice guy.  Sweet, benign, not vicious or malicious at all.  Meet him personally, anybody?

MR. KEMPE:  Thank you.  (Laughter.)  We will let you build on that later, please.  If you could identify yourself.  And I would very much appreciate if the questions are questions and are short. 

Q:  Thank you.  Mr. President, I am Timothy Tell (ph), a consultant.  You should be congratulated for your courage, your courage to stand and push back to a KGB colonel acting like a KGB colonel, and commended even more so for coming to this town, one of the nastiest towns on the globe, where people talk about everybody else and backbite.  So their comments about you – and I would like your reaction to one of the stories going around this nasty town – that George W. Bush likes you and liked you, that you are both Ivy Leaguers.  He went to Yale and you went to Harvard.  You both speech English with a New England accent and don’t need an interpreter.

So he went to the ranch one summer and the rest of the elite went to the Hamptons and the Cape and you pushed back about the sovereign territories of your sovereign nation, thinking that your fellow preppy would support you.  And the KGB colonel pushed back hard acting like a KGB colonel.  And where was your preppy standing at your shoulder, sir?

MR. KEMPE:  Interestingly put.  (Laughter.)

PRES. SAAKASHVILI:  I mean, do you want same hyperbolic answer or more concrete answer?  (Laughter.)  Actually Georgia is a small country.  And this stupid and I think immoral debate about who started war, whether we attacked first Russia or whether Poland attacked first Germany and started Second World War and Finland attacked willingly Stalin’s Soviet Union.  This is frankly immoral because I don’t think there are as many stupid people as would like to believe that Georgia started war that was suicidal. 

We are a small country.  And in a small country, truth doesn’t hide.  And a place where Russia invaded, we had population of six-plus thousand people.  Basically, 6,000 is left.  All the rest:  Most of them went to the other parts of Georgia.  Most of the ethnic refugees from there are ethnically Ossetian and those people have seen firsthand who started what.  In a country of 5 million people, when you make polls and 90 percent, 95 percent of Georgia say Russia started the war, that’s the truth because it’s not happening overseas and it’s not happening 5,000 miles from somewhere – it’s happening in the heart of Georgia, next to the capital.  We have lots of eyewitnesses that are still alive.  Go and ask them.  Not a single refugee ever said on the record that we started the war and they’ve seen it.

So obviously they are one thing and the other thing not only George Bush was having holiday but he was in Beijing, incidently, at that moment, not at his ranch.  Our minister of defense was gone for holidays, most of our foreign policy people – half of our offices were gone for holidays.  And our best brigade was in Iraq, even though we had contingency procedure for this thing to, you know – we had felt that there was danger to come back. 

So this is not a debate.  This is the debate of those people who want to justify why did that or why they are doing something now and, you know, Georgia also acted irresponsibly in Georgia.  There is some irresponsibility in Georgia:  It’s in the fact of our existence.  It’s in the fact that we dare to do reforms that they didn’t like.  I don’t think you can please these people by just saying, oh, we will be sweet to you, we won’t join NATO, we won’t do this and that.  Everything in us they don’t like.  They dislike our statehood, our way of life. 

When you’ve sent Ekas Woled (ph), 28 year-old U.S. university graduate to sit with the old KGB generals with 40 years of experience at the same level when we were in CIS or other ministers going to the – another level of mentality, another level of understanding and they don’t like their body language, they don’t like the way they are, they don’t like their knowledge of the language, et cetera, et cetera. 

So that’s the way we are different and being different there is risky.  But that’s also the only reward we get and that’s how we are – we cannot be otherwise.  And that’s the only thing that also protects us because I think the best defense we have is these values and democracy and freedom and this is indeed very substantial stuff. 

You can be a sophisticated KGB operative; that’s true.  You can be a good master, how to poison people or blackmail people or collect information about the people – this is all possible.  This is a matter of techniques.  But when it goes really to understanding a political process, even intelligence agencies of democratic countries are not so good at that.  KGB especially is not good at that. 

And that’s what Georgia has created:  a real, genuine, democratic process.  That’s why it’s so difficult to understand that after so many years of subversion, we are not shouting, we are besieged.  We want to be normal.  We don’t want to end up with the same GDP like some countries, when they’re starting in ’56 – 1956 – to shout they are besieged, and they still have the same GDP as 1956.  I would like to double our economy in the next few years.  Again, we tripled it almost, nominally, for the last six, seven years and when you do that, it’s an investment-driven growth so you want to be normal and you want to be developed. 

So from that point of view, we just – by being normal, they cannot understand how can, after all so many years of empire by subversions, explosions, ultimately war and bombing, still we get skyscrapers in the town of Batumi of the same number as downtown Vancouver has?  I was there in January and I have place to compete with – (laughter) – especially after Dubai’s certain failures.  But anyway, that’s where we are.

MR. KEMPE:  I’ll go right to you in a second but let me pick up one part of this question, which is, are you satisfied – first of all, what do you want from this U.S. administration and are you getting it?  But how would you compare your relationship now to your relationship with the Bush administration?

PRES. SAAKASHVILI:  We had very good relations with President Bush.  I still jog today around the town in sneakers that he gave to me as a present so there are some leftovers from that relationship, from that support.  Obviously we had very, very good relations and I have high esteem for him. 

But I also have to say that we have as long relations with Vice President Biden, personal ones.  Very few people in the world understand me as well as he does; I hope I also understand what he feels all about it and what he thinks.  I have to say that he was more outspoken on Georgia on all the issues for all these years as senator than any of the other U.S. politicians that I can recall and that’s very important to understand.  That’s something that was – even at the moments where some people denounced what we did, Biden protected us and he had a point and he understood something very profoundly – some of the things very profoundly. 

Last year, President Obama called at a very decisive moment when most of the policymakers in the world were gone for holidays.  His Russian counterpart strictly warned him against provocations on Georgia and that was very high timely and very helpful and I will never forget.  It was very timely reaction and I still believe that basically on every issue that concerns us, this administration is very tough, very straightforward and very strong and very systematic.  Needless to say that you have Secretary Clinton who, together with John McCain, nominated me for Nobel Peace Prize.  I never got that as well as I never got my doctoral degree – (laughter) – but you know, it’s always nice to have some nice intentions or other people to have nice intentions about you. 

Then we have lots of friends in this administration.  Dick Holbrooke came to Tbilisi and basically was acting like anchorman for all major world televisions during – and he was the first one to break news.  He was the first one to predict, first of all, and Ron Asmus did it little bit later, but he was the first.  He came there and he was standing on that balcony tirelessly and explained to the world the way things were and that certainly – I mean, he is almost a genius, as we all know; he’s brilliant. 

He really put things in a very blunt way and he’s had amazing – put it in the context and made it very clear what was really happening and by the way, that really helped us to break the truth to the world because when first the whole thing erupted and I was speaking on CNN and I saw, read this inscription, “South Ossetia:  3,000 people killed by Georgians” and the brackets with small letters, “Interfax,” even I was shocked. 

I knew that there was not even 3,000 people – there was no 3,000 people.  Russia said, evacuate everybody from there not because they liked people but because they didn’t want people to be on the way of their tanks on that narrow road for military necessity.  But even I had some doubts for a moment – maybe, maybe suddenly, I don’t know what we bombed there; maybe some shell got somewhere, maybe –

Not a single woman and child was killed there and they ultimately, Russian prosecutors, that accused of genocide came up with a list of 132 people, all of them, basically, either militia members or suspected militia members and when they have their final conclusion and I haven’t heard for a while accusations of genocide to Georgia, but anyway, the reality is that there were all these people breaking this truth and then of course when we turned it around and after a while, when the thing subsided and of course, PRA agents started to work and of course second thoughts and doubts and of course all kind of manipulated information came into feel the thing and to try to reverse it back but that’s the law of the game.  They have lots of money and they’re good at spending it.  That’s done from time to time.  But ultimately, truth will always prevail.

MR. KEMPE:  Thank you, Mr. President.  Please.  I’ve got a question up in front.

Q:  My name is Angela Tlustenko.  (In Ukrainian.)

PRES. SAAKASHVILI:  (In Ukrainian.)

Q:  It’s a Ukrainian greeting.  A few things:  First of all, I’d like to make a very short comment.  Georgia, with its people, the culture – I travel there frequently for business in the satellite communications industry.  Quite educational, lovely and lots to learn.  Now, I also would like to congratulate you.  UGT is opening its first subsidiary in the United States and as far as from a business perspective, between Georgia and the U.S., some of the relationships that are forming.  But also to follow up on that, what are the plans to perhaps publicize some of the successes, especially with a company such as UGT, involved in telecom, as well as others as well?

PRES. SAAKASHVILI:  Well, thank you for these kind words of – it’s obvious that we need to get word out more.  But it’s also true that the six and even possible 7 percent of growth I’m talking about – and we’ll have six or 7 percent growth this year – this is all investment-driven growth.  Two days ago, Standard and Poor raised our credit ratings back to B-plus.  We were first country after the crisis whose rating was raised back, at least in that wider region. 

As I said, we are number one business destination Eastern and Central Europe.  We are number one fighter worldwide with corruption.  We did some of these ads on CNN to publicize it.  I think next week CNN International is doing also “Eye on Georgia” specifically on Georgia’s economic reforms and economic successes.  So you know, gradually, step by step, it’s getting out. 

But the fact is that the investments – basically, every investor we had, they didn’t leave after the war and they didn’t leave during the crisis and the biggest thing:  some of the institution money went back.  But those that were present physically, they didn’t leave.  Most of them shut down their operations all around the region but they stayed in Georgia.  That says quite something about Georgia.  The fact that more investments come back and more investments, new investments come – it’s not only just resilience of our economy but it’s also people telling each other. 

The best thing is word of the mouth.  They’re spreading it and you don’t need to put it necessarily in the Financial Times or Wall Street Journal – it’s basically people’s own successful experiences that spread the word and then more of them want to come in.  I know lots of those stories:  I know people investing in real estate and getting 300 percent return within six months to one year; people opening restaurants that are getting return of 500 percent without exaggeration.  So when these things spread, the others want to do the same.

MR. KEMPE:  We have about 10, 15 minutes left, I’m told, so let me try to get a couple of questions in.  I’ve got one – the two women here with their hands most highly raised.  (Chuckles.)  Please.  We’ll take both of your questions.

Q:  Thank you.  Susan Allen Nan at George Mason University.  Given your goal, Mr. President, of reintegration by means of engagement through cooperation across the administrative boundary lines, what role do you see for Georgian Abkhaz and Georgian South Ossetian unofficial discussions to occur even while you continue the very difficult Georgian-Russian discussions that you’re pursuing?

PRES. SAAKASHVILI:  Yes, well, we have this engagement possible which certainly was initiated by me personally; it has my strong support.  South Ossetia has no population left so engaging whom there?  I mean, bare rocks that stayed there and empty villages?  I mean, 6,000 people, most of them old people, staying in the villages, barely speaking any Russian.  They simply have no place to go to. 

They have quite some number of Russian soldiers now but I don’t think it may – and we are engaging some of them, by the way.  Some of the officers are fleeing across the lines like they used to flee across the Berlin Wall and I saw one – I think Russian colonel recently articulating very well on Georgian television why he fled and why he asked for political asylum in Georgia.  I mean, I was pretty impressed. 

Abkhazia’s population is 20 percent to what was before.  Half of Abkhazia is totally empty.  But it’s still very important to engage that population and especially when they’ve seen now what the real occupation looks like.  There is this ongoing story of Russians, told to me by an Abkhaz family. 

We had recently hundreds-plus Abkhaz families, ethnic Abkhaz families that fled over the border.  These ones were not expelled; they just fled and unlike the others who had 50,000 Jews expelled from their 4,000 Greeks, 30-something thousand Ukrainians, thousands of Estonians, 200,000 ethnic Georgians:  I don’t distinguish these people across ethnic lines.  These were the – simply those people who expelled them:  They knew the lists.  I still couldn’t find out how could they distinguish the ethnic Russians and Ukrainians in the ’90s but they did. 

But also these Abkhaz fled and one of them told me a story which – except it’s like the talk of the town in half-empty Sukhumi – that Russian general went to hairdresser and hairdresser went out and said, look what a guest came to us.  And he said, who is the guest here?  I am the owner of this whole place – the whole place, like Abkhazia.  You might be a guest here yourself. 

The fact that they were talking about this more or less reflects the feeling of the population there because it’s not about – I mean, Putin certainly didn’t occupy this place to please small ethnic group of Abkhazias.  The way how he likes to please ethnic groups can be very well seen in Northern Caucasus and other places in Russia.  Of course he will find the place for strategic and also aesthetic reasons – best, nicest place in former Soviet Union – so basically, that’s so much important. 

It makes it so much more important to engage every single person:  communities, young people especially.  Free Internet connections.  We don’t have – every Georgia hospital is obliged to treat them for free and every Georgia school is obliged to accept them for free – obliged; government pays for it, obviously – and there are no limitations on moving inside the other parts of Georgia.  There are limitations in opposite directions but whatever the limitation, we should just keep trying. 

MR. KEMPE:  Thank you.  Please.

Q:  Hi.  This is Sherry Weiberger (ph) with AOL News.  You reportedly referred earlier this week to another smuggling incident of uranium that Georgia intercepted.  Can you elaborate on that?  Was it highly enriched uranium?  Was it weapons-grade?  And presuming that it was from Russia, as in the previous couple cases, have you had any contact with Russian authorities about this?  Have they been helpful or cooperative?

MR. KEMPE:  And let me add something to that, that comes off Abkhazia, et cetera, which is what dangers do your border disputes pose in this relation as well, in this respect?

PRES. SAAKASHVILI:  Well, obviously black holes are not helpful and that’s why we are demanding that every government calls a spade a spade and basically say what Russian troops are doing there.  You have these empty or half-empty areas and Russians claim that they’re an independent state but they maintain a high presence of troops there.  What are Russian troops doing there?  Are they picking up mushrooms?  Are they military tourists? 

Or are they occupiers?  If they are occupiers, that’s much bigger responsibility than tourists.  It’s not necessarily a bad word, it’s just a legal status.  You are obliged to take care of the things like – that non-proliferation does happen, or other things.  So it’s important to define it and hopefully, U.S. Congress can do it or some other international organization.  Hopefully a responsible and intelligent government puts it on the paper.

With regard to smuggling, I think we said we submitted – (inaudible) – conference.  I think it’s up to security component investigation to disclose all the details and all I can say that there were instances of highly enriched uranium trafficking.

MR. KEMPE:  What weapons grade?

PRES. SAAKASHVILI:  The weapons-grade.  You can assume from which – the road where they are coming.  One thing I can say:  they were not coming from Australia and they were not coming from some other place, from Nauru, for instance.  And where they were going?  It’s up to investigation. 

We know – the fact is, Georgia foiled multiple attempts.  Hopefully, we foiled all of them but it’s never sure, as you know.  Fact is that once there were multiple attempts, then there was this kind of things going around in that region and we all should be vigilant.  We are very well equipped but black holes:  Nobody can guarantee and control the fruit.

MR. KEMPE:  Yes?  I see a question here.

PRES. SAAKASHVILI:   With regard to cooperation with Russian government, we would love to cooperate with Russian government and they really substantially should accept that.  They don’t think we are the government ourselves so it’s has no –

MR. KEMPE:  And what are you doing to collaborate with the U.S. government on this specific issue?

PRES. SAAKASHVILI:  We have very good cooperation with the U.S. and in terms of equipment, also of arms, security forces and in terms of exchanging information.

Q:  Thank you very much for taking the time, Mr. President.  It’s a pleasure to listen to you and my question is about NATO and how far – I mean, I understand Georgia’s desire to be a member of NATO and to be member of collective security but the NATO membership seemed to be a trigger in the invasion of Russia.  So would you right now say that it was the right decision to approach NATO without being sure that you will be offered membership – a membership action plan?

PRES. SAAKASHVILI:  I think primary reason for Russian invasion was not NATO membership aspiration.  I think it was, as I said, that we created another kind of government, another kind of success story and other kind of behavior.  I think when you go to ideology, it’s not so much based on just NATO issue or closeness to the U.S.  It’s besides this. 

But of course, NATO’s also part of what I’m talking about because this is not separable from each other and when we talk about value-based system, NATO is closest thing to that values.  So from that point of view, I mean, I think of course denying Georgia MAP was sending wrong signal to Putin.  That was a wrong signal.  But even without that, there were ways to do something. 

President Putin – their president Putin – has many since 2006, 2006, not only us but secretary-general of NATO, big military action against Georgia.  We heard Russia’s chief of general staff menacing NATO foreign ministers with, basically, military confrontation in that region, behind the closed doors but it was leaked, by the way, later than 2008, but I’ve read about.  But it wasn’t the big news and it was everybody.  I’ve heard them telling different leaders about some of these conversations.  I heard later that they were warning that they would fight war because they generally dislike us, not only because of NATO.  And I think NATO’s support  remains as high as ever in Georgia. 

MR. KEMPE:  Please.

Q:  Hi.  Thank you, Mr. President.  Alex Gregory (sp), Voice of America Russia News Service.  I understand your vision of future of Georgia.  Can you predict the future of Russia under these circumstances?  (Laughter.)

MR. KEMPE:  This is what I mean about a terse question that gets right to the point.

PRES. SAAKASHVILI:  Well, how much time have you got?  (Laughter.)  Well, I think ultimately Russia has no other way but to modernize and become modern society but that’s a big issue.  I think without that it has no future and if it modernizes, it has great future.  I didn’t mean it when I say it has no future so it really was the same, I mean, without serious modernization turnaround. 

But for modernization to open up your society and democratize and give up some of the powers, especially of security forces, especially of abuse over – daily abuse over citizens, that’s –
  But once it starts to modernize and become a more open society, I think it will stop, finally, to be threat to anybody, to its own citizens and to all its surroundings because in some ways, what happened to Georgia was continuation of what happened in Chechnya, what happened to Yukos and Khodorkovsky, what happened to many other people, what happened to my friend Anna Politkovskaya.  It was one big change.  They are not separable from each other.  And on the other hand, once Russia becomes more democratic, more open, it will be good for the world and primarily good for Russia and that’s what I think and then it will have great future.

MR. KEMPE:  One more question from the audience, please.  Wait for the microphone and also identify yourself.

Q:  My name is Andrew Cardin; I work for the State Department.  (In Georgian.)  (Chuckles.)

PRES. SAAKASHVILI:  I always love how American public servants speak Georgian.  (Laughter.)  And it cannot only be explained by pay raise, but I think it has – there is a certain talent that every American has for Georgian, for some strange reason.  (Laughter.)

Q:  Can I say, as a New Hampshire native, and no disrespect to the gentleman in the back, you have a lovely and interesting accent but it is not from New England.  (Laughter.)  Mr. President, what is your administration doing to make sure that the upcoming elections for the mayoral position in Tbilisi are free and fair?

PRES. SAAKASHVILI:  We have several issues there.  One issue is media and I think now we have something like C-SPAN in Georgia.  When I was a student here, I was a big watcher of C-SPAN.  I loved it but I was one of few Americans or few people present in America to watch C-SPAN.  We have the same story now in Georgia, how every political party has access to the television station and they’re joking it’s the most popular one in Georgia.  But it’s there. 

Obviously, there are other safeguards that – public television’s board is 50-50 split between opposition and the government’s – it’s under BBC, not only monitoring but daily advice so that they can make programs of higher quality and more fair.  I’ve seen the intermediate BBC report; it’s very positive. 

There is the issue with election lists and we – (inaudible) – but election commission basically, which is now a multi-party, basically has received high praise from people in the radical parties or at least have not received big criticism, which always is praise from them.  They basically gave the right to every party to go out and get money and to compile their own lists and they registered lists compiled by the parties. 

That’s the good news and there are some other things like a limitation on abuse of administrative resources although I have to say, there will always be a bunch of experts from abroad, would say, oh, you should stop all this road-making and school-building and bridge-building and health care changes and new hospitals and all kinds of stuff because it’s helping the government; it’s like spending budget for electoral needs. 

I wonder how mayor of the city of Chicago win their elections?  I state clearly to every foreigner, forget it – we will build bridges, we will build roads, we will build schools, we will make sure that people have nicer municipals infrastructure environment, they have nicer health care, they have better schools for their kids and maybe they’ll vote for us because of that but that’s their decision because we take blame for everything that’s not good in Georgia and of course it’s 100 times more than what is good in every people’s mind.  At least we should claim credit for whatever is left. 

I think that would be the only criticism, frankly.  I don’t think anybody can criticize us on media or anybody but I’ve seen some critics already and I can guarantee there will be critics later because we build for the last one year more bridges, more roads, more schools, more hospitals in Georgia than had been built for the last year, basically, than had been built for Georgia for the 30 years before that, including the Soviet period. 

And next year, we’ll build even more or private sector will, of course, build most of it.  But I don’t distinguish those two.  The more private sector does, more I’m happy and I still say “we” because that’s basically what our government is all about:  to have a small government and give the priority to the people’s own initiative.

I was reading these days again Thomas Jefferson and he said what government’s function is that government should take care that citizens don’t harm each other but otherwise create conditions where they have full freedom for their initiative and whatever they can do and that’s exactly our philosophy on government.  We try to do things but on the other hand, more and more space is allocated for citizens.  We decrease taxes; we have really put the act in the pipe that taxes can only be raised from referendum, public spending will be limited. 

And that’s not because of elections but because we want to give more freedom to business.  But again, people will criticize.  The only criticism I can assure we’ll get is when – administrative resources abuse but we are going to use whatever resource we have to improve people’s life, even if they say we are abusing it.  Okay, we are abusing it but we’ll still do it.  But I think it’s legal.  Otherwise, we’ll make sure everything else goes well.

MR. KEMPE:  Before I thank you on behalf of the audience, there’s one sort of issue that’s out there hanging that just with two minute, I wonder if we can nail down:  this issue of calling these areas “occupied.”  Who actually has the responsibility to do that and what commitments – or what do you expect from Congress on this?  Especially what you expect on Congress.

PRES. SAAKASHVILI:  Well, I think U.N., national parliaments – and that’s U.S. Congress – but also primarily the governments.  The governments, when we say we should engage, break away area of South Ossetia, break away from whom?  It’s occupied and it’s empty of population and it has had ethnic cleansing – at least ethnic cleansing has been recognized by many people and by many international bodies.  I know the word “occupation” has been used by Vice President Biden when he was visiting Georgia last year many times.  It’s not something that’s like – it’s not unspeakable or unheard of.  It is being utilized in routine speech but it needs to be formalized.

MR. KEMPE:  Thank you.  Before I thank you, I just want to tip my hat to Damon Wilson and his International Security Program.  He’s vice president of Atlantic Council and you worked very closely with him when he was at the National Security Council, and to the Office of External Relations:  obviously, the vice president there, Anna Eliasson Schamis and Christine Mahler.  This has just been an extraordinary event. 

But most of all, of course, President Saakashvili, it’s so wonderful to have you back in town and great to have you back at the Atlantic Council.  It was an important speech; it was a frank and characteristically colorful exchange with questions and answers.

PRES. SAAKASHVILI:  You know, from time to time I have to show up in this city because more – (inaudible) – because it’s not this town is nasty, as one of our friends described here in audience.  But the usual epithets I get if I don’t show up for a while, in the press or at some think tank books – the “tumultuous,” “hot-headed,” “impulsive,” et cetera, et cetera.  This is the easiest one I can get and you know, when it’s done by – from time to time it’s just useful to show up to show that it’s not as bad as sometimes people think.  (Laughter.)  And I’m not on any medication to calm me down.  I’m just like this.  (Laughter, applause.)

MR. KEMPE:  I think we’ll let you have that last un-tumultuous, cool-headed ending to this session.  Thank you so much.  (Applause.)

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