Research

Georgia’s Foreign Debt Policies: PRC’s bank among Georgia’s top creditors

Civic IDEA started observing Georgia’s foreign debt policy after the Georgian Dream officially refused financial assistance from the European Union. It turns out that Georgia is still actively borrowing from various financial institutions or directly from other countries, and the two main creditors of the country are the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). On September 21, the Asian Development Bank (ADB), which is highly affected by China, officially announced that it would provide the Georgian government with a USD 100 million loan, aiming to strengthen Georgia’s electricity sector. On September 24, ADB already approved a USD 15 million loan to assist Georgia in effectively implementing the vaccination programs. Three weeks before the debt approval from the ADB, the Georgian government publicly refrained from taking 75 million Euros worth of aid from the European Union. According to Prime Minister Irakli Gharibashvili’s official statement, Georgia has begun the reduction of its foreign debt, and therefore, no additional assistance from the EU was needed. 

Based on the information we have, the question naturally arises: Why does the Georgian government take debt from the Asian Development Bank and the Asian Infrastructure Investment Bank when their services are twice as expensive as the EU’s? We will provide our readers with a consistent history of when, why and under what conditions the Government of Georgia decided to cooperate with the bank, which was established only recently, in 2016.

Georgia’s Foreign Debt Policies: PRC’s bank among Georgia’s top creditors Read More »

PRC’S TWOFOLD GAME IN THE RUSSIAN-UKRAINIAN WAR

After our Central Asia publication “Can Russia find more Friends and supports in War against Ukraine?
Position and reactions of Central Asian Countries” we provide the interested audience with the compilation of tactical and strategic narratives coming from Beijing over the Russia-Ukraine war.

PRC’S TWOFOLD GAME IN THE RUSSIAN-UKRAINIAN WAR Read More »

CAN RUSSIA FIND MORE FRIENDS AND SUPPORTS IN WAR AGAINST UKRAINE? POSITION AND REACTIONS OF CENTRAL ASIAN COUNTRIES

Russia’s invasion of Ukraine found Central Asian states in surprise. Undoubtedly their attention was occupied by events in Kazakhstan beginning of 2022 and developments following widespread unrest when Russian military aggression against Ukraine shook the world.

As for the facts, all Central Asian states and their economies are intertwined with Russia. Some are members of the Eurasian Economic Union as well. The cooperation and interdependency are so high that the threat of Western sanctions over the Kremlin having an effect on them is very tangible and high.

Moreover, three countries of Central Asia, Kazakhstan, Kyrgyzstan, and Tajikistan, along with Armenia and Belarus, are members of the Russian-led security/military alliance – the CSTO. Therefore, Moscow’s expectation of demonstrated support, including military, was rather realistic and projected.

Despite relatively clear links and bondages to Moscow, the reactions and political statements of national governments from Central Asia differed from complete silence to support or concerns over the developments in Ukraine. President Putin’s recognition of breakaway regions and dismissal of Ukrainian statehood should’ve rung a bell in some Central Asian states, particularly those with significant Russian minorities.

CAN RUSSIA FIND MORE FRIENDS AND SUPPORTS IN WAR AGAINST UKRAINE? POSITION AND REACTIONS OF CENTRAL ASIAN COUNTRIES Read More »

Russian and Chinese Influences in Georgia

With the support of the European Values Center for Security Policy, USAID and MFA of the Czech Republic, Civic IDEA, with the local partners (GRASS, DFR Lab, MDF), contributed to the second volume of the joint research “Russian and Chinese Influences in Georgia”.

This Report is the second edition of the study launched in 2020 – Mapping Research: Comparing foreign influence in Georgia. This year’s issue – Russian and Chinese influences in Georgia – 2021 update monitors the development of foreign country influences in Georgia in 2021, especially in state institutions, NGOs, media, political parties, or the Church. This paper aims to further analyze a broad spectrum of problems already introduced in the previous report, such as campaigns and activities implemented and sponsored by third countries, ranging from political infiltration to corrosive capital flows with political goals.

Report ?

Russian and Chinese Influences in Georgia Read More »

Collection of Articles Analysis of the Growing Chinese Influence in South Caucasus and Central Asia

Dear readers

It is a great honor for us to share with you the first part of the publication initiated by “Civic IDEA” and prepared together with partners, which will tell you the story of the growing influence of foreign countries in the South Caucasus and Central Asia. The second part of this edition is planned for 2022.

This publication is a collection of 8 analytical articles, which mainly introduce the dynamics of various projects, loans, and debts initiated by the People’s Republic of China (PRC) in the South Caucasian and Central Asian countries, the growth and expansion of the role of the Chinese Communist Party (CCP), as well as the existing threats and most notable events. While much is being written today about the operations of the People’s Republic of China and the Chinese Communist Party by various research institutes and organizations worldwide, very little is said about region of our interest and even less about the dynamics and patterns that are unequivocally evident in these states.

“Civic IDEA” has been studying Chinese influence operations in our region for more than three years now. We are interested in the policies of the Chinese state, its universities, and other educational centers, companies, and financial institutions, etc. Accordingly, in our previous publications, you will find materials about the activities of the Confucius Institutes, student and scientific exchange programs, the so-called “debt trap” practices, and security risks for different countries, etc.

In this publication, you will get more detailed information and knowledge about seven countries: Georgia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan. Unfortunately, despite our numerous attempts, we could not find a suitable partner in Turkmenistan who would agree to participate in the joint study.

The work about Georgia was written by Ani Kintsurashvili, a senior researcher at the Civic IDEA. The paper summarizes the Civic IDEA’s China Watch reports and measures the growing Chinese influence in critical infrastructure and defense sectors of the country by reviewing the misconduct related to the notorious and blacklisted Chinese companies (CEFC, Sinohydro, Motor Sich, Nuctech, CRBC) actively operating in Georgia within the BRI. Moreover, the research stresses that these Chinese companies usually mediate the massive corruption schemes orchestrated by the Chinese state officials and local business and political elites. This occasion explains the ignorance of the Georgian government in failing to investigate the company’s reputation with which they are signing the
MoUs and handing the projects critical for Georgia’s natural security.

Artak Kyurumyan, an independent expert and a chairman of the board of Open Society Foundation, discusses Sino-Armenian political relations and the performance of Armenian investments in the People’s Republic of China. The paper highpoints the diversity of opinions in the experts’ community, as some believe that Armenia has working relations with China, while others think that Armenian-Chinese relations are in stagnation. Armenian authorities don’t have a vision or strategy on how to build ties with China. Russia had and has a significant impact on Armenian foreign policy and holds leverages to influence them. For several years different Armenian governments were optimistic about the Armenian-Chinese joint venture Shanxi-Nairit. Shanxi Nairit does not utilize its full capacity and could not cover its costs and accumulated huge losses. After 2018 the representatives of the Revolutionary government were also represented in the board of Shanxi Nairit and were assuring that they are doing important job. However, large parts of the Armenian community think that government officials use such opportunities to travel and don’t create any substantial
value added.

Gubad Ibadoghlu, a senior policy analyst of the Economic Research Center, covers China’s mounting interests and influence in Azerbaijan, emphasizing the boosted trade between China and Azerbaijan and between China and Europe through the Baku–Tbilisi–Kars railway, which forms an integral part of the Belt and Road construction and serves as a critical bridge that connects the eastern and western ends of Eurasia. Moreover, Azerbaijan is devoted to building a new corridor for cross-border transportation designed to cut through the territory of Armenia to join up the Azerbaijan mainland and the Autonomous Republic of Nakhchivan. For China, this corridor will serve as the second South Caucasus route leading to Europe via Armenia, Nakhchivan, and Turkey. Azerbaijan’s economic diversification policy and China’s willingness to transfer industrial capacity facilitate more extensive economic cooperation between the two countries. Besides, China has failed to close several critical financial agreements at the governmental level to boost economic ties with Azerbaijan. There are currently no agreements on currency swaps, industrial transfer, or free trade between the two countries.

Research on informing the people of Kazakhstan about the activities of Chinese companies in the Kazakhstani extractive sector belongs to Danil Bekturganov, a political scientist and a Director of NGO “Civil Expertise” in Kazakhstan, who analyzes the coverage of activities of Chinese companies in the extractive sector of Kazakhstan by Kazakh media. In addition to analyzing the awareness of citizens, investigated the availability of statements and other documents issued by the government of Kazakhstan related to Chinese investments and BRI. The study examines specific cases related to the impact of the activities of Chinese extractive companies on local communities, and social, economic and environmental consequences of these activities. Mr. Bekturganov argues that Kazakhstan is one of the key places in the implementation of the BRI. Large Chinese extractive and construction companies operate on the territory of the country, railway and road routes, including the “Western Europe – Western China” corridor, pass through Kazakhstan’s territory. One of the important parts of the BRI implementation is the informing of Kazakhstani citizens about the initiative and about the opportunities, provided to businesses and local communities. The absence or lack of information gives rise to a large number of myths and phobias, and does not contribute to increasing public confidence in the presence of Chinese business in Kazakhstan. Another important aspect is the environmental impact of Chinese projects, which should be objectively and publicly assessed.

Bakytbek Satybekov, an expert and a co-chairperson of the National Open Government Forum in the Kyrgyz Republic explains China’s “debt trap” diplomacy in Kyrgyzstan by highlighting the obvious signs of the presence of such a policy in the country. Author starts with the description of a term China’s “debt trap” with examples of experience of other countries. After that mr, Satybekov describes history of Kyrgyz borrowings from China with details, such as purposes of loans, financial and other conditions and later emphasizes evolution of Kyrgyz debt management strategy with emphasis on limitation of share on a creditor in debt portfolio. At last, he provides the audience with the analysis of impact (outcome) the Chinese “debt trap” could bring to Kyrgyzstan.

Umedjon Majidi, political analyst and a postgraduate of the University of Sussex covers the topic of Corrosive inflows to the Republic of Tajikistan and how Chinese investments undermine good governance and transparency in Central Asian region. Corrosive capital coined by Center for International Private Enterprise based in Washington DC is defined the term “corrosive capital” to more clearly label financing that lacks transparency, accountability, and market orientation flowing from authoritarian regimes into new and transitioning democracies. It applies directly to big authoritarian countries which play a key role in Central Asia, they are Russia, China that lack true forms of transparency, accountability, good governance in their capital granting schemes. This paper based on wide variety of publications in various languages analyzes specifically how People’s Republic of China within its strategy of Belt and Road Initiative in Tajikistan brings bad governance schemes to Tajikistan local and national governance institutions in contrast of western countries when the capital and funds come usually with conditions to reform a local governance attached.

Farkhod Tolipov, a director of the non-governmental Research Institution “Bilim Karvoni” (“Caravan of Knowledge”) in Tashkent, finalizes the collection of articles with his input “China’s Power Projection in Central Asia and its Geopolitical Implications: The Case of Uzbekistan”. The state’s power projection capability means its ability to exert influence on other states by utilizing its real power. This utilization of power can take different forms from diplomatic communications and political pressure to open demonstration and application, separately or in combination, of elements of soft and hard power. So this paper is constructed around the main question as to what we know about China’s power projection undertakings in the Central Asian region with some more focus on Uzbekistan. Public and experts’ opinions in Central Asian countries are quite ambiguous about Chinese influence in the region; Sino-phobia and Sinophilia coexist among people, officials, and experts. In particular, Beijing’s repressive attitude towards Uighurs in Xingjian province also affected the perception of China by Central Asians. China as a great power cannot, but pursues great-power politics, which per se can bring with it opportunities and challenges for neighboring areas including the Central Asian region. Moreover, all great powers historically have always competed with each other and this competition, in turn, always caused significant geopolitical implications.

Collection of Articles Analysis of the Growing Chinese Influence in South Caucasus and Central Asia Read More »

Civic IDEA’s research featured in Carnegie Endowment for International Peace publication

Civic IDEA’s work has been featured in the 2021 publication of Carnegie Endowment for International Peace, “China’s Influence in Southeastern, Central, and Eastern Europe Vulnerabilities and Resilience in Four Countries”. Part of the research concerns the Chinese influence and the activities of the notorious Chinese companies in Georgia, as well as, the PRC academic initiatives and its Covid-19 diplomacy in the country. Civic IDEA’s research is attributed to well-demonstrated uncertainties associated with the Georgia-China economic cooperation. 
Below we provide an extract from the Carnegie research mentioning Civic IDEA:
“Georgian civil society organizations and experts—such as former defense minister Tinatin Khidasheli, now of Civic IDEA and Transparency International Georgia—enumerate multiple concerns about Sinohydro’s reputation, lack of transparency, and close relations with some government officials. The company has been blacklisted by the African Development Bank. The Georgian government’s transparency portal offered no record of how Sinohydro’s qualifications were assessed.

The China Railway 23rd Bureau Group is also controversial. The company has powerful backers in China. Initially the railway troops of the PLA, it became part of China’s Ministry of Railways. In 1989, the China Railway Construction Corporation was established as a stateowned enterprise. In June 2019, the World Bank announced “the nine-month debarment of China Railway Construction Corporation Ltd. (CRCC), a Chinese, state-owned construction and engineering company, and its wholly-owned subsidiaries, China Railway 23rd Bureau Group Co., Ltd. (CR23) and China Railway Construction Corporation (International) Limited (CRCC International), in connection with misconduct under the East-West Highway Corridor Improvement Project in Georgia.”This did not prevent the company from winning the contract for the new north-south bypass road shortly afterward.”

Check the full report below ?

Civic IDEA’s research featured in Carnegie Endowment for International Peace publication Read More »

Pandora’s Box Opened Bidzina Ivanishvili’s Connections with the Chinese Companies Report N8

In 2018-2020, “Civic IDEA” intensively published research concerning the shady links of Georgian political/business elite representatives with the notorious Chinese companies. Among them was a study named “Chkhartishvili Leads in China’s ”Closed Business Championship'”. According to our research and analysis of the materials found, the interests of CEFC China Energy, a company that has been exposed in many criminal cases in different countries of the world, were pursued by former Prime Minister Bidzina Ivanishvili and Vice Prime Minister of Eduard Shevardnadze’s government and Minister of Economy, Ivane Chkhartishvili.

The findings presented in the reports published by us over the years are fully corroborated by the Pandora documents published by the International Consortium of Investigative Journalists in late September 2021, portraying the links between the former Prime Minister of Georgia and Brightstone Finance Limited registered in the Virgin Islands.

This report is a continuation of the studies published by us in 2018-2020. We will tell you how the judicial and the executive branches of government handed over one of the most important strategic assets of Georgia – the Poti Free Industrial Zone, to the bankrupt Chinese company CEFC China Energy. The report will also evaluate how Poti FIZ was brought under the total control of Bidzina Ivanishvili and Ivane Chkhartishvili after the bankruptcy of the Chinese CEFC. The court decision, which can not withstand any criticism, serves the sole purpose of retaining complete control of the former prime minister on Poti FIZ and preventing the return of property to the state.

Download report from here ?

https://www.facebook.com/tvpirveli/videos/209319291288503

https://www.facebook.com/tvpirveli/videos/2362796507187165

https://www.facebook.com/TvMtavari/videos/200362635500407

Pandora’s Box Opened Bidzina Ivanishvili’s Connections with the Chinese Companies Report N8 Read More »

China Road and Bridge Corporation in Georgia Report N7

Civic IDEA’s China Watch Report N7 deals with misconduct related to the activities of the Chinese company “China Road and Bridge Corporation” (CRBC) in Georgia, tenders won illegally, violations related to labor rights, and shady practices in various countries worldwide. The company is collaborating with the Georgian Roads Department on two major infrastructure projects. Like other Chinese companies in Georgia, it was blacklisted by the World Bank in 2009 for fraudulent conduct in the tender of the first phase of the Philippine National Road Improvement and Management Program (NRIMP 1). CRBC was banned from participating in all World Bank-funded infrastructure projects for eight years. The mismanagement of the Chinese company in Georgia is mainly related to the violation of labor safety rules. In particular, China Road and Bridge Corporation did not adhere to minimum sanitary norms in the workplace, forced employees to work overtime and, most importantly, did not create labor safety conditions in the area, which endangered the health of local workers. The local Labor Inspectorate gave only a few recommendations to China Road and Bridge Corporation, and in fact, no sanctions were imposed on the company. Controversial activities of China Road and Bridge Corporation are also observed in Kenya, Uganda, Kyrgyzstan, Croatia and Ukraine. However, despite the shortcomings in other countries, the Georgian government continues to actively cooperate with the representatives of the Chinese company and sign new contracts with them.

More information about the activities of China Road and Bridge Corporation can be found at the following link ?

Annual-Report-ENG-1

China Road and Bridge Corporation in Georgia Report N7 Read More »

Civic IDEA’s 6th China Watch Report “Nuctech Company Ltd. in Georgia“

Civic IDEA has published the 6th China Watch report “Nuctech Company Ltd. in Georgia”, which evaluates the controversies over the Chinese biggest security scanner distributor “Nuctech Company Ltd”. The latter covers the company’s cooperation with the Georgian government, fraudulent activities related to Georgian and foreign tender procedures, malfunctions of its security equipment, and corruption scandals worldwide. More specifically, the report discusses the cases of Georgia, Namibia, Taiwan, and Europe, reveals Nuctech’s military ties with the Russian Federation, and reviews the US adversarial policies towards it.

Chinese company Nuctech company limited first appeared on the Georgian market in March 2008. At that time, The Minister of Finance of Georgia, Nika Gilauri, signed an agreement with Nuctech Company Limited on behalf of the Government of Georgia. The contract was on the implementation of the project for the supply of inspection complexes to the Government of Georgia. According to the 2014 report of the State Audit Office, in 2012, within the framework of simplified procurements, two contracts were signed with Nuctech Company Limited for the purchase of stationary X-ray scanners (NUCTECH MB1215DE). The X-ray inspection system was to be delivered at the Kazbegi customs checkpoint. The total value of the procurement was 4,566,775 USD. Within the tenders announced by the Revenue Service in 2011-2013, participating suppliers filed several claims against the National Procurement Agency over the fact that the Revenue Service adapted required technical specification to the Nuctech Company Limited catalogs; also, they were so complicated that many suppliers were barred from participating. In 2018-2020, the Revenue Service purchased a total of 5,870,722.48 USD goods from Nuctech Company Limited through simplified procurement. The objects of procurements were the preventive and corrective maintenance service of the X-ray scanners owned by the Revenue Service. One of the countries that properly resist Nuctech and restricts its access to critical domestic industries is the United States. The US Transport Security Administration (TSA) banned Nuctech installations in 2014 and provided a detailed review of the company’s misconduct leaning on its international experiences in the classified document. Furthermore, the US government is calling on its European allies to restrict Nuctech’s access to public tenders and disregard the baggage screening equipment it provides. Moreover, the US government is calling on its European allies to restrict Nuctech’s access to public tenders and abandon its baggage screening equipment. However, today European states respond individually to the allegations against Nuctech and its activities. For example, while Nuctech has successfully won tenders in Estonia, Finland, and Croatia, the Lithuanian government has officially banned equipment manufactured by this company. We are often asked about the specific damage Nuctech can bring to the country. For instance, in Ukraine, Nuctech not only supplied incomplete and defective equipment to the Ukrainian customs checkpoints but even won the case against the State Security Bureau and the Ministry of Finance in court. Namibia also has a painful experience, as Beijing removed it from China’s internet search engines and imposed all kinds of media censorship on it all over the country just because the latter had launched an investigation regarding the Nuctech-related corruption scandal. The Chinese authorities removed Namibia because Hu Haifeng, the son of the Chinese Communist Party leader Hu Jintao, was involved in the corruption scandal there. Despite the global technological development, the Chinese Communist Party still effectively manages to ban undesirable internet searches from its population. It is noteworthy that in addition to expanding economic influence and participating in corrupt and fraudulent activities, Nuctech and its owner, Tsinghua University, also seek to spread influence through the academic sphere. The company works closely with St. Petersburg State University to develop high-energy X-ray machines, anti-terrorist equipment, and other technologies that have the potential of being used for military purposes.

Download link ?

Report-6

Civic IDEA’s 6th China Watch Report “Nuctech Company Ltd. in Georgia“ Read More »

Echo of the Rocket Fraud in Georgia: Defense Memorandum with “Motor Sich”

On January 23, 2021, based on the information spread by the Ministry of Defense of Georgia , it became known that through the active involvement of the State Defense Ministry, the above-mentioned Ukrainian company signed a trilateral memorandum with the Georgian State Military Scientific-Technical Center DELTA and Tbilisi Aircraft Manufacturing (TAM), also known as „JSC Tbilaviamsheni“.

In the official statement, we read that the cooperation and, consequently, the memorandum „aims to develop the military industry and modernize aircraft belonging to the defense forces.” The same disclosure announces that „the company is already repairing helicopter engines and gears owned by the defense forces.” However, previously, nothing was publicly known about the existing cooperation between the “JSC Tbilaviamsheni” and the Ukrainian company, disguised to strengthen Georgia’s defense capabilities. Information about the current contractual relations was later confirmed by the Ministry of Defense in a statement issued on January 31, 2021: „”The contract between the company “Motor Sich” and JSC “Tbilaviamsheni”, concerning the engines and the reduction gears of the Mi-24 helicopter gunships, has already been signed. The cooperation envisages modernization and repair of the engines of the Mi-24 combat helicopters.”

It is noteworthy to find out exactly when a cooperation agreement was signed between JSC “Tbilaviamsheni” and “Motor Sich”, as, since 2017, the company has been under constant investigation by the security services and represents an object of attention of our strategic partner, the United States. Unfortunately, such information is not publicly sought, suggesting that the Georgian side was well aware of its relationship with a controversial company with a damaged reputation and under investigation in various countries. Consequently, the state authorities did not disclose information about the cooperation. In June 2020, while presenting the Minister’s report to the Parliament, Irakli Gharibashvili, then Minister of Defense of Georgia, mentioned aviation development, among other issues. During the speech, he focused on the joint events planned with the Georgian State Military Scientific-Technical Center DELTA and Tbilisi Aircraft Manufacturing (TAM) “Tbilaviamsheni”. “As a result of the joint cooperation of JSC “Tbilaviamsheni” and “DELTA”, the preparatory works for the restoration-rehabilitation-modernization of the existing aircraft are underway. In particular, we will start the rehabilitation and upgrade process of Su-25 and Mi-24 military helicopters in Delta hangars very soon.”– commented Irakli Gharibashvili. The Ministry also referred to the Mi-24 rehabilitation agreement in its statement of January 31, 2021, as an ongoing contractual obligation between “Motor Sich” and JSC “Tbilaviamsheni”. We can assume that in June 2020, this collaboration was already established. Moreover, we should not forget that in 2019, the world media outlets already aired the warning to avoid the danger of being caught in China’s “debt trap” policy, brought to Kyiv by the US President’s National Security Adviser John Bolton. Bolton’s messages referred to “Motor Sich” and its new Chinese owners. In 2020, the media reported the ongoing investigation concerning the “potential financing of terrorism” by the company “Motor Sich”. The statements of the world media outlets and the testimonies of various countries, are overwhelmed with the claims, accusations, and suspicions against the company mentioned above. Special mention should be made that the ambiguities and problems surrounding “Motor Sich” became known as early as in 2014, when, despite the Russian occupation of Crimea and the ongoing military confrontation in eastern Ukraine, “Motor Sich” together with other Ukrainian companies, continued to cooperate with the Russian Armed Forces providing them with military needs. This fact was reported by the Washington Post in 2014.

REPORT:

5-report

Echo of the Rocket Fraud in Georgia: Defense Memorandum with “Motor Sich” Read More »

Scroll to Top