GEORGIAN MINISTER DOES NOT RULE OUT ECONOMIC CRISIS IN GEORGIA STEMMING FROM SANCTIONS AGAINST ADZHARIA

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TBILISI, March 17, 2004. (RIA Novosti) -- Drawn-out sanctions against Adzharia may trigger a grave economic crisis in the country, Georgian Economic Minister Irakli Rekhviashvili said in the city of Poti in West Georgia, where the Georgian government held its session.

"Such sanctions harm not only the budget of Adzharia but also threaten entire Georgia with a crisis," he said.

The tendency of changing the cargo transportation routes in favour of adjacent states has surfaced, he said.

"If the sanctions go on for over a month, this will be a serious blow for unstable Georgian economy. The closure of the Batumi port for international ships, from where they carry Kazakh oil to the world market, and of the border point Sarpi (on the Georgian-Turkish border) for international shipments is fraught with multimillion losses and the undermining of our partners' trust", Mr. Rekhviashvili said.

The closure of the Sarpi point makes Georgia loose $200,000 daily, a source in the Georgian Economic Ministry told RIA Novosti.

Moreover, Georgia's participation as the key element of the Trans-Eurasian transport route TRACECA is being jeopardised.

"In recent days cargo carriers have changed the routes in favour of Iran. If things go on like that, Georgia may lose a serious income and its image of a transit state passing humanitarian cargoes for Afghanistan," the ministerial source said.

In the meantime, food prices have gone up and cash deficiency is being felt in Adzharia, the Georgian media report from Adzharia.

"We are not ready for the crisis in Adzharia and did not get ready for sanctions. We were preparing for a dialogue with the leadership of Adzharia but have been drawn into a grave economic crisis against our will," Georgian Prime Minister Zurab Zhvania told the cabinet session in Poti.

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