I welcome you all. We are establishing a very important tradition. This dinner is very important because it is the first major event of its kind in our country. We are only beginning to establish traditions. We have a new coat of arms, a new anthem, which everyone loves, and a new flag, the most beautiful flag in the world. We even have our Grandfather Frost who has already become the country's most popular figure. Today we are hosting the first true charity dinner in the history of our country. We will spend an hour here today and have one meal. Using the money you have paid for it we will feed over 20,000 Georgians over the next two to three months. This is a very important event. I intend to have charity evenings twice a year, on the night of 26 May [Georgia's Independence Day] and on the eve of the New Year.

Let's have a look at what is happening in relation to the thieves [members of the criminal world bestowed with the power to act as figures of authority among criminals]. All sorts of views are being expressed on television. We have said that the institution of thieves will cease to exist in Georgia. Saakashvili will not be able to do what Stalin failed to do, an opposition MP said yesterday. I will be able to deal with them perfectly well. Stalin didn't fail. He didn't want to succeed because the Soviet regime was a criminal regime. Many members of my family, as well as members of your families, were exterminated by that regime. It used criminals to keep the political situation under control. We need to keep the political situation under control in a free society. Hence, we do not require the kind of methods they used. The entire country was a prison with its spectators and its thieves. We are rooting this system out. And we will root it out.

I am surprised, however, that only public servants are voicing their opinion about the problem, while many of those who should be aware of the dangers posed by the crime bosses are silent. You may be aware of the threat but they pose a threat to the entire society. Their ability to exercise power, even at prisons, poses a threat. Almost all of them have been put away. I will sign the bill on organized crime into law tomorrow and they will cease to exist. The thieves will go to prison, while their wealth will go to the state coffers and eventually to the private sector, a genuine private sector.

We lived in a system in which Vato Qipiani, a notorious criminal and murderer, used to ring from the prison and threaten the judge who ordered his arrest. This was just a few months ago. Vato Qipiani appointed his uncle, Jimi Qipiani, as deputy chair of the Supreme Court in 1992. He appointed him because it was 1993, if I am not mistaken, or the beginning of 1994 and Mkhedrioni [paramilitary organization] was in full swing. The uncle of one of the most notorious criminals in Tbilisi ruled the Supreme Court.

That was the kind of society we lived in for all those years. Those people were in power. Courts were ruled by those people. Prison administrations were under the thieves, the ministries were under the thieves, there were thieves among government members. [Former Interior Minister] Koba Narchemashvili escorted Tariel Oniani from the airport whenever he arrived in Tbilisi. We all know this perfectly well. He was guarded by police. Georgia was governed in that way. How could business and country develop?

Tariel Oniani is wanted by the Spanish authorities because we cooperated with international organizations. According to our special services, he is in Moscow, trying to obtain Russian citizenship and protection with the help of [fugitive former Georgian security chief] Igor Giorgadze, who helps these elements to saw unrest in Georgia. They will fail. As regards Russia, may it benefit from them. We can send a few more Onianis there if they like them.

We have come to a fork in the road. What is the role of the state? I do not know whether copies of this calendar have been handed out to you. It tells us what we intend to do next year. It rather says what you intend to do because two thirds of these initiatives come from the private sector. Most of the new construction will have to be done by the private sector. At the bottom here there is a picture of a business centre that will be built on Chavchavadze Avenue. I do not know who is building it, or whether or not they are represented here. I like the project a lot because it involves a most interesting design, and I want Tbilisi to be one of the prettiest cities in the world, known for its beauty.

Is the company represented here? Are you representing it? It is a pleasure. By the way, this is an excellent example. I do not know these people. Yet, these people are building the most beautiful building in Georgia. They never came to the president for protection and support. There was a booth in front of this site. It belonged to the head of the Vake-Saburtalo administration, Avto Davitadze. By the way, it was us who appointed him. That booth made central Tbilisi look ugly. It belonged to an official who stood in the way of this development. Davitadze has been jailed, the booth destroyed and a good, modern building is being built in its place by a free business. The state is not interfering, only facilitating. This is a classic example of what the state's new role in the Georgian society is. We ought to develop at a very high rate. Unless we develop, the majority of Georgians will be pensioners in 2020. This means that we are facing dire risks.

We also are under severe pressure from abroad. You know this well. This is the sort of pressure that has its drawbacks. Russia's decision to double the price of gas was purely political. They are quadrupling the price of gas they supply to Ukraine. We have discussed the issue with Russia at length, and we have come to a conclusion that the decision wasn't based on economic considerations. Our citrus fruit have been banned from the Russian market around Christmas time when demand always reaches peak levels.

However, this also is the sort of pressure that turned the Baltic countries into truly modern states. They too were under similar pressure. Some 90 per cent of Estonia's trade was with Russia, compared to just 5 per cent now. Estonia has the highest rate of development in the world. As the title of the Communists' favourite novel goes, that is how the steel was tempered. If we want to become a modern economy we ought to reorient ourselves in these conditions, take command of this situation, take our produce to other markets and use other opportunities, just as some of you have managed to do. [Passage omitted]

We should increase the growth rates and speed up our development. Serious tests lie ahead. We should get used to [the challenges]. Cement plants should switch to coal, Tqibuli coal by the way, when the price of gas increases. It will help activate the Tqibuli plant and get people jobs. If we have problems exporting tangerine, we should process it and export concentrate instead. That way we will be exporting better quality produce, making more money. That is to say, they [the Russians] are pushing us towards a better economic model.

Naturally, we must try to have [good] relations with everyone. We must not create conflict situations under any circumstances because Georgia's territorial integrity is very important. We have done a miracle by having been assigned a B+ rating. We couldn't even dream about it a year ago. For those unaware, it is a very high investment rating. It means that much more money will be invested in Georgia. International agencies are encouraging investing in Georgia. Consequently, more jobs will be created. We must unify our country. However, steps taken towards its unification must not harm the economy. This is our main principle. We can't afford to create disasters which will cancel current economic growth.

Therefore, we are exploring every avenue. The United States of America, for the first time, has become directly involved in conflict settlement. There are very few places in the world where America has done this. These places include Israel, the Balkans and now they are directly involved in [the settlement of] conflicts in Georgia. Have you noticed that the attitude of Russia and the groups operating inside Georgia changed immediately? We should work and move in this direction, and, of course, we should unite the country by peaceful means, while keeping it strong, not week. It is you who are creating this strength.

Let's look at the example of glassware, the bottles on your tables. We produce less than 10 per cent of the glassware Georgia needs. Is it right? The glass plant has changed hands numerous times in recent years through courts and corruption. How could anyone produce [glassware]? No-one stands in your way now. No-one is taking anything away from you. All you have to do is start producing. Why should we be importing glassware? Are we short of raw material? Are we short of workers? Don't we have expertise in Georgia? Of course we should be doing this.

In Tbilisi you can buy ajika [herbal extract popular in Georgia] produced by Baltimore. I am not joking. American-made Baltimore ajika is sold at supermarkets in Tbilisi, not just at Goodwill but at many other places too, as well as elsewhere in Georgia. While tqemali [traditional Georgian dressing] made in Moscow is sold in European countries. It isn't even made by Georgians living there but Russians. Tqemali is also made in Brussels. This isn't because customs duties are such that producing in Georgia makes no sense. That's nonsense because PSP and others, like Aversi, have managed to start the production of medication with no duty being levied on foreign-made drugs.

I don't think that even the lowest duties can make Bulgarian cucumber cheaper than Georgian cucumber, provided that we introduce the right taxes and import duties. There are drawbacks as well as advantages here and we should protect our interests at the World Trade Organization. [Passage as heard] This is not about the difference in duties but about fair conditions. There are many other, similar examples. We also are a country of tourism and service. A free trade regime is good for us. The more companies invest here, the more they build, the more they do, with the help of Georgian subcontractors of course, the better. Therefore, we should continue this dialogue with the government to build a right and fair system.

The [new] tax code will produce its first results next year. We adopted a new tax code. It will start producing results next year. We should also think about reducing taxes even further because a further reduction will generate a higher economic activity. Next year we should announce what the taxes will be in 2007 so that people can invest under a steady progress. We should develop our economy step by step.

Naturally, we will continue to have problems. On the one hand, there are examples of successful cooperation with Russia. The installation of gas turbines is an excellent example of it. The Tbilisi subway car repair plant is another excellent example of it. We are working there together with people from Moscow. On the other hand, there are people who think that it is 1921. They think that they should teach us a lesson by making gas more expensive, something they have been threatening us with for years. They are telling us that we will no longer be able to sell tangerine there, that gas will be more expensive, all which should make our life miserable. There are people there who honestly believe in this. They have already done it all. Gas is becoming more expensive, while exporting tangerine has become difficult.

It is not 1921, however, and Giorgadze is not Sergo Orjonikidze [Bolshevik leader in 1921] either. [Orjonikidze] was a much more powerful bandit. I am not [Georgian President] Noe Zhordania, while that country does not have Lenin. The great Lenin was laid in the mausoleum a long time ago. We are more experienced and smarter than [Georgian] Social Democrats.

I am sure that if we are united, if we continue dialogue and civilized relations with Russia and if we do not engage in confrontation under any circumstances we will manage to build a model which will transform Georgia into a modern, European, developed country which will join NATO in 2008. This is our task. No-one will be able to stop our process through tangerine and gas blockades because it is an irreversible process leading us towards our independence and development. We need unity, your cooperation and partnership.

Finally, I would like to say that we all ought to be united in our support of the poorest sections of society. This is what we are doing today. I would like to name the companies who can celebrate doing this today. When you sit at the table to have your New Year's eve dinner you will know that you have also provided for food, for that night and for the next few months, for far less privileged members of our society. [Passage omitted]

This translation is published with permission from BBC Monitoring, Reading UK

Communications Office
of the President of Georgia