Powerless in Georgia

By Almond, Mark | New Statesman (1996), August 25, 2003 | Go to article overview
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Powerless in Georgia


Almond, Mark, New Statesman (1996)


"Total blackout in Georgia" was the news agency headline earlier this month. But this wasn't Jimmy Carter's Georgia in the Deep South. It was Eduard Shevardnadze's home state south of the Caucasus.

Power cuts in the Republic of Georgia don't usually raise eyebrows there or anywhere else. For more than a decade, the country has been de-industrialising and learning to live with firewood or diesel generators brought in from Turkey. But Georgia's lack of electricity is down to much the same reasons as New York's, even though its problems are less publicised than the latter's power cuts.

The promotion of energy privatisation around the globe has been a key goal of the past three US administrations. For post-communist states, there is a sharp correlation between getting good marks in the State Department's assessment of your human rights record and selling utilities to US companies. Georgia, for instance, sold its Soviet-era Telasi generating company to AES Corporation, the energy giant based round the corner from the Pentagon in Arlington, Virginia. AES also bought that mastodon of our own grid, Drax in North Yorkshire.

AES has now gone bust because it has found that the economic policies which go with privatisation hugely reduce demand for electricity. In Britain, energy-hungry metal-bashing plants have virtually disappeared without air-conditioning taking up the slack, as it does on the other side of the Atlantic. In Georgia, nearly all industry has collapsed and the mass unemployment shafted AES's projected profits.

Yet the company cut off 70 per cent of the population from the grid from the start. Sadly, even the cruellest approach to nonpayment couldn't find enough Georgians able to pay up, so AES's investment went down the tubes.

Its investments in Georgia or Drax had one thing in common--they were not investments in the real meaning of the word (the purchase of new technology), just one-off payments to get control of a supposed Milchkuh.

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