 Ladies and gentlemen, please take your seats. The program is about to begin. Good morning. Good morning and welcome. My name is Nancy Lindborg. I'm the president of the US Institute of Peace. And I'm delighted to welcome everybody here for a very special celebration. Today we are marking the centennial anniversary of the Republic of Georgia's first republic in 1918. So my warm congratulations to our Georgian guests. And I also understand congratulations are in order because the Georgian Embassy won the soccer championship last night. So double celebration. This morning's conference, which is co-sponsored with our friends at the Embassy of Georgia and the Heritage Foundation, will celebrate the strategic partnership and the friendship between our two countries. And it will explore both the security and economic achievements, the challenges, and the opportunities facing our bilateral partnership. And as we mark 10 years since the Russian invasion of Georgia in 2008, it's also my hope that we will be able to identify opportunities for a lasting and just peace in the Caucasus and beyond. It is my great pleasure to welcome back to the United States and to US Institute of Peace His Excellency, Yorgi Kirviri-Kashvili, the Prime Minister of Georgia. I'm also delighted to welcome many distinguished members of the Georgian government. We have His Excellency, Mikhail Yanalidza, Vice Prime Minister of Foreign Affairs of Georgia. His Excellency, Dmitri Kumshishvili, the first Vice Prime Minister, Minister of Economy, and Sustainable Development of Georgia. His Excellency, Livanizoria, the Minister of Defense of Georgia, and His Excellency, David Bakradza, the Ambassador of Georgia to the United States. Mr. Prime Minister and Excellencies, I want to take this moment to congratulate you on your national day. And I want to thank you for being a partner with USIP and the Heritage Foundation for this conference. We look forward to the conversation. And we are very interested to have the kind of conversation that helps us learn about opportunities to strengthen the partnership and to build a just peace in the region. And it is now my great honor to introduce Prime Minister, Kirviri-Kashvili. He has led Georgia since December 2015. He was previously Georgia's Vice Prime Minister, and he's also served as Minister of Economy and Sustainable Development and as the Foreign Minister. So this morning, as we celebrate the Georgia-United States Strategic Partnership, we also want to recognize Georgia's contribution to regional security, to the international forces in Afghanistan, and to the UN peacekeeping operations in the Central Africa Republic and Mali. Mr. Prime Minister, thank you for your leadership, your partnership, and your friendship with the United States. Our warm congratulations on your national day, and I welcome you to the stage to share your thoughts with us. Excellencies, distinguished guests, ladies and gentlemen, I am honored to have this opportunity to open the second annual US-Georgia Strategic Partnership Conference. And my thanks go to Nancy Lindbergh, US Institute of Peace, and to our many friends at Heritage Foundation for hosting this wonderful event. Last year's conference was the first of its kind, and it was a great success. A good idea is hard to suppress, and I note with considerable satisfaction that this year's meeting is called, auspiciously, the second annual conference. We stand, as they say, at the doorway to history. History is never far from Georgia's thinking. We have survived so much of it to arrive here today, and of course, the Georgia people are the heroes of this story. 100 years ago this month, Georgia took a leap into the future. We gave birth to the Democratic Republic of Georgia as turmoil, revolution, and civil war swirled around our small country, powered by forces much larger than ourselves. Our predecessors may or may not have realized at that existing moment that Georgia's independence, our freedom, would be delayed still further, for nearly two-thirds of a century more. The Red Army swept into Georgia just three years after we reclaimed our statehood, and at least temporarily swept our independence away. But we have been good and persistent stewards of our dream of independence and freedom. Such instincts are within our national DNA. One may speak of formal state independence arriving again in 1991, but Georgia's experience of statehood is much deeper, many centuries deeper. As a crossroads of civilizations, we absorbed much from and contributed much to all those around and while remaining uniquely Georgian and Western. A century ago, Georgia set its course inseparably with the West. Georgia is a not-between land. Our culture is European with strong American accents. Our outlook is Western and transatlantic, as are our values and politics. Today, our economy is among the most dynamic in its region and indeed in all of Europe. Our commitment to democracy and human rights, the bedrock of Western and European values is solid, deep, and sustainable. We are proud and active member of the transatlantic community and we only grow more or more so over time. The United States was among the first to recognize Georgia's independence in 1991. America supported us when we most needed it during some of the most trying episodes of our own national consolidation. In the last 27 years, since our Declaration of Independence, Georgia has had no greater friend than the United States. Together, we have crafted what may truly be called a strategic partnership. We take the reality of strategic partnership seriously. It is strategic because we share with our American friends a vision of our region and of Europe that is whole and free and at peace. It is strategic because we can look at the same facts on the ground and then share our intrinsic understanding of the importance of these realities to develop strategic strategies for pursuing shared objectives. Each of us brings distinct sets of analytical filters to the challenges we face. Our collaboration is aimed at devising the right strategies to achieve shared objectives. And it is partnership because the sharing is continual and mutual. The United States was quick to recognize the inherent challenges of Georgia's geostrategic position, especially its fraught relationship with Russia and the complexities of its larger security environment. But it was also quick to understand Georgia's advantages geography, its power to demonstrate and advantages of democratic development and the unquenchable spirit of Georgia's dynamic people. For its part, Georgia understands and contributes to America developing and defending its interest in our region and democratic values everywhere. Georgia honors its part of the partnership bargain by fighting alongside America and its NATO allies in hotspot like Iraq and Afghanistan, where Georgia has suffered more casualties per capita than any NATO country except the United States. Georgia's spending on defense well exceeds NATO's 2% standard as President Trump has rightly insisted on. We are proud to do so and to support our common security agenda. We are stronger together than apart. The literal meaning of partnership. The tempo of Eurasia is quickening from the stimuli of new trade routes like the emerging Trans-Caspian corridor and the New Silk Road. New participants from around the world are now pursuing Eurasia's burgeoning opportunities. New friendships and alliances are forming from Europe to Asia, the significance of Georgia's unique position and therefore of the importance of its strategic partnership with the United States can only grow. Now is the time to pursue a bilateral trade agreement that will bring economic and security benefits to both of our nations. Partnership and strategy go hand in hand with peace and stability. Georgia is honored to be one of America's strategic partners and we are extremely pleased that this annual conference will strengthen and deepen understanding of our partnership to everyone's benefit. Thank you very much. Good morning. My name is Charles North. I'm a senior advisor here at the US Institute of Peace. I want to thank the Prime Minister and President Lindbergh for their remarks this morning, getting us started on this conference. We're now turning to the first panel. And so if I guess the panel is coming to the stage, the first panel is moderated by Luke Coffey. Luke is the director of the Allison Center for Foreign Policy Studies at the Heritage Foundation and he is the author of the recent report, quote, NATO membership for Georgia in US and European interests. Prior to becoming the director of the Allison Center, Luke served as the Margaret Thatcher Fellow in the Margaret Thatcher Center for Freedom at the Heritage Foundation where he focused on transatlantic and European security issues. Luke, over to you. Thank you very much, Charles, for the introduction. And I want to thank our co-host, the United States Institute for Peace and the Embassy of Georgia for including the Heritage Foundation today on this very important event. This is the first panel of this conference. And while the conference will look at the progress and path towards democracy over the past 100 years, we should not forget that Georgia's played a very special role in the history and the culture of the West for centuries, indeed millennia. After all, modern-day Georgia is the location where Prometheus, the creator of mankind and Greek mythology, was chained to a mountain for punishment for giving fire to humans. The statue in the center of Batumi reminds us that the region is also home to the legend of Jason and his search for the Golden Fleece. We talk about the important contribution of Georgian troops today in Afghanistan, but we should not forget that Georgian soldiers actually first fought in Afghanistan in the 1730s in the same places where they are today around Kandahar. And Georgia's path towards good governance and liberal democracy did not start in 1991. It did not start in 1918, but in the 1800s. As the British diplomat and the foremost Cartagelian and first British ambassador to Georgia noted, Sir Oliver Wardrop, noted in 1888, I quote, it is interesting to notice that the political ideas of the country are borrowed from Western Europe. Accepting in Japan, perhaps, there is no instance of a people passing directly from feudalism to liberalism. The grandsons of absolute monarchs, the men who little more than a quarter of a century ago were large slave owners, are now the ardent champions of the democratic idea. And they loudly proclaim the freedom, the equality, and the brotherhood of prince and peasant and master and man. Now today's panel is going to focus on the security and the geopolitical aspects of Georgia and the South Caucasus. Now in 1918, the Democratic Republic of Georgia faced a very complex and geopolitical situation as well. A German occupation followed by a British occupation, a fear of an ultimate invasion, and an actual Armenian invasion, which led to a very bloody and short war for both sides. And of course, the spillover from the Russian Civil War and the eventual invasion of Soviet Russia, which led to the end of Georgia's democratic experiment until 1991. Today, Georgia also faces a complex situation. 20% of its country is occupied by Russia. It's in a region, a very rough neighborhood, where if you include the Schkenvali region in Abkhazia, and also the situation with the occupation of Nagorno-Karabakh and Azerbaijan, there are 25,000 square kilometers of illegally occupied territory in the South Caucasus. Even so, Georgia has not wavered from its commitment to Euro-Atlantic integration, and a lot of progress has been made. To talk about the progress since 1991 and the future of the U.S.-Georgian relationship, we have a very distinguished panel. First to speak is His Excellency, Mikhail Janalitsi, the Vice Prime Minister and the Minister of Foreign Affairs of Georgia. After the Foreign Minister, Fiona Hill will speak, the Special Assistant to the President and Senior Director for European and Russian Affairs at the National Security Council. Mr. Robert Karam will follow Fiona. Robert is the U.S. Assistant Secretary for Defense for International Security Affairs. And finally, last but not least is Dr. Jim Carafano, Vice President of the Catherine and Shelby Colom Davis Institute for National Security and Foreign Policy at the Heritage Foundation, and more importantly, my boss. So I would encourage loud applause at the end of that panel. Yeah, there we go, there we go. Minister, please. Thank you for this introduction. Thank you all for being with us today. This is a very important conference. This is a very important day for us. We are holding the second forum, Conference of Strategic Partnership between the U.S. and Georgia. And as Prime Minister mentioned, we've done a lot to come to this moment and to reach this level of development and to reach this level of partnership in the United States, and we are proud to be a strong partner. And also, I would not hesitate to say that NLI in the region for the United States. We have gone through many difficulties, as it was already mentioned, but we always fought for freedom, we always fought for democracy, and we always fought to be part of a free world. In 1918, Georgia was one of the first European democracies aimed at establishing the free country with one of the best constitutions for that time, ensuring all the rights and liberties. Since then, although being under authoritarian rule, maintained our fight for freedom and for liberties, and in 1991, we started building our new state and institutions. We've done that with the help of the United States, and today we are actually proud to be one of the among few countries ready with its institutions and capabilities to be a partner and a lie for the United States. It's mostly about democracy, it's mostly about freedoms, but at the same time, it's about geopolitics and the interests of the West in the region. In 1918, there were big interests of the Western countries towards Georgia because Georgia was a gateway to South Caucasus as well as to Central Asia. Their geopolitical interest continues to be relevant today. Georgia continues to be a gateway to the South Caucasus as well as to Central Asia, and today we see big actually change in terms of development, which I want to address specifically. We see shift of economic development towards Asia, towards Eastern Asia, but at the same time, this development moving towards the Central Asia. And that is translated into more transit routes, into more economic cooperation in this corridor. And I think the role of Georgia is rising in that regard. We are witnessing enhanced trade economic cooperation between Europe and Asia. Only between the EU and China, trade has grown by 100% during the last 10 years, and that trade will grow further. At the same time, we see new projects in energy developed in the region. We see, we will launch on 12th of June, a new project, TANAP, which will bring new Caspian energy to the European market, but there is still other resources not delivered yet to Europe from Caspian, and Georgia continues to play a very important role in energy diversification and diversification of energy routes and supplies for Europe. So this actually makes Georgia again relevant for the West. It makes relevant Georgia for Europe, and they are generally transatlantic unity and Euroatlantic community. But at the same time, with these economic factors together, we see many security challenges in the region. We are in a region which has still many conflicts, active conflicts, not talking about Georgia, Georgia-Russia conflict, but conflicts around us. And Georgia plays very important role for the West and for the region in general for keeping security, contributing to the stability and security of the region. We are the largest per capita troop contributor to the Afghanistan mission, 870 soldiers. It's not about just being the largest non-native troop contributor. There are many NATO countries which have much less contribution to the Afghanistan than Georgia has. At the same time, Georgia is without any caveats. And actually we suffered the most together with the United States. And it shows how committed we are to the regional security, how committed we are to defend the interests of the transatlantic community and the Euro-Atlantic community. At the same time, we have become from a recipient country, we have transformed into a country which contributes also to the needs of the Euro-Atlantic community with our spending and defense readiness, with our economic development and opportunities for the Western businesses to grow and approach region from Georgia and to use Georgia as a good foothold for its interests and to be a partner in defense and security cooperation as well as in trade economic cooperation. Here in these two directions, we see potential for next steps to step up our relations and to move from strategic partnership to maybe strategic alliance. We are very much interested to contribute and to work with the United States, not only in bilateral format, but also in multilateral. You know that we are fighting for membership in NATO, US leadership in that process is key and crucial and we were very much encouraged by the statements just few days ago by Secretary Pompeo as well as statements by Vice President when he was in Georgia that Georgia will become a member of NATO. We are having all practical instruments which are actually moving us towards membership. We have more instruments than any other country being a candidate country for NATO membership and we believe that we are well prepared to make next steps on our membership path and we are sure that when we are confident that Georgia will be a clear added value for the Euro-Atlantic security and once we are members, we'll bring more benefits to the interests of the Euro-Atlantic community. Georgia is an important player in the region generally. We are working not only with the Euro-Atlantic community but we are working with our neighbors, we are working with Central Asia, we are working with East Asia and Georgia is very much interested to be a very interesting bridge. We are part of Europe but at the same time open for Asia and to be a reliable partner for everyone to cooperate in Georgia and to create new opportunities with the help of Georgia. The generally the global environment is very difficult today. We know that there is big challenge to the democratic development in general and we see that the trends which we have in the economic development which we have in the information revolution age are affecting a lot the politics. In general politics as well as international politics and we need to find ways to cope with those challenges to find democratic outcomes and how to stand together to be successful in building further peace and stability for Euro-Atlantic community. Authoritarian regimes are very happy to see these challenges on a global scale. They are trying to actually challenge the Euro-Atlantic unity, finding these loopholes and cracks through these developments on global scale and we should not let them use that for their benefit. That's why I think in this period especially moving forward with the integration process of Georgia in Euro-Atlantic institutions is critical. Georgia is at the front lines and we should not let the powers interested in actually removing Georgia from this family and it's time to make new steps in bilateral as well as in multilateral settings. Thank you. Thank you, that's absolutely right. And I think any future membership, NATO membership for Georgia will be built on a very strong US-Georgia bilateral relationship. And speaking of the US-Georgia bilateral relationship we're very lucky to have Fiona Hill today with us. So over to you. Thank you so much, Luke. And it's just such an honour and a privilege to be here today, I have to say, with such distinguished company to talk about a country that looking out into this audience I think is dear to everyone's hearts. I see so many people here who have been so invested in building up the partnership between the United States and Georgia that we're celebrating today and who have been active in building this up for I think best part of three decades now. Georgia really is a very remarkable country, part of a very remarkable region. And I think for the United States and speaking here on behalf of so many of my colleagues from the National Security Council and from the White House and across the US government, it's a great honour to be the partner of what appears on the surface to be a young country but is really an ancient land with such a great heritage that we can all share in. A little allusion there to the Heritage Foundation. We can all build on the great depth of the relationships and the contributions. As you said, Georgia is a great contributor but the contributions that Georgia has given to Western and global history and culture. I mean, Georgia is a country that is not just part of the region that Luke alluded to that gave us fire that was forged in fire and the fire of World War I. I mean, this is the 100th anniversary of the US entry into World War I as well. We've had a whole host of commemorative events to mark what really brought the United States most clearly into the history of the last 100 years of Europe and of the Western world with the American intervention force. And Georgia itself was playing its own role not just in trying to exert its national sovereignty and fighting for its own identity on the ruins of the Russian Empire. But Georgians themselves were fanning out and starting to play a larger role in claiming that. I mean, I think of one of the great heroes and great Americans, General Shalikashvili, whose family ostensibly came from Poland but were part of that great Georgian diaspora that played such an important role in actually forging the Russian Empire in its period. The Georgian royal family, Georgian warriors, Georgian generals were really the backbone of the Russian imperial forces before moving out to become their own independent force. And I'd just like to celebrate and to thank the members of the Georgian armed forces today who have stood with us at great cost to themselves, great self-sacrifice, collective sacrifice in helping us with our own expeditionary wars to fight for our own security and an interest from Afghanistan and also Iraq, which we can't forget as well. We have a few in the audience. Thank you. A few back there, there. I mean, this is part of a great tradition and a great history. Growing up in the United Kingdom, I actually grew up with lots of stories of Queen Tamara, the warrior queen of the Caucasus, going back to the period when Richard the Lionheart was being a bit feckless, it has to be said, across Europe and falling into captivity in various places. And always Queen Tamara, at least in the legend and the stories would somehow come to the rescue. And most people didn't realize, I think, in reading about her that, of course, she was one of the great queens and the great progenitors of so many legends and stories in Georgia as well, which Georgia is now able to claim as part of its heritage. I think the image of Georgia, not just as a contributor, but as a crossroads and a great gateway is important too. Because when you stand at a crossroads and you stand at a gate where you look back, as well as looking forward. And it's that great history, that great tradition that we can celebrate with the 100th anniversary of reclaiming your independence, something that's very strongly fought for. I think as we look to the other contributions, not just to our security, but also to that partnership, I'd like to give a shout out to someone I've seen in the audience here, Mama Kucera Tilly, who ought to kind of go down in the legends of the future legends of Georgia. There's someone who brought George and wine back to the world. I know that Georgians and Armenians and others have a little bit of a battle of who was the first creator of the wines that we know of today. I know that he said there's no other story. I hope none of our Armenian colleagues are in the audience today. But Mama Kucera, I think without question, has been someone who has brought George and wine back to where it belongs and the pantheon of great wines. I remember many years ago meeting Mama Kucera when it seemed a very difficult quest to make sure that you would have a George and wine on a table in every American household. He's not quite there yet. He's certainly working towards it. And I think that actually shows, again, the evidence of the great potential that Georgia has looking forward. As Foreign Minister Jan Lidz has talked about, when you're thinking of free trade and the great spirit of that, Georgia has so much to offer. The potential of Georgia was a tourist destination. My own niece got in touch with me recently saying that she was thinking for her summer vacation of going to Georgia. Did I know anything about this? And could I recommend anyone? Do I know something about Georgia? And I told her how I recalled my own first encounter with the great hospitality and beauty of Georgia in 1988, so 30 years ago. In fact, it was actually 30 years ago this month. Shortly before I met the great Ted Japeridze, which came just a little bit later from that. But I was a student in what was then the Soviet Union, took a trip to Tbilisi and burst into tears. I have to confess, when I first looked out of Tbilisi thinking I'd never seen anything quite so beautiful. This was after kind of a long winter in Moscow, stuck in the side when it was minus 20. Spring had broken out all over the place. And I stood on what was one of the vantage points looking out over Tbilisi and thought, really, my goodness, can somewhere really be looked like this? And Tbilisi looks even more beautiful today. After shaking off the dust of the old Soviet Union and becoming one of the most beautiful countries again, as it always has been in the region. You can see that I could go on and on here, but I just wanted to say again what a great honour it is to be able to represent now today National Security Council and the White House after such an amazing period that George has gone through, that all of us here in the audience have gone through today. And I'd like to say about everybody who is also here who has played a role in this. I see Judy Ainslie, who was in this same position 10 years ago during the very fateful period of the Russian invasion of Georgia. And we've come a long way since then. And I think that everyone here, and especially our colleagues from Georgia, should be very proud of the accomplishments. And it's a great honour again for us to be able to celebrate with you your 100th anniversary, as well as the second annual conference on the strategic partnership between the United States and Georgia. And thanks to our colleagues in the SIP and from Heritage for putting this on. Thanks, Fiona, for those... Thank you so much. Thank you for those very personal and passionate remarks. Robert? Well, Luke and Nancy, thank you for the invitation to be here and to the U.S. Institute of Peace and the Heritage Foundation for putting together the second annual conference on this incredibly important strategic partnership. It really is an honour to get to represent the Department of Defense and talk a bit about our important and blossoming defense relationship that I think has really been truly important for both of our countries. I'll be very brief, not only because I think we'd all like to get to questions, but also because even with prepared remarks, it would be very difficult to be as eloquent and comprehensive as the foreign minister and Fiona. And alas, I do not have prepared remarks. But looking back at just the history that we've already talked about this morning, 100 years since Georgia's original independence, 70 years of Soviet occupation, 27 years of independence since 1991, 10 years since Russia's unprovoked invasion in 2008 and as Secretary Pompeo noted just this week, Russia continues to occupy 20% of Georgia. It's hard not to be impressed and surprised at the progress that Georgia has made in spite of so much adversity and a commitment to defending its people and its values and its commitment to Euro-Atlantic integration is truly impressive. I looked back at the U.S. Georgia Charter and I know some people in the audience had something to do with it in the wake of Russia's most recent invasion of Georgia. And I think it's important how prescient that document was and how it stands up after a decade. And it speaks to our shared values, our common interests, the importance of the rule of law, the importance of territorial integrity, the inviolability of borders, and the importance of sovereignty. All principles that are under assault today, in part or in particular by two countries that are national security strategy and national defense strategy name, Russia and China, who seek to undermine the rules-based international order that has helped to create conditions for such peace and prosperity. But that peace and prosperity will only last if we can defend it. And it's very important for the United States to have partners like Georgia who are so willing to contribute to our common security. And here I would like to pay a special homage to Georgia's armed forces who have been with us in Iraq, in Afghanistan, who contribute to the UN mission in Mali, and are very, very far away in, as Nancy said, the Central African Republic. This has come at considerable cost. Dozens of Georgian soldiers have been killed, hundreds wounded over the course of their time in these conflicts, conflicts that are far away from Georgia. But the things that we are fighting for as partners I think resonate and typically see as they do in Washington. More recently, I think we've been very appreciative of not just the extent to which Georgia has contributed these common causes, but it's taken its lessons and helped others. And its own efforts to treat its wounded warriors are paying dividends in how Georgia has helped Ukraine. The latest victim of Russian aggression treat its own wounded warriors and incorporate them back into society. I also want to acknowledge, I think, a relatively new program, the Georgia Defense Readiness Program, which has taken a longstanding program aimed at helping Georgia contribute more effectively to these international efforts and make sure that as the United States helps train and equip Georgian soldiers who are going to fight in Afghanistan, that we are also focused on the long-term effort to help Georgia's defense forces provide for their own security and territorial defense. And this is not simply something that the United States does. It's a shared program, and Georgia's own investment in training ranges and bases and capabilities really highlights the extent to which this is a true partnership. Just another quick word on defense reform and defense institution reform, where Georgia has really been a leader, and I want to recognize the defense minister and his team for their continued efforts to make very, very tough decisions in reforming not just the ministry, but also tough decisions about acquisition and personnel that are hard in our system and hard in the Georgian system. And that, Georgia, has been able to make these decisions despite the occupation, despite the pressure, I think really is a model for other countries, whether they are in NATO or not in NATO of the need to modernize and reform militaries to meet the challenges of today. And I suppose I would just close with noting the progress that I think is being made towards NATO membership, the opportunities that the enhanced opportunity partnership present, and that Georgia has taken advantage of, and to reiterate Vice President Pence's statements last year that Georgia will be a member of NATO. Thank you. Robert, thanks for that overview of the US-Georgia defense relationship. It's flourishing. It's heading in the right direction. It's positive news. We talk a lot about Georgia's contribution to Afghanistan, but it's also worth pointing out to a reminding, actually, I should say that at the time of the invasion in 2008, Georgia I think had the second most number of troops in Iraq after the United States. So this commitment predates its need for greater security after the invasion. Now over to Jim Carrafano to wrap us up. Give me a second. So I always like to check to see if President Trump tweeted anything about Georgia before I do it. I do have all my public remarks. No, I want to say I have three points I want to make. And the first was I want to say the things that Robert and Fiona can't, which is to explain President Trump. Because I do think it's important when we talk about this relationship that we put in context, the larger context of what this administration is doing and what the president is trying to do. So when Donald Trump says America first, what he means is it's his job to put the vital interests of his country at the forefront of every single decision he makes. And I think why that's important for this conversation is if you believe that your job is to protect America's vital interests, then at the very top of the list is the peace and stability of Western Europe. That literally that is an anchor of America's place in the world and comes above everything. And there's nothing more key to that than the success of the transatlantic community and the transatlantic partnership. That has to be at the very top of your agenda if you're serious about protecting us and our peace and freedom and prosperity. And I think this administration has been very clear in its actions about what the great threats to that are. And they are the destabilizing policies of Russia and also the potential of challenges in the Middle East to bleed over and affect the stability of Western Europe. This administration gets that and it's the forefront of all their policies. And while that's important to this conversation is because Georgia is a cornerstone in that strategy. Georgia is a corner of Europe that is vital to complete that whole piece of transatlantic security in the US-European partnership. And so that I think that message and that position really I think is the shadow that frames everything we think about when we think about the US-Georgian partnership. Then the other thing I would do is, the second point I would make is to say the things the minister can't say, right? This is what he should be asking for from us. And I think there ought to be two big asks. The first thing I think is that we bring Macedonia into NATO and that that happens. And it would be great if it happened this summer. And I think that's actually would be, is very important to Georgia for a couple of reasons. First of all, it would demonstrate in the Ascension of Macedonia that NATO figures out how to deal with complex issues. And I think that's an important message to send. The second one is that the door is always open because NATO is an alliance of nations that love freedom and security and work to wanna work in common cause to that. And nobody can dictate to the members of NATO who they can and cannot invite into that community. And the third thing I think is, honestly as it clears the decks because honestly after Macedonia, there is only one country that is ready and qualified and where we need to take seriously and that is Georgia. So I think it just moves that ball one step closer to what inevitably has to happen. You know, the other thing I think I'd ask for from the United States is many of you know about the three C's initiative was a great initiative. It's largely really an initiative of EU countries and it's primarily designed to kind of build this economic and energy backbone across Northern and Central Europe. And I do think it has in many ways is really key to the healthy future of a prosperous and secure Western Europe. And that's fine. The, you know, Vizagrath and the EU, they should have a three C's initiative. But I think the US ought to look at that and I think our initiative, and we ought to broaden that, that we ought to think of that as a four C's initiative, right, because there are two very important bodies of water that kind of fall on either side of Georgia. And that integrating that fourth C into this concept and into that economic development program, I think is something that is great for the transatlantic community and I think it's something the United States ought to be front and center in doing. And then the third point I would say is my optimism for all this and it's simply because Georgia has paid its dues. Georgia has earned the right to be a member of the transatlantic community and to stand with the other free nations. Oh, no, I mean, the reality is, if Georgia has not earned America's friendship and confidence and trust and partnership, then really what other nation in the world really has. So, thanks. Thank you. Thank you. Thank you. Thank you. Still no tweets, just, we're good. Before we open up to questions, I'm gonna pose a couple of myself. First to the minister, what would you define as success for Georgia at the upcoming NATO summit? What are you hoping for, just broadly speaking? I'll be very specific. We are anticipating the actually decision which will define the reality. The reality is that Georgia has improved and changed and came to the standards of NATO very successfully. During 10 years, we changed our democratic institutions. We changed our economy. We changed our defense and security system. We have all instruments in place which are preparing us for membership and it is recognized by NATO. And I think that this reality should be clearly recognized at this summit. To be honest, we are ahead of even some members of the alliance with our readiness and all the institutions, also with our contributions. We know that what is the key factor there in the decisions and I think that they should be more political understanding to move with the membership in Europe. And also in the United States. When we are talking about Macedonia, we were very happy also that Montenegro joined NATO. We are happy that Macedonia is on its way to membership and we wish them success on that path. But I think when we talk about Georgia, it's more about a political decision and we need to work and find that political decision. We look forward to this kind of talks on this summit. Right. Well, not only do we have a very distinguished panel, we also have a very distinguished audience. I see a lot of Georgia watchers, followers, supporters, experts out there and one of my favorite parts of panels like this is actually the Q&A section of it because you learn so much as a panelist too. So I'm gonna open it up to the floor. We have microphones on both sides. If you could please state your name and any affiliation that you might have that would be very useful. Do I see, so nothing that was said was even slightly controversial. Yeah. No, I don't wanna do it. Yes, sir. We have a, from here, can't quite make out the rank, but a Georgian officer. Thank you. Colonel Kapteraz, the Georgian Army, currently attending the National Defense University, College of International Security Affairs. Yes. Yeah, my question is the following Georgian aspiration to join the NATO. What are your thoughts if it goes to minister and to other ones, to the idea which was announced by moderator of this panel, Mr. Luk Kofi. Joining NATO as a whole nation without occupied territories until they are de-occupied peacefully. Especially having in mind the examples of Germany, Guam, and so on. Thank you. Maybe for the benefit of the audience, I could quickly summarize the proposal the gentleman's talking about. Because this is DC and there's no such thing as shameless self-promotion. There's a report out there that I wrote and that I published that one of the proposals thinking of a creative and realistic way to get Georgia quickly into NATO was an idea that because Georgia already has a non-use of force pledge to get back the occupied regions, why not invite all of Georgia to join NATO but set aside the occupied regions where they don't get article five protection until that conflict is resolved peacefully. And this isn't questioning Georgia's territory on Tiger T. All of Georgia would join. But there are examples of NATO members that are in NATO and not all their territory is under article five protection. Falkland Islands for Britain, Guam for the United States for example, and this would require an amendment to article six of the 1949 North Atlantic Treaty. Article six describes where article five is applicable. And in 1952 this was amended when Turkey and Greece joined, when Algeria became independent, article six was changed again because before French Algeria was included under article five so there's a precedent for this. So that's the proposal that the gentleman was talking about, not giving up on Georgia's territorial integrity but finding creative and new ways to maybe speed up the process. I think the question was addressed to you of course minister. You're probably tired of answering this question because we've sat on other panels before where you're asked this as well. Yeah and our answer is clear there. So first of all the territorial integrity of Georgia is the most important issue for Georgia. And everything what we are doing, your Atlantic integration or European integration or membership in NATO, et cetera, these foreign policy priorities are oriented to finding ways how to restore peacefully the territorial integrity of Georgia. NATO membership for us is an opportunity to build even stronger democracy, to build even resilient, more resilient country, able to protect all the rights of its people living on the whole territory of Georgia, create a country, attractive country for everyone. So an opportunity for reconciliation, an opportunity for more engagement and actually new prospects for everyone. This is the case in relations and in regards with the European integration. You know that we have a association agreement with the European Union which has deep and comprehensive free trade area agreement and we are trying to share the benefits of that European integration process with the people living in the occupied territories. We have elaborated a new mechanism and new actually mechanisms and the programs for sharing those benefits with the people living in the occupied territories. When it comes to NATO's position, NATO's position with regards to territorial integrity of Georgia is clear. NATO is the most important and for us key guarantor of our territorial integrity. And I think when it comes to the question in our application of article five on the occupied territories, it's more of a technical part of a political decision. Thank you and I'll just add to that that the reason why this proposal would work for Georgia and not for Ukraine for example, is because of that non-use of force pledge. That's what separates Georgia from other countries that aspire to join NATO that are also involved with conflicts with Russia. Right, I knew that one was coming. Glad we got that out of the way quickly. Any other comments, questions, remarks? Now I see, I'm gonna call him out, I hope he doesn't mind, but we're very lucky to have in the audience the Adjutant General of the Georgia National Guard, Georgia, the state, Major General Gerard. So I was wondering if maybe you could just give us a comment or two about what your state is doing to help Georgia in the relationship. Had a relationship with the country of Georgia military for about 24 years now. So next year will be 25 year anniversary. We're very honored and we've cherished that relationship, it's a great one. Probably about 10 or 12 times a year we travel to the country of Georgia or some of their members come to our state and we work together to get better. And so that's us getting better and helping them to improve as well. So some of the things that we have worked together on could be anything from military decision making process at different levels of staff to also currently our chaplain corps is working with the military in Georgia to help them improve their chaplain corps or to develop a chaplain corps. They do it differently than we do. They have priests that are not in the military that minister to them and so forth. So just talking about those type of different things. And we will get together with General, I don't think General Chachabay can make it Nick in a couple of weeks but Europe has a state partnership program conference every year in Germany and I'll meet with a representative of their leadership and their SART major and my SART major and I will go over and participate in that conference here in a couple of weeks as well. So just a great relationship, we're Georgians. So it works and we're brothers and sisters and it's a great relationship and we both get better from it. So we cherish it. Thank you General. Sorry for putting you on the spot there. But yeah, that state partnership program is so crucial when it comes to building the capacity and capabilities of our European allies and to make it as confusing as possible, the state of Georgia of course was assigned and paired with the Republic of Georgia. Turning back to the panel, I was wondering if maybe Fiona or Robert could give some insight on the thinking behind the decision with Javelin, some of the logic behind it and maybe talk about what the next steps of the U.S.-Georgian Security and Defense Relationship can be because a lot of times with the discussion of Javelin, whether it's Georgia or Ukraine, many people think this is like some magical silver bullet. But it's not, it's a part of what should be a larger strategy. So could either of you say something? Well, I'll leave some of the specifics to Robert because this is very much the purview of this overall defense relationship that Robert's talking about. But I just want to underscore what you've just said. I mean, certainly the thinking behind that was very much as part of a broader strategy towards Georgia. There is no silver bullet for building up any kind of defensive capability and I think that it's a testament to our colleagues from the state of Georgia and from the long-term, long-standing military relationships at all kinds of different levels and the commitment of the Georgian armed forces to train with us, to fight alongside of us Iraq, Afghanistan and in other expeditionary ventures that is really the secret of Georgia's success and its ability to be able to defend itself and to also project its influence, which I'm pretty confident that Georgia will be over time more broadly in the region and through this network of military defense and other political contacts throughout Europe and the partnership that already exists between Georgia and NATO at this stage. So you can't think of one particular system without thinking of the entirety of the defensive posture and the whole package of the relationship with Georgia as well. And I think it's actually unfortunate that there became so much fixation on the issue of javelins in the media and elsewhere and making that seem as if this was a momentous decision in of itself and the momentous decision was really the decision that Georgia took 25 or more years ago to stand with the United States and to build up this partnership with us. Yeah, no, I had hard to improve on that. I would say just a couple of things. First, the silver bullet is not a single system. Silver bullet really has been Georgia's commitment to defense reform and modernization and a willingness to spend money on capabilities that will allow it to help the Georgian military defend itself against aggression. And I would tie this back to the US Georgia Charter which commits the United States to help Georgia responsibly defend its own territory. And I think the steps that Georgia has taken in the 10 years since that document was signed made this an easy decision that Georgia's commitment, it's responsible and reliability as a partner made the decision to sell this capability, I think quite easy for us. But as I said, it is not the silver bullet. The silver bullet really is the sustained commitment to defense modernization and reform. I would say one more thing to connect back to something that Jim had said about the three Cs initiative, the Baltic, Black and Adriatic. There's a different three Cs. C is in the letter that we talk about in NATO context. Cache, capabilities and contributions. Cache meaning how much money is given country willing to spend on its own defense? 2% being the 2014 Wales pledge. Capabilities, how are they spending that money? The Wales pledge highlights the extent to which we would like to see NATO would like to see its members spending more than 20% on capabilities and modernization and contributions to what extent our country is contributing to the common defense of the alliance. And here I would highlight, if you use this three C approach, Georgia really excels. And that, more than any individual system, I think highlights the extent which is a cable car. Ooh! So actually, let me ask you a question. All right. Not to go too far afield, but I think that since Americans and Georgians have contributed so much in Afghanistan, and it's worthwhile, and you do Afghanistan for us, you served in Afghanistan, talking about why we should continue that, why we both should continue that commitment in the Afghanistan mission. Yeah, well, Georgia is right up there, as was already pointed out, with its commitment to Afghanistan. And I think it's because of two main reasons. The first is that Georgia wants to be seen as a net contributor to regional and global security, and that's why it plays such an important role. But also, Georgia sees the potential of what could happen in Afghanistan around the world if we were just to cut and run. You know, it's been well said, I'm sure many of you have heard this fact before, but I think it's 20 out of the almost 100 U.S. designated terrorist organizations operate in the Afghan-Pakistan border. And now is not the time to leave this mission, which is now a training, advising, and assisting mission. And it's important that the U.S. leads the way on this matter, because if the U.S. leads on it, then other countries like Georgia and our European allies will follow. And Georgia, I mean, really sets itself apart from other countries, whether in NATO or not in NATO, in terms of its very important contribution. And I know there's gonna be a decision coming up sometime this summer on the future of the U.S. and NATO mission in Afghanistan, and it's important that we take a reasonable, realistic, and a responsible approach to that operation, and no doubt Georgia will be a part of that. In my report, I highlight, moving on to a different subject, I highlight the different cases of what is called borderization of Georgia, of the two occupied regions, the Shkinvalli, also called South Ossetia region, and Abkhazia. And basically, these are cases of Russian-backed forces or FSB forces physically moving a boundary or a border, where Georgian will go to bed and free Georgia and literally wake up and occupy Georgia, or farmers have their crops divided or signs are posted, fences are built, ditches are dug. And I've, through a lot of research, mainly with the help of my research assistant Alexis, she spent a lot of time finding GPS coordinates of small Georgian villages. She's the leading expert on Georgian villages, and we uncovered 56 cases of borderization at 48 different locations since 2011. And these have a real impact on the lives of the Georgians that live in this region. So I was wondering if the minister could talk about what Georgia's doing to raise awareness of this on the international stage, what you're doing for your non-recognition policy, what you're doing to show the people that are living in occupied Shkinvalli region or Abkhazia that they do have a place in Georgia, that they are Georgian, that the Georgian government, the Georgian people care about them. Because I know there's been some recent initiatives with this that are trying to bring the communities together wherever they can. So I was wondering if you could expand on some of this, please. Thank you. Thank you for this question and for raising this issue. This occupation of our territories remains to be the greatest challenge for Georgia. And it's not only about occupation today, but we see the process of factual annexation of those regions through the so-called integration treaties. Russia is absorbing those two regions in all the directions. Unfortunately, we see constant provocations on the occupation lines. We see, you know, kidnappings every day. Last year, only more than 300 citizens were kidnapped from the occupation line. Unfortunately, we see still cases of murder and killing. I mean, a gig with Kosoria was Georgian IDP killed at the Aplasia occupation line. And just recently, this year, IDP from Skynvali was killed in detention in Skynvali, and the body was not returned to family for a few weeks. So these are the provocations, constant provocations we are having on the occupation line and in the occupied territories, as well as not only ethnic discrimination, but also ethnic cleansing happening there. Last year, for instance, in September, the whole village, Erredvij, was actually erased. All the houses of Georgian IDPs were taken down, and under so-called Russian investment program, the farming was developed in that village. So these are the clear signs of ethnic cleansing, not only discrimination. Discrimination is happening there every day. The people are left without right of education, right of having property, owning property, getting education in native language, and etc. So the challenges are really creating big obstacles for the full-scale development of Georgia. And what we are trying to do is to find peaceful ways for the conflict resolution. First of all, we are trying to push Russia to fulfill its ceasefire agreement of 12 August 2008. Unfortunately, there were 43 rounds held in Geneva. The Geneva discussions were established under the ceasefire agreement, as you probably know, and as you know. But unfortunately, there is no any movement on any points of the ceasefire agreement. So you mentioned the non-user force pledge from the Georgian side. There is no any readiness from Russia to reciprocate. The fifth point of the ceasefire agreement talks about the need of withdrawal of Russian forces to the pre-war positions and establishment of international security arrangements on the ground. But there is no movement on that issue. There is no movement on the IDP returning issue. So to reinforce and strengthen our positions in Geneva, we are working also in international organizations. And actually, during the last two years, Georgia has really very significant results in international fora. We had maximum support to our resolution in the UNGA General Assembly on the IDP, return of IDPs. We had first time resolution adopted by the UN Human Rights Council on the need of entry of international humanitarian monitoring capabilities in the occupied territories especially the High Commission of Human Rights of the UN which is not allowed to enter the region. We are actually working within the Council of Europe and unprecedented decision was taken by the Council of Europe this spring which talks about the Russia's legal obligations as a force exercising effective control over the occupied regions. In legal terms, it's a recognition of occupation by Russia of those regions which was a very important document. Unfortunately, since 2008, there were no relevant decisions made in international fora. There were no relevant even resolutions made about the Russian aggression in Georgia. So we have to do now even much bigger efforts in order to achieve some results especially when you have Syria, when you have Ukrainian hot conflict and etc. To raise awareness of the situation in the occupied regions of Georgia is much difficult and it was in 2008 or 2009 when Georgia was the only country to be under the aggression but unfortunately we failed at that time to raise that international attention but now actually last two years were really very significant in that regard. Also was especially significant here in the U.S. As Congress has first time put the language on the occupation of Georgian territories in its appropriation act, it was also Congress and administration approved some kind of sanctions for the countries which have some relations with the occupied territories. It's like prohibiting any financing of those governments and countries who have relations with the occupied territories. It was really very significant support from the U.S. and also decision for non-recognition because it is a great tool for us to work also with other countries on non-recognition. And generally we try to use every format. Yesterday I was on the security council meeting. The debate was organized by the Polish presidency about the protection of civilians in armed conflicts. If there is no hot conflict in Georgia, it doesn't mean that civilians are not suffering. The cases I brought is an example how even in this situation when we don't have hot conflict there are killings of civilians and suffering of civilians due to this conflict. Let's talk about that on the security council. Russia is violating 39 security council resolutions and Russia is in violation of all its international obligations. Today actually there was last hearing of the case in Strasbourg court about Russia-Georgia conflict. Strasbourg court will take relevant decision because we provided all relevant arguments about the violation of eight actually points of the chartered by the Russian Federation. So we work with our diplomatic instruments, with our actually peaceful policy in order to find ways how to push Russia to de-occupy, fulfill its ceasefire agreements and fulfill its international obligations. I'm very proud as an American that across administrations, Bush, Obama and now Trump, the US government has continued to recognize the presence of almost 10,000 Russian troops on Georgia's internationally recognized territory as an occupation. Vice President Pence made it very clear that it was an occupation on his visit last summer. It's extraordinary to think that there are some of our European allies who still will not use the word occupation to describe the presence of Russian troops on Georgia's internationally recognized territory. I mean, they're not there on vacation. That's for sure. Mamuka. Thank you. Look, excellent panel. Thanks Fiona for promoting Georgian wines. That's important. For the record, American Academy of Science published an article on November 13, 2017, proving all this discovery of wines found in Georgia. But my question is unrelated to wine. In this case, it relates to security and relates to some of the commitments that Russia and formerly Soviet Union had with every Helsinki process and conventional forces in Europe CFE treaty. And Russia withdrew from CFE treaty in 2007 and is in violation of Helsinki final act by occupying territories of other countries, including Ukraine and Georgia, of course. But at the same time, we, western world, still honor commitments to CFE treaty on all those agreements, including Russia NATO Act, which prohibits permanent stationing of troops in Poland and Baltic states and so forth. So we still have troops there on rotational basis. So my question is to US government representatives. Are there any considerations of changing some of those maybe arrangements that are commitments that are made to Russia based on those agreements? And as we all understand, Russia only understands power politics. So by placing larger forces in Black Sea and Eastern Europe, somehow balance the desire of Russia to be more assertive. And by the way, I should mention that Black Sea is becoming a very important economic outlet for Russia. It's the largest... Novorossiysk is already the largest oil outlet and in terms of trade, it's the largest trade port for Russia. So economically, Black Sea is very important for Russia. So balancing Russia in Black Sea militarily in order to reduce appetites of aggressive actions, I think it's essential. Any considerations of that in US government? Thank you. Very good question. Thank you for that. I mean, the Black Sea is not just becoming more economically important for Russia. It's also becoming more militarized by Russia with the militarization of Crimea, a larger naval presence, the use of the Black Sea to project power into the Eastern Mediterranean. And it's precisely Russia's militarization of its western and southern military districts that I think have led to a larger, if rotational, NATO presence all along the Eastern flank. And the United States across administrations has been increasing its commitment, whether in the Baltics or the Black Sea region. I think our first priority is to rebuild the strength of our allies and partners. And that is, I think, the essence of our effort to get NATO partners to have credible plans to meet their Wales pledge. The second, I think, is to bring Russia back into compliance with its international agreements, whether it's CFE or Helsinki Final Act or the INF Treaty or Open Skies. And that our first step should be to try to get Russia to live up to its obligations and to return to a stable, rules-based approach to international affairs, which will be far less costly to everyone than having to confront a dangerous new world. But Fiona, do you have anything you want to add? Well, I'd like to add to this that we also have to be very careful, I mean, not just to think in conventional military terms. We use the term hybrid war. I mean, the Russians don't use that because they think, of course, of kind of the more the totality of war in the information field, political, economic, not just in military terms. And I think, you know, one of the challenges that we have to face is how to balance off the kinds of approaches and investments that Robert has talked about. With also the commitment to building up our own, we've talked about it as resilience or ability to resist, ability to withstand, to blunt, or to stop some of the other effects of Russia's approach to warfare and aggression. I mean, George has faced not just the seizure of its territory and now the occupation of its territory, but cyber attacks. I mean, you were on the front line of many of the subversive attacks that Russia has developed into an art form that it is applying elsewhere, including here in the United States, but, you know, across Europe and in the Balkans and in many other places. And I think we have to have a shared commitment and Georgia has already shown that it's very serious about tackling this. It should be able to figure out ways in which we push back on this, too. And to make it clear to Russia that it's not just, you know, kind of living up to the old agreements of CFE, but if we are to have a different relationship if Georgia is to have a different relationship with this, you know, major neighbor of it, if the United States is to have a different relationship with Russia, more positive one looking forward and not always constantly back to old grievances or to old conflicts, then we have to do it on a completely different basis. And it's unacceptable for Russia to use this coercive power, be it by military occupation and the seizure of territory, or be it by hostile cyber attacks or trying to subvert and undermine democratic processes and governments. And then we have to stand together to be able to show to Russia that that isn't acceptable and to move forward to picking up our theme of the kind of the gateway and the crossroads, because we're at an inflection point in history. And if Russia wants to be part of a shared future, then it basically has to move forward. And the basis that the partnership between Georgia and the United States is showing is the only way to build a common future together. So, I mean, it's complicated, it's very difficult, but I think we continue to work together and to learn from each other. There are things that we can do. And the Black Sea, you mentioned the economic importance and the energy importance, of course, but also then there's a political importance for the U.S., too. The countries that form the Black Sea account, well, minus Russia, of course, but then the other countries other than Russia, Bulgaria, Romania, Ukraine, Turkey, and Georgia, that are Black Sea countries, actually contribute one-third of all of the Resolute Support troops in Afghanistan. So just these five countries contribute one-third. So these are countries in the region that are serious about NATO security, serious about the three Cs, cash commitment and capability. Is that right? Yeah, cash commitment capability. And, you know, we should, you know, we should, you know, focus on the countries in this region, too. A couple of ideas that I've proposed in the past was creating a, like a Black Sea maritime policing force based off the Baltic air policing mission. So have a permanent list of NATO countries that will commit in advance to entering the Black Sea because, of course, non-Black Sea countries are restricted by the 1936 Montreux Convention. You can only spend 21 days at a time in the sea. There can only be seven non-Black Sea, or non-Black Sea countries in the Black Sea at any given time. And the aggregate tonnage, I think, is like 25,000 tons altogether. So there are huge restrictions on non-Black Sea countries operating in the Black Sea. So we need a commitment from the Alliance as a whole to find a way to patrol and be active in the Black Sea more. Another idea that impacts Georgia is create a center of excellence for Black Sea security inside Georgia. Now, NATO has a bunch of centers of excellence that are around the Alliance. They're certified by NATO. And there hasn't been a center of excellence created that is in a non-NATO country, but there's a first time for everything. And I think it would help anchor NATO more into Georgia and into the Black Sea and acknowledge Georgia's importance, not only to NATO, but to Black Sea security. And the center could be used like the Center of Excellence for Cybersecurity in Estonia or the Center of Excellence for Energy Security in Lithuania to help the Alliance and its partners better understand how to address some of the unique security challenges in the Black Sea. So there's plenty of ideas out there on how to do this. I think we have time for one final question. Oh, yes. Because this is a very important issue and a top priority for us. We want Black Sea to be a sea of development, peace and stability, because we are developing new maritime connections with the European market. For the physical integration, this is key to overcome the challenge which has been created by Russia. And for that, you know, NATO presence on the Black Sea is very important. We really welcome the NATO focus on the Black Sea. We had discussions during the Warsaw Summit where we actually agreed to have deeper dialogue between NATO and Georgia on the Black Sea security. We've been contributing to Black Sea security by providing information from the Georgian side. Unfortunately, there's been the one-way street until now, so we look forward to have more dialogue and more engagement also from NATO. We have tabled our proposals last year, a year ago, actually a little bit more than a year. We worked very actively on that subject and we hope that deeper cooperation on the Black Sea security issues will be one of the outcomes of the upcoming Summit in Brussels. We have time for one final question. I see up in the gallery actually. Alex Melikishvili, IHS Market. Thank you very much for the panel's comments. Informative and insightful. I have two questions for the minister. One, Estatunashvili's case earlier this year abundantly showed Georgian, remaining Georgian population in the breakaway regions faces imminent threat from the separatist authorities. Now, does the Georgian government have any contingency plans whatsoever if and when separatist authorities decide to harass and mass the remaining Georgian population either in South Ossetia or in Aphazia? That's my first question. My second question has to do with the upcoming, please correct me if I'm wrong, but if I'm not mistaken, another meeting of Karasin Abashidze format is supposed to take place in Prague fairly soon and it's my understanding that the Russian government just recently finally signed on to the 2011 agreement that would entail monitoring of any goods that enter and leave breakaway regions via the Swiss company. Can you update us on that? Thank you very much. Thank you for the questions. I will reiterate our strategy with regards to the occupied regions. I talked about that during my previous answer. Our strategy is to find peaceful ways for solving those problems and ways based on international law. We are using all instruments available today which are not as effective as we want to see them, but these are the only instruments which exist today, unfortunately. These are international organizations which are actively involved in the peaceful conflict resolution process. We use Geneva international discussions. We use incident prevention and response mechanisms which are established under the Geneva international discussion format. And with the mobilization of international community, we try to actually push the occupation regimes as much as possible not to see the developments what we have on the ground today. Unfortunately, this is not about separatist regimes, but it is about Russian policies which are driving the processes and policies on the ground. Unfortunately, we don't see any readiness from Russia to find solutions even to the humanitarian issues. But again, we will use all international instruments in our hands to protect the rights of all people living on the occupied territories. It's not about ethnic Georgians, but also we believe that others, even Abkhaz and Dossetians, living today under the Russian occupation, they are suffering a lot. They are suffering from the isolation. They are not allowed to have any contact with normal contact with the international society, free world. They are under the big propaganda pressure. They are under the big KGB control, and they are suffering a lot. So we have to find solutions for everyone, not only for ethnic Georgians, but everyone living in the occupied territories. Therefore, the government of Georgia, I have not answered that question during my previous answer, has elaborated a very important program called Step for Better Future, which is about creating new opportunities for everyone living in the occupied territories. This is about creating more confidence, creating more opportunities for reconciliation. I think that will create some more positive environment within the population in the occupied regions and help to finding peaceful ways for the engagement. We cannot change, unfortunately, the occupation regimes, which have quite different agenda and different interests, different from actually humanitarian interests. But there is only way to counter that, the full-scale mobilization of the international community, what is now the priority of the government of Georgia. When it comes to SGS, it's good that Russia finally signed the contract with the SGS. We hope that Russia will start implementing this agreement, which was signed in 2011, in line with the provisions of this agreement. Great. Well, that concludes the first panel. So please join me in thanking our panelists. Right. We've ended exactly on time, 10.45. We have a coffee break until 11.15, and then we'll start our second panel. Thank you. Okay, welcome back, and thank you for being here. We'll get started with our second panel. And our second panel, once you come on up to the stage, our moderator for the second panel is Jonathan Katz. Jonathan is a resident fellow with the German Marshall Fund of the United States. Before he joined the German Marshall Fund, Jonathan was the Deputy Assistant Administrator for Europe and Eurasia with the Agency for International Development. Thank you, Jonathan. And panel, come on up. Please. Minister could sit right here, and then Brock next to him. And then I think we're going to put you all the way at the end. Right here, right here. Great. And then also Christian, right here. Yes, I'm changing, right? Okay. And then please sit right here. Thanks. We're changing the choreography a little bit. Thank you. Please sit down. Well, thank you so much. We have this great panel here this morning. The first panel was really great. And first, I want to thank USIP, also the Heritage Foundation, as well as the Georgian Embassy in government for being able to join you here this morning. And I was listening to the first panel. I couldn't help but notice that the topic of the second panel, which is economics, was focused on by the Foreign Minister, who has, I know, a great interest in background in economics as well. So it was good to hear some of those topics already discussed. What we're going to do, obviously, today, and I thought Luke did a magnificent job just as a moderator, but also just bringing into current context US-Georgian relationship, but also looking historically at US-Georgian relations and some of the challenges that Georgia is facing from both the security, the political, but also economic as well. And the panel that we're having today is going to focus on how do we grow the US-Georgian economic relations, but we also have a leading official from the European Union from DG and near Christian Danielson here who is deeply engaged with the Georgian government in support of its efforts to fulfill DCFTA and association agreement. And I think we all would agree that Georgia has been a model for economic reform in its region, but also globally. Interestingly enough, every year I look at the World Bank index, the ease of doing business index. And I think every single year, Georgia's always sort of top ranked and I think they can't go any further and every year they kind of go one step further. And I think in this year is in the top 10, I think number nine globally. And I think that's really a testament to the work of the government, to partners that are sitting here from State Department, from the EU, from USAID, and Mr. Minister, obviously your leadership as well at keeping Georgia on the right path, looking forward, being strategic. And I think there was a lot of discussion in the first panel about NATO, but there's also interest on your end and other agreements, some that you've been involved in in the past, including some of Georgia's trade relations. I think Georgia's overall FTAs and other trade arrangements include over two billion. Two point three. Two point three, thank you, correct me. So you can see Georgia really is at a geostrategic crossroads economically. And I think part of what you're looking at, what your government is looking at in the Georgian people, is how do you build on the success that you're having? How do you strengthen economic inclusivity within Georgia? How do you tackle some issues that remain including unemployment issues? In fact, some of the same issues that we face globally, but Georgia is in an enviable position based on its resources. I think it was mentioned, Georgian wines, tourism, energy, crossroads, Silk Road. If you go down the list, Georgia is really an amazing space to be in right now. Faces, challenges with Brock here, hopefully an opportunity to talk about some of the areas and Christian to talk about some of the reforms, but areas, tough spaces. And I know that we're also, not only is this the centennial of independence, but also it's the 10-year anniversary of the war that took place and Russian aggression. And I think the remarkable part of that is the progress that's been made after that war took place, which your government deserves a lot of credit for really creating that success. But I think it's really the issue of resiliency and how you've taken a situation with the support of Western allies like the United States, like the EU to support that transition. And so I just want to, while we're here today, not only to talk about the steps that need to be taken, but also to reflect on what success has been so far. And hopefully you can step back. And I will just say that as a congressional staffer at that time in 2008, we were part of a group of bipartisan staff and members of Congress that supported, I think it was $1 billion in assistance to Georgia. All together from 4.4. Okay. I mean, that came in quickly. And I think that really highlights the commitment that's been made, including the resources that have come after that or the resources from the EU as part of this association agreement in DCFTA. So I really want to turn to each one of our speakers right now for an opening statements. And Mr. Minister, you've been the minister since 2016, and first deputy prime minister since 2016, and then also the Minister of Economy and Sustainable Development since 2017. You also were a vice mayor of Tbilisi, I think, which really shows that you know how to roll up your sleeves at the local level to get things done, which is critical when you talk about local development, SMEs. Brock, I know you're going to talk a little bit about the support that's provided on that end, but we really appreciate your leadership. To your left is Brock Fairman, who was sworn in on January 8th as the assisted administrator for USAID's Bureau for Europe and Eurasia also just brings an amazing amount, both private sector experience and public sector experience, even sort of locally in Rhode Island and the state house there as well, but also at FEMA Department of Interior has started up several businesses of your own. Having you here today is great because I think you bring the sensibilities of someone who's been both in and out of government and now is overseeing the USAID's portfolio overall in Europe and Eurasia, but also Georgia specifically and are co-chairing the Economic Working Group, which is part of this overall strategic partnership effort. To your left is Christian Danielson, who I know quite well for working with you closely at USAID who was appointed director general for enlargement at the European Commission of Brussels and has been in this position since 2015, this director general for neighborhood and enlargement negotiations, which really is an incredibly large and challenging portfolio. We were talking earlier before we came in and if I can quote you to say that Georgia has been a stark pupil and its efforts to integrate further with the EU, but also into your Atlantic institutions and we really look forward to hearing your thoughts on where Georgia stands and then maybe I might ask a more delicate question of the future of EU enlargement and where that stands, especially for a country like Georgia, which was said earlier, if Georgia isn't as ready as any country for NATO, I don't know who is, but I could say the same thing for EU membership. Certainly they have ways to go, a great deal of progress and what does light look like at the end of the tunnel for Georgia, even though I know that's a sensitive question. And last but not least, Pete Aspalard, who is the principal deputy assistant secretary for the European Eurasia Bureau, also was ambassador, I think it was Tajikistan, also consul general in Morocco, Casablanca, which is a wonderful post, and also served as a DCM in Astana. And we want to thank you for being here, obviously to focus on a lot of what was said earlier with Fiona Hill and Robert Karam as well, focusing on the strategic relationship. Obviously there's a lot of interest here in this room and others, and how do you build a really strong relationship? How do you take it to the next level? One of the topics in discussion, certainly to come up is what type of trade arrangements if there can be between Georgia and the United States, where do things stand and how do we build on what we've created and worked on for the last, really after over 25 years to strengthen this partnership. So I want to obviously get to everyone in the audience as well for questions and to really delve and jump really into this conversation. Mr. Minister, can I ask you to make the opening statement? Thank you, Jonathan. Thank you very much. I would like to thank the U.S. Institute of Peace and Heritage Foundation, as well as the Georgia Embassy in the U.S. to make this gathering happen. Thank you very much all the guests who are coming today. So we had a very useful, I think, panel on the first session and we already discussed the old security issues and you give me a lot of thoughts to explain what's going on in our country, what happened, how we increased the resilience of our country and where we are right now in relation with the United States today. So just to give you a small facts with the United States, today we have some 308 million United States trade turnover from which around 220, 260 million is the import from the United States and 120 million is the export from Georgia. Mostly the import from the United States are the cars and medicaments and other products from Georgia. It's a fair of alloys and other commodities which we export to the United States. But what we see, is that the potential between our two countries is much, much more and we see that the potential which we need to utilize should be pushed to start the talks about the free trade agreement. So yesterday I had a very good meeting with the Secretary Ross and I delivered to him hand in hand the survey which asked to do the Pricewaterhouse Cooper about the free trade agreement, how it can affect on the Georgia's and United States trade turnover and the numbers are quite good. So if the United States and Georgia will have the free trade agreement in place, the trade turnover in the next five years will increase from this 300 million up to 1.5 billion and from this 1.5 billion around 1 billion will be the export from the United States and around 500 million will be the export from Georgia to the United States. So it's a benefit from the United States as well as in the benefits from the Georgia. For sure there is a question if today we are the balance positive to the United States is a balance positive to the Georgia why we would like to have such kind of free trade agreement and there are a lot of spillover effects which we are looking for and the biggest spillover is the foreign direct investment for Georgia. The foreign direct investment is a very important source of income as well as the technology transfer, the knowledge sharing and experience as we all know from literature as well as from our experience that as soon as we have the free trade agreement in place with some countries the foreign direct investment comes and the company center to the country freely. So today around 278 companies which are established using the United States capital are operating on the territory of Georgia and they are quite active. We have American Chamber of Commerce who is quite active in our country and the American society is growing and we see that the commercial interest of the United States is increasing year by year in the region so not in the Georgia but in the Caucasus as well as in the Central Asia. We see that the United States company is investing a lot on the Central Asia countries and we see that new open up on the Uzbekistan we know that only in the Kazakhstan United States companies investing around 50 billion and this is mostly in the Gazan oil sector and when we are talking about the Gazan oil sector you need to take this Gazan oil from Kazakhstan or from Uzbekistan other resources or merchandising goods and then transfer it to the Europe or to the US and to do it you need to find the shortest and more safest route and the shortest and most safest route the safest route is for Georgia is via Georgia so this is the route from let's say the Kazakhstan using the Kazakhstan port then the Caspian Sea then Azerbaijan and then via Azerbaijan Georgia and Black Sea ports and Black Sea or via Georgia then to the Turkey and to the Europe and we are investing a lot on that direction and the last year economy grows in Georgia was quite good so we had some 5% GDP growth last year and the estimation from the International Monetary Fund in the beginning was just 3.5% we argued a lot so at that time by the way I was the Minister of Finance and I argued a lot with the International Monetary Fund that 3.5% is too small and we will get 4% and we entered to the Parliament with our budget to estimation of the 4% and finally we get 5% so this year we agreed on 4.8% GDP growth but the first quarter is 5.2% GDP growth and I think that we will finalize around 5.5% to 5.7% GDP growth and this grows mostly coming from let's say the investment, the consumption as well as the net export but based on the structural reforms which we implemented in our country the last years and we will still continue to implement the structural reforms which are very important so last year what we did we tackled several very important problems you mentioned what kind of challenges that we have and how we increase the resilience so the last year was the very important year so the one of the biggest challenges in our economy is the current account deficit 2016 we finalized 12.6% current account deficit which is huge but this current account deficit was covered from the foreign direct investment but last year we finalized 8.7% current account deficit which is for 4% less than than what was in 2016 and in nominal number it means around 500 million less than what we have in 2016 and how we do it for sure we sell much, much more products and services outside of the country which means that our export increased by 28% in 2017 and we sell a lot of our products outside the country but as well we sell a lot of our services like a tourism so tourism increased dramatically and we experienced around 28% increase on the tourism generation so when we are revenue from the tourism it reached around 2.75 billion so just to compare all the goods what we sell excluding great export is 2.8 billion and the generation from the tourism is 2.75 billion so it's around the equal what we have from all of our all of our export but when we are talking about the trade turnover of the Georgia so you should tell me when I should stop because keep going when we are talking about the trade turnover so the whole trade turnover of Georgia is around 10.7 billion from this 10.7 billion 2.7 billion as I mentioned this is the export including the re-export and some 8 billion is the import in our country from this 8 billion import what we import into our country around 2.2 billion we import from the European Union and right now I want to touch the relation with the European Union and what we are doing there so starting from 2014 as soon as we became the associated members of the European Union the trade turnover increased dramatically so at the same day we signed the deep and comprehensive free trade agreement so the two directions the one direction is that we should harmonize all our legislation with the European Union which means that the living standards in our country will increase that the law enforcement will increase all necessary legislation will be implemented etc etc but at the same time what we see we see that today the European Union supports the Georgian development a lot and I think that the director general will in his speech then talk about what kind of support do we have from European Union but what I would like to mention that today we have around 2.8 billion trade turnover with European Union and only 380 million trade turnover with United States and what we would like to see we would like to see the increase of the trade turnover with the United States so to go a little bit further on the current account deficit and to strengthen the resilience of the country so last year we implemented the several reforms which we called the gross friendly fiscal reforms under this gross friendly fiscal reforms we fully changed the corporate profit tax modality and right now in Georgia the corporates are taxed on the profit only in case of the distribution of the dividends so what it gives in the final it gives around 130% increase on the reinvestment rate and if usually in Georgia we have the reinvestment around 300 million last year we had 722 million reinvestment which means that the companies who has 10% or more the foreign capital they reinvested their money in Georgia's economy to withdraw as a dividends so from other hand we increased the indirect taxation like excise taxes on tobacco on the cars, on the fuel which for sure limits the imports from from outside but at the same time what we did we increased the capital spending and we decreased the current spending so all together these all measures increased the resilience of the economy and helps to increase the savings in the economy which is very, very important to Georgia's economy just as an example so the government savings was 2.5% to GDP and they should increase up to 6% to GDP on the 2020 so we are all so I am the politician are you a politician right now? I will keep my remark short okay but we all know how much important when you promise to your citizens something in the pre-election period so what is good happened right now in Georgia in the pre-election period in 2016 we elaborated the four pillar reform agenda so and what is good that this four pillar reform agenda which is about the education about the special development which means that improving the core infrastructure of country this is about the economic reforms and one of them I just described and this is about the open governance so all these reforms are already embodied on the midterm budget which means that we already already know how and where we should find the money to and sources to get all these reform until 2021 and support it by the international monetary fund and all IFIs which means that what we promise to our citizens will be delivered in that direction for sure the international society support to Georgia is very important and in this case I would like to particular mention the USAID support and I would like to thank you sir for your continued support during the last 25 years and I have a very very big case of describing of USAID support in our country and honestly even right now we have support in the whole direction of the sectoral economy so we have support on the rural development we have support on the energy direction we have support on the democracy building we have support on on the society building so a lot of support which we get from the USAID and then very thankful to USAID on that support so I think that for my first intervention I am ok starting from the next round I will go thank you very much I think you highlighted really positive growth numbers I know that IMF there was I think a staff visit in April that went really quite well I think the forecast their forecast was really upbeat hopefully you haven't sold all the thunder from Brock I think you were right to point out the importance of US support USAID and that also mentioning several of the sectors in business enabling environment of course is important so I am going to turn it over to Brock to talk about that but also sort of USAID ongoing effort but also looking ahead and the good note here in Washington too is that these resources are both in terms of the administration and Congress are well supported and a lot of discussions about foreign assistance but one thing that has remained constant across the political spectrum in Washington has been this great deal of support for assistance to Georgia to support the type of projects and efforts that you talked about in Brockville as well well thank you very much Jonathan and I want to take an opportunity to thank the panel for being here today I would like to thank the Heritage Society and the Institute for Peace this is a very important opportunity to have a dialogue, to have a discussion about the future of our partnership and the exciting things that are going on in Georgia I just got back from spending actually almost a week in Georgia and you know as much as we see the changes incrementally when you live in Georgia I hadn't been back to Georgia since 2006 so it was tremendous just to look at the skyline when you land but my first visit in 1999 in fact I will tell you my level of fear if you will with Georgia has gone back almost 25 years by itself and you look at some of the changes that have gone on just not with the skyline but whether it's the infrastructure whether it's just walking down Main Street you see a real change a progressive change one that's very positive and we're looking forward to continuing that important partnership that we have with Georgia and I think that starts with dialogue. One of the things that I have been impressed with since returning to USAID after almost a 10 year hiatus if you will is the working groups that I have actually now participated now in two just recently with the Democracy Working Group and also with the Economic Working Group back in March and this is an open dialogue where you can have a frank discussion and you can learn about what's important and frankly what I've learned is that business is open in Georgia. I think that's a very key important aspect you mentioned earlier in your remarks that Georgia is the number 9th in doing business but they are also the 16th according to the Heritage Foundation in Economic Freedom and I think those are really two very important key economic figures. As I look back over the last 20 years just again I've seen a tremendous amount of change but during my two weeks or I'm sorry in Georgia I had a chance to get up to Anaklia and I think that just to mention the seaport albeit that A doesn't have any direct correlation with the actual seaport itself we're doing actual programs around the port in helping create small business opportunities for businesses of which I also visited but let me just say you know you've got a $2.5 billion infrastructure program going on with that infrastructure that with the port that's a real game-changer they're going to create something that is not just impactful for the country but the entire region and looking out throughout Anaklia and visiting actually going right to the seaport and talking to the people who are involved with the project and seeing their vision they're very passionate and they've got a very aggressive timeline. They're talking about getting their first container in the first quarter of next year and if that happens there could be a lot of positive things that are going on but even still if you look at the long-term plans for Anaklia it's tremendous it's going to help Georgia throughout that entire region. Just talking about a few more things because I do want to keep my remarks somewhat short because again I know we're going to have a little bit of a question and answer and I'm looking forward to having a little bit more back and forth but I think in the ag sector I think it's worth noting USAID is heavily invested in the ag sector and since in 2017 our programs have trained 190,000 people we've facilitated credit for more than 78,000 farms. We've generated 56 million dollars in new growth sales and leveraged investments of 11.6 million dollars. Our programs have created a legacy of strong self-sustainability and commercial institutions including 29 farm centers 24 food processing facilities 10 cold storage facilities 6 primary producers and 1 testing lab providing 370,000 rural household 370 I'm sorry and I hate to read for these things but I think the statistics in this case are very important and those statistics show you how far Georgia has gone we're looking forward to working with Georgia as a partner we're excited to be part of its future. We also understand that there are some stumbling blocks along the way one of those stumbling blocks if you will are actually problematic issues in the ag sector is the marmaladed stink bug so I think some of you have heard about that and I actually the stink bug to be short it's the brown marmaladed what did I say marmaladed I was thinking marmalade but the marmaladed stink bug I'll just keep it at stink bug but honestly it's a huge devastation I believe they've lost between 40 and 50 million dollars in the last season I visited a couple of farms while I was in Georgia and it has destroyed entire crops it's been very devastating and we're actually working with them to solve this problem we launched a 3 million dollar effort just recently while I was in Georgia to help them fight this scourge we're actually working with an American company in a small town in Oklahoma where they're actually producing the traps to help fight this effort or this problem and so we're looking at a number of levels to help Georgia not just on the ag sector but in the energy sector as we have in the past and we'll continue to look to Georgia as an important strategic partner in the area as we know they are in a very very important strategic area and we're looking forward to working with them so thank you. I think you highlighted that support and continued support for Georgia's economy and its long standing relationship and the success to in specific sectors maybe I can turn Christian to you now to talk about the EU side of this and obviously one of the things I wanted to point out too is that the US and the EU have a tremendous amount of cooperation on the ground both between the embassies but also with your team out there as well as representatives in USAID and I think that has been invaluable to the work that's been taking place support for Georgia and I know that with both of you sitting next to each other that work will continue but maybe you can speak to the EU side of this and also some of the progress that you see Georgia has made. Thanks a lot, thank you Jonathan and thank you for arranging this those who have arranged it and given this to discuss this issue it is essential and as you said in the beginning Georgia is the star and that is true when we look on the transition that has taken place over the last 10-15 years it is impressive you just previous speakers mentioned the various indexes that show that this is a country which is doing extremely well when it comes to business environment improvements it is also interesting how well Georgia has done when it comes to open society indexes about transparency which is a sign of the efficiency that they have put into fighting issues such as corruption so all of that are good things and I think that one reason why this has been so successful is because the vision from Georgia has been the romantic integration and where the relation to the EU has played a very important role why? because this association agreement and the awful DCFDA as a deep and comprehensive free trade agreement in terms of term that one has provided a fairly good roadmap for reforms the roadmap for reforms not only when it comes to the trade issue but also into various other areas and minister you mentioned it and we can see already now how that has affected trade which has increased substantially as was mentioned but it has also provided the necessary environment for direct investments doves who invest can be fairly sure that investments will be well taken care of and therefore they can take the risk of doing the investment in that development as well so all that is good and quite impressive and I would like to commend the government and the measures and the energy that they are putting into these issues now that being said of course there is a need to continuously look into how this can further be improved and the minister pointed to that you have a very ambitious reform program underway on education on also addressing the issue of the urban and rural divide which is essential but also when it comes to structural forms of the economy and there are some issues which we are looking into now in particular one is the issue of shall we call it commercial justice where there is not so much that you can't get it but it's just that the issue is to strengthen the instruments and the infrastructure for it and the other one which is very important is to look into the whole the financial sector and see that that can develop even further measures are underway we are very much involved in it now it's a pleasure to point to that for this whole period of reforms of transition EU has been very actively involved in supporting and we are running right now at the level of 120 million in grants euro on the we have also provided in addressing the macro financial situation, macro financial stability support just recently we have agreed on another 45 million and we have done it in a number of areas so it has been supporting the additional reform it has been supporting rural development right now very much focusing on smaller medium sized enterprises and seeing to that the industry in and those who are active in the economy can draw the full benefit of the free trade agreement the reality is that Georgia when the association agreement and the deep comprehensive freedom agreement will be fully implemented which will be fairly soon will more for all practical purposes be able to be on the European market the 500 million market with its products so that is what we also focusing on very much and we are focusing on infrastructure and in terms of instruments we have found it quite interesting to work on issues such as how to provide financing for smaller medium sized enterprises and that has to do with the banking sector that is has not been fully geared up for that kind of purpose we are now looking into how can we get more of local currency credits out on the market it is of course a big risk for an actor on the in the Georgian economy to take loans in dollars on euros when he is actually working on the local market so we are looking into that one and we are looking on the major infrastructure elements and there we have an interesting project which I would like to mention and that is a new approach when it comes to infrastructure we have been working very hard with blending arrangements within national financial institutions what we now are moving into is much more of guarantees naming what this is about is trying to tap the capital market in a broader sense for the interesting projects that are out there in Georgia and it is within the context of something called the external investment plan that we are putting lots of efforts into and I think we are going to see quite a lot of possibilities in Georgia and finally say two words about the regional element and one thing is the regional hub that Georgia has all the potential has already become and has all the potential to become even much more that goes for transport when it comes to the one built one road but it goes very much also when it comes to energy and I am thinking of the Tana pipeline I am thinking of other pipelines where Georgia's role is essential but Georgia also plays an important role when it comes to the regional cooperation between those countries who are within what we call the eastern partnership that is Armenia that is Azerbaijan, that is Georgia that is also Ukraine, Moldova and Belarus and there they have created together a cooperation which we are supporting very much which has to do with helping expanding experiences on governance and how to become better of that on how to make the economy more competitive on how to see to that infrastructure can actually happen and finally and also to see to how people to people can be more engaged and more happened there and Georgia plays an important role in that context as well I think I will stop here Christian thank you and I think it highlighted both the work that Georgia has done as the star pupil but also some new opportunities and you mentioned DCFTA and AA association agreement something that Georgia is moving really closer to fulfilling its obligations which is significant and then how do you build on that and obviously access to 500 million people in the European market is critical I think one of the the dirty secrets here too is that underlying this association agreement efforts is strong US support for Georgia to implement this agreement and these agreements going forward and I think that's really an area of great cooperation and importance to Georgia and seen that in the agriculture sector before where the US has played an important role in USAID and the State Department Elizabeth can I turn to you to fill in sort of this picture on the US side and the strategic economic partnership and how you're looking at it the State Department looks at it obviously it was a great opening session with the Secretary of State and Georgia Prime Minister which focused in part on economics as security and how do we look at that Georgia and the United States this relationship has grown so much over the past two decades really Georgia is a key a key ally and partner we talked a little bit before coming here about the sacrifice that Georgian soldiers have made but how do you see that going forward and how do we fill in this picture and move this relationship to the next level well thank you so much and again it's a pleasure to be here this morning with this very distinguished panel then I want to thank the organizer so much for pulling this important event together many of the things I will say will repeat what we've already heard from a slightly different angle and we are reflecting now on this milestone of Georgia we agree of course that Georgia has emerged as a democratic leader in the region and has embarked on an ambitious economic four program that has already shown impressive results as we've heard and all the while as Georgia has been making these great strides the United States and America and Georgia have cultivated a deep and enduring partnership based on a joint commitment to democratic values and global security and yes it's with particular gratitude that I note Georgia's contributions to the Resolute Support Mission in Afghanistan we're deeply grateful for your sacrifices no discussion of Georgia will be complete without acknowledging the precious occupation of the Georgian territories of Abkhazia and South Asetia as well as its broader efforts to destabilize Georgia so I want to take this opportunity to reaffirm our support for Georgia's independence sovereignty and territorial integrity within its internationally recognized borders I want to commend the government's peace that is before the parliament and which contains numerous proposals to encourage trade and personal connections across the administrative boundary lines despite this occupation Georgia experiences economic growth and we believe the steady economic progress Georgia is currently experiencing and it's rising rankings we heard them it's currently ninth in the world the bank ease of doing business report are tributes to sound economic principles my government continues to support the prime minister's focus on economic growth including his four-point plan to improve education invest in infrastructure streamline taxation and governance structures and implement judicial reform our economic strategy is tied to our support for Georgia as a prosperous and democratic nation one that is making progress on its Euro-Atlantic goals in cooperation with the government other donors in civil society we are focused on strengthening institutions and the rule of law framework increasing bilateral trade and investment utilizing targeted economic assistance and supporting regional economic cooperation so I want to recognize also today not only Georgia's contributions to European security and its role as a regional anchor for advancing democratic reform and economic reform but also as a former ambassador to Tajikistan I know that Georgia has a unique potential to help further expand trade and commercial ties across the South Caucasus Central Asia and beyond to Europe and East Asia I'd like to just briefly touch on two key issues Georgia's contribution to European security the important connection between the rule of law and economic growth and Georgia's potential to help unlock greater regional prosperity on the first one I think it's important at the outset to place Georgia within the context of broader US strategy towards Europe which asserts that a strong and free Europe is in the United States vital interest as the president made clear in the national security strategy Russia's subversion and aggression are threatening this vision seeking to undermine confidence in Western ideals and weaken credibility of our commitment to transatlantic unity European governments and institutions this is a reality that Georgia understands all too well in addition to Russia's subversion we're also engaged in strategic competition with China we cannot challenge these we cannot tackle these challenges on our own we need a Georgian partner that's resilient with strong institutions and rule of law and growing economically this is why my country has provided Georgia with more than 4.5 billion in assistance since 1992 an investment we are continuing most recently with this year's omnibus spending bill which was signed by the president in March which directs an allocation of a 105 million US dollars of foreign assistance to Georgia this assistance will help Georgia continue reforms and come closer to achieving its goals of integrating more closely in your Atlantic institutions on judicial reforms and economic growth I'd like to talk about one institutional reform which is part which is judicial reform an important part of the prime minister's platform Georgia has successfully started a comprehensive justice sector reform and it's critical to the public's confidence in institutions as we already heard a little bit about the private sector also must be confident that business deals and potential investment disputes will be handled in line with international best practices reforms that provide the private sector the ability to transparently adjudicate commercial cases needs to be part of Georgia's foundation of a vibrant economy Georgia with the assistance of the United States is working on a system of commercial chambers that would bring more transparency and integrity to such cases a commercial chamber would assure investors attracting new investment from abroad and retaining existing investors which is critical to increasing economic growth and we encourage the Georgian government to continue to focus on this important reform we also continue to strongly support increased opportunities for US businesses in Georgia including through our support for commercial exchange programs we have a partnership with the Department of Commerce and with the America Georgia Business Council and we have brought 14 representatives of US companies to Tbilisi we hope will have a similar mission in 2019 will be yet another opportunity to strengthen economic ties with Georgia and finally Georgia as a regional leader and you have an important regional role Georgia's success in implementing democratic and economic reforms as well as its openness to free trade and entrepreneurship significantly enhances efforts to develop an economic corridor that links Marcus in the South Caucasus and Central Asia to Europe and China Georgia's global approach to free trade is a smart way to attract new partners and investment it will help Georgia develop as a stronger economic partner for the United States Georgia has also taken steps alongside many of its neighbors to significantly increase investments in infrastructure including several port projects and we already heard about them and efforts to improve road and rail networks we heard about Anaklia Deep Sea and the Georgian government to build this Deep Sea port in the Black Sea two U.S. companies the Conta Group and SSA Marine will be involved in this development and construction and operation another U.S. company PACE is in the process of expanding its operations in the port of Poti by modernizing its port, road and rail infrastructure Georgia maximizes its own potential for foreign direct investment and creates new possibilities for trade there is also significant regional value in energy sector Georgia has provided a reliable transit state for the Baku Tbilisi Jehan oil pipeline and for the southern gas corridor which will bring Caspian gas to Turkey this June and to Italy by 2020-21 this gas corridor will enhance European energy security and it would not be possible without Georgia's cooperation and support so through its embrace of reform and free trade infrastructure investment, support for European energy security Georgia has created important political and economic opportunities for itself and for the broader region you talked about a dirty little secret earlier I have a little dirty secret too but I have never been to Georgia and I may be the only person in this room who has never been in Turkey but I will say working in Kazakhstan and in Tajikistan Georgia was very often held out as the model Georgia had implemented the reforms and these countries could see that it could be done and so we often pointed to Georgia as the star as we already heard and in the near future I will have the opportunity to go and see for myself the wonderful progress you have made and with that I will conclude my remarks. Thank you very much. Thank you for those remarks and I think you went through just building on Brock said this extraordinary cooperation that exists and also I am glad you brought up justice sector reform I know it is something that the EU looks at and it is not about picking out one specific challenge it is about creating the right type of business environment for Georgia not only now but in the future and I think it is something that all western democracies struggle with to ensure that they remain market oriented democratic and have the right infrastructure to attract investment and that is something that is a lifelong endeavor for all countries to keep their markets open and transparent if I could and just open up with a quick question about Georgia as a regional hub which was mentioned by almost I think all the panels as well and I wanted to get a sense from you building on what they have said it was mentioned energy has been something that Georgia has played a role for quite some time now I also want to mention the importance of electrical grids that Georgia plays an important role and I know USA and US government and others have focused on between Armenia and Georgia but also Turkey and Georgia as well how important that is but maybe if you could speak to that regional center and both for European and American investors what are the opportunities that you see and also maybe speak to some of the challenges as well you have important regional partners some that Elizabeth was talking about that looked at Georgia as a model that haven't quite made it to the point where they're as necessarily as transparent or as focused on the right type of business enabling environment and how we can best assist that environment to support Georgia as a regional hub first of all I would like to thank you all for encouraging us on our success in our reforms and I would like to mention that the continuation of the reforms depending on the political will so and this is the the utmost when you are implementing so many reforms during so many years and what is good in our country that as soon as the government is committed to deliver some reform we are delivering it so and there is no question if we committed to do something we do it because we do believe that if we do something we do it in benefit of our country of our citizens and it helps a lot when we are talking about the sustainable growth of economy it's very important to note that right now there is a clear understanding in the country that all reforms all economic reforms and I have a huge huge least this is the only the economic reforms which right now are undergone in our country so all these reforms should help to the to the sustainable growth and then this is the most important so the structural change of the country helps to be sure that you will get the success in many years in the future when we are talking about the hub this is also the part of the reform so without the without the rate of corruption what we have in our country without the rate of crime what we have in our country we cannot become the hub in the region and we have the we are the most safest country in the broad region so we are number 5 worldwide as a less criminal country among 125 countries and by the corruption perception we are number 46 among 190 countries and I think that it helps a lot to attract the international companies as well because if we are talking about to become a hub to become a regional hub you need to create the environment where all participants want to see themselves and to work there and this is I think that very important because right now we are in the very competitive environment so all countries want to become the hub so all the countries have the ambitious to become a hub and all of them are implemented some of reforms but the geopolitical location as well as the as the political will with the government has right now I think that helps a lot to implement such kind of reforms which helps to attract many many internationals to our country so today the European Union will get around 24 BCM per year starting from 2019 and then it can even become more and more so up to 30 billion BCM only the top and tunnel this is only the top and tunnel this is only only one project which is extending and I think that what we have right now on the Central Asia as a resources which should be delivered to the Europe is very important to deliver on the shortest and safest route and this is the Georgia and this is via Georgia and we will do everything to have such projects in our country so you mentioned the and it was mentioned the transport corridors and I would like to mention that we as a government and country are very active on the transport corridors so there are the several corridors like a tricycle, like a car like Lapis Lazuri, like Black Sea Gulf corridor so all these corridors finally concentrated on the Georgia and via Georgia to the European direction and you mentioned the new Silk Road direction and the middle corridor is also very important and already we get a benefit from it so a lot of companies right now are looking to that corridor we get the new transport cargo to that corridor and it was mentioned that the Anaplia Deep Support will be constructed in the next few years so it's already the construction is already started so and the OPIC is right now considering to be the blender on that port and as it was mentioned the SSA Marine, US Port Operator as well as the Conti Group are there which is very important for us and all together it's 2.5 billion project in time to even strengthen the transit capability of the country we are investing a lot on the East-West Highway on the modernization on the Georgia and Railway because you need the supplementary infrastructure so only the port cannot work you need the railway and you need the roads to deliver the goods to the port so I think that they all together the business infrastructure all together creates the hub which we would like to see the Georgia and not only the hub on the transit as I mentioned for the goods for the energy sources but as well as for the business so I think that the Georgia has the full potential to attract as I mentioned the international companies to have the headquarters there and we see right now a lot of international financial institutions have the headquarters in our country and cover the region from our country and I think that they feel themselves quite good in our country and for sure we will continue to support this direction and the certified trade missions are very important from United States because when you have the trade missions from United States it increase the interest from United States to the country and it gives you the opportunity to give to the companies the exact opportunity what you have in your country and I would like to thank the Commerce Department last year we had the trade mission I hope that this year we will get another one so and it helps to make closer in Georgia and United States companies because as I mentioned around 270 companies are active right now in Georgia but still we would like to see more and more United States companies in our country. While we do this I know we have a lot of experts who are here and I see someone from OPIC here and maybe we will turn to Merrill first to ask some questions and if you can just please identify yourself and let us know where you are from and he represents. Merrill investment policy at OPIC overseas private investment corporation we are the US development finance institution as many of you know we have been active in Georgia very active since the 1990s I just came from Georgia where we were doing an analysis of the broader outcomes the impacts of our projects in Georgia and we were really excited to see some of what has come out of that we have supported everything from the Tbilisi Marriott to the New Moxie the restaurants on the Fenicular Hill to Telyani which is part of your new exporting to the US and we were obviously very happy to see what our own investments were doing in terms of succeeding and growing but one of the really interesting things we found in this analysis was that because of these investments that OPIC supported there were over 300 small businesses created to supply these entities and thousands of people now working for those small businesses because they were able to supply some of these entities we supported and I think it's really remarkable that what we were told over and over again is when they these small companies are associated with a US firm whether it's Marriott or Wendy's or whatever there is an understanding by potential clients that they are doing international standards they are dealing with environmental and social situations appropriately and so they are then able to grow themselves because they are seen as very acceptable businesses for other people to work with so I just wanted to comment that the impacts of what US entities are doing there the impacts supported by OPIC are huge and what we found as you just mentioned most likely in some of the infrastructure coming up our new Gazelle fund supporting a small well not so small cement company that will be working on some of the infrastructure there so I just would like to hear from anyone who wants to comment on sort of the downstream effects of the investments that US government is supporting there thank you why don't we take a couple questions and pull them together we have right up front thank you for your comments I'm Steve Powell managing director of Sino Powell Capital you all know what capital is I'm Powell Sino is a prefix meaning China and I heard China mentioned for the first time by Elizabeth today I think China needs to be discussed I know this is not a China Georgia conference but still I think it's a factor in any investments that people might want to make in Georgia depending on what direction you go in the Silk Road either starts or ends in China and China has been making a lot of investments along the Silk Road so I'd be interested to hear how you're coordinating interest from China and investments from China with interest and investments from the United States thank you we'll take one more Alex you should the HS market thank you very much for your comments very informative lots of data I wanted to ask you a question that kind of cuts to the core of economic development in Georgia that has to do with unemployment Georgia has been for years plagued by a fairly high degree of unemployment and I was wondering if you can comment on that and also related to this economic development in Georgia I think it's a little bit somewhat can you please provide comments on the level of national debt and the level of hard currency and gold reserves thank you very much great minister do you want to tackle debt unemployment absolutely easy issues absolutely I can even show the charts OPEC is very active since 1992 and until now the OPEC invest in more than 50 projects and the investment is more than 500 million so what we know that even today the OPEC is considering to invest on 6 to 7 projects all together around 100 million and I think that this is very important and I would like to ask you to share your experience with the USTR because this is what we found in our research with the PricewaterhouseCoopers that with increased trade with the United States as soon as the pre-trade agreement will be there around 22,000 jobs should be created in Georgia because of the spillover effect so and what we see we see that as soon as they enter to the country they help to increase these standards on the SME and this is very important and we have the special program to support the SMEs on their direction to increase their capability to supply the goods and services to the multinationals and as soon as the Marriott or other companies like that enter to the country it helps a lot and in their direction I don't see that it can be the downside so only the upside what I see on the investment from the United States so I would like to encourage and commend you to look at the projects what you have in our country you are quite active and I think that two infrastructural projects especially the Anaglia Deep Support as well as the expansion of the PACE terminal in the Potiport are very important both of them are infrastructural projects both of them strengthen the transit potential of the country so and it's really very important you mentioned the Teliani Valley so and just for the information the Teliani Valley is one of the best wine producer factory in our country who owns the factory itself as well as the vineyards and they are selling the wine outside of the Georgia as well as in the United States so what I remember by heart last year they sell around 50 million bottles which is really incredible so it's really good company thank you Opik to support so the next question was about the China-Georgia relation and what's going on there we have very good relation in 2017 in May we signed the free trade agreement with China so we was among the first countries who joined the initiative of at that time they called it Silk Road initiative and then they changed the name and right now it's One Belt One Road initiative in early 2015 we signed the cooperation with China at the time our Prime Minister was the Minister of Economy and he signed with the Commerce Minister at the time the agreement on the cooperation on the Silk Road and it pushed the relation between our two countries and then we signed the free trade agreement with China and what we see we see a quite big increase in our trade relations so right now the trade turnover between Georgia and China is 970 million from which around 200 million is the export from Georgia and 700 million is the import from China but what we see is that the very important products like Georgia and wine increase dramatically in the Chinese market so last two years in 2016 we had some 85% growth in 2017 we have same number so Chinese market become number third market by the volume of the Georgia and wine which we sell there and and by the price of the Georgia and wine they become number second and for sure we will continue the trade with them and because it's a huge market for us and we would like to utilize this opportunity to trade with them in regard of the investment Chinese behind the United States for sure only in last 10 years United States invest in our country around 800 million and all investment of the Chinese in our country is around 350 million but right now they are quite active from four industrial free trades on two belongs to them in the Kutaisi and other is in the Poti and they are quite active so we can see in the future the activities of China but we don't think that it can be a threat for us so the visitors from China last year we had some 14,000 people only and from United States we had some 42,000 people so I think that the United States is quite ahead in relation with China but still we need to deepen and strengthen our relation in regard of the economic one and for sure the support what we get from United States is far, far ahead from relation what we have from China but still the initiative the initiative of the One Belt One Road is very important and why for Georgia is very important because there is five principles of physical coexistence of the countries along the Silk Road and these five principles are very important the first principle is not interfering of internal matters of the countries the second principle is the respect of sovereignty and territorial integrity but these two let's say the principles are very important to us so you know that we have the territorial problems 20% of our territory is occupied and not interference and sovereignty and territorial integrity is very important the second thing is very important that how we see the countries and the ability of the countries along the Silk Road that the Georgia can be the complement and can be the beneficial of the whole Silk Road so we are not the competitors of the countries who has the gas and oil so far away from it so we don't have the gas we don't have an oil so the Azerbaijan and all other countries in Central Asia they are the gas and oil producers we are not if we look far a little bit far away on the Mongolia on the China and other countries so we are also not competitors so we can provide let's say the very good platform to create some joint ventures and etc but and can be the complementary and benefit find the synergies of it so this is how we see it right now I talked to exact numbers of the visitors I talked to tell exact numbers of numbers of the investment and and trade but still the Georgia is the relatively small countries so we are only 3.7 million citizens so this is the all the country and the territory of the Georgia is all territory of the Georgia including the occupied territories is 70,000 square kilometers and you cannot allow yourself we don't have the luxury to be the protectionists we don't have such kind of luxury because the country is too small as soon as you will start the protectionist it means the pressure on the inflation as well as the quality on the small country so the only way to to support the competitiveness of the country is the open up and we are very open economy right now for sure some part of the economy struggled from it and for sure the producers are all the time complaining that even the European Union as soon as we open up the one factory of the sugar producer is stopped and 600 people right now are looking to the jobs but still we think that the government should think how the government can create the new jobs for that people but not be the protectionist so and we are thinking right now to create the new sustainable way of new jobs in that region particularly and maybe we will ask even the European Union to support us to create these new jobs but for sure not to close the borders and on that case I would like to go to the unemployment the unemployment is really huge so and if you are aware about the last data because of the census of 2014 the statistics department recount the unemployment rate and in 2017 the unemployment rate was 13.9% still the trend starting from I don't know 2012 is decreasing dramatically from 17.8% to 13.9% but the challenge is huge there and I would like to explain the challenge even when we are talking about 13.9% unemployment employment 47% are self-employed and working on the rural area and they are only creating 8% of our GDP so and this is the real issue and talking about this issue for sure we are working to tackle this issue and the DCFTA facility as well as the USID support on the rural area development as well another import program from the European Union on the rural area development SMA strategy which we elaborate with the QFW as well as all other programs should tackle this unemployment and what we should get there is that to increase the productivity on the rural area which then will create even additional unemployment and then these people from these people we should tackle jobs so as you see it's a very complex issue and with our friends we are working to tackle this issue but yes. I wanted to bring in some of the other panelists who just building on both the question of colleague from OPIC who spoke about I think specifically Christian of the EU of looking at those models how do you view European business and European medium size business coming into Georgia and facilitating that type of relationship we talked about the US but also China and tackling that and the issue and the rise of sharp power as well in Georgia no doubt Georgia is a geographic position as a small country that trade with all of its partners and all of it is important and not always possible when you have a neighbor in the north that uses trade and economic sometimes as a weapon but I wondered if colleagues want to weigh in on China but also on SMEs and I think the OPIC example is quite important of what the US is seeking to do on the ground and Georgia mentioned some of the things that USAID is trying to do. I think one thing you said on the benefits of an open economy is probably not only true for small countries it's also quite true for bigger countries and I think we have the experience in Europe of that in particular. Now on the issue of the small and medium sized enterprises as you said Deputy Prime Minister this is in terms of seeing to that environment becomes the right one for the development of that particular form of activity and what we are doing together is to look into how we can and which is quite substantive means KFW was one example where we worked together but also with the European Bank of Reconstruction and Development is to see how we can provide the necessary financing but also the funding for SMEs or those who would like to do startups to exploit this new very beneficial environment for economic activity that is underway in Georgia and of course with the aim of both looking into the Georgian market but also going beyond to the European market and in this context that for instance the ideas we have right now on local currency are important because for a small or medium sized enterprise this is a big challenge to get the financing but also to take the financial risks of foreign currency is an additional burden and it is absolutely true what was said about infrastructure investments or investments being done by us as by others that that create surrounding around which is beneficial for SMEs to develop and we have seen that also happening in Georgia so this is a challenge but it's something that I think we are very much to get the focusing on and I think it's very much also part of the economic model Deputy Prime Minister that you have outlined and is going to follow. I would just I know we're up against time but I would just add this is a very high priority for us at USAID specifically in Georgia as we're helping SMEs understand how to be more competitive how to understand better practices how to reach out to other markets in 2017 we created 2,000 new jobs so this has been a real important target for us we understand that giving them the tools and creating better atmospheres for them for their businesses for their products is very important but I would also suggest as the unemployment issue is a problem I think the direction that Georgia is going is obviously in a very positive direction again I think it's worth noting that the ease of business those markers aren't going to reduce unemployment until you get to that point so what I'm suggesting is that you've got to change the marketplace first in order to increase the employment and I think those things are happening in Georgia and so I think as we move ahead I think we're in really good place and so I'm excited about the opportunities in Georgia. Well I would just say that you know we've lauded a lot of the accomplishments of Georgia but on the sort of foreign investment side and welcoming foreign investors I would say this is a continued everyone needs to continue working on it this is not you can't rest on your laurels the investment climate that's what the investors will look for they will look for predictability they will look for transparency and so we will just continue supporting Georgia in this important work. I think what we're going to do because I know we're running up against time is to give the minister the last word before we break for the next speaker. Thank you very much so I'd like to finalize the answers on the question so to return to the unemployment so the last initiative what we would like to start with with the degenere as well so we would like to propose to start because we have the European external investment plan as well as the European investment fund there and we already talked with the European investment bank is to create the credit guarantee fund which is well known in the Europe and is the market failure what we have right now in our country so there is several directions where we need to support we have to support the SMEs and as it was mentioned there is an expertise there is a knowledge there is a technical assistance as well as is the access of finance and in the direction of the access of finance the problem of Georgia is that the deep of the financial market is too small and what we have right now in our country is only the commercial banks and this is the real problem and at the other hand the SMEs does not have enough collateral to provide this collateral to the commercial banks so and only the way how we see right now to support the creation of the new jobs is to support the access to finance so the two directions so one direction is to support on the expertise the technical assistance knowledge providing etc and for other hand to support the access to finance to support the access to finance when they learn the lessons around the world we find that the credit guarantee mechanisms or schemes or funds are the most spread it in Europe and because the Europe right now covers us and the covers as I mentioned the instruments what I mentioned so I think that it will be very easy to establish with the European Union such kind of credit guarantee funds and when we learn the lessons even the additionality how you should evaluate if the credit guarantee mechanisms or funds are successful or not nobody is measure how much lending they stimulate everyone measures how they are creating so we think that right now we have the several instruments like a produce in Georgia which helps a lot but still it's not enough so we have a lot of programs in now in my ministry in the ministry of agriculture and it's create a lot of jobs so we count around 14,000 new jobs which we are created on the only on the program under the produce in Georgia but still last year the private sector creates 36,000 new jobs but still it's not enough so and if we will get such kind of instrument I think that it can help a lot to to close this market failure so there was another question about the I think based on sort of timing of some of our guests too if there's anybody who has any follow-up maybe on some of the questions too but I think what we could certainly spend based on this just this topic alone several more hours and I think what you were expressing in this point is the need for even more creative thinking about how the US the EU and others can support Georgia we can talk about land registration either which I failed to mention but I think it's an important aspect and I think it leaves the great deal of cooperation I think the opportunities also the challenges for small countries, larger countries partnerships and new areas of investment we didn't get a chance to talk about new economy which I think for Georgia is really going to be important but again I just want to one I hope everyone will join me and thanking our panelists and our distinguished guests for being here today for this important event and thank you pleasure. I look forward to seeing you again. I am. No, no, no, this is about the next speaker. So ladies and gentlemen as the panel is leaving great session the final speaker here today and it's very appropriate that the Minister of Defense is the final speaker of the U.S. Georgia strategic partnership conference. Minister Levan has been in office since 2016 a challenging job I mean a minister defense for a country that's been invaded and is partially occupied has a hard job. Other countries have been recently been invaded and we didn't learn from the Georgia experience in 2008. So the movement as Prime Minister mentioned from strategic partnership to strategic alliance I think is an important one and he also oversees the preparation for the NATO alliance movement. So please join me in welcoming the Minister of Defense of Georgia Levan Izoria. So thank you ladies and gentlemen and welcome. I'm honored to be here. First of all I would like to thank the Georgian Embassy Institute of Peace and Heritage Foundation for hosting this event. 2018 is a very special year in many ways. It marks the 10th anniversary of the Bucharest summit declaration which stated that Georgia will become a member of NATO. It marks 10 years on from the August and the Centennial anniversary of the declaration of independence of Georgia. The past 100 years reflects a time of trials and transformations as Georgia shifted between political realities and came to once more regain its treasured independence. I want to take this opportunity to honor all those that serve and sacrifice to make that freedom possible. Commitment to duty, strengths, determination and sacrifice of individual soldiers is and will always be the strengths of our countries. It makes us strong and inspires us to unify in our fight for freedom. I would like to say a special word to thanks and appreciate the very close partnership and friendship that has been forged between our countries and our armed forces. Friendship is stronger based on common values and interests and unity is the strengths of our partnership. Currently 870 Georgian military servicemen and women serve carrier free other the different commands of Afghanistan and will continue to participate until the last soldier lives Afghanistan. The U.S. enduring support and assistance has been instrumental for us to provide adequate treatment to Georgian wounded warriors and care for their families through the State of Georgia National Guard Family Support Program. Furthermore in 2018 we will be expanding our rehabilitation facility in Sarovani to provide a regional center of excellence for wounded warriors. We are proud that since 2016 we are providing physical and psychological rehabilitation courses not only to Georgian soldiers but to the Ukrainian servicemen as well along with their family members. While we contribute to greater peace and stability Russia continue to destabilize the regional security and seeks to change the international order. Russia undermines the sovereignty and security of countries worldwide and attempts to subvert and discredit western democratic institutions and processes. In Georgia Russia maintains around 10,000 troops in Abkhazia and Srinvali region as a recognized both regions and as independent states with military, economic and social linkages to the Russian Federation. Threat Georgia is facing on the front line is not only associated with direct military aggression but also includes sophisticated so-called hybrid warfare and new complex approach that offers fundamental and new tactics in the conduct of warfare. In order to effectively respond to global as well as regional complex security challenges Ministry of Defense of Georgia continues ambitious defense transformation program which derives from the Georgia's Euro-Atlantic integration needs and is fully in line with NATO's focus to further strengthen deterrence and defense posture boost efforts to project stability in the neighborhood advance the alliance modernization agenda ensure fair burden sharing with this in mind we have been carrying out a comprehensive set of reforms in SDR MOD introduced a new total defense approach which places great emphasis on enhancing interagency cooperation as a way to ensure the whole of nation approach and effective use all the resources to defend the country. Interagency pillar is the cornerstone of effective planning and implementation with the MOD test during annual governmental interagency exercise aimed at deepening interaction and coordination at the strategic and operational level against the hybrid warfare and other threats during crisis and warfare various state agencies and individual organizations participate in the exercise this year did gory exercise will be exceptional it will be held on highest strategic level with involvement of the prime minister and relevant senior level government representatives in the framework of total defense approach we implemented important measures to improve reserve and mobilization system the new system is based on lessons from the Scandinavian and Baltic states given that we face similar security challenges and have to counter Russia's hostile foreign policy MOD has already achieved significant progress in reforms I would like to underline our notable progress in enhancing our capability and our success in mirroring the NATO standard of spending 2% of our GDP on our defense budget additional personal cost has been reduced from 67 to 53% and we have increased from 4% to 20.9% of our military budget spending to major system acquisitions the NATO standard of 20% this improvements has enabled Georgia to purchase the US anti-armor system which has significantly improved Georgia's anti-time capability contributing to Georgia's potential for deterrence and resilience it has also strengthened regional security and has made Georgia more capable we as partner in the region and around the globe allowing Georgia to purchase the government system is a testament of the absolute trust towards Georgia which we highly value and appreciate in coming years as we continue to increase the spending on equipment modernization priority will be given to developing major self defense systems air defense, artillery engineer and intelligence cyber surveillance and reconnaissance capabilities for the first time the Ministry of Defense has elaborated a long term acquisition strategy a policy document and defense portion resource management handbook defining key acquisition principles and financial planning and management framework we named 2018 the year logistics to help prioritize multi-logistic initiatives we hope to make significant progress in shaping our logistics structures and streamline our logistics processes to improve the sustainability, mobility and continuous and speedy logistical support of combat units as I have mentioned before our number one priority is building institutional planning and training capacity that yields a credible, sustainable organic deterrent capability Georgia's defense readiness program is the backbone for strengthening Georgia's combat readiness and resilience it is tailored to the tasks assigned by the national defense plan and is designed to rapidly improve the combat readiness of Georgian infantry battalions and to produce long term system policies and processes to sustain military readiness since 2017 we have been working on GDRP institution laying out necessary institutional foundations and building the infrastructure and training facilities for the GDRP training and now I am delighted to know that recently we started GDRP training and the execution of the program is progressing exceptionally well after the program is finished Georgia Armed Forces will have the organic capability to train and evaluate units from national missions to counter complex security challenges and to ensure the effective defense of the country united and coordinated actions of all government agencies is essential in the framework of total defense it is necessary to explore and develop new approaches methods tactics and capabilities unconventional warfare should become the main principle of the Georgian Armed Forces in compliance with SDR and updated national defense plan in 2018 we plan the reorganization of the Georgian Armed Forces with the aim of establishing brigade combat teams and restructuring of the engineer units special operation forces as well combat support and combat service support units main emphasis will be placed on standardization table of organizations which will ensure effective and equal distribution of forces and equipment stated changes will place the main emphasis on small tactical units capable of execution mission command in parallel we are complementing the readiness of the Georgian forces by addressing equipment capability shortfalls thanks to the US as I have already mentioned received German anti-tank system and currently the capabilities being gradually disseminated in infantry battalions with the US support we are also in the process of equipping all infantry battalions with NATO standard small arms secure tactical communications and light vision capability our goal is gradually to fully transition all infantry battalions to US origin equipment in 2018 Georgia will continue hosting as well as participating international exercises last year with Georgian multinational exercise agile spirit and noble partner we are conducted exceptionally well noble partner was the largest field training exercise ever held in Georgia this year we plan to build on the success achieved and increase the scope of the exercise even further this year agile spirit exercise will continue to invest in Georgia and act as rehearsal for the planned exercise the following year which will include amphibious operations here I must also mention that positive impact of the agile spirit on the Black Sea area Georgia as an indivisible part of the Black Sea security architecture remains committed to contribute to the NATO's efforts in strengthening stability in the region and the development of all existing cooperation mechanisms with NATO and our partner nations which are fully in line with our reform objectives and further assist Georgia on its way towards NATO membership the substantial NATO Georgia package has become one of the key practical cooperation mechanism which significantly assists defense transformation process and helps prepare our country for NATO membership we remain hopeful that the NATO Brussels summit will mark an important step as 29 Allies duly recognize Georgia's progress and reform their commitment to our Euro-Atlantic aspirations we hope to take away meaningful deliverables from the summit in the end I would like to highlight the past few years have been remarkable in terms of advancing the bilateral cooperation the various high level visits including the historical visit of Vice President Mike Pence increased flow of financial assistance and multiple project of cooperation we will demonstrate that U.S.-Georgia relations have become stronger than ever this is the result of right policy changes and smart reforms which is crucial for future development of our defense system and armed forces such joint efforts complement our ongoing defense reforms and altogether enhance Georgia's potential for deterrence and resilience for the past 26 years United States as a strategic partner has been standing beside Georgia and Georgia people safeguarding freedom security and prosperity which has been vital for sustainable democratic development of our state Georgia as a responsible partner is dedicated to continue strengthening our friendship partnership and I believe this partnership will translate a long-term strategic alliance thank you for your attention as we draw this conference to a close I just want to take a moment to thank all of you for being here today participating in this discussion I want to thank our panelists for their participation and the insights they brought us today and finally I want to thank the Embassy of Georgia and the Heritage Foundation for their collaboration and friendship in pulling this event together so thank you all very much Ladies and gentlemen we kindly ask that you please remain seated until the official party departs. Thank you Ladies and gentlemen we ask that you please exit from the upper level of the auditorium. Thank you