The Problems of Energy Security in Georgia

Besik Aladashvili

In general, threat is a constant category and can not disappear, just changing of its parameters, di-
rection, time and geopolitical space origin is possible.

Energy related threat is the unity of economic, political, social, economic and other (existing or expected) internal and external problems of the country resulting from complication, the unity of negative phenomena and processes spearheaded against the country’s interests that hamper the current and prospective development of the country’s fuel and energy complex.
The importance of energy for any country’s development is immeasurable and it is an important condition of economic growth.
Before designating arrangements for energy security, the main threats should be designated. Here only global and geostrategic threats should be taken into account, since daily problems and fixing of minor shortcomings is the subject of the concrete current economic and energy policy of the country. However, it should be stressed that singling out of concrete energy related threats is complicated by the circumstance that here not only the regularities of economic and energy development, fundamental and generally determinative processes, but also seemingly superficial, transitional, subjective and accidental phenomena should be taken into account.
Energy related threats may be classified in the following way:
1. Of foreign and internal character;
2. For a short or a long period of time;
3. Having open or latent form;
4. Stipulated by objective or subjective reasons;
5. Characteristic of extreme and normal situation;
6. Existing and expected;
7. Global and local;
8. Proceeding from the concrete stage of the country’s economic development.
Each of them requires a detailed consideration.
Energy related threat of foreign character is a result of the problems that arise outside the country and, as a rule, are inspired and managed from abroad. That is why, the current objective negative economic, political, social, demographic, natural and other processes taking place in other, first of all in neighboring countries and in the world should be considered as potentially risk including factors.
The following pertains to this kind of threats:
– Use of economic sanctions contrary in defiance of countries’ interests;
– Declaration of embargo or boycott;
– “Trade war” and blockage of other countries’ export-import operations;
– Discriminating customs-tax and visa policy of the neighboring countries;
– Blockage of other countries’ thruways and declaration of energy blockade;
– Unexpected changes of the situation on the world energy markets;
– Acquisition by other countries and their firms of our country’s strategic units: with the purpose of their bankrupting and ousting from the domestic and international markets;
– Using by other countries of “energy debts” factor for the sake of own political and political interests;
– Possible negative effect of the current economic (financial) crisis on the energy policy of the neighboring countries, etc;
Energy related threat of internal character, as a rule, originates from the economic processes inside the country. However, frequent are cases when negative phenomena taking place outside of the country (external threat) may give rise to internal energy problems and stipulate arising of internal threats.
There are quite a lot of threats of this kind that is why it will be expedient if we single out only the main ones:
– Protracting of the process of the economy’s structural rebuilding and its negative effects on the balance of production and consumption of fuel and energy resources;
– Uneven development of branches of economy: advance development of trade and services sectors in comparison with industry and, first of all, energy sectors, which eventually entails increasing of “negative import” and outflow of convertible currency;
– Increasing of foreign debts;
– Rising of inflation rates which has an effect on the prices of fuel and energy resources as well, etc.
Threat for a short period of time originates from concrete problems facing the development of the country’s fuel and energy sectors. The period of their effect is determined by a short period of time (up to 3 years) a comparatively short period is enough for overcoming of them:
– Breakdown and repairs of basic energy enterprises;
– Seasonal increasing of fuel prices in view of climate conditions, etc.
Threat for a long period of time – this kind of threat, as a rule, originates from strategic, profound and complex problems, the period of their effect is a long one (more than 3 years), and complex step-by-step measures are necessary for overcoming of them.
The following pertains to this kind of threats:
– Loss of traditional internal and external energy markets;
– Corruption in energy sphere;
– Hyperinflation processes, etc.
Open form threat is characterized by sufficient transparency in order to timely establish the problems (reasons) causing it, as well as set and implement a plan of adequate actions.
The following pertains to this kind of threats:
– Seasonal changes of the situation on the world energy market;
– The problems created by the existence of natural fuel and energy monopolies;
– “Expansion” of foreign products and exclusion of local ones from the domestic market;
– Lack of development of energy infrastructure, etc.
Latent form threat may arise both as a result of hostile intention of some foreign country and as a result of implementation of narrowly corporate interests of international financial and industrial groups. Besides the aforementioned cases, a possibility of this kind of threat will also exist when the expected effect of the ongoing or latent processes taking place on the international energy market or in other countries is not properly taken into account.
The following belongs to this kind of threats:
– Latent export of fuel and energy resources in conditions of the difficulties on the domestic market;
– Latent control of foreign companies over local strategic enterprises with the purpose of bankrupting them and ousting from the international markets;
– Illegal uncontrollable outflow of skilled labor force from the country;
– Contraband import of fuel and energy resources, which makes production and processing of local oil and gas unprofitable, etc.
Energy related threat stipulated by objective reasons is, as a rule, prompted by objective processes taking place in the economy, society and nature.
The following pertains to this kind of threats:
– Existence of natural monopolies;
– Natural calamities;
– Cyclic development of the economy;
– Economic crises taking place in some countries, etc.
The source of energy related threat stipulated by objective reasons is to be found mainly in the conflict of problems and interests of subjective character existing in the society. Besides, personal confrontation of the country’s leaders, negative historical heritage, religious intolerance (e.g. Armenia and Turkey, Israel and Arab countries) have often determined energy policy between countries.
The following pertains to this kind of threats:- Corruptibility of state structures;
– Shadow economy;
– Imperialist policy of undemocratic leaders of some countries, etc.
The threat characteristic of extreme situations – the reason for this kind of threat is, as a rule, the current or expected problems inside or outside the country. Its eradication or localization of negative consequences is a most complex problem and demands coordinated interaction of all parts of public administration.
The following pertains to this kind of threats:
– Energy related problems originated from terrorist acts and natural calamities;
– Open aggression of other countries, as well as obstacles in supplying of fuel and energy resources that sprang up as a result of hostilities, economic sanctions and blockade;
– Ecocatastrophes, etc.
Energy related threat characteristic for a standard situation is, as a rule, a result of typical problems and application of the already tested standard methods and skills.
The existing threat originates from economic and socio-politic problems taking place at the moment, and if corresponding measures were not determined and carried out in advance, a belated reaction to the fact that has already taken place almost always entails an undesirable result.
Unfortunately, there are a lot of examples of this kind of threats both in general and in Georgia’s day-to-day life.
Expected or potential threat is a result of previously known phenomena or expected problems. For its eradication and planning of adequate arrangements forecasting of these phenomena and problems as well as simulation of crisis situations are necessary, which is a most difficult task even for the highly developed countries. However, implementation of the previously planned arrangements raises the possibility of obtaining of final positive results.
The following pertains to this kind of threats:
– “Chain” crisis reaction in the national economy as a result of the world financial and economic crisis and economic problems taking place in other countries;
– Decreasing of fuel and energy resources;
– Ageing of basic assets of enterprises of the fuel and energy sector;
– Immigration of highly skilled specialists and problems of training of new ones, etc.
Global energy related threat is a result of the processes taking place in the world, forecasting of and planning of reciprocal measures to which is impossible by one country only and requires efforts of the world’s leading countries and the international organizations.
With the purpose of avoiding of this kind of threat, international (regional and territorial) coordination and planning of measures related to energy security are necessary.
Instances of this kind of threat:
– World monetary and financial crisis;
– World fuel and energy crisis that arose as a result of political and military confrontation;
– Impact of global ecocatastrophes on the international energy market;
– International terrorism, etc.
Local threat is mainly stipulated by the phenomena taking place inside of the country and its result, as a rule, does not spread outside the national economy.
The threat originating from the specific stage of the country’s economic development changes in proportion to overcoming of definite steps of the country’s economic development. For instance, both energy related threats and security measures are different for the developing, transitional, economically developed and highly developed countries. The higher is the rate of the country’s economic development the shorter the list of energy related risks is, and vice versa. However, this does not mean that a highly developed country should give up “ordinary” systematic monitoring of energy related threats.
It should be pointed out that separate kinds of energy related threat are closely interrelated. For instance:
A long-time provision of some country with imported natural gas (Threat ‡2) is first of all related to the supplying country’s (Threat ‡1) interests (Threat !3, !6, ‡7) and the current (expected) economic, political, social, demographic and natural phenomena (Threat !4, !5, ‡8) taking place there.
In this case the threat “coming” (!1- external) from some other county is taken as the starting-point of the situational model. In other cases, another threat or combination of threats may become a situational model of energy security, for instance, “the existing latent, internal threat in an extreme situation”.
Ranking of the energy related threat is necessary, as well as systematization in accordance with corresponding indicators and parameters (quantitative and qualitative indicators). With the purpose of prevention of future energy wars and blockades, it is necessary to create an energy security belt for our country. But this is a topic of another conversation.