IV.  Political Environment

U.S.-Georgian trade and investment agreements have been ratified
by the GOG.  However, there is presently no treaty on taxation
between Georgia and the United States, although one is expected
to be reached over the next 1-2 years.

The GOG is comparatively open to foreign investors and economic
policy is officially aimed at developing the market economy.
However, in some cases the GOG's formal declarations and actual
acts contradict one another.  While formal decrees are intended
to encourage the privatization process in the industrial sector,
a state-owned trust is organizing the metallurgical industry.
Other issues affecting the business environment include frequent
changes in business regulations and rules.

Political power in Georgia is divided between Parliament, led by
Parliamentary Chief and Head of State Eduard Shevardnadze, and
the Cabinet of Ministers headed by the Prime Minister.  The Head
of the State's Personal Staff coordinates relations between the
Parliament and Cabinet of Ministers.  Parliament has various
commissions working on economic policy and legislation in
different sectors: foreign affairs, law, economy, finance and
budget, natural resources and environment, education and science,
culture, health care, agriculture, industry, construction, energy
and communication, social affairs, sport and tourism, defense,
etc.   The Cabinet of Ministers consists of 16 ministries, 5
committees, 16 departments, 2 inspectorates and several state
concerns.  The Cabinet of Ministers has 20 State Advisers
coordinating different sectors of the country's policy and
economy.