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Page last updated at 14:56 GMT, Wednesday, 22 October 2008 15:56 UK

Donors pledge $4.5bn to Georgia

Children wait to receive bread in a refugee camp in Gori, Georgia. Photo: September 2008
Tens of thousands of Georgians were left homeless after the war

Western donors have pledged $4.55bn (£2.7bn;3.5bn euros) to help rebuild Georgia, two months after its conflict with Russia.

The announcement followed a meeting of some 70 organisations and countries in Brussels, hosted by the European Commission and the World Bank.

EU officials said the amount was far more than had been expected.

In August, Moscow ousted Georgian troops from Georgia's rebel regions of South Ossetia and Abkhazia.

EU External Relations Commissioner Benita Ferrero-Walder said the sum included $3.7bn of public money and $850m from the private sector.

"I must tell you that it is much more than we have thought, and therefore I think it's really a day of joy," said Ms Ferrero-Walder.

The Georgian prime minister reacts to the money pledge

She described the donations as an impressive sum, "especially in difficult times".

Pledges from Western donors had expected to reach more than $3bn (£1.8bn).

Some key donors had announced their pledges prior to the meeting, with the US pledging $1bn (£600m) and $700m (£429m) coming from the European Commission.

The remaining amount was expected to come from EU governments and international bodies like the World Bank.

Georgian Prime Minister Lado Gurgenidze said his country was "deeply moved and humbled by the demonstration of solidarity" from donors.

"At a time like this, to show such support is something that no Georgian will ever forget."

Long-term need

Russian troops dismantle a checkpoint near South Ossetia. Photo: 7 October 2008
Russia withdrew its troops from the "buffer zones" earlier this month

At the opening of the conference, European Commission President Jose Manuel Barroso said there was a "moral imperative to help a neighbour in need" and that the European neighbourhood policy was "more than words, it's about actions".

He said that by helping Georgia, a key energy transit country, the EU was also helping itself.

The BBC's Oana Lungescu in Brussels said the conference was intended to send a strong signal of support and confidence in Georgia in its hour of need.

With winter approaching, the focus of the aid process is expected to be on resettling almost 65,000 refugees whose homes were burned and looted in the war, says our correspondent.

But much of the aid is for long-term needs, rebuilding infrastructure and restoring the confidence of foreign investors in Georgia's once fast-growing economy.

Mr Gurgenidze said Georgia now had its "work cut out" to use the funds effectively.

"Our commitment to the taxpayers of all of the countries ... is that every single euro, every single dollar, pound, whatever other currency, will make Georgia stronger, more prosperous, freer, more democratic and more genuinely and thoroughly European," he said.

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Critics have warned of the damage that could be done by such a large influx of money.

Six Georgian opposition leaders sent an open letter to the conference urging donors to strictly monitor the funds allocation.

They said this would ensure that the money reached the displaced people and helped economic recovery, rather than strengthening the administration of President Mikhail Saakashvili, which they said had provoked Russia's military intervention in August.

Russia still has more than 7,000 troops in South Ossetia and Abkhazia and was not invited to donors conference.

The Kremlin has drawn criticism from Western nations for recognising the two territories as independent states.

The conference supports Georgia's territorial integrity and Russia has a different interpretation of that, one EU official explained.


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