US pledges $ 1bn, IMF offers loan to Georgia

Russia News.Net Thursday 4th September, 2008 (IANS)

The US will provide $1 billion in humanitarian aid to Georgia following the Russian invasion of the former Soviet republic, while the International Monetary Fund (IMF)offered $750 million in loans.

‘Georgia’s needs are great, especially its economic needs,’ US Secretary of State Condoleezza Rice said Wednesday. ‘The free world cannot allow the destiny of a small independent country to be determined by the aggression of a larger neighbour.’

The aid will help support ongoing humanitarian relief efforts and reconstruction and buoy the economy. It is not military assistance, Rice said.

Three US warships have arrived in Georgia since the conflict erupted last month to deliver humanitarian supplies. The US Air Force and Navy have been flying aid into the country.

The IMF said its own loan would fill the ‘financing gap’ as money streams in from other donors and was designed to ease investor concerns about the Georgian economy. The loan is expected to be approved in mid-September by the IMF’s executive board.

Rice reiterated US calls for Russia to comply with an Aug 11 ceasefire agreement brokered by French President Nicolas Sarkozy and to withdraw its troops back into the disputed Georgian breakaway provinces of South Ossetia and Abkhazia.

‘It’s high time that Russia meet its obligations to the ceasefire,’ Rice said.

South Ossetia was the source of the conflict that began Aug 6 when the Georgia government sent in troops to quell attacks by separatist militias. Russia responded with a large military attack deep into Georgia and fighting quickly spread to Abkhazia.

The Russian assault has brought relations with the West to the lowest point since the end of the Cold War, and the US and European Union (EU) have said the Kremlin will face consequences.

‘Frankly, Russia’s done itself in on this,’ Rice said.

The EU has hinted at possible sanctions against Russia, and the White House has said it is weighing whether to pull a civilian nuclear cooperation agreement with Moscow from congressional consideration.

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