Georgia is entering a crucial period of transition and elections in 2012-13. In a Q&A, Thomas de Waal discusses Georgia’s democratic and economic outlook in the years ahead. He argues that although Georgia has taken steps toward reform, the governing elite has done little to build a sustainable model so far. There is responsibility on Washington and Brussels to hold the Georgian government to account for its actions.
- How stable and democratic is Georgia?
- Is Georgia becoming more democratic?
- What do recent protests tell us about the popularity of the government?
- What is the significance of the upcoming elections?
- How strong is Georgia’s economy?
- What are the options for developing Georgia’s economy?
- Which path should it choose?
- What can the United States and Europe do to help Georgia reform?
How stable and democratic is Georgia?
Georgia is an interesting case in the post-Soviet space. It’s a non-conformist—it has always been different. On the one hand, it has a strong tradition of pluralism. But I would say that is not the same as being a full democracy. It has a tradition of having a rather lively parliament and a free press.
Rather paradoxically, what we’ve seen in the past few years is this young, modernizing, dynamic government that has instituted lots of reforms, but at the same time, seems to be creating what is virtually a one-party state. Opposition parties are weak in Georgia and the parliament is less powerful. The government also controls the regional authorities and all the main television channels who support them.
So Georgia is still pluralist in comparison to other states like Armenia, Azerbaijan, and Russia. But Georgia is now facing this transition in 2012 and 2013 in which the ruling elite has to figure out how to renew itself or there is a risk that Georgia becomes an ossified, one-party system.
Is Georgia becoming more democratic?
The government instituted many modernizing reforms, but we’re now seeing some signs of overreach. For example, the government inherited a situation back in 2003 and 2004 where there was a higher degree of corruption and criminality in society. What we’ve seen now is that one of the most effective reforms has been against petty corruption. Now, if you want to get a driver’s license or get your kid into university you no longer have to pay a bribe in Georgia and that is quite a big deal in the post-Soviet space.
On the other hand, the police force is now extremely powerful—the most powerful institution in society. The prisons are full—on a per-capita basis, Georgia has the fifth highest prison population in the world after the United States, Russia, and a couple of other small countries. In criminal cases in Georgian courts, the acquittal rate is virtually zero at 0.04 percent. By cracking down on corruption and criminality—which was positive—Georgia has gone a long way toward looking like a benign police state.
What do recent protests tell us about the popularity of the government?
On May 25-26, there was a hardcore group of opposition demonstrators on the streets of Tbilisi who were obviously looking for trouble. The government wanted to hold an Independence Day parade the next day and there was a deadline to clear the streets by that morning. In that sense, you can understand the government position that they wanted to clear the streets by the end of the night. But what they did was extremely brutal; we see the footage now of these heavily masked riot police moving into the streets, blocking off the demonstrators, and beating them rather brutally. As a result, four people died overnight, a couple of whom were policeman knocked over by opposition vehicles.
This was no good for Georgia’s attempt to have a more European, tolerant image and this is a symptom of a group that has been in power a long time and uses its police force as its main instrument of control.
What does this show us about the popularity of the government? Well, actually, it shows us that the opposition is not that strong. President Saakashvili and the United National Movement are still the dominant force in the country’s political life. There is a growing apathy and a growing concern about economic issues, which doesn’t bode well for the future.
What is the significance of the upcoming elections?
Georgia is entering a period of transition. We are going to see parliamentary elections next year in 2012 and then presidential elections in early 2013 where Saakashvili will finish his second and last term as president at the beginning of 2013. This is a very important period because this is the time when the post-Rose Revolution generation is up for renewal.
What have they done? Well, they’ve changed the constitution so that the strong presidency will end the moment President Saakashvili’s presidency ends and to many people this doesn’t look like a coincidence. There’s going to be a new, strong prime minister who will inherit many of the powers of the president and the president will have a weaker, more foreign policy type role.
This obviously raises a lot of questions. The way the electoral system works is that the United National Movement—the governing party—is likely to do well in the parliamentary elections, get a majority, and they will then elect a new prime minister. The result is that we will be looking at more of the same. The big question is whether Mikhail Saakashvili will dare to become the new prime minister. Technically he could, but it would certainly have a bad look to it and would raise questions about his legitimacy abroad.
How strong is Georgia’s economy?
Georgia likes to present itself as a big economic success story and you may have seen the ads in the Financial Times, Economist, or on CNN saying Georgia is the world’s number one reformer. But anyone who goes to Georgia and sees the reality there knows that this is basically a rather clever PR campaign. It has done well on a couple of indices, such as the ease of opening a business and anti-corruption measures.
That said, there are big problems within the Georgian economy. The government has done some useful reforms, but Georgia is very much at the beginning rather than the end of the process. There is a list of problems. Inflation is now at about 14 percent and food inflation is at about 30 percent. Agriculture has also been really neglected by this government, with the result that 80 percent of the food is now imported into what was once a rich agricultural country. Additionally, unemployment is very high—around 30 percent in Tbilisi—because although there has been a kind of economic boom in Georgia, it’s been mainly in sectors that don’t employ many jobs.
All of which is to say that there are big challenges ahead for Georgia to turn it around, create an export sector, and revive agriculture so the country is capable of feeding itself, which it isn’t doing at the moment. At the same time, foreign direct investment has been falling, so there are real questions about where the money is going to come from and whether Georgia has a long-term sustainable model.
What are the options for developing Georgia’s economy?
In my recent report on the country, I draw a triangle to explain Georgia’s Choices. I call the first corner “Old Georgia.” Anyone who goes to Georgia loves old Georgia when it comes to culture, going out and meeting people, wonderful old traditions, and the amazing ancient Orthodox Church. But when it comes to a kind of model, that means keeping things in the family, nepotism, discouraging people from going abroad-- that’s what the patriarch of the Orthodox Church has done, and completely un-transparent business practices, this way of doing things still has many adherents in Georgia.
I call the second corner of my triangle, “Singapore,” which the president has talked about as well. He talks about wanting to create “Singapore in the Caucuses.” There is also an ultra-liberal group, close to many people in the United States, that believes in massive deregulation, privatization of everything, and free investment from around the world. This is the model that has created success in some sectors of Europe and the Georgian economy, but has not in others. But this group is still quite influential.
My third corner is the “European Union,” which is the kind of slow business of building institutions, regulations, regulatory approximations, standards, and democratic accountability that mean that the country slowly converges with the EU. This is following the model of places like the Baltic States.
The Georgian government is kind of flirting with all three corners—particularly Singapore and EU—but can’t really make up its mind. And Singapore and the EU models are actually pretty incompatible. One involves massive deregulation, the other involves regulation and institution building. As one diplomat in Tbilisi said to me, he calls this the “Yogi Berra” strategy—when you come to a fork in the road take the fork. Georgia still hasn’t made up its mind about which road it is going to take.
Which path should it choose?
My conclusion is that while “Singaporization” sounds attractive, Georgia is still a very rural country. It is not, by any means, a kind of great hub and its capacity for rapid modernization is quite small. It is a European country by geography, its neighbors are turning to Europe, it needs an anchor particularly because of its problems with Russia, and therefore the EU has to be the best model. But that obviously involves surrendering some of the monopoly of power in this rather informal style of government that the governing elites like. But I think that is basically the route they have to take.
Having said that, Georgia does need better help and assistance and a better communications strategy from Brussels and the United States that this is the road to take. This approach will obviously involve a lot of painful regulatory reform—reforms that cost money and are difficult for the population—so the population has to see that there is light at the end of the tunnel as it goes down this route.
What can the United States and Europe do to help Georgia reform?
Georgia is a very strange case: it’s a country of less than 5 million people, it’s a pretty poor country, and by most standards it’s not a country that would attract great interest. But it has attracted interest, in part, because the young, western-educated elite won itself a lot of friends in Washington. This was particularly the case under the last U.S. administration when there was personal closeness between President Bush and Saakashvili.
Inevitably, after the disaster of the 2008 war, the relationship cooled. But there are still a lot of people in Washington who think that Georgia needs support and who see Georgia as a kind of anti-Russia. These sentiments, in some sense, still fuel the enthusiasm for Georgian elite.
It’s time to move away from this narrative and say that Georgia is a country that has done some good things but it still has massive problems. It is by no means a model and by no means a beacon of democracy. Georgia has some positive things going for it, but it needs conditional love.
Conditional love means a lot of tough pushing in the right direction. These people are not miracle workers and they don’t have many domestic checks and balances and so the checks and balances are external. And that really puts the responsibility on Washington and Brussels to kind of push the Georgian elite in a more democratic and accountable direction.
