Worrisome trends have emerged during the eight-year rule of the Georgian Dream party. Unless the opposition manages to form a coalition in the upcoming October election, Georgia faces further democratic backsliding – potentially leading to weaker ties with the EU.
In a nutshell
- Georgia has successfully implemented reforms in hope of joining the EU
- A political crisis is threatening to undo these accomplishments
- The ruling party is likely to remain in power despite protests
Among the countries that once formed the Soviet Union, Georgia has long distinguished itself by its economic liberalization and anti-corruption efforts. In the 2019 Transparency International Corruption Perception Index, the country ranks on par with or above 10 EU member states. Other international indicators provide similarly positive feedback on democracy as well as ease of doing business.
Given that few other countries in the region boast such accomplishments, it is understandable that Georgia has long been considered a leader in the EU’s Eastern Partnership (EaP). In its third Association Implementation Report, presented in January 2019, the EU found that Georgia was “making clear progress on its reform agenda.” Earlier rewards for this progress have included a comprehensive free trade agreement, signed in 2014, and visa-free travel to the Schengen zone since March 2017.
Undeterred by geography
Located in the South Caucasus, with no border with any European country (except Russia), Georgia might appear an unlikely candidate for joining the EU. Yet, undeterred by geography, it has been actively seeking membership ever since the Rose Revolution in 2003.
Popular support for a pro-European stance has remained strong. In a January 2020 poll, 82 percent of respondents said they support EU membership, and 77 percent supported NATO membership. Only 10 percent were against joining the EU, and 14 percent against joining NATO. While these indicators have been consistent over time, suggesting that the achievements of the Rose Revolution have been consolidated, Georgia’s situation is not entirely stable.
Ever since the war in 2008, relations with Russia have been strained, with negative implications for trade. Georgian GDP per capita stands at around half that of Bulgaria. Further support from the EU seems essential.
Facts & figures
The Georgian economy
- The 2019 Georgian GDP per capita was $4,346, compared to $9,313 for Bulgaria, the lowest in the EU
- In its most recent report, the World Bank notes that Georgian GDP has grown on average by 4.5% annually over the past decade, and that poverty has declined from 32.5% in 2006 to 16.3% in 2017
- Free trade agreements with the EU and China have boosted market integration
- Tourism and agribusiness have contributed to the accumulation of international reserves
- A sharp drop in remittances from Russia is more than offset by healthy inflows from Italy, Greece and the U.S. in particular
- External debt stands at approximately 100% of GDP
- The current account deficit is declining, from 12.5% of GDP in 2016, but remains problematic
- Completion of major infrastructure investment has implied a sharp drop in foreign direct investment
However, there is cause for concern when it comes to providing such support. The two factions that dominate the country’s political landscape have recently locked horns in an increasingly bitter struggle for power. The depth of the political crisis is such that Georgia may still be able to snatch defeat from the jaws of victory.
On one side is the United National Movement (UNM), created by former President Mikheil Saakashvili. Having emerged as the hero of the Rose Revolution, he carried out a set of broad reforms that transformed the country and made him the darling of Western governments.
On the other is Georgian Dream (GD), created by billionaire businessman Bidzina Ivanishvili – who defeated Mr. Saakashvili in the 2012 presidential election. Disappointed by the GD victory, Western governments found further cause for concern in 2014, when a court order was issued for the arrest of the former president, who had gone into exile.
Many have branded Mr. Ivanishvili a Putin stooge, but framing the conflict as Europe versus Russia is too simple.
Although many have branded Mr. Ivanishvili a “Putin stooge,” framing the conflict as Europe versus Russia is too simple. Given that parts of Georgia remain under de facto Russian occupation, being openly pro-Russian is not likely to win over Georgian voters. Furthermore, following its initial congratulations, the Kremlin has also been clearly underwhelmed by the performance of the Ivanishvili government.
The strength of Georgia’s pro-Western sentiment was manifested on December 14, 2019, when the government put on an extravagant rally in the capital to celebrate the start of its chairmanship of the Council of Europe. It was claimed to have attracted 150,000 participants.
Europe’s main champion in Tbilisi is President Salome Zourabichvili. Born in Paris, she was ambassador of France to Georgia during the Rose Revolution. Recruited by Mr. Saakashvili to serve as Georgian foreign minister in 2004, she later fell out with her benefactor over his role in the 2008 war with Russia. In December 2018, she was elected president.
Ms. Zourabichvili is as pro-European as it gets. In July 2019, speaking at a conference held in Batumi to celebrate the 10th anniversary of the EaP, she reaffirmed the country’s determination to join the EU: “Our values, culture, history are European, our population is European, 80 percent of our population support the objective of joining the European Union.”
In a speech in Vilnius in August, she admitted that the EU was not keen on admitting new members at the moment, given that France had recently blocked the accession of Macedonia and Albania. But in subsequent appearances she reiterated that “I am a European,” claiming she would “knock on every door” until EU membership is secured. The way forward, according to her, would be to implement so many EU laws that Brussels would have no other choice than to admit its doors remain closed for political reasons.
Although this kind of momentum is impressive, Georgia may be approaching a dead end. In the absence of a clear perspective on how membership can be achieved, it may be hard to maintain enthusiasm for EU-style reforms. And outside support is waning.
The current political crisis was triggered in June 2019, when a visiting Russian Duma member took the speaker’s stand in the Georgian parliament and addressed the audience in Russian. Outraged, opposition MPs called for Speaker Irakli Kobakhidze to resign, and about 10,000 protesters breached a police cordon. Some were carrying EU flags and placards reading “Russia is an occupier.” As police resorted to tear gas and rubber bullets, 240 people suffered serious injuries. Yet, the protests dragged on for weeks.
Clearly taken aback, the government responded by tabling a parliamentary motion to reform the electoral system. With national elections in October this year, the opposition had expressed fear that the current setup, which combines party lists with single-seat constituencies, would give an unfair advantage to the ruling party.
In the 2016 election, Mr. Ivanishvili’s party won only 48.68 percent of the votes but still managed to secure 115 of the 150 seats – a feat achieved by lending considerable support to candidates in single-seat constituencies.
The opposition demanded a system entirely based on party lists to even the playing field. But by November the government was backtracking from its earlier promise to address the request. On November 14, parliament roundly rejected a bill on electoral reform.
In response, the opposition took to the streets again. Demanding snap elections, protesters blockaded the parliament building, placing padlocks on its gates. Several mass rallies were dispersed by police using water cannons and tear gas.
The escalation was accompanied by growing popular resentment of both sides in the conflict. A poll in November showed 43 percent would support GD and 15 percent UNM, leaving 32 percent undecided. Then, in a December poll, only 19 percent declared support for GD and 13 percent for UNM, with 20 percent preferring “no party” and 14 percent refusing to answer.
In addition to the political crisis, recent events have also demonstrated that corruption among the elite remains to be addressed in earnest. In the spring of 2019, several Supreme Court appointments showed the government was bent on packing the court. In April, the Council of Europe’s Venice Commission issued an “urgent opinion” on the selection and appointment of Supreme Court judges.
Concerns over an increasingly politicized judiciary were aggravated by two events in July. One was the arrest of Irakli Okruashvili, former defense minister and current leader of the small opposition party Victorious Georgia. Once a right-hand man of Mr. Saakashvili, he was charged for having taken part in the attempt to storm the parliament. The opposition claimed his arrest was part of a battle for control over the Rustavi 2 television channel. The second event occurred when Georgian financier Mamuka Khazaradze, founder of one of Georgia’s leading private banks, JSC TBC Bank, and his deputy Badri Japaridze were summoned to the Georgian Chief Prosecutor’s Office to be formally charged for alleged money laundering.
Western governments have found geopolitical reasons for concern.
The charges were widely believed to be related to their role in a consortium created to build a massive port in Anaklia, on the eastern shore of the Black Sea. Hailed locally as the “project of the century,” the $2.5 billion venture would have been the largest infrastructure investment in Georgian history. With a handling capacity of up to 10,000 vessels, the Anaklia Deep Sea Port was designed to turn Georgia into an important link in China’s Belt and Road Initiative.
As it would have allowed a significant portion of Chinese-European trade to bypass Russia, it was viewed by Western governments as an important development. The presumed reason behind the arrest was that the project conflicted with Mr. Ivanishvili’s own financial interests. In response to the charges, Mr. Khazaradze announced the formation of a political movement of his own, named Lelo.
On December 12, the Georgian parliament appointed 14 lifetime members of the Supreme Court, a key institution for the proper functioning of Georgia’s legal system. The appointments were made against a backdrop of opposition protests and in defiance of the Venice Commission recommendations. The United States embassy stated that the list included appointees who were “unable to demonstrate sufficiently their legal expertise or a commitment to impartiality.”
In addition to democratic backsliding and the politicization of the legal apparatus, Western governments have found geopolitical reasons for concern. Following a cabinet meeting in January, Infrastructure Minister Maia Tskitishvili said the government was cancelling its contract with the Anaklia Development Consortium. The decision followed months of wrangling over who was at fault for holding up the project. That the port will probably not be built is a victory for the Kremlin.
The political crisis came to a head with a February 10 Supreme Court ruling sentencing former Tbilisi Mayor Gigi Ugulava to 38 months in prison for allegedly having embezzled $17 million. It was his second sentence during his time as mayor, and the verdict was widely seen as political. The opposition responded by withdrawing from further electoral reform dialogue, instead announcing it would hold an April 4 rally to present a joint action plan for the upcoming elections.
Unsurprisingly, the ninth meeting of the EU-Georgia Parliamentary Association Committee (PAC), held at the European Parliament in Strasbourg on February 12-13, failed to adopt a joint statement. Opposition MP Otar Kakhidze claimed the ruling party had opposed several amendments to the draft added by members of the European Parliament. GD MP Kakha Kuchava said that ruling party lawmakers could not endorse the amendments because they “sounded absurd.”
The government could backslide on democracy and move closer to Russia.
In a joint statement issued on February 13, PAC cochair Marina Kaljurand and two other leading MEPs noted that the Ugulava verdict “raises questions regarding the procedure, timing and motivation of the decision.” The EU vowed it would continue monitoring all other high-profile trials in Georgia.
All eyes are now on the upcoming parliamentary elections in October, where three distinct scenarios could unfold.
If Mr. Ivanishvili’s GD wins again, it will be the first time a party has won three consecutive terms since 1990. As such, the victory would likely be associated with widespread fraud and undemocratic conduct, and would lead both the EU and the U.S. to scale back support. The government would be pushed into further backsliding on democracy and move closer to Russia. It would be a geopolitical setback not only for Georgia but also for its Western supporters.
A second scenario would see a third party come to prominence – something many voters hope for, especially after the recent victory of President Volodymyr Zelensky in Ukraine. But the prospects for this are slim. The only serious candidate is Mamuka Khazaradze and his Lelo movement. Although Mr. Khazaradze does have substantial financial resources, taking on the GD chairman would pit millionaire against billionaire. Mr. Ivanishvili also has ample “administrative resources” at his disposal.
The third option is that several smaller opposition parties could create a coalition with UNM. A victory would likely imply that Mr. Saakashvili is pulling the strings, much like Mr. Ivanishvili does today with GD.
U.S. diplomats helped guide the transfer of power both in 2003 and in 2012, and Western governments could still broker a compromise that includes election reform. Several embassies have been active recently. But paving the way for an opposition victory seems like a stretch.
The most likely outcome is a victory for Georgian Dream and Mr. Ivanishvili. This would further erode many of Georgia’s accomplishmen, and it would encourage Russia to step up its efforts to gain more influence.