Georgia’s winding road to reform

By Uwe Brodrecht — 0873 — Kaukasus 2014 — Georgien — Batumi, CC BY-SA 2.0,

The glittering skyline of Batumi reflects both the history and the rapid development of the Georgian Black Sea seaside city. Reforms and investments during the 2010s have turned the city’s fortunes, drawing visitors from the entire Black Sea region to its refurbished casinos, skyscraper hotels and simmering nightlife.

The high level geopolitical 14th Batumi International Conference gathered hundreds of politicians, business representatives, academics and civil society representatives under the title of “Georgia’s European Way — Ensuring Regional Stability”.

Georgia is currently the top of the class in the EU’s Eastern partnership, an initiative of the European Union governing its relationship with the post-Soviet states of Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine, intended to provide an avenue for discussions of trade, economic strategy, travel agreements, and other issues between the EU and its Eastern European neighbors. The Eastern partnership has even been mentioned as a preparation for EU membership application. But with Azerbaijan and Belarus being dictatorships, and Armenia, Moldova and Ukraine involved in security conflicts, the Eastern partnership’s progression has been put into question. Many eyes turn to relatively stable Georgia for inspiration.

Mikheil Saakashvili, Georgia’s former president from the Rose revolution in 2003 to 2012, transformed the country. Low level corruption was eradicated throughout the government, and by basically firing everyone in the corrupt police force. All public institutions were rebuilt from scratch. The number of public employees was drastically reduced, but wages were raised for those staying. A program of rotating civil servants after three years on a position, even to a different branch of government altogether, in order to make the concentration of power more difficult. An apt combination of simplifying business legislation, reforming of technical regulations, privatizing state enterprises, tax cuts, harder penalties for corruption and reduction of government bureaucracy paid off. Maybe the crowning achievement of the reforms was that Saakashvili lost to billionaire Bidzina Ivanishvili in the 2012 presidential election, and a shift of power was carried through peacefully. It is not a common occurrence in Georgia’s or the region’s history.

Prime minister Giorgi Kvirikashvili listed results of the reforms in his conference introductory speech. Georgia’s GDP has more than tripled since the Rose Revolution, Reporters Without Borders’ World Press Freedom Index has shifted the country from 104th place (out of 180) in 2012 to 64th place in 2016. Transparency International ranks it at place 44 of 176, as 59th most competitive economy by the World Economic Forum, and at a 13th place in the Heritage Index of Economic Freedom Georgia actually outranks most EU member states. Open-market policies, supported by competitively low tax rates and regulatory efficiency, have facilitated flows of trade and investment. It is an impressive success that has even given Georgia the hopes of some day achieving EU and NATO membership. Georgia and the EU have a free trade agreement in place, and since March 28th Georgians are able to enter Schengen without a travel visa.

Both Prime minister Kvirikashvili and President Giorgi Margvelashvili raised the question about the NATO membership application being fueled by Russia occupying Georgia’s South Ossetia and Abkhazia regions. It is a situation shared with Moldova (in Transnistria), Ukraine (the Donbas and Crimea) and Azerbaijan (in Nagorno Karabakh).

Maros Sefcovic of the European Commission emphasized the important role of the Southern Gas Corridor, which will bring gas to Europe from the Caspian Basin by transit over Georgia. The goal is to diversify the EU’s sources of gas imports. The question is if the region will stay stable enough for a 20–30 year long investment? Russia uses its gas export as a mean of political pressure, and is currently building a second Nordstream pipeline in the Baltic Sea.

Cyber warfare and fake news are spreading globally, “we’re all Russia’s neighbors now”, as senior analyst Brian Whitmore noted. The effects of low intensity daily propaganda, low key cyberattacks is keenly felt by the Eastern partnerships states. The way to stop its effects is to check the facts, like Ukrainian site, not to attack the source in itself. Fake news often contradicts itself, but an understanding that it is an effort to weaponize media to create confusion is necessary in order to counteract. The extent of freedom of speech in the Eastern partnership is fragile as it is, so governments not adhering to it, and shutting down TV-stations or newspapers plays in the hands of fake news.

MP Tamar Khulordava brought attention to the necessity for the free trade agreement to have visible effects in the lives of Georgians. Standardization, technical improvements and gradually implementing the European Small Business Act can have that effect, Georgia’s export to the EU has increased by 41 per cent just in 2017. But harmonizing to the EU body of regulation has a burden in costs and time, which is often used in Russian attacks against it. MEP Eduard Kukan highlighted that a free trade agreement is a political document that needs clear communication and clear regulation.

For clear regulation, a clear constitution is needed. At a special morning session Irakli Kobakhidze, chairman of Georgia’s parliament, presented the work with a new constitution. The current suggestion switches the electoral system from a mix majoritarian one to a proportional, increasing checks and balances and clarifying the roles of political bodies and parties. Constitutions in the Eastern partnership countries do get politicized, and the current attempt to create a broad consensus has provoked protests in civil society regarding which NGOs are included in the deliberation and of introducing issues such as blocking the legalization of gay marriage and a ban of selling agricultural lands to foreign citizens.

As the Eastern partners enter the European system, they also face global issues such as migration. The UN is currently discussing a global compact for migration, the question is if such a broad agreement is achievable. Georgia’s issue with internal refugees from Abkhazia and South Ossetia is quite different in scope and scale from Europe’s current of migration over the Mediterranean. The demand for silver bullet solutions could be part of the problem. Martijn Pluim of the International Centre for Migration Policy Development, pointed out that current migration policy focuses on short term solutions like shutting down borders. Rather, migration is a long term process of global governance, with technological development and prosperity being pull factors while poverty, climate change and lack of democracy being push factors. Discussion at the conference focused on development policy as prevention to uncontrolled mass migrations, improving response by rapid screening and also including the forgotten consequence management following migration.
Russia’s policy of “you’re either with us, or against us” was quite frankly described as the threat to the region. But as deceased German chancellor Helmut Kohl said “Peace must be more than the absence of war”. The lesson from Georgia is that successfully building institutions and fighting against corruption, gives long term results. There is an understanding in Georgia, as presented by ambassador Natalie Sabanadze, that EU and NATO membership should be seen as a gradual processes of adopting a body of governance rather than converging all at once. It is a process that will demand patience and political foresight. Eastern partnership countries are sometimes threatened or cajoled to play double with Russia. Ultimately, Europe needs to counter this with a relationship based on sovereign equality, predictability and mutual benefit.