Georgia at a Glance

Georgia, a country once hailed as the regional champion of reforms, now looks rather like a just another post-Soviet republic. At the same time Georgia’s foreign policy has become more mature and balanced, taking into account recent shifts in balance of power, first of all the resurgent Russia.

Domestic politics – business as usual

In 2012 Georgia held parliamentary elections that ensured peaceful and constitutional transfer of power for the first time in its history. President Saakashvili’s lost elections to Georgian Dream, a huge coalition built around Bidzina Ivanishvili, the richest man in Georgia. It looked like a milestone achievement promising only further progress. The Economist Intelligence Unit placed Georgia on the top of hybrid regimes in its Democracy Index with just a notch from the category of flawed democracies. While in Georgia not a few people questioned Ivanishvili’s motives Georgia’s Western friends believed (or at least hoped) that the billionaire would continue the reforms started by Saakashvili and at the same time strengthen democratic institutions – something Saakashvili clearly failed at.

But now as Georgian Dream is close to finishing its second term it is more than clear that the major domestic challenges remain basically the same. Instead of strengthening democracy – reforming judiciary, depoliticizing law enforcement agencies and ensuring atmosphere for free and fair elections – the ruling party has been mostly focused on consolidating its power. In 2016 Georgian Dream won parliamentary elections again. The elections did raise some questions about the commitment of the ruling party to democratic values as there were numerous reports of falsifications and use of administrative resource. But as it was obvious that Georgian Dream enjoyed still more support than the Saakashvili party these misdoings were condoned.

But it turned out to be only the beginning (or maybe continuation) of bad news. The 2018 presidential elections were further marred not only by use but rather abuse of administrative resource, and not only by falsifications but also intimidations and vote buying. In this context the decision of the Georgian authorities to write off bank loans for about 600 thousand citizens (a huge number for Georgia with population of about 3.5 million people) just before the runoff was especially noticeable. Interestingly, the loans were covered by the Cartu Bank that is owned by no one else but Ivanishvili.

The role and place of Ivanishvili remains pivotal for Georgian politics. After winning elections in 2012 and becoming the Prime Minister (a key figure in Georgia since the constitutional changes enacted from 2012) he soon resigned officially. But it was clear to everyone that he was still pulling the strings from behind the scenes. First, he left his former assistant as the Prime Minister. Then the latter suddenly resigned (removed by Ivanishvili – as it was clear to everyone) and was replaced by Ivanishvili’s banker. The latter resigned too in 2018 and once again it was clear that it was Ivanishvili behind this unexpected move. After that the billionaire officially returned to politics as the chair of Georgian Dream. He also made sure that the next Prime Minister would be politically much weaker than previous ones and therefore almost totally dependent on the billionaire.

It is widely admitted that with all of its flaws the Ivanishvili’s regime is less oppressive than the Saakashvili one. However, this is clearly not enough for the country that officially aspires to join the EU and NATO. After the disastrous presidential elections Georgia’s ratings fell down sharply. Before that the country’s image had already suffered heavily because of Rustavi2 case – a TV station critical of Ivanishvili and serving the interests of the Saakashvili party. Georgian courts ruled Rustavi2 to be handed to a businessman loyal to Ivanishvili and the TV station was saved only by the Strasbourg court that suspended the decision of Georgian courts finding it biased. Conclusions were telling and hardly encouraging: Georgian judiciary served the ruling party, plus the ruling party was doing its best to shut down critical media.

As Georgia lags behind in terms of democratic development, the same is true about economic development too. Average GDP growth is about 4-5%. This would be good news for rich and developed countries but not for Georgia that is much poorer than the EU’s least developed countries. The only field that has enjoyed growth is tourism industry. Much thanks to normalization of relations with Moscow the inflow of Russian tourists has grown exponentially since 2013. In 2018 up to 5 million tourists visited Georgia and it is understood that Russian ones account for more than one third of this number.

In 2020 next parliamentary elections will be held in Georgia. Georgian Dream still enjoys a huge handicap thanks to various factors. First of all, it is the flawed electoral system that combines proportional elections and elections in single mandate districts – always dominated by candidates of the ruling party thanks to administrative resource. Another factor is Saakashvili. His party remains the major opposition force and as it enjoys significant support at the same time it still has too many opponents to win elections (especially in the unfair environment). Ivanishvili is obviously very comfortable with having Saakashvili as his main rival. There is clearly a need for „a third force“ but it is easier said than done. Just like in Russia businesses in Georgia prefer to stay away from politics because of the risk of prosecution and retribution from the authorities. Thus, finding financial support would be difficult for any political force capable of threatening Georgian Dream. Actually, Georgian Dream leaders react nervously even to any sign of Saakashvili getting stronger. His recent return to the Ukraine clearly did not make Ivanishvili happy as it is thought that if Saakashvili manages to gather support and resources in the Ukraine, he may be able to get his revenge on Ivanishvili.

Foreign policy – finding a key to survival

Since the war of 2008 Georgia is in a precarious position as the Russian military base was deployed in some 40 kilometers from Tbilisi. Under Saakashvili there were no chances of any normalization with Moscow and the country lived under threat of another invasion. After coming to power in 2012 Ivanishvili undertook bold steps to reengage with Russia. It was understood that Russia in response would neither withdraw its troops nor withdraw the recognition of Abkhazia and South Osetia so easily. But at the same time without normalizing relations and engaging in a dialog chances of such withdrawal would be even smaller. Plus, reengaging Russia without accepting the results of the 2008 war promised Georgia some tangible benefits, first of all the reopening of the Russian market (closed for Georgia since 2006 following the sharp deterioration of relations under Saakashvili). It was not an easy thing to do as Ivanishvili was already accused of being a Russian stooge by the opposition. These accusations were mainly based on the fact that Ivanishvili made his fortune in Russia but hardly ever were substantiated. Plus, Georgia managed to seal the Association Agreement with the EU in 2014 and continued to cooperate with NATO. In parallel with these activities normalization of relations with Russia did not raise serious concerns.

As we already mentioned, Georgia economically benefited a lot from reengaging with Russia. However, the problems of Abkhazia and South Osetia still remain unsolved. Moscow is reluctant to change its stance and take back its decision on recognizing these territories as independent countries. So, the Georgian authorities have to scramble in order to find ways for winning hearts of Abkhazians and South Osetians. Free health care is offered to the citizens of the break-away territories and not a few have used this privilege. But so far there are no signs that Abkhazians or South Osetians have changed their attitude towards Tbilisi as public opinion in both break-away territories is shaped by the Russian media and, more importantly, the Russian political influence over these territories has increased irreversibly since 2008. The administrative border with Abkhazia is controlled by the Russian military. As for South Osetia, it has no natural boundary vis-a-vis Georgia proper and so the local Russian military have to do their very best to isolate this territory – mainly through erecting barbed wire all along the perimeter that goes through households, farms, cemeteries destroying properties and lives of locals, mainly ethnic Georgians.

As for Georgia’s ambitions to join NATO and the EU, the former goal has been become extremely difficult after the 2008 war. With the Russian troops on its territory Georgia’s chances of entering NATO are scarce. A possible solution has been developed by certain Western analysts – Georgia entering NATO without article 5 covering its break-away territories until the country’s territorial integrity is restored. However even such scenario looks rather unrealistic at the moment with NATO focused on defense of its member states and such member states as Germany still opposing Georgia’s possible membership. For making this scenario work the Georgian authorities would have to win major diplomatic battles in the West. At the same time the Russian propaganda would do its best to blame NATO “for final loss of Abkhazia and South Osetia,” thus complicating further this task. So, the accession process is still put on hold. The US has been encouraging and supporting Georgia promising further help providing financial and technical assistance, but despite this Georgia remains quite vulnerable. Compared to Georgia both its South Caucasian neighbors look to be more or less protected – with Armenia hosting a huge Russian military base and Azerbaijan having entered in an agreement on strategic partnership and mutual support with Turkey.    

Under such circumstances Georgia could focus on EU integration. But as we already mentioned the country hardly meets the EU standards neither in terms of economic development nor in democratic one. The Association Agreement has definitely brought tangible benefits for the country. Many ordinary citizens managed to travel to the EU for the first time – something that allowed them to see Europe by their own eyes and compare it to Europe portrayed by the Russian propaganda. The bilateral trade with the EU has grown too, although not as significantly as it was hoped. The share of the EU in overall Georgian exports was about 25% in the period of January-April, 2019, while Russia alone accounted for about 15%. Obviously, the Georgian entrepreneurs still struggle to meet the EU standards. 

Under these circumstances Georgia looks to be destined for balancing: trying to benefit from the Association Agreement, from strategic partnership with the US and from widening ties with Russia. It turned out to be doable but at the same time but it has not helped the country with achieving any of its major goals – restoring territorial integrity, entering NATO or the EU, or simply achieving high living standards for its citizens. The problem is not with a foreign policy but with a domestic one. For further progress willingness and ability for bold economic reforms and democratic development are needed, and it can be done by Georgian authorities only, not by its partners.