What happened with Georgia?

Over the past twenty years Georgian political elite has failed to implement a national- government project modeled after the countries of Central and Eastern Europe. Now Georgia has to think of a new project.

Over the past twenty years Georgian political elite has failed to implement a national- government project modeled after the countries of Central and Eastern Europe. Now Georgia has to think of a new project.

Restoring Independence

 Tbilisi will not mark December 8-- the twentieth anniversary of the meeting in Bialowieza Forest at which the representatives of the core republics of the Soviet Union certified its death. Nor will they celebrate December 21 when the other republics accepted this fact. They are not likely to take any notice of December 25 when the red flag over the Kremlin was replaced by the Russian tricolor.

The history of Georgian independence began on April 9, 1989 after the suppression of the meeting on Rustaveli Avenue. From that time on, the slogan of state independence ceased to be marginal for Georgians. In 1991 perhaps only August became memorable for Georgians due to the nervous reaction of Zviad Gamsakhurdia to the Moscow putsch: at a certain point of time the President was concerned that the perpetrators of the coup were really ready to abolish the liberties of perestroika. By the time the collapse of the Soviet Union was made into law Tbilisi could not care less because of the armed conflict raging in South Ossetia for a year; Gamsakhurdia was under siege in his own palace by the armed opposition and his time before the capitulation and exile was running out.

Was there a project of state sovereignty of Georgia? The answer is both yes and no. Yes, because Georgia had a long-standing tradition of statehood lost in recorded history, because independence was discussed in the dissident circles as far back as the 1970s. No, because the path towards acquiring sovereignty was not part of any project but rather a spontaneous and almost an uncontrollable process.

Disappointing Reality of Independence

The reality of independent existence turned out to be disappointing. As a result of three civil wars (in Abkhazia, South Ossetia, between Gamsakhurdia’s supporters and the State Council) the transformational economic downturn in Georgia amounted to 70% of the GDP (as in Tajikistan) and was the longest in the whole post-Soviet space. Despite the impressive growth rates in the 2000s, the country has not yet coped with the aftermath of the downturn. Like many other post-Soviet countries, Georgia is losing its population -over the period between censuses of 1989 and 2002 the number of its residents has decreased by a million (by one fifth). Over the recent years there has sometimes been talk of returning emigrants but the scope of this process does not tally with that of the exodus.

However, one should give credit to the Georgian elite for the fact that despite the acute economic crisis and almost complete collapse of statehood, for the last twenty years they have been trying to enforce one and the same doctrine with commendable consistency. The doctrine has had its critics and opponents but they only rarely managed to slow down the movement in the direction chosen by the majority of the elite.

It does not really amount to much. The ideal of the Georgian political mainstream is a democratic unitary state within the borders of the Georgian SSR integrated into Western security structures. In Central and Eastern Europe and even in the Balkans this unpretentious ideal has been attained by different countries--from Croatia to Estonia. And they were not hampered by their own ethno-political “skeletons in the cupboard” which for twenty years have been poisoning the life of Georgia. The idea of NATO membership was expressed on the political level in Georgia as early as in the late1980s; at the end of the 1990s Eduard Shevardnadze promised “to knock on the Alliance door”, so Mikheil Saakashvili came to the scene already set by his predecessors. All these years the words about democracy and market economy have been something taken for granted. This ideal included radical and emotionally loaded distancing from Russia, and the “European choice” was viewed as anti-Russian.

Mistakes in Calculation

If one remembers what Saakashvili began with, then all the goals seemed attainable. Within a few months he succeeded in achieving what his predecessor had failed to do for years --restored control of the central government over the whole territory of the country with the exception of Abkhazia and South Ossetia, destroyed the armed gangs, silenced and weakened the old bureaucratic clans. The rest seemed a matter of technique. The world possessed huge amounts of money it did not know what to do with. One had only to carry out elementary liberal reforms--less government regulation, higher position in international ratings--even splatters of pre-crisis global cash flows of Georgia would have been sufficient to ensure decent economic growth rates. We can also add to that the effect of the low base after a deep recession of the 1990s, enthusiasm of the people and the launch of transit oil and gas pipelines.

Further on -- to take advantage of the growing interest of the West which had almost completely   abandoned all hope of democratic transition in the post-Soviet countries, but luckily at this time “the Rose Revolution” occurred. Just pronounce the right words, take the correct position in the polemics about “the old” and “the new” Europe, and Georgia would be literally dragged into NATO. Russia is against the expansion of the Alliance, but the Georgian leadership has been used to the idea that Moscow would have to accept the fait accompli. Moreover, Ukraine was going to join NATO and it encouraged the Georgians still further.

The economic growth was far from impressive: industry and agriculture were stagnating, trade balance deficit was getting worse. In the years of Saakashvili’s rule authoritarian elements were becoming more pronounced and after 2007 they became quite evident. Georgian liberal intellectuals who set the tone in politics could comfort themselves with the fact that the process of integration into Western international institutions would in itself be a catalyst of positive domestic political transformation. The most important thing as was said in Ukraine, is “to crawl up to the threshold” of Europe. With regard to the prospects of the national production, “the market hand” would somehow sort it out.

There was one but very important vulnerable point in this strategy. The devised plan was adventurous or, strictly speaking, its success depended to a critical extent on the factors beyond Tbilisi’s control. What if the world ran out of spare money? And if Russia would oppose the NATO’s expansion in a more decisive way than it was expected in Washington and Brussels?

By the beginning of 2006 the problem of Abkhazia and South Ossetia through the efforts of Tbilisi had been built in the context of Russian-American confrontation in respect of NATO expansion. The master plan of the Georgian leadership, judging by their actions, was the following: to transform the Georgian-Abkhazian and Georgian -Ossetian conflicts into the Georgian-Russian conflict and then upgrade the Georgian-Russian conflict to the Russian-American one. Then the energy of Moscow-Washington confrontation could be used to attain Georgian national goals.

It does not mean that Tbilisi was in fact preparing to wage a war. It was a game of character testing: which side would be the first to surrender. The mistake in calculations was that Russia had nowhere to retreat: should it “swallow” military action in South Ossetia it would no longer be consulted on any matter relating to European and global security.

As a result there was no restoration of territorial integrity within the borders of the Georgian SSR and now Georgia is farther removed from this goal than, say, in July 2008. The integration into the NATO structures is still on the agenda; however it has actually been put off for an indefinite period. Nobody in the Alliance would want to see close contact of Russian and NATO troops on the borders of Abkhazia and South Ossetia.

Collapse of the Georgian Strategy

The economic recession in Georgia was mitigated by a large-scale foreign economic assistance which amounted to 1/3—1/2 of the GDP. Despite this assistance in 2009 the country had a downturn of 4% of the GDP  while in 2007 the growth rate was 12%.The funds allocated after the war by the Brussels Donors Conference are coming to an end. The government is trying to compensate for the losses by raising taxes and selling the state-owned assets on the world exchanges, but it is unlikely to be hugely successful given the overall turmoil in the economies of Europe and the USA. Foreign investments do not amount to much. There are doubts about the quality of the institutional environment for doing business. In April 2011 economist Nodar Javakhishvili, former head of the National Bank of Georgia, noted a curious pattern: a considerable recession-related reduction in the prices for essential commodities of Georgian imports on the world market was accompanied by a slight increase in the prices for the same goods on the domestic market. At the very least, it is a sign of cartel collusion of importers and monopolization of the consumer markets, and the question of who has got hold of the margin is anyone’s guess (not the budget for sure: against the background of growing import income tax revenues dropped by 13.2% as compared with the level of 2008)

As to democracy things are looking bleak. Saakashvili has managed to get amendments to the Constitution which greatly widened the powers of the prime-minister. It is generally agreed that he intends to change the President’s chair for that of the Prime-Minister after the expiration of his constitutional term of office. The political machine is no less effective than in other post-Soviet autocracies: hardly had businessman Bidzin Ivanishvili mentioned his political ambitions, when he was deprived of Georgian citizenship, with his business falling under the close scrutiny of the law enforcement agencies.

In other words the strategy which the leadership tried to carry out for over twenty years has failed. It does not mean that Georgia is on the threshold of a new revolution and any minute now everything will change. Actually, the political regime created by Saakashvili’s team is relatively stable. More or less decent existence can be sustained by simply serving transit flows to Transcaucasia. The unfavorable trade balance is offset by remittances of migrants working abroad.  With the political opposition marginalized, mass demonstrations of the discontented will be dealt with by the police loyal to the government.

A different matter is that this is the existence by inertia. Sooner or later the national- state project will have to be updated. And then it would be necessary to answer those questions which earlier seemed irrelevant. Would it be possible to ensure sustained economic growth without the development of national industry? Would it be possible to develop production without access to foreign markets and primarily to the Russian one? How to ensure security of the country if joining the NATO would be actually impossible? How to match the European choice with friendly relations with Russia? And the last but not the least, how to build relations with the Abkhazians and the Ossetians since it turned out to be impossible to regain control over Abkhazia and South Ossetia by force?

The situation is such that all these questions can be answered in the context of Russian-Georgian relations. Even before August of 2008 in Georgia part of the political elite discussed the prospects of attracting Russian investments into the country regarding it as a safeguard of peace. Even now Russia may become a source of investments especially if the plans of economic integration in the post-Soviet space recently laid out by Vladimir Putin are put into life. With regard to Abkhazia and South Ossetia, any settlement of this problem for Georgia (except, naturally, simple recognition of the two republics) is impossible without a dialogue with Moscow. Naturally that guaranteeing security also requires such a dialogue.

Pause in Relationships with Russia

Russia has taken a break in relations with Georgia having stated that it would not speak with the present leadership of the country. In many ways it is a justifiable position since Moscow has had such an experience in relations with Saakashvili which does not inspire any enthusiasm. Besides, over the last several years Russia has been successful in relations with its immediate neighbors-Ukraine, Poland, Azerbaijan (the list could go on).Against this background strained relations with Georgia do not seem critical.

However, there are at least two factors which would give Moscow an impetus to search for solutions in this area. First, plans of economic integration in the Caucasus would not work until the railway line through Abkhazia was closed. Second, Georgia remains a neighbor, with the common border going along the Caucasus with its dangerous northern slopes. The Russian side is unlikely to come up with any official public initiatives until Saakashvili remains in power. But the search for contact points and possible future compromises on the level of experts and the public will continue with increasing vigor.