BOOK: Georgia 2007 [chapter introductions]

Central Eurasia Analytical Annual 2007

General Overview
Teymuraz Beridze

Assessing Georgia’s political and socioeconomic development in 2007 is not an easy task: the aspects are varied (politics, the economy, society, and religion), while the period was far from easy (elections added political and economic tension). This is more confirmation that the economy and politics are invariably intertwined and their interaction plays an important role in public life. In transition societies (of which Georgia is one), the political factor is extremely important for economic development, which means that the political establishment is doubly responsible to society.

Any analysis of the country’s political development should distinguish between the domestic and external components, even though they are intimately intertwined. On the domestic scene, the United National Movement has been shouldering all the responsibility for the state of affairs, which means that the public turns to it for explanations. Tornike Sharashenidze, the author of the article on Georgia’s domestic policy, has demonstrated this approach.

The role of the opposition in Georgia’s political life, which gained more political weight in 2007, deserves special mention. The opposition, disunited in 2006 and lacking a common platform of action, closed ranks in response to certain steps taken by the state structures: constitutional changes, not entirely justified steps during the reorganization of state structures, the statements of the former defense minister and his arrest, and, finally, the November events). There were certain economic reasons as well: two-digit inflation, the relatively high poverty level, and unemployment.

The events of 7 November proved important: enraged by the actions against the peaceful rally, the opposition and society (even its conformist part) closed ranks; the government’s democratic image was ruined. These events were triggered, in part, by the statements of the former defense minister, who hurled accusations against the government.

This ended in setting a date for a pre-term presidential election and a referendum on the parliamentary election in April 2008 and NATO membership. The latter issue, never a bone of contention, was still entered in the ballot papers.

The most prominent foreign policy issues remained the same: territorial integrity, integration into the European and Euro-Atlantic structures, relations with Russia and regional cooperation (Archil Gegeshidze’s article on Georgia’s foreign policy can be found under this cover). We have to say with a great deal of regret that territorial integrity still remains on the foreign policy agenda as a priority item. The government launched a new initiative in South Ossetia: it set up a provisional administrative- territorial unit expected to restore cooperation with the center within the single state. This invited mixed responses: some hailed this as a step toward final resolution (this came mainly from the West), others (Russia) argued that this would send tension up. Despite this move, the problem has lost none of its urgency: in the future the sides should work hard to bring their positions closer in order to arrive at the final solution.

Continued negotiations with Abkhazia failed to produce any positive effects partly because the international structures involved (particularly the U.N.) demonstrated low efficiency and partly because of Russia’s stand. It seems that the de facto leaders of Abkhazia failed to accept the formula “wide federalization with practically complete self-government on all issues” as the platform for further talks.

Georgia’s integration into the European and Euro-Atlantic structures (NATO and others) depends, in the final analysis, on foreign and domestic factors—a point Georgian political scientist A. Gegeshidze brilliantly demonstrated in his article. The territorial integrity issue and relations with Russia (especially those related to Georgia’s membership in NATO) can be described as foreign factors, while on the domestic scene Georgia should fully tap the potential of all the democratic institutions and achieve sustainable development and a correspondingly high social and economic level.

Relations with Russia cannot be ignored either from the viewpoint of general stabilization or from the viewpoint of economic growth (the Russian market cannot be neglected). Regrettably, 2007 cannot be described as a year of better and more stable relations between the two countries (despite the return of the Russian ambassador and the resumed natural gas supplies).

Regional cooperation within the BSECO and GUAM should proceed in several political and economic vectors and should also involve bilateral relations. In 2007, the official documents on the financial and technical aspects of the large regional project—the Baku-Tbilisi-Akhalkalaki-Kars railway— were signed.

Georgia’s current orientation toward Western values and the European structures should not prevent it from developing normal relations with all the interested sides and from establishing goodneighborly relations with its closest neighbors.

The processes observed in the economy were no less dynamic; it is impossible to reliably assess the country’s social and economic development without an adequate information basis and highquality statistical data. The negative trends observed in 2006 extended into 2007: the department of statistics remained a structural part of the Ministry of Economic Development, which naturally wanted good figures despite the numerous promises coming from the minister for coordination of the economic reforms that this organizational problem would be settled. Even under these conditions inflation remained two-digital (about 11 percent), while the poverty level remained fairly high.

It should be said in all justice that the GDP grew to a two-digit figure, but this did nothing to improve the nation’s quality of life. One wonders why? First, there is a distribution problem (the rich should pay higher taxes and the money thus gained should be spent on state employees); second, it was the growing financial sector that produced the GDP effect. This growth is created not by in creased material production, but by moving financial resources among banks (according to the contemporary system of national accounts).

There were positive trends in the national economy which increased the money flow to the state budget; the lion’s share was produced by privatization and therefore created a one-time effect. However, the taxation structures improved their performance, registration of new businesses was simplified, the banking sector developed quickly, and wages and pensions were raised in December 2007.

Corruption at the middle and lower levels of state administration was trimmed even though there is a generally shared conviction that this illness cannot be cured. It is observed in all societies; Georgia is no exception.

The Georgian Orthodox Church, which now enjoys unprecedented high prestige in society, played a certain role in the government-opposition confrontation. The dialog about tolerance between religions continued. It should be stressed that we support the key principle in state-Church relations— non-interference of the Church in state affairs and the state in Church affairs. Historian Zaza Piralishvili, who sides with this principle, wrote in his article: “Today the Orthodox Church is moving toward greater political involvement, while political forces tend to capitalize on its authority.” This does not bode well either for the state or the Church.

The above suggests that on the whole the year 2007 in Georgia was not an easy one—tension rose, the gap between the rich and the poor widened, while the territorial integrity issues remained pending. In 2008, radical measures must be undertaken to achieve at least some positive results in the political and socioeconomic spheres.

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Politics
Tornike Sharashenidze

2007 was marked in Georgia by severe partisan battles that brought the country to the verge of another revolution. The ruling party of the country— the United National Movement built around President Mikhail Saakashvili—looked invincible from the beginning of the year, whereas the opposition was disunited and weak. Saakashvili’s team dominated both the executive and legislative branches, while the judicial branch was weak and very dependent on the executive one. However, revolutionary Georgia was in bad need of rapid reforms and modernization, so the government simply had to be as powerful as possible—this was how the above-mentioned shortcomings were justified.

But the rising public discontent caused by the social hardships gave the opposition an op portunity to launch a mass campaign against the government and Saakashvili’s team, which was concentrating too much on economic reforms, rebuilding the armed forces, and searching for stratagems to restore Georgia’s territorial integrity.

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Economy
Nodar Khaduri

The past year proved to be an important stage in the development of the Georgian economy.

Despite relative stability in the first half of 2007, autumn brought a political crisis, which undoubtedly had an effect on socioeconomic life in the country and made it necessary to adjust economic policy so as to strengthen its social vector.

Overall, the year ended with fairly high rates of

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Religion
Zaza Piralishvili

The year 2007 proved to be very different from the two previous years: in 2005, the main events unfolded around freedom of conscience and the churches’ geocultural accommodation, two major issues that echoed in 2006. In 2007, the Orthodox Church fortified its position amid political aggravations; this pushed all the other developments in the religious sphere to the side

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International Affairs
Archil Gegeshidze

Next year will be a year of more progress, more construction and further strengthening of national solidarity... All together we should make it a year of important victories for the sake of our children’s better future and our country’s welfare,” said President Saakashvili in his New Year’s address to the people of Georgia1 on the last day of 2006. The year 2007 began on the same optimistic note. It was destined to be ripe in important events, sometimes even critical events, that had a significant influence on the dynamics of the country’s domestic and foreign policy.

In the period under review, the country continued to steer an unwavering foreign policy course. Georgia took steps to accelerate its integration into the Euro-Atlantic structures, placing a special emphasis on further rapprochement with NATO. It also exerted every effort to create conditions for unfreezing the conflict-settlement process in Abkhazia and South Ossetia. Another priority task was to overcome the general sanctions introduced by Russia in 2006, and at least partially improve the political background of the bilateral relations that have developed. Attention was also paid to bilateral and regional cooperation formats, as well as to advancing transregional transport and energy projects.

Despite the fact that the list of priorities and tasks for 2007 compared with the previous period remained the same, the unusual enthusiasm and boldness of Georgian policy, along with its obvious achievements, also gave rise to new risks and challenges.