Looking Back: Georgia’s Troubled Year 2013 Indicates More Trouble in 2014

Georgia had a difficult year in 2013 by any standards. The conflict-ridden period of co-habitation between President Mikhail Saakashvili and Prime Minister Bidzina Ivanishvili lasted until October 2013 and fundamentally destabilized the country’s fragile political and economic system. Co-habitation ended as Georgia elected Giorgi Margvelashvili as its new, constitutionally much weakened president on October 27 and switched to the parliamentary system under the new constitution. By winning the presidency, the ruling Georgian Dream (GD) coalition entirely pushed the United National Movement (UNM) out of power. To that point, the hold of UNM over the executive branch (the administration of Mikheil Saakashvili) kept GD united. Now that this political rivalry is gone, 2014 may witness the beginning of the disintegration of the highly eclectic GD. Indeed, the year 2013 already provided the first signs of this as some allies left the coalition (info9.ge, August 2, 2013) and others were demoted (Channel 1, January 23; presa.ge, November 17, 2013).

Furthermore, throughout the past year, the government was shaken by scandal after scandal as high-ranking GD parliamentarians and bureaucrats purchased luxury service cars using government funds and took five- and, in some cases, six-digit government bonuses. Moreover, nepotism has been widespread as high- and medium-level GD members packed various government and administrative offices with their family members, relatives and friends, building extensive patronage networks. The culmination of the scandals of 2013 was the resignation of Chief Prosecutor Otar Partskhaladze in December 2013, after the opposition revealed that he had a criminal record in Germany in 2001 (civil.ge, December 30, 2013). Judging by the trends of the past year, it is more than likely that high-level government scandals will continue in 2014.

Moreover, the government’s economic record in 2013 has been dismal. Although, the government subsidies in agriculture helped thousands of peasants to cultivate their lands, overall, last year’s economic showings have been alarming. The government initially forecasted 6 percent GDP growth for 2013, but the growth for the first 11 months was just 2.6 percent (civil.ge, December 31, 2013). Moreover, the Georgian lari began to fall against the US dollar since early November, breaking a two-year record when it reached 1.67 points already in the first week of November (bpn.ge, November 26, 2013). It then kept falling further, reaching 1.73 points in the first week of December. Furthermore, as the government increased social spending, the 2013 budget revenue shortfall hit 700 million Georgian lari ($400.6 million) (liberali.ge, December 20, 2013). In addition, GD’s electoral promise of dramatically cheaper utility prices never materialized.

Against the GD’s failed promises of improved socio-economic conditions, the prosecution of former high-ranking UNM officials dragged on as courts failed to reach final verdicts. These trials increasingly began to resemble hypocritical shows to appease the wider public, angry with Saakashvili’s rule and deeply disappointed with the new government. These never-ending trials are likely to continue in 2014 as the government will try to divert the public’s attention from persisting socio-economic problems in the country.

Foreign policy has not been highly successful either. In 2013, the new Georgian government continued its rapprochement with Moscow. Such a policy has not resulted in any progress in the de-occupation of the Russian-occupied Georgian regions of Abkhazia and South Ossetia. Russia did, however, begin to reopen its markets for the export of Georgian wines, mineral waters and agricultural products. Nonetheless, taking into consideration Russia’s long record of intimidating Georgia and other trading partners, it is quite likely that the Kremlin will use threats of a renewed trade embargo against Georgia this year to bend Tbilisi to Moscow’s political will.

Such a scenario is even more likely against the background of Georgia’s much-anticipated signing of the Association Agreement (AA) with the European Union. Georgia initialed the AA with the EU in November 2013 and is expected to sign the agreement in September 2014 (Channel 1; Rustavi 2; Imedi TV, November 28, 2013). So far, Moscow has not expressed its outright hostility toward the Georgian-EU AA. Yet, this may change once Russia safely puts behind the February 2014 Sochi Winter Olympics and can once again direct its attention elsewhere. For this purpose, Moscow may well use a renewed trade embargo on Georgian exports. However, a trade embargo alone will not be enough to force Tbilisi into submission as Georgia’s economic dependence on Russia is arguably not as large as that of Ukraine, another country that backed off from signing an AA with Europe as a result of Moscow’s intimidation. Thus, the Kremlin may further use the Russian-occupied Georgian regions of Abkhazia and South Ossetia to stage provocations along the occupation lines to apply pressure on the government. Sometime by late winter or early spring of this year, Georgia is highly likely to begin feeling this extra coercion from Russia. It remains to be seen, however, how much pressure Georgia and its current government will be able and willing to withstand for the sake of securing a Georgian-EU Association Agreement.

The year 2013 has been difficult for Georgia. And 2014 does not promise to be any better, as more domestic and foreign policy challenges loom ahead. But it is still unclear how well the Georgian government, shaken by high-level scandals and rapidly growing public disappointment, will tackle the myriad of problems that the country is facing.