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From Georgia to the EU is a long road

Georgia has signed an association agreement with the EU. But there is a long road ahead toward establishing transparent and accountable government.

 

Alexander Kupatadze
8 July 2014

On 27 June, Georgia, together with Moldova and Ukraine, signed an association agreement with the EU. In the Caucasus, Georgia distinguishes itself with its near unanimous support among the political elite for EU integration. The issue is more contested in neighbouring Armenia and Azerbaijan. This desire for closer links with the EU was a significant driver of the reforms effected over the past decade; however, Georgia has a long road ahead toward establishing transparent and accountable government. 

As for the EU, geopolitical rivalry with Russia must not undermine the need to pursue an agenda of transparency and accountability, the core values of the EU. In much of Central and Eastern Europe, EU conditionality played a transformational role as an exogenous incentive for political leaderships to implement reform in the 1990s. However, as the cases of Bulgaria and Romania demonstrate, EU-induced reform does not necessarily replace deep-seated corrupt practices. Moreover, once membership is achieved, a counter-effect may occur that is perpetuating practices of various forms of corruption. In order to avoid previous mistakes, in Georgia the EU can do more to incentivise the process of moving away from this push and pull of corruption and crony provincial politics.

Business as usual

In the last month of its work, Tbilisi city legislative council Sakrebulo reached an agreement to grant Sakrebulo members, bonuses in the amount of 300% of their monthly salaries. Interestingly, whereas the institution was often divided along the lines of competing political parties – Georgian Dream and National Movement – and often failed to reach consensus, it was quick to agree on the issue of bonus payments. This has not been an isolated incident, and the practice of granting large bonus payments to the leadership of public institutions have been perpetuated since the change of government in 2012. The Institute for Development of Freedom of Information (IDFI) has been regularly publishing the information on bonus payments in various government agencies. The practice more resembles political clientelism, and is, in fact, a form of legalised corruption‚ because the decision on the rewards is based solely on discretion, and there are no regulations/criteria for determining and awarding excellence in public office. Also, bonus payments disproportionately benefit the leadership of the ministries and departments, a system that more resembles the distribution of resources to their own clientele by the heads of these institutions rather than an incentive for good performance.

Bonus payments disproportionately benefit the leadership of the ministries and departments.

This situation is exacerbated by rising concerns over nepotism. A public poll administered by the Caucasus Research Resource Center showed that 30% of the respondents think that connections are the most important factor for getting a good job, up from 19% in a similar survey of 2011. Current Prime Minister and then Minister of Internal Affairs, Irakli Garibashvili, responding to the question about the appointment of his wife's cousin as the Chief of General Inspection, famously told members of Parliament in March 2013, that his wife's relatives do not qualify as his own relatives. Murman Dumbadze, a leading politician from the autonomous republic of Achara, that receives a lot of the criticism for the prevalence of its crony provincial politics, has openly spoken about the appointment of his relatives to key government positions, and brags that he never recommends people he does not know personally. 

The turnover in personnel was significant in a number of government agencies after the change of regime, when numbers of people, considered as loyalists of the previous regime, had been obliged to resign. This had a negative impact on the degree of professionalism in public structures because one of the key achievements of the Saakashvili administration was its success in attracting many young and well-educated young people to work in the bureaucracy.

Some improvements

Some sectors have seen improvements. Transparency International Georgia found that the collusion between politicians and businessmen – a major problem under the Saakashvili government – had started to decrease noticeably after the regime change. The practice of awarding public contracts to 'friendly companies‚' that would then contribute to the coffers of the ruling political party, is not so necessary for the incumbent authorities because Georgian Dream, the government in power, is funded by Bidzina Ivanishvilim, the richest man in Georgia. Hence, the authorities do not need to engage in the type of corruption prevalent under their predecessors, diverting state resources for political campaigns, and spending public funds to ensure the stability of the political regime.

Allegations of corruption have been the essential part of the criminal charges made against Gigi Ugulava, former Mayor of Tbilisi, and Ivane Merabishvili, former Prime Minister. However, concerns remain over the continuing use of personal connections to help private companies. In March 2014, a group of well-known economists addressed to the Prime Minister an open letter alleging that government representatives continue to lobby in favour of particular companies, a practice that eliminates business competition. Many businessmen from Saakashvili's National Movement party have shifted their loyalty to Georgian Dream, a process that some have attributed to ongoing political pressure and outright blackmail. This process, coupled with the cases of selective justice brought against members of the previous regime, undermines the incumbent government's claim that it would depoliticise public institutions, an ambition that was advertised as the key reform achievement after the first year of regime change.

Many businessmen from Saakashvili's National Movement political party have shifted their loyalty to Georgian Dream.

Carrot and stick

There are reasons for optimism, especially given the background of the EU association agreement signed on 27 June. Unlike the period of 2004-2012, the media is pluralistic; the political opposition is strongly represented in parliament, and has access to media outlets as well as possessing significant intellectual potential to monitor and criticise the deeds of the government. Under such increasing public pressure, the executive government has recently taken steps to standardise and regulate the payment of bonuses in public institutions. Hence, there is more incentive now to break out of the vicious cycle of crony politics because the chances of exposure, and, consequently, the costs, are bigger. But internal pressure is not enough. The exogenous incentive of the EU must also be a reason for introducing change to the still current, and ingrained corrupt structures of the political elites, thus precipitating a decisive movement away from the corrupt equilibrium. The EU can build on its own experience with other new members, but it must also introduce stronger monitoring mechanisms on the ground, and take a more rigorous carrot and stick approach to ensure progress. If this does not happen, then the alternative pathway - a reinforcement and perpetuation of corrupt practices - remains quite probable.

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