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Is Georgian 'modernisation' leading the country to serfdom?

The 2003 Rose Revolution in Georgia was portrayed as a beacon of hope for democracy and progress in the region. Far from developing society towards a free market, however, the current government has retrenched and its policies and programmes are redolent of a planned economy. This can only end badly, says Vakhtang Komakhidze

Vakhtang Komakhidze
15 May 2012

Ever since the so-called Rose Revolution of 2003, the Georgain administration has been heralded as the leading reformer in the region. Presiding over a state of constant change, it has managed to convince large parts of both domestic opinion and the international community that it alone is the guarantor of modernisation and development. 

Clearly, the unprecedented increase in international financial assistance has allowed Georgia’s administration to launch large-scale projects and develop the country's institutions and infrastructure. But have modernising reforms masked the fact that the government has ridden roughshod over democratic values?  Over the years, I argue, the answer to this question has been a fairly unambiguous ‘Yes’. 

Democracy and development

History provides numerous examples of development under authoritarian and non-free regimes. Even the most flawed political systems have managed to achieve modernisation. Mussolini and Hitler's political regimes fit such a model; roads and aqueducts were built in the most repressive periods of the Roman empire; modernisation took place in Communist Soviet Union and China, Amin's Uganda and Al-Qadhafi's Libya. The main differences lie in the effects of free economic policies on the one hand, and planning or ultra-left-wing economic policies on the other.

‘Commentators identify the media as the weak link in Georgia's democracy, but [it is] actually the result, rather than the cause, of more fundamental problems in the country’s democracy. The extent of media restrictions varies according to the degree of political tension: during quiet times, government-controlled television channels allow opponents to express themselves; in critical situations, the authorities do not stop at using force to limit journalists’ 

In the case of Georgia, criticism of the country's democracy has often been limited to the media. Many commentators identify the government-controlled, semi-free press as the weak link in an otherwise functioning democracy. In fact, this situation is more exactly the result, rather than the cause, of more fundamental problems with the democracy itself. The extent of media restrictions varies according to the degree of political tension: during politically quiet times, for instance, government-controlled television channels allow opponents of the regime to express themselves; in critical situations, the authorities do not stop at using force to limit the right of journalists to collect and disseminate information.

The government's opponents maintain that there is a simple formula for lifting political pressure from the media and judiciary. That concerns political will. Since the government lacks this will, the opposition argues, it should be replaced by a different political team which that respect democratic values and does not trample on human rights.

At the same time, polls indicate that a large proportion of the population are unwilling to commit to political change. Distrust is quite possibly the main cause of this political dilemma; this is common in many authoritarian regimes. Election results do not directly reflect the sense of injustice, because many voters will readily put up with the violation of their rights in exchange for minimal social benefits.

Georgians are distrustful of their politicians for two reasons: i) the multitude of unfulfilled promises, which have always been part of political life in Georgia; ii) the experience of Georgia’s recent past, when the emergence of new political groups resulted not in improved democracy but in yet another variety of authoritarianism. Electoral indifference — together with the government machine at the disposal of the authorities, allowing them to manipulate the electorate — has eventually always cast doubt on expectations that a change of government could be achieved through an election.

Onwards to capitalism?

Georgia's ruling political force has changed twice in the 20 years of its independence. On both occasions the change was effected by force, rather than by election. The victorious political forces began by proclaiming themselves advocates of liberal reform, but, faced with difficult social circumstances and hampered by the inertia of political traditions, they have always erred to a managed economy. At times of widespread social poverty, society has accepted the ‘advantages’ of a managed economy in exchange for a liberal economy.

In the first years of independence, it was President [Zviad] Gamsakhurdia who first tried to modify socialism into so-called managed capitalism. Under [Eduard] Shevarnadze, it was business, controlled by the nomenklatura, that did for the fledgling signs of a free economy. 

‘Businessmen are ‘invited’ to invest in projects, to which they would otherwise not have given the time of day. Companies go bankrupt, with the direct result that the number of taxpayers is reduced. These actions have put Georgia in direct conflict with the essence of modern European civilisation and are destroying the basis of liberal economy.’

Having formally declared the launch of a liberal economy in 2003, [Mikheil] Saakashvili put big business under the control of officials, who were to be assisted by the Prosecutor's Office and the Interior Ministry. So-called ‘liberal experts’, who openly supported the ruling National Movement, stated that government control over business was acceptable during the transition period, thus revealing inherent inconsistencies between the liberal economy and real-life policies. 

A few years later, several well-known political figures from the National Movement emerged as heads of major businesses. Officials from Saakashvili's government described themselves to Georgian society and the international community as the bearers of liberalism and European civilisation. In truth, they were tools for the management of the government-controlled economy. The owner of a small business was left only with the right to stand in the background at the opening of his factory, allowing the President to cut the ribbon in a show of economic revival.

Batumi.jpeg

With dozens of new hotels and facilities emerging on the city's skyline, Batumi is the most obvious beneficiary of a programme to develop the Black Sea region for tourism. Yet it is far from clear if the city will ever attract anywhere near the forecasted numbers of visitors. 

The media constantly complains that not a single businessman places ads with independent media organisations. From time to time, the rights of people in business who have been jailed or found refuge in foreign countries are discussed in the media. The businessmen try to explain that they lost their freedom because of government officials’ determination to gain control over their assets. Only businessmen who have funded the ruling party's election campaigns avoid persecution. Unsurprisingly, not one company has taken part in opposition political activities.

A planned economy by any other name…

Another thing to point out is that the ‘liberal economic’ environment announced by Saakashvili's government has in fact transformed the Georgian economy into a kind of managed economy. While there have been none of the classic ultra-left-wing reforms or nationalisation programmes, businessmen are nonetheless frequently obliged to hand over their assets to the state or government officials, ‘invited’ to invest in projects, to which they would otherwise not have given the time of day. Companies go bankrupt, with the direct result that the number of taxpayers is reduced. These actions have put Georgia in direct conflict with the essence of modern European civilisation and are destroying the basis of liberal economy. The only features of free entrepreneurship that have been retained are symbolic. 

As long ago as feudal times, Georgia identified itself with European civilisation through Christianity, cultural values and forms of ownership. In Georgia, as in feudal Europe, land ownership rights belonged to the feudal lords and the monarch's right to take them away was limited, while under Eastern feudalism feudal lords needed the monarch's consent to keep their hereditary ownership rights. The era of ultra-left-wing Leninism and Stalinism completely destroyed this quite significant, albeit not critical, aspect of the development of liberal consciousness in Georgia. Post-Soviet societies have failed to realise the significance of liberal economy because they were turned into consumers of its surrogates.

The ostensibly EU-leaning Georgian public's only reaction to the violation of its property rights has been to look on with sadness, because there are no efficient mechanisms to defend those rights.

‘Economic projects failed because of the government’s overweening desire: that it and it alone should be the ruling force as well as employer, project coordinator and the source of all other benefits.’

The Georgian government regularly tell the international community they are building the economy on a Western liberal economy with centralised regulation, open to everyone. However, the government's economic programmes bear a strong resemblance to classic examples of a planned economy.

For example, in late 2010, the agriculture minister personally led a hybrid corn programme. The cultivation of hybrid corn was promoted by propaganda, without any basis in published research. The Ministry of Agriculture imported some hybrid corn seed varieties and suggested that farmers should use these rather than the traditional varieties. An aggressive advertising campaign on government-controlled TV promoted the ministry's programme as a way to revive and enrich rural Georgia and bring it success.  Inspired by this propaganda, farmers rejected traditional corn cultivation techniques in many regions of the country and joined the hybrid corn programme, using government loans. The consequences were so grave that the government undertook to pay compensation to farmers who suffered losses (although in scale and volume the compensation proved insufficient to cover the damage). 

Another obvious example of planned economy was the tourist programme for the Black Sea region. The president of Georgia and politicians in the government personally announced inflated projected tourism growth figures, inviting the public to take out loans and involve themselves in the construction of tourist infrastructure. People invested loans secured against their properties in private hotel renovation en masse. The projected tourism plans failed, but getting compensation for the losses proved problematic, though the banks went ahead with the repossession of mortgaged properties to recover the loans.

These examples prove quite clearly that the government wanted to stimulate entrepreneurial activity and address people's social problems. The projects failed because of its other, overweening, desire: that it and it alone should be the ruling force as well as employer, project coordinator and the source of all other benefits. These neo-ultra-socialist leanings lead the government into attempts to create jobs through large-scale hydro-energy projects, while the public is unaware of either economic or environmental prospects attaching to them.

The government has come up with similar initiatives in relation to defence industries, which have already been advertised but are yet to be developed. There is a direct connection here with the militaristic propaganda and the practice of cooperation with companies that are close to the ruling party.

A question of legitimacy

While the economic system takes on some aspects of a Soviet planning model, the political system is in fact beginning to resemble a more medieval model of Eastern feudalism, where ownership rights are protected only when the monarch so desires and where individual wellbeing can only be achieved through participation in government-stimulated initiatives. The chance of success is limited, but you have no alternative. Indeed, you only have the chance for as long as you don’t complain. 

The government has effectively equated free enterprise and electoral resource, to which it attaches a negative value. It is through the neutralisation of precisely this resource that a hungry opposition, or opposition fed through behind-the-scenes deals, is now being formed.

The ruling party continues to claim that the government's legitimacy is based on — and reinforced by — elections, and that this legitimacy is sufficient for it to establish judicial norms and procedures unchallenged. This is an emotional impulse on the part of the ruling party and is sometimes criticised by unbiased observers. Dangerous interpretations of legitimacy such as these that have on many occasions in the past caused real damage to societies. It is only at the point of political disaster that a government realises legitimacy ends as soon as it seizes power at the expense of democracy. The kind of development that follows such a turn will never be sufficient to provide education, healthcare, equal opportunities and human freedoms; and will, in all probability, end in modern slavery.

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