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What do Georgians have against trade unions?

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Faced with unemployment, people in Georgia are more likely to turn to support systems of family and friends than formal collective action. Русский

Dmitry Okrest
3 November 2015

It took a long time for Georgia to recover from the economic shock of the collapse of the USSR. Initially, workers’ rights were ignored while the country tried to re-establish its sovereignty after civil war and interethnic conflicts. Later, Mikheil Saakishvili decided to go along the Singapore road of high speed economic development.

Tbilisi’s central market is popularly known as the deserters’ market, because during the Russian civil war at the start of the 1920s, when Georgia was an independent country thanks to the presence of British forces, deserting soldiers used to sell their modest booty there. According to memoirs of the time, you could buy uniforms of every army involved in the conflict, as well as stuff stolen from every battleground.

Today, on the side of the market beside the railway station (most of which is now a shopping mall) you can find an endless line of street traders standing under a makeshift awning made out of plastic sheets cobbled together with twine and duct tape. All the nearby pedestrian subways are also occupied by stalls, so commuters rushing for their trains have to dodge among the traffic.

Among the goods on display are leather jackets, women’s clothes and children’s toys. Much of it is second-hand stuff from the EU, its characteristic smell mingling with the odours of fruit about to spoil and flatbreads baking in outdoor ovens. The stallholders are mostly women in their forties and fifties, many of them residents of the Black Sea resorts of Sukhumi and Gagra before these towns were flattened in the Abkhazian war of 1992. Many refugees lived in the station building, which was still unfinished when the Soviet Union crumbled, right up until 2008.

Near the entrance to the market groups of middle aged men in crumpled clothing stand around, their heads bowed, waiting for a nod from an employer like slaves waiting to be bought in old American films. ‘There’s no work in the outlying districts’, says 35 year old Georgi S., who has a job installing German medical technology in the capital’s hospitals. ‘There are no factories left, there’s just trading, buying and selling, and who are you going to sell to? So everybody crowds into Tbilisi, on the principle that it’s better to hang around outside the job centre at the market than sweat in a field. But when they get here, they just beg between one odd job and the next. It’s also a real problem that some won’t let their wives go out to work – in the villages that’s seen as shameful.’

‘There are no factories left, there’s just buying and selling, and who are you going to sell to?’

The men, who mostly live in the outskirts of Tbilisi, have come to the capital from far-flung parts of Georgia. Most of them will go home at night without a penny to show for standing around in the sun all day. The best they can hope for is an odd shift as a labourer – a market porter, a cleaner after the market closes.

If they’re really lucky they’ll get work on a construction site where a new building is replacing a pre-revolutionary one and be able to sell any valuable metal found during the demolition work. If they are lucky and can drive they can become taxi drivers - their earnings are tax-free.

The local nuances of unemployment

‘According to International Labour Organization (ILO) criteria, Georgia has a low unemployment rate – just 12%’, statistician Nodar Kapanadze tells me.

‘But it depends on what criteria you use. Here we tend to use comparison with other countries – and according to that rating, a third of the working population can be considered unemployed. The main problem is our occupational structure, or rather, lack of it – more than half of the population is self-employed.’

Kapanadze has had experience of not only working with Georgia’s Statistical Service, but also conducting an analysis of poverty and inequality in the country for the International Fund for Agricultural Development, Unicef and the UN Development Programme. He has also worked as a consultant for the World Bank on the situation in Tajikistan and helped the European Bank with reconstruction and development in Mongolia. ‘It’s clear that experts from international organisations don’t understand local nuances in the labour market’, he says over a cup of coffee.

Since 2011, the country has had a Business Ombudsman Bureau, set up to lobby for more business-friendly legislation. Its mission statement talks about the protection of taxpayers’ rights, complaints by business against government bodies and the monitoring of professional interaction between bureaucrats and business.

The bureau’s officials are, however, difficult to get hold of for comments, despite every section having its own Facebook page. Two months of attempting to get answers to my questions yielded only a refusal, citing ‘pressures of work’. They did, however, inform me that since 2013 there had been significant changes in labour law: verbal agreements were no longer legally valid and probation periods could not last longer than six months.

‘President Saakishvili’s government gave carte blanche to employers in relation to their employees’, Professor Iosif Archvadze of Tbilisi’s Ivane Javakhishvili State University tells me. ‘The role of trade unions was reduced to ritual processions and handing out the odd free holiday; it became easier to sack people; the ‘social tax’ contributions paid by people in employment towards their pensions and other benefits were abolished – it was real neo-liberal politics’.

Mutual aid

A heavily built busker stands singing traditional songs in an underground hallway at the Cadguris Moedani metro station, his strong voice drowning out the noise of the arriving and departing trains and attracting commuters’ attention.

But unlike him, a hunched old woman gets few donations: young girls in fashionable European clothes avert their eyes and engross themselves in their smart phones. ‘People here realised a long time ago that you can’t expect any help from the state and that the best thing is to develop your own support system in the shape of family and friends’, says Archvadze. ‘Family ties have always been very strong here, with the older generation helping the younger. And it works both ways: a majority of pensioners live with their families. They can’t afford to live on their pensions - 100 Lari (£27) a month on average – surveys show them spending twice as much as they contribute to the family budget.’

Sitting at their dinner tables, Georgians complain that the government can’t afford any more social benefits – taxes are very low, comparable to Qatar or Hong Kong. So people are forced to provide for their nearest and dearest.

‘Family members helping one another out means no-one is totally destitute – it’s effective in keeping the wolf from the door, but not in combating structural poverty’, explains Nodar Kapanadze. ‘For example, if there’s a wedding, people usually invite a minimum of 100 guests, and often 250 or 300. So they have to get credit from somewhere. At the moment my sister is organising her son’s wedding, and any family and friends visiting her leave some cash. Back in the 80s this mutual aid system was even more effective – there was less inequality than there is now and everyone was able to help family members out.’

‘For Georgians, workmates aren’t the most important connections’, says the statistician. ‘Your inner circle consists of your family, the next is your friends, and work colleagues are in the background.’ This hierarchy of connections, he believes, may have helped avoid starvation in the hungry 90s, but now they are an obstacle to the country’s moving forward.

Family support systems keep people fed, but are an obstacle to the country’s moving forward.

‘When someone wants to get some plan off the ground, the first people they turn to are family and friends. They regard strangers with great suspicion’, Kapanadze tells me. ‘And at the same time they complain about the lack of skilled workers, because they only look for them amongst their own circle. But there is an objective shortage of qualified staff – in the first place, the skills loss of those who had them in the 90s. When the USSR fell apart, many highly trained workers were left without jobs and have been selling vegetables at the market for the last 20 years while their skills atrophy.

The braindrain

The main street in Tbilisi is Rustaveli Avenue, named after Georgia’s national poet. Along it lies the old parliament building, the Academy of Sciences, the National Theatre and numerous other theatres.

This is where protesters stormed the bunker of the country’s first post-Soviet president and former dissident Zviad Gamsakhurdia, and where all the massive demonstrations took place that led to the overthrow of its second president Eduard Shevardnadze, formerly the USSR’s foreign minister. And a few years later Rustaveli Prospekt saw yet more demonstrations, this time to overthrow its third president, Mikheil Saakishvili, now an advisor to Ukrainian president Petro Poroshenko.

Today along this pedestrianised highway ‘For Sale’ notices adorn shop windows thick with dust, and middle-aged men and women sell bits and pieces – church candles, dried fruit, sunflower seeds and small household goods. Every 50 metres, and more often as you approach the metro, you are accosted by the voices of legless people sitting on the pavement asking for a few coins and children who cling to your trouser legs until given a few Lari.

‘Official figures show very high unemployment rates among young people under 30’, says Kapanadze. ‘People over 30 are more likely to be in work – they found a job when they were young and will tend to stick to it until they get their pension.’

In the Soviet period Georgia was part of an integrated USSR-wide economic system, where its main role was the production of exotic fruits. After this collapsed, employment rates followed. ‘1991 brought a tectonic shift in supply and demand: we lost the Russian market that was our main customer all those years. Turkey and Greece entered the market and no one needed Georgian products any more’, Professor Archvadze tells me. ‘In the 80s, for example, Georgia exported 125-130 tonnes of tea a year; now it’s 10-12 tonnes. So everybody who had worked in that sector lost their jobs. When Shevardnadze came to power in 1992, there was a civil war going on and you had to hunt all over Tbilisi to find petrol, for example. And during his presidency male pensionable age was raised from 60 to 65.’

This led, says Nodar Kapanadze, to a brain and skills drain. The main beneficiary was, and still is, Russia, despite the problems of the visa system. Between 800,000 and 1 million Georgians live in Russia today, and many others have emigrated to Germany, Greece and the USA. Remittances from these countries come to $1.5bn a year, although the crisis in Greece has cut the value of transfers from that country by 25%, and many Georgians have been remembering how Russia’s default in 1998 hit Georgia as well.

Seasonal work

‘Russians, Indians, Ukrainians, Azeris, Armenians– they all come to Georgia on holiday.’ I’m hearing the geopolitical break-down of the tourist industry in Adjara (an autonomous region within Georgia that borders Turkey on the Black Sea Coast) from minibus driver Iraklii. ‘And Turks, of course,, bring clothes to sell by the trailer-full and holiday with the whole family. And then the men send their families home and continue their holiday alone. Batumi has restaurants and casinos, you see, and girls, mainly from Uzbekistan, to pass the time with.’

Batumi, the capital of Adjara, has only recently become a resort– Georgians preferred to spend their holidays in Abkhazia, to the north, before that region seceded from Georgia in 1992. Batumi was always mainly a port, the gateway from the Caucasus to the sea. Under Saakishvili a new boulevard appeared along the sea front, and skyscrapers and hotels transformed the skyline. In the winter the city is practically dead, but in the summer its population rises by several hundred percent as tourists flood in. Casinos, which pay a mere 15% in corporation tax, are the main magnet for visitors.

‘Arabs stay in the big chain hotels – the Hilton, Radisson, Sheraton’, says Iraklii. ‘If it’s men on their own, they go straight to the casinos, drink, eat pork if they want to – and it all means more tips for me. They can happily spend ‎€10,000 in a night.’ Crimea’s annexation by Russia has also brought more Ukrainians, and thanks to the growth in the oil business, hijab wearing women from Iraqi Kurdistan can also be seen around the town.

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Georgia was once a leading producer of exotic fruits. When the industry collapsed, everybody in the sector lost their jobs. Photo:Daro Sulakauri via Demotix‘All the tourist areas of the country—Batumi, Tushetia, Borzhomi, Bakuriani—rely on seasonal workers’, Nodar Kapanadze tells me. ‘They might be providing the infrastructure for the tourist industry or servicing it as waiting staff, cleaners or small traders. It’s not a stable labour market; it all depends on the weather, the number of visitors. And the work is only available for a few of months in the year – the holiday season ends in September. In that short time you can earn 5,000 Lari (£1,360), but that won’t see you through until next May.’

Summer is the choice season for Adjars and people from other areas working in the tourist industry, but not for everyone. Tamara, the manager of a Batumi preschool nursery, spends her summer in Ureki, a health resort 30 kilometres away – she doesn’t want the children’s parents to see her engaged in ‘menial work’. Each day she boils 30 corn cobs in the bushes behind an abandoned café beside the lifeguards’ station and sells them for one Lari (£0.27) each.

Every morning dozens of women converge on the beach from distant mountainous areas, clubbing together to buy petrol for their minibus. They bring with them enormous bags of popcorn, flatbreads stuffed with beans and children’s inflatable swimming rings to sell. In rural areas there is also seasonal work picking grapes in Kakhetia or nuts in Megrelia. For the rest of the year these people live off their own smallholdings.

Between 800,000 and 1 million Georgians live in Russia now, and others in Germany, Greece and the USA.

‘These are very small plots and inefficient to work. You could say that this is the last stop on the road to total unemployment as defined by the ILO,’ says Kapanadze.

Barriers to change

Why is nothing happening to change the situation? Why has Georgia not developed a powerful trade union movement, and why has the wind of change – the Occupy movement – passed it by?

‘Under Saakashvili, the problem was that any social demands or social protests were seen as left-wing and a hangover from the Soviet Communist Party, at a time when there was an active de-Sovietisation process going on,’ Kapanadze tells me. ‘The social agenda only ever appears at election time, and in most cases the politicians just invoke concepts like ‘fairness’ and ‘grievance’ – things that are difficult to quantify. It’s easier for people to resolve their problems through informal channels than formal collective action.

Kapanadze says that Georgia’s trade union movement is more or less dormant, and when the teachers’ trade union, for example, tried to press for better conditions - nothing came of it.

The only groups of skilled workers who could theoretically carry out effective industrial action are those employed in the ferroalloy industry in Zestafoni and the chemical and metallurgical plants in Rustavi. In 2012, workers at Zestafoni did attempt to stand up for their rights, but the local workforce is now being replaced by Ukrainians. And Rustavi is too close to Tbilisi, so wages there are quite a bit higher.

At the same time, International trade Union Confederation figures show that annually 40 people die in industrial accidents in Georgia, another 70 suffer industrial injuries – and 30% of them work in the chemical and metallurgical industries.

Professor Iosif Archvadze believes that one reason why Georgians are unwilling to organise to protect their employment rights is that these days, wages are no longer their main source of income. In Soviet times, wages and salaries made up 75% of real income, whereas now they account for no more than 40%. The rest comes from letting out property, financial operations and smallholdings. In some sense, says Archvadze, people have become less dependent on wages and bosses.

‘There will be no social protest here,’ the professor tells me. ‘It’s a question of the Georgian character. There can be no repeat of Yerevan’s "Electromaidan" here – if the price of electricity goes up, people will just try to find the extra cash themselves. There is little likelihood of a new Stalin leading a strike [as a young Joseph Djugashvili did in Batumi in 1902 - ed].

The most important thing for Georgians is the mutual support of family and friends, and the state is too distant from ordinary people. We are very fond of Thomas Jefferson’s famous remark: "that government is best which governs the least.’”

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