When I testified to this committee in March 1995 at a hearing on Georgia, I concluded: “the concentration of power in Shevardnadze’s hands… and the retention of conservative apparatchiki in policy making positions, is undermining popular faith in the institutions of democracy and the market. Shevardnadze may have managed to save the Georgian ship of state…but has given it little direction.” After seven years, and over $700 million of US government aid between 1995-2000, today I might conclude in much the same manner.
In 2000, USAID spent $52 million in Georgia restructuring its energy system, implementing business and democratic reforms, and funding social and humanitarian programs. That same year, the US government spent $35,000,000 on border defense and on the Georgian armed forces, $7,000,000 on conflict resolution, and $14,000,000 on judicial reform, rehabilitation of the health system and privatization. Yet there is little indication that this investment had made much difference. When I was in Georgia in the fall of 2001, there were blockades on the streets by citizens angered at blackouts, there was an occupation of Rustavi 2, the most popular independent TV channel by Security ministry officials, prolonged protests outside parliament leading to the mass resignation of government ministers, the bombing of Georgian villages by Russian planes, an incursion of Chechen fighters into the Kodori valley, and the election of a new South Osetian President in December more antagonistic to re-integration with Georgia than his predecessor. Conflict resolution with secessionist Abkhazia and South Osetia remained at a dead end. The judicial reform greeted with such fanfare in 1998 had petered out. Corruption and the obscure process of privatization of middle and large companies continued to undermine the faith of ordinary citizens in economic and political reform.
It would be absurd to suggest no progress has been made since 1995. Shevardnadze ended private armies, civil strife, prevented a catastrophic economic collapse, and stemmed territorial fragmentation. He de-radicalized the Georgian nationalist revolution, introduced tough economic reforms, established a constitution and initiated a process of reconciliation in a country torn apart by civil war. But this progress, in which Western governments and international organizations have invested so much, is built upon the thinnest of ice. The fragile stability in Georgia today is maintained by social and political forces that in the long term will bring it down, and along with it, US hopes of a sturdy liberal democratic ally in the region. Thus corruption, migration ( an important pressure valve for the unemployed and discontented), public cynicism, and a poorly organized civil society sustain the system today, but tomorrow these same phenomena will undermine any future prospect of sustainable reform. That means I will likely be back before this committee in seven years time repeating what I said in 1995.
By most criteria, we might call Georgia democratic although in my mind there are serious questions as to whether elected officials have effective power over the government, and whether elections, such as the 2000 Presidential election, can be described as fair and honest. Other attributes of democracy, though imperfect, are basically in place such as free expression, the right to create political parties and associations, the right to run for elective office and the existence of alternative sources of information. But despite these gains, for the ordinary voter, the expectations of democratic life, such as accountable officials, defense against corrupt judges and police, a responsive government and electoral power, have not been fulfilled.
There are many reasons why Georgia is failing its citizens, but I will mention only three. I focus on these because they are areas where Western governments have also failed Georgia.
The first concerns economic security. Impoverished democracies exist, but studies show moderate growth, a higher per capita income and declining inequality are the best means for sustaining democratic institutions. Even with estimates taking into account popular participation in the shadow economy, 40% of the Georgian population has a combined monetary and non monetary income below the subsistence level. J.K.Galbraith has remarked that “nothing… sets a stronger limit on the liberty of the citizen than a total absence of money.” In Georgia Western policies on democracy building have overlooked this basic tenet - and until Georgian citizens’ economic and physical insecurity is mediated in some way, democratization in Georgia will have little chance of success.
The second concerns Georgian state capacity. No government can sustain reform without the proper institutional means to follow through on implementation. A few figures illustrate the problem: compared to 1989, Georgia’s current economy has shrunk 67%; industry is working at 20% of its capacity. Between 1997-2000, expenditure on defense decreased from $51.9 million to $13.6., education from 35.6 to 13.9, agriculture forestry and fishing from 13.4 to 7.2. The state’s inability to fund its social insurance and employment funds, maintain its army, education and transport in rural areas, or stimulate agriculture and industry, has led the majority of the population to view the state as irrelevant, unrepresentative, and corrupt. Its functionaries are despised, its structures unworthy of trust or support, including the police and the army. Throwing in Western aid such as the US train and equip program for the Georgian army – which is aimed to help Georgians fight Chechen terrorists - will never be effective if the Georgian state cannot pay its soldiers and feed them properly. A strong fighting force cannot be built on the impoverished base of Georgia’s army. The transition to democracy and the effective impact of aid must start with the premise of a coherent and functioning state. A weak state is unable to promote good government, and cannot control bad government or misspent aid.
The third issue is political and public support for reform. There are scattered reformers in the Georgian government, even ministers, but they are powerless and do not have the support of the President. Sound opinion poll research suggests that even if state elites wished to reform, they would find it very difficult to convince a profoundly alienated population that they were genuine. Data suggests that 56.8% of the population do not trust the courts, 64% do not trust parliament, 79.4% don’t trust the tax administration, and 65.6% do not trust the President. Such degrees of alienation will kill most attempts at reform before they begin. The cycle of distrust can only be broken with visible government measures taken to end the control of corrupt political and economic networks. The US government should be strongly urging Shevardnadze to do so with sanctions if he does not.
A poll in December 2001 conducted by the Georgian research firm SOCIOGEO suggested that Georgia’s cumulative problems and the ineffective backing of the US for reform has decreased faith in the US among Georgian citizens. Forty three per cent of Georgians polled (24% in 1999) favored closer security ties with Russia and the CIS rather than with the USA.
Ultimately Georgians are responsible for building a sustainable democracy, but Western aid is an important instrument in shaping, stimulating and sustaining reform. So far, Western aid has been largely ineffective in doing so.