The IMF is satisfied with Georgia developments, and no longer hides it. Underline its current government strong commitments with economic and structural reforms announced the 31st of July that, “both this and next year will help to increase 5% the GDP, compared to 3.2% of 2013.” Still the new government wants to go further: “The program will support macroeconomic stabilization and improve confidence by providing a framework to discipline macroeconomic and fiscal policy and by providing modest balance of payments financing”, IMF Press Release states.
Veiled and indirectly, this will make Georgian institutions work properly and conversely they will attract financial confidence inside and outside the country improving competitiveness. This will leave behind the former president poor practices, in a framework in which according to the IMF “Structural reforms will be essential for achieving the program objectives of enhanced competitiveness and an improved business climate. In this context, the signing of the Deep and Comprehensive Free Trade Area (DCFTA) and EU Association Agreements are welcome developments that signal Georgia’s deeper integration with the EU, which should enhance export competitiveness and help boost Foreign Direct Investments.”
Economic variables
Economically, the program backed by the IMF goes far beyond reducing dollarization, which will brings advantages or stabilizers, but also disadvantages, among the previous a “high dollarization will weaken the effectiveness of monetary policy and expose banks to risks”. With the former president the dollarization deposit reached in 2012 66%. The current liberal government wants to reduce it to 61% next year, in a reform package that will also try to lessen inflation as well as external and public deficits, reducing the high levels of poverty and unemployment existing today in Georgia. Measures that sound similar to the Spanish ones, although both public debt and the external position in Georgia are a third less than in Spain in relative terms (compared to the GDP).
The historical similarities between the Mediterranean countries and Georgia (i.e., with the reform processes in Spain and Portugal) go beyond macroeconomic terms. Georgia has always had a valuable geographic position, as it acts as a bridge between Europe and Asia, similar to Spain between the Atlantic and the Mediterranean; between Europe and Africa. However this involves many vulnerabilities and costs, as the IMF also notes: “Regional geopolitical tensions and potential spillovers from neighboring countries may affect the prospects for the economy, especially for trade, remittances and potentially foreign direct investment.”
Political variables
Politically, a relevant variable of how Georgia will overcome all these risks and geostrategic tensions is the trial that will start this Friday and will judge the fled former president Mikheil Saakashvili.
On 28 July, the Georgian Office of the Chief Prosecutor filed charges against former President of Georgia Mikheil Saakashvili in the context of a number of ongoing investigations into abuses of power by high officials. The ex-president defends himself against the content of the charges by claiming their pursuit is politically motivated. This seems a poor defense given that the charges concern incidents which earned the former President and his government harsh criticism from non-governmental human rights organizations and the international community (U.S. senators, United Nations, the Council of Europe, etc.).
Moreover, Mr. Saakashvili’s allegation of abuse of justice for political ends is at odds with the widespread consensus that the current Georgian administration’s efforts to entrench democracy, human rights and the rule of law are on the right path. Entrenching rule of law however means someone has to pay the price for past abuses. Just because Mr. Saakashvili is a political figure does not mean he is above the law. Indeed, politicians more than anyone should be accountable to the people.
The court hearing scheduled for Friday 8 August will discuss the criminal case which relates to the role of the then-President in two incidents: the violent dispersal of anti-governmental mass protests on 7 November 2007 and the raids conducted against the private TV Company IMEDI by riot police and its illegal acquisition by the State. The charges stem from investigations into some of the almost 20,000 citizen complaints received by the Office of the Chief Prosecutor of Georgia following the 2012 Parliamentary elections.
The new government, which includes many prominent human right lawyers and NGO leaders, was elected in October 2012 on a promise to restore the rule of law and end the impunity of government officials. The Prosecutor, made independent from the Ministry of Justice in 2013, has a legal duty to investigate all complaints. Despite a decision to pursue only the cases involving the most serious crimes and to limit responsibility to the highest levels, this is a tall order. International reports, such as the latest by the Human Rights Committee of the United Nations, recognize the success of the government’s comprehensive democratic reform agenda, but continue to express concerns about delays in investigations and the provision of effective remedies to victims of past human rights abuses.
The UN Human Rights Committee report specifically mentioned the incidents in relation to which former President Saakashvili was charged. Several international NGOs produced detailed reports documenting the incidents and concluded, in the words of Human Rights Watch, that “the government crossed the line” and needed to be held to account for its abuse of power. Following the announcement of charges by the Prosecutor’s office, Georgian NGOs issued a joint statement in support of the investigation, emphasizing the gravity of the incidents at hand, and the need to ensure that “every person is equal before the law.”
Responding to editorial coverage and statements from policy-makers which show that Mr. Saakashvili still has some friends abroad, Forbes commentator and expert in Russian and East European Policies, Mark Adomanis, offered an interesting analysis which is worth quoting at length. Pointing to statements, including from “a number of US senators including famously outspoken Russia hawks John McCain and Ben Cardin” who call on the Georgian authorities “to focus on the future, not the past, and to help move their country forward, not take it backward,” he notes:
“This is an argument not against prosecuting Mikhail Saakashvili or his political allies but against the very concept of the rule of law, a concept which is necessarily backward looking. Can you imagine John McCain making a similar statement about post-Putin Russia? Can you imagine him releasing a statement saying that, whatever the former president might or might not have done while he was in office that Russia should concentrate on its future not its past? This statement amounts to a public get out of jail free card for any politician who has reached a sufficiently high level of authority.
Is Saakashvili actually guilty? I don’t know: I haven’t seen the evidence that the Georgia authorities have gathered for the trial and I am (obviously) not an expert in the Georgian legal system. It is, of course, entirely possible that the Georgian authorities are engaged in a “witch hunt” against their political rivals. It is, however, also entirely possible that they are engaged in the legitimate pursuit of justice. How do I know this? Because Saakashvili’s government really was responsible for some pretty serious legal and civil rights violations. Consider what Freedom House had to say (emphasis added):
“Georgia is not an electoral democracy. OSCE monitors found a number of problems with the 2008 presidential and parliamentary elections. These included the passage of electoral code changes just weeks before voting, the abuse of state resources, and reports of intimidation aimed at public employees and opposition activists.
Given what happened in the country while he was president it is not possible to dismiss the charges against Saakashvili out of hand at McCain, Cardin, and the Wall Street Journal wish. Someone was responsible for ordering the violent dispersal of peaceful protesters and someone was responsible for rigging elections. Given the hyper-centralized nature of post-Soviet political systems, it’s not ipso facto crazy to suggest that, just maybe, the president bore some responsibility for these actions. We will only know whether the Georgian government is engaged in selective prosecution or an admirable pursuit of justice once we see how the trial proceeds…”
Angel Maestro, Spanish Analyst of the former Soviet Union and of its transition process
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