Georgia’s Step Back

Georgia has for many years been viewed as the likeliest of the former Soviet Republics to join the European Union, with low(er) corruption rankings, a better than normal investment climate, an orderly political process, and a populace and leadership firmly committed to the West. All of these things have slowly begun to recede over the last year, reaching what may be a record low in political regression with the inauguration of Giorgi Margvelashvili, a professor whose primary virtues are unabashed an open devotion to Georgia’s new Vladimir Putin, Bidzina Ivanishvili; and a willingness to prosecute Ivanishvili’s political foes, including outgoing President Mikhail Saakashvili.

Saakashvili is well-loved in the West despite his own autocratic tendencies and his botched handling of South Ossetia, which provided Putin his much-desired opportunity to invade and carve off slave regions from Georgia despite the terrible threat of stern diplomatic letters handed to his various ambassadors. In Georgia, the populace is vaguely tired of his antics, worries about an ongoing trade war with Russia, and is largely resigned to an apathetic status quo. Naturally, this has led Ivanishvili to arrest and indict several of Saakashvili’s officers and political allies, and all but promise prison time for Saakashvili, largely for being his political opponent.

This is a bad thing. Very few people care, possibly because Saakashvili is not a beautiful woman with bleached-blonde hair.

Unnoticed by most in the West, who think finance is something one does in London and New York and possibly Shanghai, Ivanishvili during his time as Prime Minister (he has since resigned the spot, taking on the role of acting prime minister for his puppet of the week) poisoned much of Georgia’s investment climate and made clear that no foreign investment except a Russian one could be considered entirely safe. Europeans are not always good at sussing these things out (hence the enormous German investments in Greece prior to 2009), so the rate of investment has slowed, not frozen; but with a complete lock on power in this small nation, Ivanishvili’s fingerprints will only grow more significant.

The rule of law is now directly imperiled in Tbilisi, with a lot of unpleasant consequences for European integration. For now, Ivanishvili’s clique recognizes that too close an alliance with Russian will jeopardize their own power, and Brussels seems unconcerned at best about the unfortunate trend of Georgia politics. But from within Russia, it is very easy to see parallels in Georgia’s trajectory in Russian history, and in so many other polities since the the end of the Soviet era.

Investment professionals have bona fide interests in encouraging Brussels to look past what appears to be the slow Russification of Georgia, and they have an unfortunate tendency to frame things in a way that makes sense to reporters covering the Georgia beat. But while Georgia has gone very far to show its European bona fides, its recent actions speak of a nation not so much hungry for Europe as expecting it.

Today may be a very good day to reflect on Georgia’s future, to send a message that there is one set of rules for Europe and not many; and that while trying may be good enough for provisional alliances, backsliding must be considered a potential disqualifier of a shared future.

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