Democratic Transformation in Georgia

IMGXYZ444IMGZYXOn December 16, 2005, the Carnegie Endowment for International Peace hosted a meeting entitled “Democratic Transformation in Georgia” with Gela Bezhuashvili, Minister of Foreign Affairs of Georgia. Anatol Lieven, of the New America Foundation, chaired the session. Bezhuashvili’s remarks are summarized below.

Bezhuashvili trumpeted the successes of President Mikhail Saakashvili’s government and outlined its goals for 2006, accenting the separatist problems in Abkhazia and South Ossetia and Georgia’s desire for Euro-Atlantic integration.

Since coming to power in the Rose Revolution two years ago, the Saakashvili government has focused on fighting corruption, improving infrastructure, and fostering economic growth. Bezhuashvili cited healthy GDP growth—6.2 percent in 2004 and 5.0 percent in 2005—new roads, and substantially improved tax collection as signs of success. He also claimed Georgians are optimistic about the future and confident in the government.

Bezhuashvili stressed that this success resulted from substantial underlying reform, including “shock therapy against corruption.” Upon taking office, Saakashvili halted government borrowing abroad and simplified the tax system. The Georgian government deregulated the private sector substantially. In 2005 the government introduced a national system of examinations and state funding for higher education, with the goal of raising standards and making admissions competitive.

Bezhuashvili painted a darker picture on energy, calling it Georgia’s “Achilles heel.” The government aims to privatize portions of the energy sector, diversify its supply, and improve the transmission grid. This will be difficult, though, with Russia planning to raise its 2006 gas price for Georgia to more than double the 2005 level. Bezhuashvili claimed this could reduce Georgian GDP growth by 1.5 percent in 2006. Said Bezhuashvili, “If this is the price of independence, we’ll pay it. But this is not a problem only for Georgia.” Europe also faces complications from its dependence on Russian energy.

In 2006 the Georgian government plans reforms aimed at strengthening local self-government and judicial independence. But by far the biggest challenge for the government will be ending the standoff with the separatist regions of Abkhazia and South Ossetia. Russian troops currently police both.

Bezhuashvili hailed the recent OSCE statement on the conflict in South Ossetia and expressed optimism about the peace process there. He noted the absence of ethnic hatred in the area and the international support for the peace plan proposed by Saakashvili.

Russia’s intentions in South Ossetia remain opaque. While the Russian delegation acquiesced in the OSCE statement, the Russian Ministry of Foreign Affairs subsequently criticized it in strong terms. According to Bezhuashvili, Russia is “engaged” in solving the problem. The Georgian government has proposed European-type autonomy for South Ossetia. Saakashvili’s plan calls for demilitarization, Georgian investment in the infrastructure and economy of the region, and then final status negotiations. Bezhuashvili claimed the South Ossetian leadership likes the plan, but that Russia prefers the status quo.

The Georgian plan would guarantee South Ossetia representation in Georgian state institutions and protect Ossetian language, culture, and history. Georgia would undertake payment of South Ossetia's pension arrears back to 1991 and fund Ossetian schools. Bezhuashvili claimed South Ossetia would enjoy far more autonomy as part of Georgia than does North Ossetia as part of Russia.

Georgia is seeking to expand the Joint Control Commission, which oversees the Russian troops in South Ossetia, to include the EU and the US. Bezhuashvili argued that the current version of the JCC has shown no progress over 15 years.  In his view the main obstacle to peace is the largely Russian political elite of the separatist region.

The Georgian government’s other major foreign policy priority is Euro-Atlantic integration. Bezhuashvili called NATO membership an “express goal” of the Georgian leadership and said the Georgian desire for membership was based on shared values. Bezhuashvili said Georgia is not a consumer, but a provider of security, citing the presence of Georgian troops in Kosovo, Iraq, and Afghanistan. He said Georgia would like to have a Membership Action Plan by 2006 and accede in the next round of NATO enlargement. Bezhuashvili also mentioned cooperation with the EU under the European Neighborhood Policy and took an optimistic view of Georgia-EU relations.

Q&A

Q: Should Georgia pay the European price for Russian oil and gas?
Bezhuashvili: It’s a bad price and a bad approach. Energy dependence is a Russian foreign policy tool. Gazprom is a problem for Europe too. The price is a political decision. This is pay for loyalty. If this is the price of freedom, we’ll pay, but we need the help of the international community, or this winter will be difficult. We need a Euro-Atlantic energy strategy.

Q: Has Azerbaijan offered anything from the BTC [Baku-Tbilisi-Ceyhan] pipeline?
Bezhuashvili: Azerbaijan also imports 40 percent of its gas from Russia. The Baku-Erzurum pipeline won’t come online until 2007. Until then Georgia will be dependent on Russia for energy. Kazakhstan offered a fairer price, but Russia blocked the contract using its control of the transport system. We need to revive the trans-Caspian pipeline project.

Q: Could you give more details about autonomy for Abkhazia and South Ossetia? Who will raise revenue? Who will control the police?
Bezhuashvili: We haven’t addressed these issues. We tried to discuss customs revenue, but Moscow doesn’t want progress in the negotiations. Right now we’re waiting for an assessment of our proposal from the Venice Commission [of the Council of Europe].

Q: What strategy can Georgia pursue to improve relations with Russia? What can Georgia offer South Ossetia that Russia can’t? What should Georgia do to improve relations with its neighbors?
Bezhuashvili: We don’t want the West to confront Russia. The West should stand not for Georgia, but for values. Many in neighboring countries silently want Georgia to succeed. We have no fundamental problems with our neighbors except Russia. Russia still thinks Georgia is its backyard. We are trying to improve relations with Russia. But we need an international peace process because Russia didn’t deliver. Georgia is ready to accommodate Russian needs, but Russia won’t explain its interests in Abkhazia and South Ossetia. Russia should partner with Georgia to solve problems in the North Caucasus. Georgia has a strategic partnership with Turkey and we are trying to help Armenia and Azerbaijan find a common language.

Summary prepared by Matthew Gibson, Junior Fellow with the Russian and Eurasian Program at the Carnegie Endowment for International Peace.