Regime Change Coming in the Republic of Georgia
By Randall Holcombe • Tuesday October 2, 2012 12:10 PM PDT • 4 Comments
Economic and political reforms have had mixed results in the former Soviet republics following the breakup of the Soviet Union in 1991. One of the success stories is the Republic of Georgia. Elections held October 1 will replace the party responsible for that success, raising questions about Georgia’s future.
Many of the former Soviet republics suffer from corrupt and authoritarian governments, and with substantial government involvement in the economy. Georgia fell into that category prior to 2004 when Mikheil Saakashvili was elected president and rapidly cleaned up corruption, fired all of Georgia’s police force and replaced them, jailed people involved in organized crime, and deregulated much of the economy. Georgia’s economy has thrived since, benefiting from low trade barriers, low taxes, and minimal government interference in economic affairs. Georgia stands out as a post-Soviet success story.
Despite these positive developments, President Saakashvili has had his detractors, who have accused him of providing government-granted monopolies to his cronies and using the force of government to confiscate private property without compensation. He has stood up to Russia, which may have played a role in Russia’s invasion of Georgia in 2008, and may have provoked Russia’s erecting trade barriers to limit imports from Georgia.
Two weeks before the election, a Georgian television station owned by opposition leader Bidzina Ivanishvili released a video showing prisoners being abused in Georgian prisons, which surely had an effect in turning voters toward Ivanishvili’s party. But, this by itself could not have turned the election without a substantial opposition to Saakashvili prior to the video’s release.
Constitutional reform in Georgia is also changing the form of government. The old form, which featured a strong president when Saakashvili held the position, will be replaced by a parliamentary democracy in which the prime minister will be the most powerful government leader. Whereas a year ago one would have thought Saakashvili’s party would be in the position of choosing the prime minister (which many Georgians expected would be Saakashvili), it will now be Ivanishvili’s party that will choose the prime minister.
The big question is whether this regime change will reverse the huge strides toward economic freedom that were made under Saakashvili’s leadership. Saakashvili tried to strengthen ties to Europe, and to NATO, whereas part of Ivanishvili’s platform was to work toward closer ties with Russia. A less hostile relationship with Russia would be good for everybody, but a move toward Russia’s economic policies would be undesirable, as Georgians well know, having lived under the Soviet system for decades.
A personal note: I spent a week and a half in Georgia this summer (teaching economics to students from 14 countries throughout the region). I asked one of my hosts if it was safe for me to walk around the neighborhoods of Tbilisi, the capital of Georgia, with my big DSLR camera, and he told me it was safe to walk anywhere in Georgia. That, he said, was one of the results of the cleanup of crime and corruption under President Saakashvili. So, I did walk around taking lots of photos, and returned unmolested.
On one of my walks someone stopped me and asked me if I was an American. It turned out he was too, and had moved to Tbilisi two years ago. I remarked on the incredible economic progress Georgia had seen over the past decade, and he said he could see how much better things were in just the two years he lived there. One would hope, for the sake of Georgians, that the new regime will not reverse the course the country has taken toward economic freedom.
Tags: Economics, Elections, Georgia, Liberalism, Politics, Russia, Socialism 
This isn’t exactly the place I expect to see hagiographies.
Karl | Oct 2, 2012 | Reply
Hagiographies to who? Saakashvili? Good things happened in Georgia during his presidency, especially when compared to Georgia’s neighbors. But as I noted, he had his detractors, perhaps for good reasons, and his party did lose the election, so we see what a majority of Georgian voters thought.
I really meant my post to be more about the uncertain future of Georgia after a regime change than about Saakashvili, but Karl, fill us in with some facts if I’ve left something important out.
Randall Holcombe | Oct 2, 2012 | Reply
Georgia is pretty much exactly like its neighbours, but with a more unstable head of state who is now fortunately on the way out of power. It is a success story in America, because it is pro-American and Americans like tiny pro-American countries intensely and therefore see in them what they want to see.
In addition to that there is a special attachment to Mikhail Sakashvili personally because he is Columbia U educated, because he spent many millions on his promotion in the US, and because he carried pro-American sycophancy to a whole new level, even going so far as to at one point make his tiny nation the third largest contributor to Multi-National Force Iraq.
Saakashvili did not so much ‘stand up to’ Russia, as he, in the somewhat mistaken belief the Americans had his back, needlessly picked a fight with it, killing its soldiers in Southern Ossetia in a sneak attack which he launched exactly as Olympic Opening Ceremony was taking place in Beijing (so much for the Olympic Peace). Georgia did not need standing up to Russia, as it was already in the Western camp under Saakashvili’s predecessor Eduard Shevardnadze, only more loosely so, absent the same zeal.
Ivanishvili is not interested in closer political ties with Russia, but the ratcheting down of rhetoric. He is interested in there being a functional relationship between the two where the problems between them do not impede business and economic growth in Georgia. He too is in the Western camp as have been all Georgian leaders since the independence in 1991.
For a more real look at Saakashvili and his record your readers may turn to pieces published here, here and here. For Ivanishvili see here.
Karl | Oct 3, 2012 | Reply
Thanks for your comments, Karl, and the good links that you posted at the end. I don’t disagree with what you said, although I think there is some interpretation that goes along with the facts. For example, did Saakashvili stand up to Russia, or provoke them into a fight?
I’ve talked with a number of Georgians about the political and economic conditions there, and have received more conflicting opinions about the politics than the economics. Opinions on the economic reforms seem very positive, whereas Saakashvili and his government got mixed reviews. His party having lost the election, it appears voters were ready for a change.
To a degree, I chalk that up to the nature of politics. For example, lots of people have very negative opinions of President Obama, yet he also has strong supporters, and looks poised to be re-elected. And, I’ll readily admit, I know a lot more about US politics, living in the United States, than I know about Georgian politics.
There is a tendency for people to abuse political power, and I think that tendency grows as people become more accustomed to having that power. (That’s one reason why term limits are a good idea.) One of the links you posted explained how Saakashvili manipulated constitutional reform in Georgia so that he could transition from the presidency into becoming prime minister as power in the country shifts that way. Now, it doesn’t look like that will happen, and it does look like the election was at least clean enough that the opposition party won.
I didn’t intend to stick up for Saakashvili as an individual as much as to note the positive economic reforms and the cleaning up of corruption that occurred during his administration. I think the facts support that, especially in comparison to the other former Soviet republics in the region. With the regime change voters have approved, I am hoping that those economic reforms aren’t reversed.
Randall Holcombe | Oct 3, 2012 | Reply