Part 1: On United National Movement and Georgian Dream

I had been wanting to write this note for a while – probably since mid-December. But I wasn’t able to dedicate sufficient time to it on the one hand, and on the other, it actually took me longer than I expected to systematize my thinking on the subject. The two points I will try to address in this note are:

1. Over the last 9 years, United National Movement (UNM) has been a very positive force in the development of Georgia. They were far not perfect and they failed in many important areas, but overall, their contribution to the development of the country has been enormous
2. Georgian Dream Coalition (GD), which took control over the government about two months ago, is leading Georgia in the wrong direction. If left unchecked, they will undermine the positive developments of the last 9 years and will risk throwing the country back into the chaos of the 90’s

I think it is important to address these two points because: first, over the last several years (and more so recently) UNM has been vilified to the point where many Georgians become irrational when discussing anything related to the party or its leaders. A large segment of Georgian population actually believes that UNM did more bad for Georgia than good, and that the party should have no future in Georgia’s politics. I strongly disagree with this point, and I think elimination of UNM as a political force will deal a severe blow to the democratic development of Georgia.

Second, the recent victory of GD resulted in euphoria in a large segment of Georgia’s population. This euphoria seems to have left many people blind to the events that started to unfold in the country. Clear violations of democratic principles by the new government are sometimes ignored, and at times are even justified on the grounds that “UNM did it too.” I fear that by the time this euphoria recedes and people become more critical of the new government, the damage might be irreparable.

There is a lot that I want to say on the subject, and the note will end up being quite lengthy. So, instead of posting a single 20 page note, I will break it up into a sequence of 3 separate notes. The first note will address main achievements of UNM, for which, I believe, they deserve a permanent place in Georgia’s “hall of fame." In the second note, I will try to analyze the mistakes that they made and the reasons for their defeat in the recent elections. In the last note, I will make an argument against GD and explain why what is happening in Georgia now is detrimental for country’s development. So, let’s begin:

UNM’s Contribution to Georgia’s Development

I won’t go into much detail on what Georgia was before the Rose Revolution brought UNM to power in 2003. In many ways it was a failed state where an impotent and corrupt government was not able to guarantee basic freedoms and safeties to its citizens. Since then much has changed in Georgia. Any attempt on my part to capture in this note all the aspects of the transformation that took place over the last 9 years would be futile – a book would be needed to describe them (and a few have already been written). So, I would like to focus on the 3 things which, in my opinion, have been the most important achievements of UNM:

1. Eradicating Crime

In my opinion, out of the ills that can fall onto a society an unrestricted reign of organized crime is one of the worst. The power that organized crime (the so-called “thieves-in-law”) gained in Georgia after the collapse of the USSR was unprecedented, perhaps only rivaled by Italian mafia or Colombian cartels. Not only did the thieves-in-law control businesses, ran prisons, and used police as their personal security force, but they also made it “cool” to belong to the criminal world. The “crime culture” permeated many levels of Georgian society with many young boys dreaming of becoming thieves-in-law when they grow up, and young girls dreaming of marrying one. Those initiated into the criminal organizations had real power, were often respected by their peers, and many looked up to them and tried to imitate their lifestyle of crime and drug use (which became endemic in Georgia).

On the less “organized” end of the criminal spectrum things were no better. Break-ins, armed robberies, kidnappings, thefts etc. were pervasive. Those venturing out to walk alone at night through the unlit streets of Tbilisi did so at considerable risk. Even as late as 2007 leaving a car on the street overnight was a risky endeavor. I remember visiting Georgia in March of 2007 and virtually everyone I knew used secure parking lots to park their cars overnight. One time my cousin forgot to re-park her car onto a secure parking lot and, surely enough, the car was broken into and the stereo was stolen.

This situation was dramatically changed in the short 9 years of UNM rule. Thieves-in-law no longer rule Georgia – they are either in prisons or have fled the country. Crime levels have fallen dramatically. The last few times I visited Georgia, leaving a car on the street unlocked overnight (which I did on a couple of occasions) was quite safe. As a result the secure parking lots have mostly gone out of business. People in general feel much safer, and it would not be an overstatement to say that as far as crime is concerned, Georgia is one of the safest countries in the world. In fact, based on the survey conducted by Gallup in 2011, more Georgians answered positively to the question “Do you feel safe walking alone at night?” than did people in any other country (91% in Georgia vs. 75% in the U.S. or 40% in Russia, for comparison). What’s more important, the “romantic” image of being a criminal has been largely dispelled in Georgia: criminals are no longer feared, respected, or looked up to – and this to me is just short of a miracle.

How was this miracle achieved? I must say that the methods were not always beyond reproach and the government quite frequently did not follow the letter of the law. I am sure there were cases when known criminals were arrested on false pretexts, and I am sure once arrested many of them were treated less than civilly. I am also sure there were mistakes and innocent people suffered, and it’s highly likely that some government officials used this war on crime to advance their personal agendas. What’s more, anxious to maintain its popularity, the government often tried to cover-up its mistakes. Lastly, the government enacted rather harsh penalties even for minor crimes, and this “zero-tolerance” policy toward crime resulted in a sharp increase in Georgia’s prison population – Georgia became one of the leaders in terms inmates per capita (through still trailing behind such countries as the U.S. or Russia).

Now, some might say that these methods were unacceptable. That it is better to let 10 criminals go free than to punish one innocent person. To that I would say that this is a very naïve way of looking at things, for when we are dealing with organized and pervasive crime, the 10 criminals who escape punishment will ruin the lives of hundreds of innocent people. I wish mistakes didn’t happen and that innocent people didn’t have to suffer, I wish that defeating pervasive crime didn’t require putting a large number of petty criminals behind bars and turning prisons into institutions which criminals feared to end up in – but unfortunately, such is not the case. We can look back and dwell on every mistake UNM has made in their war on crime and say that they should have done a better job, but, in my opinion, given the dysfunctional institutions that they inherited from the previous government and understanding what they were up against, they performed a miracle. With a possible exception of the U.S., I am not aware of any country where organized crime has been beaten back as decisively and the safety of ordinary citizens improved as dramatically in as short a period of time and with as little “collateral damage” as in Georgia during UNM rule.

2. Reigning in Corruption

Just as crime permeated many levels of Georgian society before UNM came to power, so did corruption. Georgia was perhaps the most corrupt republic of the former Soviet Union during its terminal years, and things only got worse after the USSR fell apart. The corruption in traffic police was legendary – motorists were frequently stopped for the sole purpose of extracting bribes from them in the most shameless manner – but corruption in many other government institutions did not fall far behind. To say that paying bribes for official documents (e.g. a passport or a driver’s license) was commonplace would be a gross understatement. Same applied to universities, hospitals etc. – it was not only considered normal that one could pay off a dean of a university to make sure his child gets admitted, or would bribe a hospital administrator to make sure he gets decent treatment, or would pay a finance inspector to evade taxes – but in many cases such behavior was expected. The bribery was so engrained into everyday life of Georgian society that I frequently heard that it is an inseparable part of Georgian culture.

While UNM was able to dramatically reduce corruption in Georgia, their success in this area was not as uniform as in combating crime. But before I get to where they succeeded and where they failed, I would like to touch upon the different types of corruption that can exist in a society.

The way I think about it is that there are two different types of corruption: bribery and favoritism. Bribery is when a person pays off a public servant to get something in return. The worst form of bribery is when people are forced to pay for the services they should be getting anyway. For example, you want to register property but a myriad of government agencies makes you jump through endless hoops, come up with all kinds of documents etc. until you pay them off – and as soon as you do, the property gets registered immediately. A slightly more benign form of bribery is when people pay off public servants to get some special treatment. For example, you know that registering property takes 6 months, but you can pay a small bribe to a public servant and it will happen in 1 month. Even though I called this form of bribery “slightly more benign” it frequently degenerates into the first form – once public servants get into a habit of accepting bribes, they quickly regress into trying to extort bribes for things they are supposed to do anyway.

The second type of corruption is favoritism – this is when people use their personal relationships or connections to gain favorable treatment from the government. Favoritism can have many incarnations. For example, government contracts can go to relatives or friends of people within the government, or those with government ties can get government-backed loans with low interest rates, or competitors of the companies with government ties may get unfavorable treatment from the financial inspectors etc. The last example is probably the worst, not only do companies with government ties get favorable treatment, but the rights of their competitors get violated.

Now, UNM’s success in fighting these two different types of corruption was very different. Bribery was almost entirely eradicated. In fact, bribery levels in Georgia are approaching those in Western European countries which is confirmed by several international studies. Paying off police now is unimaginable. Same goes for tax inspectors, customs officials, and most other public servants. In the area of bribery UNM was able to achieve similarly astonishing result as they did in eradication of crime – which again, taking into account what they had to deal with is practically a miracle.

Not so rosy was the situation with favoritism which is still a real problem in Georgia. It is undeniable that having government connections in Georgia is extremely beneficial for business (though this is true in most other countries in the world). This is especially true for larger enterprises and certain industries (e.g. television). There are all kinds of favoritism in Georgia: companies with the connection to the government are more likely to win government contracts, get licenses on certain types of business activity, get favorable financing from government funds etc. Members of the government or their friends/relatives sometimes used to get a more lenient treatment from the law (as opposed to other citizens). There are even rumors of the government using its power to crush competitors of companies with government ties.

While this situation is nothing to brag about, I believe that in many ways the severity of favoritism in Georgia is exaggerated.

First, Georgia is a small country and there are almost certainly less than 6 degrees of separation between people. As such, a person through his friends and relatives is naturally connected to a fairly large segment of the population. When people see that a minister’s childhood friend or a brother-in-law are successful businessman they frequently assume that they must have used their government connections to get there. While this is certainly true in some cases, there are also undoubtedly those who did not rely on the government to realize themselves. Similarly, if a person with some relation to the government wins a government contract, it very well might be that his firm was best suited for the job, but the public frequently assumes that the contract was won solely because of government connections. Naturally, such assumptions lead to an exaggerated perception of favoritism.

Second, despite numerous rumors circulated in Georgia that most of the businesses were directly or indirectly controlled by UNM government, and that the government oppressed a large majority of businessmen over the last 9 years, these claims do not live up to the scrutiny. Even in sectors which the government considered to be its strategic interest (such as television) there were companies which, beyond any doubt, were not controlled by the government (e.g. Maestro, Channel 9). Of course, for the television stations that were in the opposition to the government, life was much more complicated than for those that were pro-government (for example, pro-government stations got very favorable tax treatment) – but they existed and had fairly large audiences. Similarly, in many other industries with high government involvement (e.g. telecom, energy), there existed successful companies with no or little ties to the government. For example, one of Georgia’s leading mobile network operators is owned by the son-in-law of the former president of Georgia, Eduard Shevardnadze – nobody would say that he was somehow favorably treated under the UNM government.

If UNM allowed real competition to exist in sectors of the economy which it considered vital for its survival (e.g. television) or which were extremely profitable (e.g. telecom, energy), it is reasonable to assume that the government involvement in other sectors was minimal. In fact, in my subsequent notes I will make an argument that less than 1% of Georgia’s businessmen were “oppressed” under UNM rules (this rough estimate is possible based on some of the data recently released by the new government), and that perception of “oppression” resulted more from the harsh measures UNM instituted to raise government revenue and reduce “shadow” economy, than from any actual acts of oppression and favoritism.

This brings me to my next point: because favoritism is difficult to measure, while we can say that it is a real problem in Georgia, it is difficult to compare it to what is happening in other countries. Favoritism in general is much more difficult to get rid of than bribery. Even in developed countries there is plenty of it (Solyndra, anyone?). And I have no basis to say that favoritism in Georgia is more widespread than it is, for example, in Turkey, Bulgaria, or Romania. Moreover, it is not easy to conclusively define the trend of how favoritism has changed in Georgia over time. It seems to be fairly obvious that favoritism in Georgia now is much less widespread than it was before 2003. At the same time, it seems like it has increased in the last couple of years. To make sure I am understood correctly: I do think that favoritism is a real problem in Georgia. In my opinion, UNM has failed to curtail it to a tolerable level, and this is one of their biggest mistakes. But saying that favoritism is endemic or that it is significantly higher in Georgia than it is in many Eastern European countries is simply not true.

In short, over the last 9 years, UNM was able to achieve a near-miracle in reigning in corruption. They reduced bribery in the country to nearly Western European levels, and if you put that together with some, even if inadequate, reduction in favoritism, Georgia now is probably no more corrupt that many Eastern European countries. This is confirmed by numerous international studies the latest of which was Transparency International’s report which ranked Georgia 51st out of 174 countries – ahead of such European countries as Czech Republic, Turkey, Slovakia, Romania, and Bulgaria. Given where the things were 9 years ago, when Georgia was one of the most corrupt countries in the world (in 2003, Georgia was 124th out of 133), this achievement is astonishing, and UNM deserves credit for it.

3. Functioning Elections

No matter how you look at it, under UNM government functional electoral mechanisms of changing power were developed in Georgia, and I consider this to be one of their biggest contributions to the development of the country. Some might argue that the electoral institutions developed in Georgia despite, not because of UNM – and in many ways this would be a valid point. They indeed pressured opposition, changed laws to make their victories in elections more likely, used administrative resources to improve their chances etc. But I would say it is not what they did but rather what they didn’t do that is important in this case.

Few, if any, political forces voluntarily give up their power. Even the most democratic ones try to use whatever means possible to stay in power. I can cite a few examples: Alexander Hamilton, one of the founding fathers of the United States, tried to change electoral districts of New York to ensure victory of Federalists (his party) in presidential elections. Or, Thomas Jefferson, author of the Declaration of Independence and another founding father of the U.S., tried to covertly sabotage president’s Adams’ negotiations with France to score political points against Federalists. Very frequently, politicians, once in power, do exactly the things that they criticize their opponents for. I can see it all too well in the U.S. and I am sure it is happening in most other countries as well. Some would say that this is because politicians are un-principled, and that politics is a dirty business. While this is certainly true, I believe that in many cases politics polarizes people so much that they think that if their opponents come to power it will be the end of the world. Hamilton, for example, honestly believed that if Jefferson were to come to power it would be the end of the U.S. and this is why he was willing to advocate some very dishonest measures against him. Same goes for Jefferson, who honestly believed that Hamilton with his Federalist party was leading the U.S. into monarchy.

Now, UNM had come to power on an unprecedented wave of popular support. In 2004 elections Saakashvili got 97% of the vote. In the parliament UNM had a constitutional majority for the entire 9 years of their rule. So, in many ways, their power was nearly absolute. Leaders of UNM also honestly believed that if their opponents came to power it would be the end of Georgia (whether this is the right thing to believe I will leave outside of the scope of this note). So, when you combine near-absolute power with the belief that your opponents will destroy your country, it is really surprising to me that UNM was able to exercise so much self-restraint.

So, let’s consider some of the things that they didn’t do:

First, they didn’t crush the opposition as is the typical practice in most post-soviet countries. To be sure, UNM didn’t make it easy for the opposition, but the pressure was fairly mild. Opposition leaders were not jailed, public protests were mostly not interfered with (for example, in 2009 opposition pretty much paralyzed Tbilisi with protests for 2 months without much interference from the government), and opposition media existed and was quite vibrant (Maestro, Channel 9 were two very popular opposition channels, and UNM even passed the “must –carry” laws before the election extending access to these channels to all cable subscribers in the country). Despite, being called “authoritarian” by the opposition, UNM’s rule tolerated a very vocal opposition which constantly challenged the government though elections, media, and public protest.

Second, they did not rig the elections. It is widely accepted that October 2012 elections were exemplary. In fact, UNM did everything possible to ensure that they cannot be accused of falsifying the election results. The voter lists were coordinated with the opposition, international observers were invited to participate in the monitoring of elections, and vote counting was very transparent and in the vast majority of cases beyond reproach.

Lastly, they did not cling to power after losing the elections. When it became clear that they lost the elections, they did not try to steer up violence, create instability, and try to cancel the election results. Instead, they did everything possible to ensure peaceful transfer of power to their direct opponents, and even gave up some of the positions that they didn’t have to according to the constitution.

The last 2 points are especially telling when you contrast them with what happened in 2003. Then, an impotent government with significantly less popular support than UNM in 2012 tried to rig the elections, and when their falsifications were exposed, kept clinging to power. A revolution was needed to enact the transfer of power (thankfully, it was a peaceful one). In October of 2012, UNM had 40% of popular support and very powerful state institutions at its disposal. But unlike Shevardnadze, for one reason or another, they decided not to employ them to remain in power.

In short, UNM maintained an environment where a vocal opposition could exist, did not falsify the elections, and when they lost, relinquished the power peacefully. Given Georgia’s recent history and that UNM had near-monopoly on power for the last 9 years, it is a near-miracle that things unfolded the way that they did.

Now, to summarize my very long 3 points on UNM’s main achievements: in a very short period of time they were able: (1) to virtually eradicate crime brining it down to Western European levels, (2) to significantly curtail corruption (and especially bribery) bringing it down to the Eastern European levels, and (3) to build a functioning mechanism of peacefully transferring power by the means of elections.

The importance of these achievements cannot be underestimated. Even if they had done nothing else, they would deserve a permanent honorable place in the line of those who pushed Georgian state forward. But in fact they had many more accomplishments from stimulating rapid expansion of the economy to virtually eliminating Russia’s influence in Georgia. Georgia now is indeed a very different place, almost world apart, from the failed state it was just 9 years ago – and UNM deserves a lion’s share of credit for this transformation.