TCS Daily

Run for the Rose Revolutionaries

By Michael Cecire - October 24, 2006 12:00 AM

"Is this the stadium of a failed state?" I asked myself, mesmerized, sitting in a gorgeous football (soccer) stadium in the heart of Tbilisi, Georgia amidst a raucous fervor during the Eurocup qualifier game between Georgia and France. Between the patriotic songs blaring over the loudspeakers, the video clips of Georgia's proud football tradition on the giant television monitor, and the roar of a fiery audience, it was easy to believe you were sitting in Arsenal's Emirates Stadium. The most significant thing about it was that only a few years ago, such a sight would have been unthinkable. Though it was once the greatest hope of the former Soviet Republics, Georgia by the 2000s had become an economic ruin and a textbook case of post-communist conflict and oligarchy. Yet on that day, sitting in that beautiful stadium and watching a proud and optimistic sea of Red and White in the stands, the future was bright. Anything was possible. There was no way we could lose.

Alas, Georgia was crushed 3-0 by a flawless French squad.

Today, all the signs seem to indicate that Georgia - that often overlooked Caucasian republic - is headed for an economic boom. Built on a flurry of foreign investment on the heels of the 2003 Rose Revolution, Georgia's GDP grew by 9.3% in 2005, with growth estimates projected to between 7.5% and 10% for 2006. Possibly more indicative was a 26% growth in the construction sector during Q1 2006, indicating an underlying optimism among investors. While the effects of the Rose Revolution created a great deal of new confidence in the Georgian economy, the rapid new growth can be best correlated with a slate of new reforms.

Since the Rose Revolution of 2003, the Pro-Western government led by American-educated opposition leader Mikhail Saakashvili has instituted a number of reforms including a simplification of the tax code, broad tax decreases, streamlining licensure, and aggressive privatization measures.

These reforms seem to have paid off, reflected by and World Bank/International Finance Committee (IFC) index, which cites Georgia as having made the most progress of any country in the world for business reform. According to the report, Georgia jumped 75 places in the global standings from last year's 112th place to 37th this year - the largest single-year improvement ever recorded. In addition, NATO - membership typically viewed as a milestone towards EU integration - has solidly, if indirectly, endorsed Georgia's political and economic trajectory by granting the small republic the status of 'Intensified Dialogue,' despite the promise of dissatisfaction by the Russian Federation. It is worth noting that so far no country that has ever reached this level of cooperation with NATO has been denied membership.

Five years ago, most of the good things about Georgia could have been written off as being merely crumbling remnants of the Cold War era, when Georgia was known as the "Soviet Riviera." However, today the situation is most certainly reversed; construction is booming in Tbilisi, and more indicatively, new projects are beginning to take shape across the agriculturally-dependent regions.

What does all this mean? Georgia is on the brink - of something. While progress is real and continually occurring, Georgia isn't out the forest yet. Endemic corruption, crime, and underdeveloped industries are only the beginnings of the uphill battle Georgia faces. Perennial security issues with two breakaway provinces - Abkhazia and South Ossetia - as well as frequent spats with Russia herself make Georgia an even more uncertain market.

Nevertheless, Georgia has shown remarkable resilience in the face of crisis, and has not allowed itself to be provoked. When Russia banned Georgia's top exports - mineral water, wine, and oranges - citing 'quality concerns,' Georgia was dealt a severe economic blow. However, Georgia is responding by seeking newer, healthier export markets in Europe and the United States, which could well put Georgia on track towards a more sustainable economic position while building new ties with the West. Undoubtedly, continued economic growth, reforms, and investment could well put Georgia in the company of the Estonias and Slovakias of the world. It is a country rich in culture, spirit, and opportunity - opportunity that the West would remiss to ignore.

While the Rose Revolution brought Georgia on the long-overdue track to progress and prosperity, such changes are not irreversible. Like the soccer game, bright lights and banners don't guarantee that the game will be won. Georgia is doing her part, and has more than a fighting change against elements that champion failure, but the international community cannot afford to sit on the sidelines, lest they see a rising star - and an important ally - fall far short.



What sort of help do they need?
I have read this article twice and I cannot see any specific suggestions for aid from the West. Is the author worried that we will forget about them? Will we stop buying their oranges as well?

From the rest of the article, it sounds like Georgia is doing fine without us...

Re: What sort of help do they need?
That's a good question. I would've thought some kind of trade deal with the EU would be helpful, but the EU is divided and pusillanimous (when Putin says 'jump', Merkel will always respond 'how high, sir?').

I had also read that Bush cut a deal with Putin over North Korea that effectively sold Georgia down the river, but I've no idea about the details.

Down the river...
Was this NK deal related to the bad blood between Russia and Georgia that the article mentioned? Do you know why there is bad blood between them?

(This article, even if the author does not explain what sort of help he thinks is needed, has pointed out to me my own ignorance on this area of the globe. He's helped me to learn what I don't know, and so he has, I suppose, helped them in some tiny way by encouraging geopolitical nerds like myself to read up on the region...)

Re: Down the river...
The deal over NK was to do with a Security Council vote - the usual kind of horse-trading, 'we'll vote for yours if you vote for ours'.

Putin is annoyed with Georgia for wanting to join the EU, NATO and, basically, move away from the corrupt p*ss-pot that is Russia - Putin seeks Russian dominance over all its former Soviet Union states. (And, via gas, over Europe; although Europe seems oblivious).

It does this in Georgia in a number of ways: first, by the control of oil and gas in terms of favourable deals and turning the flow on and off in winter, depending on how Putin feels at the time.

Okay, that's a little sarcastic, but control of the means of heating is a powerful weapon that Putin wields to its fullest extent (Belarus gets the stuff extremely cheap; Ukraine votes the wrong way and out go the lights...)

Second, Russia/Putin also support separatist movements where it is politically conveniant to do so in Ajaria, which collapsed in 2004, Abkhazia and South Ossetia. It has 'peace-keeping' troops in these two latter breakaway areas. (But it opposed independence for any of the states in the former Yugoslavia, for example, because the Serbs and Russians are both Orthodox Christian states with ties going back hundreds of years).

Georgia, now that it has got rid of Eduard Shevardnadze, wants less interference from Moscow. A couple of weeks ago, it arrested about half-a-dozen of what it said were Russian agents on charges of spying and trying to arrange a military coup.

Russia responded by stopping Georgians from going to Russia to work (a big source of income for Georgians), throwing out as many Georgians from Russia as possible, even if they had the correct documents, harrassing anyone in Russia who looked Georgian and, well, let's just say that Russia's not a great place to be if you look non-Russian. But for many in the Caucasus and Central Asia it's a honeypot compared to their Russian-backed regimes and economies back home).

Earlier, possibly six months ago or more, Russia also blocked a number of Georgia's biggest export-earners to Russia (wine, believe it or not, mineral water, oranges and a few others) on the spurious grounds of public safety. I think the article mentioned that.

The 'spies' were all quickly released by Georgia, but Putin hasn't backed down (they always make a big song-and-dance of other countries' spies in Russia, but don't like it up 'em when it's the other way round).

It's all very tedious, but let's just say that Putin isn't a live and let live kind of guy - and the sooner the world (the EU in particular) wakes up to the fact that Russians like to be led by people like Putin, the better.

All IMO, of course.

The usual Soros-backed web sites are a good place to start to get a backgrounding on the area, I reckon.

Thanks for the info...
Every time I look at former-Soviet states, I think the same thing: The more things change, the more they stay the same.

I can see why they write such gloomy stories and drink so much vodka over there, I would, too...

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