The 2020 elections have been crucial in a number of coutries – from a forthcoming one in the United States, to most recent ones in Lithuania. The same is true also for Georgia. On November 3, the Georgian citizens need to decide and to opt for either Russia or the West. Their decision will have many implications – related to human rights, economic, and political.
Here I will mostly concentrate on the economic side of the coming election. I believe that any failure in the economic sphere is another invitation to Russia and China to activate its efforts. Of course Georgia is not the only vulnerable nation in the COVID-19 period but with the other conditions around Georgia needs some stronger clarity.
Although the official statistics and donor organizations were sure Georgia’s economy was not that weak and the GDP had grown (before the COVID19) in average 3-4 percent, all other indicators show the opposite – as calculated in USD, average salaries, basic pensions, budgetary revenues, foreign trade, etc. remained for the most part in the same range, or declined.
Let us, therefore, take a look at the major players of the coming general election and indicate the most important economic policy ideas they generated for the voters.
The government party of Georgian Dream (GD) is a populist party led by a billionaire Mr. Ivanishvili. He holds no official position in the government now and it seems he is not going to have it in future, if the GD wins the majority. His position is mostly looking like communist party leader in the SU, who didn’t have an official position despite being the de facto ruling the country.
So far, the GD’s election platform has no clear elements other than criticizing the previous government of Mr.Saakashvili. Instead of offering clear visions how they are going to restore economic growth after many years and after COVID-19 crisis, the GD is promising several ideas on how their government would spend money on infrastructural projects. etc.
It is not visible what will be the policy after the election as it is understandable that GD will be avoiding any changes before.
United National Movement
The United National Movement (UNM) is the party of Mr.Saakashvili – the 3rd President of Georgia, the leader of the reforming government of the 2003 Revolution of Roses. With the leader in exile and weakened team (unluckily the most famous reformer of Georgia Mr. Kakha Bendukidze died some years ago) UNM has chosen a tactic to unite the smaller opposition parties around it, as well as trying to coordinate the election campaign.
The election platform of the UNM is based on some policy offers combined with the goals they want to achieve. The key policy offer from the UNM is eliminating taxes and making the country’s fiscal system based on one tax – VAT (though it is not clear what the UNM is going to do with the pension, property taxes or the excise).
While it is not clear what are the expectations of such a move it is quite unclear then how the UNM based government would finance so many dear promises like doubling the basic pensions, financing the college education, and subsidies to the COVID 19 affected people and businesses, etc.
European Georgia (EG) is a party detached from the UNM some years ago mostly for the reasons of policy differences. The EG is a party of reformers – many people who worked and designed the reforms are collected in this team. EG has had the biggest opposition faction in the current parliament and were the most active members of it.
EG has the most comprehensive plan of what the government should do after the election, how to get out of the crisis. Their ideas are based on the free market approach though supporters of such visions could still demand elimination of all subsidies as well as more clarity on the so called pension and healthcare reforms and International Financial Aid.
The most impressive element of the platformof the EG is their attitude to decrease the government spending to 20% of the GDP, cutting taxes and leaving more resources to the people and business.
Strategy – Aghmashenebeli
Strategy – Aghmashenebeli (SA, after King David the Builder – Aghmashenebeli) – another party led by one of the reform leaders of the former government. The SA was one the first to start the election campaign and announced its plans. The SA leader also was one of the first to declare about his desire to become the Prime-Minister.
The SA’s platform is full of initiatives to make Georgia technologically advanced, to become a hub of industries, tourism, finances, etc. What is missing in this platform, though, is how the SA is going to finance all the promised projects and benefits and why they think this is the function of the government.
Lelo for Georgia
Another interesting political party that appeared in the frontline recently is Lelo for Georgia (Lelo is the old popular game something similar to Rugby). This party established only recently collected famous leaders from business, politics and civil society.
The platform of the Lelo calls itself Marshall Plan for Georgia consists of a list of government financed spheres and activities and much less attention to the sources and policy.
There are tens of other political parties and individuals taking part in the election but their perspectives in these election are not so good.
Although one of them, the Girchi – the only libertarian party in Georgia, so far, has been an influential player which successfully negotiated with particular opposition parties some interesting policy issues, like election of judges, decentralization of police and elimination of state security service, etc.
Issues (Not) Discussed
There are several policy issues informed voters would be looking for in the platforms of all or most of the parties. The most important ones missing are healthcare, savings pensions and monetary systems. Healthcare reform of the GD was in fact the most popular achievement though its support gradually regressed. The governmental savings pension system introduced last year is regarded by some experts as anti-constitutional.
The problem with the Georgian currency – Lari is even bigger. From 2012 Lari lost its value, its rate to Euro fell down 2 to 3.8 and to the US dollar – from 1.65 to 3.2. This means increased prices and a very unstable business environment.
There were some voices before the election to solve these (and other) problems though they didn’t get enough attention from the politicians during the campaign (Girchi and Patriots’ Alliance announced their visions to create free use of foreign currencies for payments, though without practical details.).
The pre-election surveys indicated that income problems, unemployment and inflation were the major concerns of the voters. While some parties try to explain how they would deal with these challenges others simply ignored the policy and methods but promised subsidies and direct governmental involvement in the economy and business.
The underdeveloped character of many of the pre-election ideas indicate – the parties are mostly concentrated on the political side of the election, postponing the economic side for the near future after the election.
In fact, the major topics still include: national security, Russian occupation, the COVID-19 response, among others. that successfully covered up the economic issues. The major concentration of the opposition is on how to get rid of informal ruling power of Mr. Ivanishvili and stop the expanding Russian influence.
So, now, the major concern of the experts can be what will be the real policy of any future government. The options are clear: Georgian Dream or a broad coalition of current opposition. None of them can promise real solutions and/or their implementation.