Clouds Gather over Georgian Dream

Lasha Tughushi, Liberal Academy Tbilisi Foundation (Tbilisi, Georgia)

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For the ruling party of Georgia, the year began with several strikes. The Georgian Dream had to compromise on electoral reform. Stumbling on the project of the century” implementation is a threat not only to the country’s economy and image but also to the relations with international partners.

Domestic policy 

Parliamentary elections under new rules 

Since the beginning of the year, there have already been tough debates about changes in the electoral system, with parliamentary elections planned for October. It looked like the Parliament was ready to proceed with the mixed electoral system, convenient for the ruling party. Currently, 77 parliamentary seats are formed by the proportional electoral system and 73 members of parliament are chosen by plurality voting system. Thus, the opposition has no chance to win a majority, because in Georgia the majority seats, as a rule, are almost entirely given to the ruling force (?won by the ruling force?).

Unexpectedly for the Georgian authorities, a number of influential American politicians sharply criticized the current political processes in Georgia. In such a situation, billionaire Bidzina Ivanishvili, the undisputed leader of the party in power Georgian Dream, faced a choice: either a compromise and support of the West or no compromise and loneliness.

And only thanks to the active mediation of several ambassadors, including the ones of the United States, the EU and Germany, the parties came to a compromise solution: 120 mandates will be won by the proportional system and 30 by the plurality voting system.

Who will finish the port of the century” construction?

The construction of the strategically important deep sea port of Anaklia, the project of the century”, as it was called by the country’s authorities, was frozen. In February, the Georgian government cancelled the agreement with the Anaklia Development Consortium, which was responsible for the port construction. Before the dissolution of the agreement, representatives of the authorities and the consortium accused each other of failing to fulfill the obligations. A major investor and curators left the project. The port was transferred to the Ministry of Economy balance. Meanwhile, the founder of the Consortium, the banker Mamuka Khazaradze, forms the opposition political party Lelo.

The port is an important infrastructure project for the Georgian economy and was supposed to make the country a logistical hub between Eurasia and Europe. It also has serious prospects in terms of the Black Sea security issues. Problems with the Construction may also hit Georgias international image as the partner in the Consortium was an American company.



Unexpectedly for the Georgian authorities, a number of influential American politicians sharply criticized the current political processes in Georgia




Lari hits anti-record

In the first quarter of the current year, the Georgian national currency, the lari, broke the anti-records. For example, on February 25, the exchange rate was 3.07 GEL for 1 euro; by March 25, the official rate increased to 3.74. On April 1, it is 4.05 GEL. Such a sharp depreciation of the lari caused harsh criticism of the National Bank and the government. The National Bank sold about $100 million over the past month but could not keep the lari. At the moment, the National Bank and the government are facing a dilemma: how to keep the lari in free fall if the economy is practically in a pause mode? Moreover, it is extremely difficult to make any economic forecasts today. Besides, the problem has a budgetary nature, since in the draft budget for 2020 the US dollar exchange rate was fixed at 2.98 lari per 1 US dollar.

At the beginning of each year, the National Tourism Administration publishes data for the previous year. In 2019, Georgia accepted a record number of tourists – 9,357,964 people, which is 7.8% more than in 2018. Significantly more tourists came from the EU countries: Germany +38.1%, Poland +32%, France +28.4%, Great Britain +27.5%, the Netherlands +25.8% etc. However, against the backdrop of the global pandemic, this is a thing of the past, and the tourism industry in Georgia is waiting for support.

Foreign policy

Under Russian cyber strike

In February, it was reported that Russian intelligence services stood behind the cyberattacks carried out on various Georgian servers in the previous year. The British National Cyber Security Centre (NCSC) was the first to come to such a conclusion, stating that the cyberattacks were most likely initiated by the General Staff of the Armed Forces of the Russian Federation (GRU).

The GRUs reckless and brazen campaign of cyberattacks against Georgia, a sovereign and independent nation, is totally unacceptable. The Russian government has a clear choice whether to continue this aggressive pattern of behaviour against other countries, or to become a responsible partner which respects international law,” the UK Foreign Minister Dominic Raab said.

The US Secretary of State Mike Pompeo also condemned the Russian cyberattack against Georgia: We stand with Georgia in condemning Russias cyberattack against its people and institutions. Russia must immediately cease this behavior in Georgia and elsewhere. The stability of  cyberspace depends on the responsible behavior of all nations,” Mike Pompeo tweeted.


Photo: activists of the party “Georgian Dream”.

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