Foreign investors, be forewarned: In Georgia, politics is everything, and everything is political.
That is the biting insight contained in a recently released guidebook from anti-corruption watchdog Transparency International Georgia on the murky relationship between business and politics in this dynamic South-Caucasus country, long viewed as one of the few market-reform prodigies of the former Soviet Union.
Yet, even amid reforms, politics and clannish networks of family and friends still play an all-important role in the business sector.
From battles over the airwaves to questionable privatization in the mining sector, the book uses Transparency International reports and Georgian journalists’ investigations to examine the links that emerged between Georgian President Mikheil Saakashvili’s United National Movement (UNM) and various politically sensitive businesses after Georgia’s 2003 Rose Revolution.
The paper trail is confusing, and author Paul Rimple, who also works as a freelance reporter for EurasiaNet.org, has done an admirable job of connecting names, dates, and ownership shares to portray a concentrated effort by the country’s political elite to maintain control over critical sectors of the economy.
The book predates the October 2012 parliamentary election that brought billionaire businessman Bidzina Ivanishvili to power as prime minister, but it remains timely. Few of the convoluted ownership structures highlighted in its pages have changed since the vote.
In the end, readers will walk away wondering what, if anything, was left for the foreign investors the government worked so hard to attract.
Georgian media already have reported several of the connections between private business and government covered in the book, but Rimple uses his own reporting and experiences to illustrate how corruption among the elite can reach down into mundane aspects of daily life.
In the sphere of gasoline distribution, for instance, the discrepancy between the overall amount of imported fuel, as estimated by Transparency International, and the officially recorded volume, as determined by the Revenue Service, could explain “why my mechanic found water damage in my gas tank last year,” he wrote.
While the book does not touch on the deals now under investigation – the latest, allegedly involving two former cabinet ministers (former Education/Justice Minister Nika Gvaramia, a former first deputy general prosecutor, and former Finance/Energy Minister Aleksandre Khetaguri) with Tbilisi power company Telasi in a tax scam – its documented cases of questionable ownership structures would seem to suggest that more criminal investigations will be opened in the not too distant future.
Ultimately, to a reader not familiar with Georgian politics or society, the intricate web of alleged sham deals, opaque ownership transfers and cronyism could prove disorienting. Even exhausting to digest.
But Rimple draws on his own experiences to reduce this puzzle down to its everyday essence.
For example, in a grocery store one day, he decides to purchase a chocolate bar made by Georgian company Barambo. One friend tells him former Defense Minister Davit Kezerashvili made the chocolate; another insists the company is really owned by former Prime Minister Vano Merabishvili.
“That’s when I realized that politics have become so deeply entrenched into the daily lives of Georgians that even buying a bar of chocolate is a politically motivated decision, irrespective of who the real owner may be,” he writes.
By shedding light on the hard, cold facts of Georgian business ownership, “Who Owned Georgia” makes a move toward a time when a Georgian chocolate bar may come with no politics attached.
Who Owned Georgia: 2003-2012 By Paul Rimple with Giorgi Chanturia Transparency International Georgia, 2012 100pp
The Open Society Georgia Foundation provided financial support for the publication of “Who Owned Georgia: 2003-2012.” EurasiaNet.org operates under the auspices of the Open Society Institute-New York, a separate part of the network of Open Society Foundations. Molly Corso is a freelance journalist who also works as editor of Investor.ge, a monthly publication by the American Chamber of Commerce in Georgia.