Georgia Special Report: OCT 2024

Executive Summary

Georgia continues to stand at a critical juncture, facing significant shifts in its political landscape that threaten to alter its geopolitical orientation and internal stability. The country, long caught between its aspirations for Western integration and the persistent influence of its northern neighbor, Russia, is experiencing a complex interplay of domestic and international pressures that could reshape its future trajectory.

This report analyzes key developments in Georgia, focusing on several interconnected factors:

1. Closing Space for NGOs and Civil Society: Recent legislative changes, notably the "Law on Transparency of Foreign Influence," have significantly restricted the operational environment for non-governmental organizations (NGOs) and international development agencies. This shift mirrors similar laws in Russia and other countries seeking to limit foreign influence, potentially weakening Georgia's civil society and its ability to promote democratic reforms.
2. Increasing Russian Influence: There is growing evidence of Russia exerting increased pressure on Georgia's political landscape. This influence manifests through various channels, including economic leverage, disinformation campaigns, and political pressure on current parties and leaders. The intensification of Russian influence poses a significant challenge to Georgia's sovereignty and its Western-oriented foreign policy ambitions.
3. Public Sentiment Towards EU Integration: Despite recent government actions that appear to be moving away from European Union (EU) integration, a significant portion of the Georgian population continues to aspire for closer ties with the EU. This disconnect between public sentiment and government policy creates tension within Georgian society and could potentially lead to social unrest or political instability.
4. Upcoming Elections (October 26, 2024): The scheduled parliamentary elections represent a critical moment for Georgia's political future. Changes to the electoral system, including a shift to fully proportional representation and an increased threshold for parliamentary representation, could significantly impact the political landscape. The introduction of new voting technologies and increased international scrutiny add further complexity to the electoral process.
5. Internal Stability and Democratic Trajectory: The culmination of these factors - restricted civil society space, increased foreign interference, public-government disconnect, and high-stakes elections - raises concerns about Georgia's internal stability and democratic trajectory. Key indicators across political, media, judicial, and civil society spheres show a trending decline, suggesting a potential degradation of democratic institutions and practices.
6. Regional Implications: Georgia's geopolitical orientation has significant implications for regional stability in the South Caucasus and broader Black Sea region. Any substantial shift in Georgia's foreign policy or internal governance could have ripple effects on neighboring countries and regional power dynamics.

This report provides an analysis of these key areas, examining their individual impacts and interconnected effects on Georgia's political and security landscape. It also offers a set of recommendations for various stakeholders, including NGOs and international development organizations, to navigate this complex and evolving environment.

The situation in Georgia requires careful monitoring and engagement from the international community. The outcome of current developments, particularly the upcoming elections, will likely have far-reaching implications for Georgia's future stability, its relationships with both Russia and the West, and the broader geopolitical balance in the region.

1. Closing Space for NGOs and International Organizations

Recent legislative changes have significantly restricted the operational environment for NGOs and international development organizations in Georgia.

Key Developments

• Adoption of the "Law on Transparency of Foreign Influence" (dubbed the "Russian law")
• New constraints on organizations receiving more than 20% of their funding from abroad

Initial Impact

• Reduced capacity for civil society organizations to operate freely
• Potential decrease in foreign funding and support for democratic initiatives
• Increased government control over NGO activities and messaging

Analysis

This legislation mirrors similar laws in Russia and other countries seeking to limit foreign influence, such as Hungary's 2017 NGO law and Azerbaijan's 2014 NGO regulations. It represents a significant step backwards for Georgia's civil society and may hinder the country's democratic development. The law's broad scope and vague language create a chilling effect, potentially leading to self-censorship among NGOs and activists. This could result in a reduction of critical voices and independent oversight, weakening key pillars of democratic governance. Moreover, the law may deter international donors and partners, reducing the financial and technical support available for civil society initiatives. This, in turn, could slow progress on crucial reforms in areas such as anti-corruption, judicial independence, and media freedom.

The timing of this legislation, coupled with other recent political developments, suggests a concerning trend towards democratic backsliding and increased state control over public discourse. It potentially signals a shift in Georgia's geopolitical orientation, moving away from its stated goals of Euro-Atlantic integration and closer to the authoritarian model promoted by Russia. The long-term implications of this law could extend beyond civil society, potentially impacting Georgia's relationships with Western partners and its prospects for EU and NATO membership.

2. Russian Influence and Pressure

Multiple sources of evidence indicates Russia continues to exert increased pressure on Georgia's political landscape through various channels, leveraging a combination of hard and soft power tactics to maintain influence over its southern neighbor.

Methods of Influence

1. Economic Leverage:
   • Trade Dependencies: Russia remains one of Georgia's significant trading partners. According to the National Statistics Office of Georgia, in 2022, Russia was Georgia's second-largest export market, accounting for 13.4% of total exports, and the fourth-largest source of imports at 10.2% .
   • Energy Sector: Energy Sector: Although Azerbaijan remains Georgia’s main natural gas supplier, recent shifts are evident. In 2023, Georgia imported 486 thousand tons of Russian gas, a 16.54% increase from the previous year, costing $131 million (up 18%). Imports from Iran, though small, surged by 606.5%, from 10.38 tons in 2022 to 73.28 tons in 2023, with spending rising from $30.65 thousand to $142 thousand. Conversely, imports from Azerbaijan fell by 3.99% to 1.77 million tons, with Georgia spending $314 million, a 9.20% drop compared to 2022.
   • Remittances: Remittances play a significant role in Georgia's economy. In 2022, remittances from Russia accounted for 20.5% of total remittances to Georgia, amounting to $824.7 million.
2. Disinformation Campaigns:
   • Media Influence: Pro-Russian narratives are spread through various media channels. A 2020 study by the Media Development Foundation identified 270 media outlets in Georgia spreading anti-Western messages, often aligned with Russian interests.
   • Social Media Operations: Research by the Atlantic Council's Digital Forensic Research Lab has documented coordinated inauthentic behavior on social media platforms, spreading pro-Russian narratives in Georgia.
   • Historical Narratives: Russia often leverages shared historical and cultural ties to promote a narrative of natural alliance. This is evident in Russian state media coverage and official statements regarding Georgia.
3. Political Pressure:
   • Support for Pro-Russian Parties: There have been documented cases of Russian support for certain political factions in Georgia. For instance, the Alliance of Patriots party has been linked to Russian funding and support.
   • Exploitation of Territorial Disputes: Russia maintains a military presence in Abkhazia and South Ossetia, regions it recognizes as independent states. This presence serves as a constant source of tension and leverage.
   • Diplomatic Maneuvering: Russia has employed both incentives and threats in its dealings with Georgia. For example, it has offered visa-free travel for Georgians while simultaneously threatening economic sanctions .

Analysis

Russia's multifaceted approach to influencing Georgia's political sphere poses a significant challenge to the country's sovereignty and its Western-oriented foreign policy. The economic ties, particularly in trade and remittances, create potential vulnerabilities that Russia could exploit during critical political moments.

The disinformation campaigns are particularly concerning as they target the foundations of Georgia's democratic aspirations. By spreading anti-Western narratives and promoting cultural alignment with Russia, these efforts aim to shift public opinion and create divisions within Georgian society.

The political pressure, especially through the support of certain political factions and the exploitation of territorial disputes, directly challenges Georgia's democratic processes and territorial integrity. The ongoing situations in Abkhazia and South Ossetia not only provide Russia with strategic footholds but also serve as constant reminders of Georgia's complex relationship with its northern neighbor.

Russia's influence strategy in Georgia appears to be part of a broader geopolitical approach aimed at maintaining influence in the post-Soviet space. By leveraging economic ties, information campaigns, and political pressure, Russia seeks to counterbalance Western influence in the Caucasus region.

The cumulative effect of these influence tactics creates a challenging environment for Georgia's democratic development and Western integration efforts. It necessitates a careful balancing act for Georgian policymakers and underscores the importance of continued support from Western partners to help Georgia maintain its path towards Euro-Atlantic integration.

3. Public Will and EU Aspirations

A significant portion of the Georgian population continues to aspire for EU integration, creating tension between public sentiment and recent government actions. This disconnect represents a critical factor in Georgia's current political landscape and future trajectory.

Public Support for EU Integration

1. Polling Data:
   • According to a poll conducted by the National Democratic Institute (NDI) in December 2022, 81% of Georgians support EU membership for their country .
   • The same poll found that 69% of respondents believe that Georgia should join the EU even if it means a deterioration in relations with Russia.
   • Another annual poll from 2023 indicates more of the same, with the following polling data points.
     • 84% of Georgians feel their country has good relations with the EU, a nine-point increase since 2016.
     • 78% trust the EU, up 12 percentage points from 2016.
     • 54% have a positive image of the EU.
     • Awareness of the EU’s financial support has risen from 60% in 2016 to 82% in 2023, with 46% welcoming further EU support, especially in economic development and trade.
2. Demonstrations and Civil Society Action:
   • In March 2023, tens of thousands of Georgians protested in Tbilisi against a controversial "foreign agents" law, seen as potentially hampering Georgia's EU aspirations. The protests led to the government withdrawing the bill [2].
   • Civil society organizations and pro-EU activists regularly organize events and campaigns promoting European integration.
3. Historical Context:
   • Georgia's EU aspirations date back to the early 2000s, with the country joining the EU's Eastern Partnership initiative in 2009 .
   • In 2014, Georgia signed an Association Agreement with the EU, which includes a Deep and Comprehensive Free Trade Area (DCFTA).

Government Actions and EU Integration

1. Mixed Signals:
   • While the Georgian government officially maintains its commitment to EU integration, some recent actions have raised concerns about the sincerity of this commitment.
   • The proposed "foreign agents" law, similar to legislation in Russia, was seen as potentially detrimental to civil society and Georgia's EU aspirations .
2. EU Candidacy Status:
   • In June 2022, the European Commission recommended that Georgia be given the perspective to become a member of the EU, but suggested postponing granting candidate status until certain priorities are addressed .
   • The government's response to these recommendations has been mixed, with some reforms implemented but others facing delays or pushback.
3. Relations with Russia:
   • Some government actions, such as the resumption of direct flights with Russia in 2023, have been criticized as potentially undermining Georgia's EU integration efforts.

Analysis

The strong public support for EU integration in Georgia represents a significant force in the country's political landscape. It reflects a desire among many Georgians for closer ties with Europe, perceived economic benefits, and a strategic orientation away from Russian influence.

However, this public sentiment is increasingly at odds with some government actions, creating a notable tension in Georgian politics. The government's official stance of pursuing EU integration while simultaneously taking actions that may hinder this goal reflects the complex balancing act Georgia faces between its European aspirations and its geographical and historical ties to Russia.

This disconnect between public will and government action has several implications:

1. Political Instability: The gap between public sentiment and government policy could lead to increased social tensions and political instability, as evidenced by the large-scale protests against the "foreign agents" law.
2. Electoral Implications: EU integration is likely to remain a key issue in Georgian elections, with pro-EU parties potentially gaining support from the large segment of the population that favors European integration.
3. International Relations: The divergence between public sentiment and government actions complicates Georgia's relationships with both the EU and Russia, potentially affecting diplomatic ties, economic cooperation, and security arrangements.
4. Reform Process: The strong public support for EU integration could serve as a driving force for democratic reforms and anti-corruption measures required for closer EU ties, even in the face of potential government reluctance.
5. Civil Society Engagement: The tension is likely to sustain high levels of civil society activism and public engagement in political processes, particularly around issues related to EU integration.

The persistence of strong public support for EU integration, despite some government actions that appear to move in the opposite direction, underscores the complexity of Georgia's geopolitical position. It also highlights the potential for further political developments as the country continues to navigate between its EU aspirations and its challenging regional context.

4. Upcoming Elections Assessment

The parliamentary elections scheduled for October 26, 2024, are shaping up to be a critical moment for Georgia's political future. These elections come at a time of significant political tension and will likely have far-reaching implications for Georgia's domestic politics and international relations.

Key Factors:

1. Electoral System Changes:
   • Shift to Fully Proportional Representation: The 2024 elections will be the first to use a fully proportional system, as opposed to the previous mixed system. This change, implemented following the 2020 agreement between the ruling party and opposition, aims to enhance the representativeness of the parliament .
   • Increased Threshold: The threshold for parties to enter parliament has been raised from 1% to 5%. This change could significantly impact smaller parties and potentially lead to a more consolidated parliament .
2. Technological Innovations:
   • Electronic Voter Verification: The Central Election Commission (CEC) plans to implement electronic voter verification systems nationwide, aiming to enhance the integrity of the voting process .
   • Ballot Counting Machines: The introduction of electronic ballot counting machines in some polling stations is intended to increase the speed and accuracy of vote tabulation .
3. International Scrutiny:
   • Increased Observer Presence: A record number of international observers are expected, including missions from the OSCE/ODIHR, EU, and various other international organizations.
   • Heightened International Interest: Given Georgia's geopolitical importance and recent political developments, these elections are likely to attract significant international attention.
4. Political Landscape:
   • Polarization: The political environment remains highly polarized, with deep divisions between the ruling Georgian Dream party and the opposition.
   • EU Integration: The elections will be seen as a referendum on Georgia's EU aspirations, with various parties positioning themselves on this issue.
   • Russian Influence: Concerns about potential Russian interference or influence on the election process and outcomes remain significant.

Potential Risks and Challenges:

1. Electoral Manipulation:
   • Voter Intimidation: Past elections have seen allegations of voter intimidation, particularly in rural areas.
   • Misuse of Administrative Resources: There are concerns about the potential misuse of state resources for campaign purposes.
   • Disinformation Campaigns: The spread of false or misleading information, potentially from both domestic and foreign sources, could influence voter perceptions.
2. Post-Election Unrest:
   • Disputed Results: Given the high stakes and polarized environment, there's a risk that election results could be disputed, potentially leading to protests or civil unrest .
   • Challenges to Legitimacy: If significant irregularities are reported, it could lead to challenges to the legitimacy of the elected government.
3. Democracy Backsliding:
   • Consolidation of Power: Depending on the outcome, there are concerns that a strong majority could lead to further consolidation of power and weakening of democratic checks and balances.
   • Judicial Independence: The appointment of judges and the overall independence of the judiciary remain contentious issues that could be affected by the election outcome.
4. Implementation of New Technologies:
   • Technical Failures: The introduction of new voting technologies carries the risk of technical glitches or failures that could disrupt the voting process.
   • Public Trust: If not properly explained and transparently implemented, new technologies could lead to public mistrust in the election process.
5. International Relations:
   • EU Integration Process: The conduct and outcome of the elections will likely influence Georgia's EU integration prospects, including its candidacy status.
   • Relations with Russia: The election results could impact Georgia's complex relationship with Russia, potentially affecting regional stability .

Analysis

The 2024 parliamentary elections represent a crucial juncture for Georgia's democratic development and geopolitical orientation. The shift to a fully proportional system, while potentially enhancing representativeness, also introduces new dynamics that could reshape the political landscape.

The increased threshold for parliamentary representation may lead to a more consolidated parliament but risks excluding smaller parties and potentially significant portions of the electorate from representation. This could exacerbate political polarization and potentially lead to extra-parliamentary opposition movements.

The introduction of new voting technologies presents both opportunities and challenges. While these innovations have the potential to enhance the integrity and efficiency of the electoral process, their successful implementation will require thorough testing, training, and public education to ensure trust in the system.

The high level of international scrutiny expected for these elections reflects their importance not just for Georgia, but for the broader region. How Georgia conducts these elections will significantly impact its international standing, particularly its aspirations for closer EU integration.

The risks of electoral manipulation, post-election unrest, and potential democratic backsliding are significant concerns. Given Georgia's recent political history and the high stakes involved, it will be crucial for all political actors to commit to a fair and transparent electoral process.

The outcome of these elections will have far-reaching implications for Georgia's future. It will not only determine the composition of the parliament and government but also set the course for Georgia's foreign policy orientation, its reform agenda, and its path towards further democratization.

In conclusion, the 2024 parliamentary elections in Georgia are set to be a pivotal moment in the country's political evolution. They present an opportunity for Georgia to demonstrate its commitment to democratic principles and processes, but also carry risks that could impact the country's stability and international standing. Close monitoring and support from the international community will be crucial in ensuring a free, fair, and transparent electoral process.

5. Stability Indicators

Analysis of Stability Indicators

The overall trend across most stability indicators is negative, suggesting a deteriorating situation in Georgia. The mixed economic stability, while providing some resilience, may not be sufficient to counterbalance the degradation in other areas, particularly if political instability deters foreign investment.

Conclusion

Georgia is at a critical crossroads, with the upcoming elections and recent legislative changes posing significant challenges to its democratic trajectory and geopolitical orientation. The closing space for civil society, increased Russian influence, and tensions between public EU aspirations and government actions create a volatile political environment. The outcome of the October 2024 elections will likely have far-reaching implications for Georgia's future stability and international relations.

Recommendations

Proactive Preparedness

1. Legal Compliance and Adaptation:
   • Conduct a thorough review of the new "Law on Transparency of Foreign Influence" and other relevant legislation.
   • Develop strategies to adapt operations to comply with new regulations while maintaining core mission objectives.
   • Consider establishing partnerships with local organizations to potentially mitigate the impact of foreign funding restrictions.
2. Risk Assessment and Mitigation:
   • Conduct comprehensive risk assessments for all ongoing and planned projects, considering the changing political landscape.
   • Develop and regularly update contingency plans for various scenarios, including potential forced closure or significant operational restrictions.
3. Staff Safety and Security:
   • Enhance security protocols for local and international staff, including updated emergency evacuation procedures.
   • Provide regular security briefings and training to staff on the evolving political situation and potential risks.
4. Information Security:
   • Strengthen cybersecurity measures to protect sensitive information and communications from potential surveillance or cyber attacks.
   • Implement secure communication protocols for staff and beneficiaries.
5. Stakeholder Engagement:
   • Cultivate relationships with a diverse range of local stakeholders, including government officials, civil society leaders, and community representatives.
   • Engage in dialogue with other international organizations to share information and best practices for operating in the changing environment.
6. Public Perception Management:
   • Develop a clear communication strategy to transparently convey the organization's mission and impact to the local population and authorities.
   • Consider ways to demonstrate the local benefits and non-political nature of development work.

This analysis underscores the need for vigilant observation and engagement with Georgia's political processes in the coming months, as the country navigates a complex geopolitical landscape with significant implications for regional stability and international relations.