It’s Not the Russians: What’s Behind Georgia’s Discontent?

There’s an old cliché in American politics, so often repeated that it’s taken as a law of nature. When gauging the public’s mood about a politician, or politics in general, one sentence nearly always captures the complexity of the people’s hopes, frustrations and political preferences:

“It’s the economy, stupid.”

Countless sociological studies have shown that when economic times are good and wages are rising, populations nearly always favor their incumbent government, even if the people are having their civil liberties curtailed and their voices silenced (see Russia, Azerbaijan, UAE). In the same vein, when economic times are bad, even the most democratic and well-intentioned leaders nearly always fall (see George W. H. Bush 1992, Barack Obama 2012).

Why? Because generally if people are optimistic about their financial futures and feel that their children are going to have a better life than they had, they can overlook the “smaller” stuff (democracy, human rights, peace) and generally agree with the government not to rock the boat. On the other hand, when people feel pessimistic about their futures they nearly always blame the government, rightly or wrongly.

Where does Georgia sit on this formula? Well, it depends on who you ask.

The Georgian government would have you believe that Georgia has been an economic miracle, a powerhouse with the envy of the world at their backs. Indeed, the Georgian economy grew by more than 9 percent for three straight years from 2005 to 2007, and has recovered well from the sudden pull-out of investment following its 2008 war with Russia. Georgia sits comfortably near the top of several international lists for “ease of doing business” and glitzy glass structures are popping up in Batumi and Tbilisi — conspicuous signs of development.

And it’s true that a portion of the population has certainly reaped the benefits of that sudden economic boom. Young, English-speaking Georgians have found their way into fruitful employ in tourism, and many others have retooled their careers, trading in their piddling $100-a-month salaries as physicians in state clinics or rectors of universities for respectable jobs in foreign firms. But that’s only part of the picture.

For all the money pumped into building up beach resorts in Batumi and Anaklia, $145 million spent on a ski resort in Svaneti, countless more thrown at a facelift for Sighnaghi, electric cars in Mtskheta, a new Parliament bubble in Kutaisi and so on, how many people are employed in Georgia’s booming new tourism agency? — Around 60,000 according to government figures.

If tackling Georgia’s crippling unemployment – rated as the country’s biggest problem in virtually every public survey – is the goal of all of this spending, it has to be one of the lowest bang-for-your-buck investments imaginable. Of course, tourism is an industry that has a wide ripple effect on the economy. Foreigners come to Georgia to snarf down khachapuri, burn money at casinos and leave with a few marked-up bottles of souvenir wine from the airport gift shop. Plus, all of these glittering new attractions across Georgia are indeed built by someone, although much of the construction has been carried out by foreign contract workers brought in by their respective firms. Still, for all the pomp and fanfare, the average Georgian isn’t much better off today than they were in 2003.

By Western standards, Georgia’s unemployment rate is very high – officially 16.3 percent in 2010, an increase from 13.3 percent in 2007 – but even that number is largely obscured. Nearly half of Georgia’s population works in subsistence agriculture, and according to humanitarian organization, IFAD, around 80 percent of Georgians living in rural sectors subsist off of their own farms, consuming around 70 percent of what they produce. Obviously, if you are only selling the 30 percent-or-so of your product that you don’t need to eat, you’re not exactly building a nest egg. Nonetheless, if you are in this situation, you are officially classified as an “individual entrepreneur” and any family members who help you tend to the crops are classified as “unpaid family business workers” by the tax authorities. Such terms allow the Georgian government to claim single-digit unemployment figures in rural areas, while implicitly ignoring the regions’ extreme and structural poverty.

In the cities, where it is harder to call scrounging for sustenance an economic activity, the official unemployment rate has wavered around 26 percent since the Rose Revolution, and, by some estimates, is nearing 40 percent in Tbilisi. Indeed, regardless of government figures, Georgians themselves don’t “feel” employed. According to a survey conducted by the National Democratic Institute, almost three-quarters of those polled considered themselves unemployed, and 46 per cent said their standard of living was worse since 2008.

Unemployment and poverty are particularly acute among people over 40, who were educated in the Soviet Union and who seemingly don’t fit into Georgian President Mikheil Saakashvili’s vision of a bright, young capitalist generation. Saakashvili’s own government is a mirror of this trend — of 20 cabinet-level ministers, only six are over the age of 38. Georgian Minister of Economic Development Vera Kobalia is 29.

But, when predominantly middle-aged protesters following fringe opposition leaders took to Tbilisi’s streets in May, they were labeled as pro-Russian provocateurs. Georgian friends of mine who are well-employed took similar stances, saying they were rent-a-mobs and rabble rousers.

So, like I said, it depends on who you ask.

My friends who are getting good salaries – particularly those in government – tend to see the country through rose-colored glasses. Many truthfully believe that Anaklia, a resort built from scratch at the muddy delta of the Inguri river, just a few hundred meters from the Abkhaz conflict lines, will one day become a world class resort. They take pride in the shiny new buildings that are cropping up, and even some who aren’t making any more money now than a decade ago see new construction and feel that the country is at least on a path of development.

These aren’t the only people I talk to, however. In my life and work here in Georgia, I know several who have experienced systemic poverty their whole lives. I can’t think of a single local friend whose entire family is employed. In fact, more often than not, the Georgian families I know, consisting for seven or eight people, are usually supported by the incomes of only two or three of the able-bodied members of the family. This stretching of incomes, in turn, hampers the economic mobility of those in the family who do have employment.

Meanwhile, with an estimated 55 percent of Georgia’s population working in agriculture, a high-ranking U.S. embassy official scoffed to me recently that the (useless) new pedestrian bridge over the Mtkvari river cost nearly double the budget of the Ministry of Agriculture.

So, what do we have? GDP growth? — Check. New buildings? — Check. Jobs? — Well, about half of the country has them. Sort of.

Still, it’s easy to paint a rosy picture of the country, because foreign countries love Georgia for it’s low trade barriers and non-existent labor regulations. Saakashvili makes sure there is a constant onslaught of ribbon-cuttings, concerts and fireworks keeping the the atmosphere bright and hopeful. How could anyone deny the obvious development a midst the constant media blitz?

When complaints do arise, the government drones on about the perilous effects of Russian propaganda and the insidious attempts by Moscow to foment public unrest as the primary causes of dissatisfaction in Georgia. In truth, the clinging discontent of the Georgian public, in spite of stunningly effective police and bureaucratic reforms, in spite of all the glam and festivities and visits by Sharon Stone, has nothing to do with Russia, and I hope Georgia’s leadership – even if not publicly – acknowledges it. If not, then I will.

It’s the economy, stupid.

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