President Shevardnadze has shown all the signs of being weary of independent civil society already in September 2001. On the eve of his visit to the United States he said the government should exercise closer control over NGO grants and, reportedly even raised the issue with US Secretary of State in Washington, DC.
However a cold response of the US officials has not discouraged Georgian government to seek closer control of the NGOs and international grants. Independent experts say there are both political and economic reasons for this.
Politically, independent civil groups have grown mature and their checks on the government are sharply felt. Recently, several human rights NGOs have submitted a shadow report to the UN Human Rights Commission, while the civil advocacy groups achieved resignation of some top officials by investigating the cases of tax evasion.
Economically, the NGO grants are the only financial flow that bureaucrats do not exercise discretional control upon. And experts say they should not: “Grant agreement is a private contract between the donor and an NGO, there is no role for the government in controlling the subject of such an agreement” says Roman Gotsiridze, economic expert and chairman of the Parliament’s budgetary committee.
Since fall last year official pressure on independent NGOs has been mounted both in economic and in political fields. Several political forces, headed by the pro-presidential faction of the Citizens Union of Georgia have argued NGOs are “grant eaters” who deprive the citizens of hundreds of thousands of dollars.
Others have argued NGOs are Western agents who undermine Georgian national values, conspire against the patriots, promote homosexualism and non-orthodox religious sects.
A campaign of hysteria in press provides with much needed public attitude to press for the legislative adjustments that would uproot independent civil action. A draft on “Grants and Humanitarian Assistance” prepared under Shevardnadze’s direct orders by the Finance Ministry cancels the current law on grants and fails to present any new regulations referring the reader to non-existent “relevant legislation.”
“With this document the government attempted to receive a rubber-stamp – an authority to decide which financial inflow is a grant and which is not,” says head of the Georgian Business Law Center Vazsha Salamadze. NGO leader argues with no procedure of state control outlined, the law would become a tool for the political pressure.
In his “terrorism” speech Shevardnadze also proposed to tax NGOs with a ‘symbolic’ 0,2 percent profit tax. Experts say this proposal for a ‘tribute penny’ carries a hidden political danger.
NGOs are currently taxed with income tax from the salaries as well as with several minor social taxes. Tinatin Khidasheli of the Georgian Young Lawyers’ Association says taxing NGOs with a profit tax cancels their non-profit status, makes it more difficult to receive donor assistance and, above all opens the way for inspection agencies to check not only the financial operations, but also the contents of the project proposals.
“There is a possibility that the Control Chamber [main inspection agency] would ask us to disclose correspondence with the donors, or require to approve the proposal before it is submitted to the donor. President’s proposal opens the way for a major step back in democratic development,” Khidasheli says.
On the other hand, both NGOs and some independent experts argue these are the grants and credits to the government itself that were severely mismanaged. “These were the government grants that were misappropriated, not the NGO ones, which are strictly controlled by the donors,” says Roman Gotsiridze.
The government also owes NGOs hundreds of thousands dollars as reimbursement for 20% VAT tax which is foreseen by the tax code but was never implemented as the government says it has no funds to cover its debts.
In their attempt to straighten the record, NGOs have received fairly unexpected support from the Minister of Finance Zurab Nogaideli, who after bitter exchange during the government briefing said the executive tries to “violate the principles of democracy” by its attempts to control the NGO activity. Nogaideli was dismissed immediately after the government session.
The venom of the President and the State Chancellery is directed only towards independent NGOs, as there are many government-sponsored GONGOs which have been made to divert the budgetary funds and international assistance to officials’ pockets.
In a revealing and cynical statement President Shevardnadze recently welcomed on national TV creation of an NGO by the former Interior Minister Kakha Targamadze, who was dismissed on the wave of popular protests in October 2001. Charged with corruption and assault at free media Targamadze’s new NGO claims to support legal reforms.
Charges in terrorism, voiced half-humorously by the President triggered an outrage of the Georgian NGO leaders, who say president directly threatens the freedom of association and encroaches upon the independence of the civil groups.
The NGO leaders agree with Roman Gotsiridze’s statement who argued “this anti-grant movement is reminiscent of the policies of Lukashenka in Belorus, nowhere else [in former CIS] such process took place. But if the President [Shevardnadze] wants to be mentioned alongside with Lukashenka, it is only the matter of his own political taste.”
By Jaba Devdariani, Civil Georgia
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