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Analysis

Shevardnadze’s Choices Alienate Reformers

Jaba Devdariani Aug 23, 2001

Two events in Georgia’s Parliament this month have President Eduard Shevardnadze, the Soviet reformer, playing a defender of the status quo. It is his least popular role so far- and perhaps his most dangerous. On August 10, while debating a law regarding the confiscation of illegally gained property, Justice Minister Mikhail Saakashvili openly accused the ministers of economy, state security and internal affairs of corrupt practices. Four days later, Minister for Taxes and Revenues Mikhail Machavariani resigned during debate on the 2002 draft budget, citing disagreement with state policy. These disputes reveal something deeper than political theater. They expose Shevardnadze’s tendency to seek compromise and his inability to right Georgia’s course. As they fester, they could weaken the President’s status.

The drama in Parliament reflects a fracture in Georgia’s political growth. Saakashvili and Machavariani are leaders of the “young reformer” team of the ruling Citizens Union of Georgia (CUG), which Shevardnadze chairs. Under Parliamentary Chairman Zurab Zhvania, this team had steadily increased its influence and won Western supporters (as well as investors in its natural resources). When Saakashvili Machavariani and Finance Minister Zurab Nogaideli moved from Parliament to key government positions in 1999 and 2000, structural reform seemed within reach. Shevardnadze endorsed the idea of a Cabinet of Ministers, which would distribute executive power across several people. Prospects seemed especially bright for Zhvania; when Shevardnadze began advancing a Cabinet of Ministers in May, he spoke of Zhvania as a future prime minister.

However, such harmony proved fleeting. Once they were in power, reform-minded ministers faced attacks from both the political opposition and conservative elements within their party. These forces formed a coalition and effectively blocked draft legislation on the Cabinet of Ministers. Shevardnadze responded in a startling way. Allegedly acting under influence from the conservative wing, he hinted that the future Prime Minister would gain only limited power, especially over strategic and military decisions. This month’s fireworks followed, making Shevardnadze’s grip more tenuous.

Shevardnadze has proven inept when he has to take sides. Since he became president in 1992, Shevardnadze has always played the supreme arbiter in Georgian politics. He managed to quell civil war by balancing contesting militias, and subsequently put himself at the center of the state’s power structure. As a result, today’s Georgia hinges on a fragile balance among political forces, which clans frequently infiltrate for their own purposes. As long as the president remained popular, he could broker these disputes. But a stagnating economy, a corrupt business climate and a foundering democracy make his balancing act less credible. Western analysts increasingly view Georgia through the prism of a “state failure,” and the president pays the price. His popular support dropped to staggering 6% in recent polls.

As Shevardnadze’s image dimmed, so did the reformers’. They weathered the shift from insurgency to power clumsily, often fighting in public. Without breakthrough reforms to their credit, they increasingly became associated with old-school dirty politicking. Fair or not, this association dramatically weakened the group’s power to act as reformers. And facing a united opposition in Parliament, Zhvania risked breaking up his team. The only way out of this crisis was to address the high-profile issues of corruption and budgetary crisis in a decisive manner. So Justice Minister Saakashvili not only moved on the government session to propose confiscating executive bureaucrats’ property, but also openly accused several of them of illegally building lavish homes. This accusation aimed to provoke a response.

But guess who responded? In a recent interview for national radio, Shevardnadze distanced himself from Saakashvili’s measure, citing the presumption of innocence and the sanctity of homeownership. These arguments echoed ones from ministers that the public perceives as corrupt. This echo made the President’s interview a public relations fiasco, even if some of his arguments seemed logical. And when Machavariani quit over the 2002 budget, Shevardnadze again listed toward the conservatives.

The draft assumed 100 million GEL (approximately, 45 mil. USD) in new revenues. Machavariani insisted that the government would never collect this much money unless it drastically improves its efficiency. Nogaideli seconded Machavariani and warned that the state would have to borrow more to meet the target, triggering higher repayments. In this discussion, Shevardnadze tried to literally split the difference. He strongly supported the increase in revenues, but mentioned that the target figure can be reduced to 50 million GEL. Then he refused to accept Machavariani’s resignation, which the minister later reiterated.

In effect, Shevardnadze voted against the reformer team twice in one week, before they eyes of the world. If the reformers keep openly rebuking Shevardnadze’s policies, their party will have to face a crisis. And with Parliamentary and presidential elections still distant, it may be international lenders and governments who resolve this crisis.

Jaba Devdariani is a founding director of the United Nations Association of Georgia (www.una.ge) and Research Director of the UNA’s program for applied research.

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Shevardnadze's Choices Alienate Reformers

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