It’s easy to forget that today marks the second anniversary of the Russian invasion of Georgia; a ten day conflict in which hundreds died and the entire infrastructre of a country was shattered.
Some, of course, are comfortable to draw upon Neville Chamberlain’s words and dismiss Georgia's problems as those of as “far away land of which we know nothing”. Those taking such a position fail to recognise that Russia’s ongoing belligerence towards states on its periphery is, in reality, a battle between the cause of freedom in the West and Moscow’s poisonous insistence on clinging its Cold War past.
In his book, A Little War That Shook The World, Ron Asmus summed up the ten day conflict as a “clash between a 21st-century Western world that saw the extension of democratic integration closer to Moscow's borders as a positive step toward greater stability and a Russia that was returning to the habits of 19th-century great power thinking and viewed it as a threat”.
Against a backdrop of bombs raining down on Tbilisi and tanks rolling across the green plains of Tskhinvali, those dark August days two years ago led Georgians not to simply question the future constitutional status of Abkhazia and South Ossetia but the very survival off their country as a sovereign state.
While the majority of the country’s infrastructure was destroyed by Russian troops, it is remarkable feat that further devastation and more substantial causalities were not incurred by Georgian forces. In holding their own, the Georgians bought themselves the time they needed to bring international attention to their cause and secure a vital ceasefire.
In the immediate aftermath of the war, Georgia secured pledges of $4.55 billion in international aid - $1 billion of which came from the American government. While such aid has undoubtedly been crucial in the success of the country’s rapid reconstruction programmes for homes, schools and roads, Kosovo’s example proves just how foolhardy it is to construct an economic model on the presumption of future international hand-outs.
For Georgia’s recovery – and transition from the ranks of former USSR satellite state to a fully-fledged Western democracy – to succeed, it requires more than the chequebooks of foreign governments or their oft-hollow pledges of diplomatic support.
It requires serious action on a policy level; and, in a nutshell, that means trade liberalisation.
Since 2004, Georgia’s exports to the European Union have totalled a meagre €1.3 billion, despite the country possessing significant chemical and mineral deposits that are in short supply and active demand in EU member states.
While Georgia has in the past years benefitted to some extent from EU Eastern Partnership initiatives designed to provide funding and technical assistance to Eastern states keen to deepen their links with European economies, a 2008 report by the Warsaw-based Centre for Social and Economic Research judged the country to not yet be in a position to “negotiate... a far-reaching trade liberalisation [deal or to] to implement and sustain the commitments that it would require”.
Georgia has clearly taken these comments on board – and taken urgent action to modernise and liberalise its economic structure. Such reforms are embodied by the Act on Economic Freedom, an unabashedly Thatcherite document which has implemented arguably the most free-market agenda of any government since the election of outgoing Colombian President Alvaro Uribe in 2002.
Popularly referred to as the ‘Liberty Act’, the Act on Economic Freedom has instituted regulations demanding budget deficits are kept to less than 3% of GDP and a maximum debt-to-GDP ratio of 60%. Furthermore, tax increases must now be ratified by public referenda, a moratorium on government agencies introducing any new licences or permits has been implemented and levels of personal and business taxation have been slashed.
The results have been startling.
Despite Russia’s ongoing trade embargo, Georgia is expected to at least match Moscow’s 5.4% annual GDP growth rate this year before recording 9% growth in 2011. Despite the country’s economic growth rate having slumped from 12.3% to 2.3% in the twelve months prior to the Russian invasion in 2008, double digit growth rates are now projected to return from 2012 onwards.
The 2009 Forbes Tax, Misery & Reform Index ranks Georgia as the world’s fourth most tax-friendly nations behind only Qatar, United Arab Emirates and Hong Kong.
Given the country’s clear commitment to free market principles, it is now surely time for the European Union to re-examine it’s trading relations with Georgia and commence negotiations on the implementation of a wide-ranging customs union agreement similar to that currently in place with Turkey. As a starting block, Georgian membership of the Euro-Mediterranean Free Trade Area (EU-MEFTA) and Central European Free Trade Agreements (CEFTA) would allow the country to extend its trading relations with not only the EU but scores of states on its near periphery.
Increasing growth and economic liberalisation aside, Georgia will never fully be able to thrive while large parts of the country remain under the control of criminal gangs of Russian-backed separatists.
Since the election of President Saakashvili in 2004, the Georgian government has made progress in this field, bringing the former separatist region of Adjara back under central government control.
Ruled from 1991 to 2004 by a Russian placeman named Aslan Abashidze, the coastal area was well known as a haven for drug, human and weapons smuggling. Since his ousting in a popular uprising, Abashidze has been living in Moscow so as to avoid the Georgian courts which have sentenced him to fifteen years in prison for his part in the theft of £34 million in public funds.
Corruption aside, the most significant thing about Abashidze’s Adjara is that he enthusiastically welcomed the presence of the Russian Army’s 89th Rifle Division. Without their puppet controlling the region, Russians were forced to leave their military bases in 2007 and thus surrender control of shipping lanes along NATO member Turkey’s north east coastline.
As in the case of the Russian-backed breakaway province of Transnistria in Moldova, Moscow has singularly failed to honour its commitments to international agreements on the future of Abkhazia and South Ossetia. Indeed, when listening to statements from the likes of Russian Foreign Minister Sergei Lavrov, one can be forgiven for raising more than a wry smile at the country’s claims to be continuing their occupation of areas of former USSR satellite states in order to “guarantee minority rights” and “the principle of self-determination”.
As I have discussed elsewhere, the separatist movements in South Ossetia and Abkhazia are likely to call upon the International Court of Justice’s recent ruling on the legality of Kosovo’s declaration of independence to bolster their own case for global diplomatic recognition. To draw such a comparison is lazy at best and disingenuous at worst.
While the invasion of Kosovo was justified on the basis of preventing the ethnic cleansing of ethnic Albanians, the Russian-backed regimes in Abkhazia and South Ossetia have expelled more than half a million Georgians and other ethnic groups from the provinces since 1991. Far from their military incursions into the territories being designed to protect ethnic Abkhaz and Ossetian residents of the two areas from persecution, the Russian Federation simply aims to expand its territory and sphere of military influence.
The 2008 ceasefire agreement between Georgia and the Russian Federation is clear – and worth quoting in its entirety:
- Not to resort to force;
- To end hostilities definitively
- To provide free access for humanitarian aid;
- Georgian military forces will have to withdraw their usual bases;
- Russian military forces will have to withdraw to lines held prior to outbreak of hostilities. Pending an international mechanism, Russian peace-keeping forces will implement additional security measures;
- Opening of international talks on the security and stability arrangements in Abkhazia and South Ossetia.
Given the stated commitment of Russia to withdrawing its forces “to lines held prior to outbreak of hostilities” and promise to “not resort to force” in respect of disagreements about the constitutional status of Abkhazia and South Ossetia, it is curious to read remarks from the likes of Abkhazia’s “President” Sergei Baghapsh describing recent discussions with President Medvedev as having covered the “development of Abkhaz-Russian cooperation in a number of directions, including... [of a] defensive character”.
Similarly, the Russian government’s own website makes reference to a Treaty on Friendship, Cooperation, and Mutual Assistance between Moscow and the South Ossetia which allows for thousands of Russian troops to remain in the province under the auspices of “peacekeeping”.
While the sun might currently be shining in Georgia at the moment but Tbilisi is never far from the frost of Moscow’s icy winds. As Ron Asmus argued in the Washington Post last month, Russia is “determined to break Tbilisi's will to align with the West”.
Without international pressure, Russia has no intention of either fulfilling its obligations made under the ceasefire agreement or working constructively with the Georgian government to find a solution to the ongoing conflicts in Abkhazia and South Ossetia.
Prime Minister David Cameron must join the likes of US Secretary of State Hillary Clinton and French Foreign Minister Bernard Kouchner in calling for Russia to come to the negotiating table and find a solution to this poisonous conflict before more blood is spilled.
On today of all days, we must stand firm with Georgia.
