GEORGIA: A radical reformation
Thomas Cromwell

It is just two and a half years since a popular uprising in Georgia swept the government of President Eduard Shevardnadze from power and, in January 2004, elected the young leader of the revolt, Mikheil Saakashvili, to take the country’s helm. Since the ‘Rose Revolution’, as it is called, Georgia has undergone dramatic changes.

In a recent interview with, Georgia’s new ambassador to Washington, Vasil Sikharulidze, talked about some of those changes, Georgia’s relations with Russia, its aspirations for closer integration with the West, and its relations with the United States.

The ambassador said that the big changes in Georgia have been made in fixing many of the domestic problems that had afflicted the country since the breakup of the Soviet Union and independence in 1991. Top of the list has been corruption, for which Georgia had developed an unenviable reputation under Shevardnadze, and which, the ambassador said, peaked in 2003. Symptomatic of corruption’s impact: at that time some 60-65 percent of all business transactions took place in the gray economy. Today, that figure has been reduced to 10 percent.

One result of this clean-up has been a four-fold increase in government revenues. As a result, the government has been able to take long-overdue measures to improve the management of the country. Civil service pensions have been increased 100 percent, and the salaries of military personnel have been increased ten-fold.

The army, which had just four battle-ready battalions, which were poorly trained, accommodated and equipped, has been completely overhauled, with Washington’s help in training and equipping. Today it stands at four brigades, each with four battalions, for a total force of 18,000. Two of the four brigades are fully professional, the third is being converted from conscript to professional, and the fourth will eventually become professional as well.

Furthermore, most of the military personnel have rotated through Iraq on six-month stints with the coalition forces there, which Georgia supports with two battalions (850 men).  And with Georgia now using US equipment and methods, this means that six of their battalions can be fully integrated with US Army forces.

Policing has also been reformed. Previously, a center for corruption in Georgia, and a profession that had earned the support of only five percent of the population, the police have now been reorganized to use American policing practices, including regular patrols, “a totally new way of policing,” the ambassador said. Abuse of their authority has been brought largely under control and support for them has risen to 75 percent of the population.

The decrepit infrastructure is also being addressed, and two new airports (at the capital Tbilisi and Batumi) are to be opened later this year. Many roads have been resurfaced and new ones are being built.

At the same time, with the better tax collection, local governments have bigger budgets to spend and are now able to undertake improvements themselves.

It is interesting to see how a country can be turned around so dramatically by a change in leadership. In the atmosphere of corruption that prevailed until rigged parliamentary elections in November 2003 pushed a large portion of the population to flood the streets in protest against Shevardnadze’s government, it was almost impossible for good to flourish. Now, that the central government is leading the clean-up campaign and setting the standards for good public behavior, transparency and real democracy, there is broad support for the reform program, support that is manifesting in all areas of the country’s life.

No surprise, then, that education and healthcare have also tasted the benefits of reform. One key measure has been to establish common testing standards for schools and universities so that entrance is won on the basis of ability, and not patronage.

In healthcare, the government approach is to reduce the many poorly staffed and equipped medical facilities to a smaller number of quality institutions. At the same time, it is encouraging the establishment of private hospitals and clinics for patients who can afford to pay for health services.

In fact the government has been privatizing most state assets, and the ambassador said that with the new, business-friendly climate in Georgia the state has been doing better than expected in the prices it is getting, often receiving double the initial asking price.

The economy has been doing well. GDP growth in 2005 was 8 percent, and this year might reach double-digit figures, the ambassador said. Nevertheless, the number of Georgians living below the poverty line is still high, with unemployment at 20 percent. One reason for these high figures is that the Saakashvili government raised the figure that denotes poverty from an income of $100 a month in 2003 to a “much higher level now,” said Ambassador Sikharulidze.

“We think that the important thing is to maintain the developmental momentum,” the ambassador said, describing the government’s strategy to tackle poverty.

Georgia’s rapid strides are all the more remarkable when you consider that they have been taken while Russia has continued to exert maximum pressure to stall Tbilisi’s westward march, in particular by manipulating the populations of Abkhazia and South Ossetia, two enclaves that historically are part of Georgia but currently are in effect governed by Russia.

“Our government wants a political solution,” the ambassador stressed, “and it has introduced a ‘road map’ to a negotiated solution.” In the words of the ambassador, Tbilisi sees the issue of the enclaves as “95 percent Russia-Georgia problems rather than ethnic problems.”

Essentially, Georgia will not cave in to Russian pressure. “The policy of Russia is to keep hot spots, conflicts that put pressure on us, trying to pull us back from our Euro-Atlantic aspirations,” that ambassador said. But “we are very patient in this regard.”

The ambassador pointed out that there are considerable differences between South Ossetia and Abkhazia. In the first, the population is a mix of Georgians and Ossetians, who get on well together, intermarry, trade with each other, etc. Apparently active officers from the Russian army hold the positions of prime minister, defense minister and interior minister, because Moscow does not trust the locals with their own administration.

Having Russia so directly in control there, “does not contribute to a peaceful resolution,” the ambassador noted. Georgia would like to see international mediation, but Moscow apparently believes that only it can act as mediator, he said.

In Abkhazia, the majority population used to be Georgian, but after civil strife broke out in the 1990s, “ethnic cleansing reduced the Georgian community to a tiny minority,” the ambassador said. “Again, we want more foreign engagement, since a recent Russian attempt at a political solution failed.”

The ambassador said that part of the problem is that the people living in the enclaves receive only Russian media, which is heavily controlled by Moscow. The impression they get is that NATO is a threat and the United States is still an adversary and not to be trusted.

The Georgians argue that it is to Russia’s benefit to have prosperous and stable neighbors. “Our dialog is built on this,” the ambassador said. “We hope that they will share this view.”

The government in Tbilisi clearly will not be swayed from its chosen, western course. The ambassador said that relations with NATO are growing stronger and “We are not afraid of new requirements for membership.” With troops in Iraq and Kosovo, and offering support to NATO for Afghanistan, Georgia clearly wants to show that it can be a valuable member. “We don’t only want to be a club member to get more security [for ourselves], we are also trying to contribute to wider security for the world.”

Ultimately, Georgia would like to become part of the European Union, although for the moment that remains a distant objective that is not under discussion in Brussels.

There is another side to the Georgia-Russia issue. When Moscow used heavy-handed arm-twisting to get Ukraine to pay more for Russian gas at the beginning of this year, by cutting supplies that ultimately were bound for Europe, western governments became alarmed at the prospect of being held hostage by a Russia that controls supplies of over a quarter of all gas consumed in Europe. Part of Europe’s reaction has been to scramble to find alternative routes for energy from Central Asia. With the Baku-Ceyhan oil pipeline already operating, and a parallel Baku-Erzurum gas pipeline due for completion this year, both of which pass through Georgian territory, Europe has been giving strong encouragement to Kazakhstan and Turkmenistan to develop gas pipelines across the Caspian to Baku. From Erzurum, in eastern Turkey, a gas pipeline to Greece is already being built, bypassing the Russian gas supply networks. From Greece the gas enters the European distribution network.

Thus Georgia, with minimal oil or gas production of its own, has emerged as a strategic player in global energy systems. In addition, it has “huge potential” in hydropower generation, the ambassador said.

Energy is one sector Georgia would like to see more American companies invest in. Others are agriculture, tourism, telecommunications and infrastructure.

That Georgia has become an interesting market for investors is demonstrated by the skyrocketing real estate prices in Tbilisi, where property prices have quadrupled in just two years.

Biography of Vasil Sikharulidze

Mr. Vasil Sikharulidze was born on 30 May 1968 in Tbilisi.  In 1993, he graduated from Tbilisi State Medical University, Faculty of Physician.

From 1993 to 1995, he worked at the Institute of Psychiatry as a physician, psychiatrist.

From 1995-1996, he was Executive Director of the Atlantic Council of Georgia.

From 1996 to 2000, he worked in the Parliament of Georgia as a leading specialist on the Committee on Defense and Security.

From 2000 to 2002, he held the position of the Head of NATO Division at the Ministry of Foreign Affairs of Georgia.  In 2002, he was appointed as Deputy Head of the Georgian Mission of NATO in Brussels (Belgium).

In 2004, from March to July, he served as Undersecretary of the National Security Council of Georgia.

In July of 2004, he was appointed as the Deputy Minister of Defense of Georgia. 

In October of 2005 he became the First Deputy Minister of Defense responsible for policy and planning, international relations and legal affairs.

On March 1, 2006 He was appointed as an Ambassador Extraordinary and Plenipotentiary of Georgia to the USA, Canada and Mexico.

He was a NATO fellow from 2001-2003.

Languages: Georgian, English, Russian and basic French