Georgia: Greater Democracy, Open Markets Are the Way Forward

The US Heritage Foundation has released its report by authors Anthony Kim and Mamuka Tsereteli on the top priorities and key areas in the US - Georgia relations and partnership.

"The United States and Georgia have measurably deepened their partnership through strong cooperation over the past three decades. Georgia, for example, has made significant military contributions to the US-led international security operations in Iraq and Afghanistan. The United States is a strong supporter of the sovereignty and territorial integrity of Georgia within internationally recognized borders. Yet much more can and should be done to advance the US–Georgia relations. The two long-time partners have much more to gain if they pursue greater cooperation to amplify the values of democracy and open markets," reads the report. 

The publication points out that America’s growing relationship with Georgia, based on shared values and common interests, is beneficial to both countries. The US and Georgia have built a strong relationship but much more can be done, especially through trade and investment. It concludes that Washington should continue to encourage and support Georgia to pursue institutional and structural reforms to strengthen its democracy and economic freedom.

"America’s growing relationship with the strategically located country of Georgia, based on shared values and common interests, is important and beneficial to both countries. As in past crises and challenges, Georgia is proving in the current coronavirus pandemic to be a dependable ally for the United States. Located at the geopolitical crossroads of Europe and Asia, the country stands out as one of the most notable emerging economies in the world," note the authors of the report. 

The publication highlights that in its latest edition of Freedom in the World, an annual report that assesses political rights and civil liberties around the globe, Freedom House classifies Georgia as a “partly free” country. On the June 29 ratification of electoral reforms by the Georgian parliament, the Washington-based organization noted, “This important compromise between Georgia’s political parties will result in greater political pluralism and trust in Georgia’s electoral processes…[and] reflects the contribution of Georgia’s public and civil society in their successful months-long campaign to demand reform.”

Applauding the adoption of constitutional amendments that establish a more proportional electoral system, the US Department of State also noted the ratification as “historic” and underscored that “the United States will continue to support Georgia’s efforts to strengthen its democracy, electoral practices, and the rule of law.”

"To that end, Georgia’s upcoming October parliamentary elections have become more critical as an elevated proving ground for Georgian democracy that should bolster good governance. Georgia has been regarded as a beacon of hope within the Eurasian region because its democratic endeavors drastically contrast with its post-Soviet neighbors. Washington should pay closer attention to Georgia’s forthcoming election process and ensure concrete support for the country’s democratic practice of free, fair, and transparent parliamentary elections in October," reads the report. 

The authors of the publication call Georgia "a regional champion for economic freedom," noting that the country offers a critical route for trade and energy from the Caspian Sea to Eastern Europe, and a robust US–Georgian economic partnership serves American interests.

Over the past 25 years, Georgia has made tremendous progress in integrating with the West and moving toward a more market-oriented economy. Since 1996, when The Heritage Foundation began including the country in its annual Index of Economic Freedom, the Georgian economy has moved up from the ranks of economically “repressed” to “mostly free.”

The fact that Georgia’s economic freedom score is 77.1 out of 100, making its economy the 12th freest in the 2020 Index, is also highlighted. 

The authors of the report conclude:

"The United States and Georgia have more to offer to each other and more to gain from their ever-evolving partnership on key policy fronts. Washington should advance a pragmatic and forward-looking policy agenda with Tbilisi by:

• Continuing to encourage Georgia to pursue institutional and structural reforms to strengthen its democracy and economic freedom. Functioning constitutional and legislative frameworks have been in place. However, further strengthening the rule of law and the business dispute-resolution system, advancing the quality and transparency of public services, and safeguarding the independence of key institutions from undue political influences would contribute to nurturing Georgia’s democracy and furthering its economic freedom.
• Focusing on technical economic collaboration to fully capitalize on Georgia’s high degree of economic freedom. Georgia made substantial progress in economic reforms over the past 25 years as recognized by many international studies. The creation of a large number of private enterprises has been facilitated by the simplicity of business procedures and regulations. However, lingering bottlenecks in the system that prevent firms from growing and employing more people remain a pressing economic and societal problem in Georgia, with significant security implications. Diagnosing and addressing this problem merits more targeted bilateral economic cooperation.
• Laying the practical groundwork for formal bilateral trade agreement negotiations. The United States has discussed creating a free trade agreement with Georgia. Pursuing such a deal with Georgia would not be starting from scratch. High-level trade and investment dialogues already exist, in addition to a bilateral investment treaty and a bilateral trade and investment framework agreement. Institutionalizing a modern trade pact would be a logical next step to upgrading the US – Georgia economic relationship as a key anchor for further reforms and greater partnership. Congress and the Trump Administration should make it a priority.
• Supporting infrastructure development in Georgia that will ensure regional connectivity and build up the evolving economic cooperation among the countries in Central Asia, the Caucasus, and Central and Eastern Europe. The US strategic interest in this process is clear: to bolster the economic sovereignty of all the countries involved and to limit Russia’s existing and China’s growing influence in this space.

"Indeed, the United States and Georgia still have a lot to offer to each other. Much more can be accomplished through greater strategic focus and clarity between these two willing partners."

By Ana Dumbadze 

Read the full report here

Image: US Embassy Press Office