Georgia’s October 26 election is set to be the country’s most significant since the collapse of the Soviet Union. Many Georgians believe that the country’s long-held Euro-Atlantic aspirations are at stake. So too do Tbilisi’s Western partners, and much of the investment community.
The incumbent Georgian Dream party is seeking to renew its mandate for the fourth time since it came to power in 2012 while the opposition is hoping that the latest changes to its electoral system offer them a chance at power.
It is the third election in a row in which the Georgian legislature will have a new electoral system, one that does away with single-member majoritarian districts. But while the Georgian Dream party first came to power as a unity grouping of numerous opposition parties, in the past decade it has devolved into being little more than a vehicle for its founder, the billionaire Bidzina Ivanishvili, whose net worth is estimated at around a third of Georgia’s GDP. In the upcoming vote, all seats will instead be allocated by proportional representation. The new parliament will also elect a successor to President Salome Zourabichvili as popular election of the post has been abolished.
What is clear is that the Georgian Dream will win the most votes – it has led in all polls, though polling in the country is poor, and heavily politicised. The domestic pollster GORBI – widely seen by locals as close to Georgian Dream – is, however, the only one that has projected the ruling party will receive an outright majority of votes.
In all likelihood it will be the Unity Coalition centred on embattled, and imprisoned, former president Mikheil Saakashvili’s United National Movement (UNM) that comes in second place. Having led the country after the pro-democracy 2004 Rose Revolution and Georgian Dream’s rise to power in 2012, however, the party’s ability to expand on its loyal base of around 20% of Georgians is extremely limited. In the run-up to the 2012 elections, Saakashvili’s government faced a major crisis after videos were leaked showing prisoners being sodomised. While Saakashvili’s treatment of his political rivals was long controversial, police reforms had been at the centre of his political narrative, though the offence the videos caused to Georgia’s traditionally conservative sensibilities ultimately had more impact domestically.
The UNM repeatedly splintered over the past decade, but none of its breakaway parties were able to build their own support base even after Saakashvili was jailed on abuse of power charges after his surprise return to the country in October 2021. They’ve thus largely agreed to return to the fold in the aforementioned Unity Coaliton.
That serves Ivanishvili and Georgian Dream just fine. They have sought to cast all of the opposition as different flavours of the UNM. The rhetoric they have used to do so, however, has proved poisonous, casting them as part of a “global war party” that, in their telling, seeks to make Georgia a second front in Russia’s war against Ukraine.
And although Georgian Dream has not formally restored diplomatic relations with Moscow severed since the 2008 Russian-Georgian War, Ivanishvili has sought to recast the domestic narrative around that conflict, effectively casting his own country as the aggressor in a public speech on September 15. Georgian Dream also controversially restarted direct flights with Russia despite severe Western opposition last year, while it has steadfastly refused to join the international sanctions regime against Moscow even as many Georgians have themselves placed restrictions on doing business with the hordes of Russian tourists who have fuelled the country’s strong economic performance in the last two years. Perhaps the closest sign of Ivanishvili’s ties to Moscow came in May when the parliament rammed through a ‘foreign agents law’ that copies similar legislation in Russia and is widely seen as an effort to crack down on the country’s pro-Western civil society.
The Kremlin has returned the favour, lifting visa restrictions on Georgians and granting them the right to work in the country 16 days before the vote — meaning Georgians now have the second best access to the Russian market after citizens of wholly Russia-beholden Belarus. But an October 21 Bloomberg expose highlighted how Putin has not settled just for a relatively friendly governing partner, with Russian spies infiltrating the country’s foreign ministry, finance ministry, central bank, alongside other government departments and utilities providers.
Georgian Dream’s casting of the opposition as a united force under Saakashvili is highly misleading; most of its leading members are as critical of Saakashvili’s period of dominating the country’s politics as they are of Ivanishvili’s. Ex-president Giorgi Margvelashvili and President Zourabichvili – both of whom were elected to the country’s now largely symbolic presidency with the backing of Ivanishvili and his Georgian Dream party, resulting in the government seeking to impeach Zourabichvili earlier this year – have endorsed opposition parties and accused Ivanishvili of cosying up to Moscow. But the reality is that their chances of forming a government after the election will require some kind of cohabitation with the UNM.
The three main opposition alliances are the For Georgia Alliance, the Coalition for Change and Strong Georgia. The former is a vehicle for former prime minister Giorgi Gakharia, who has undergone a remarkable political transformation in recent years from Ivanishvili’s hand-picked prime minister, a post he gained after impressing the billionaire for his strong hand in cracking down as interior minister. The Coalition for Change is based on the libertarian Girchi party and the popular former MP Elene Khostaria, who previously bitterly criticised Gakharia. Finally, the Strong Georgia alliance is centred on the Lelo Party of businessmen Badri Japaridze and Mamuka Khazaradze, who founded the country’s second largest bank – TBC – and have feuded with Ivanishvili since cases were initiated against them. While ultimately unsuccessful, they saw them and their European and American co-investors lose the contract to develop the country’s flagship project, the Anaklia Seaport.
In another sign of the Georgian Dream’s willingness to break with the West, the government handed the Anaklia development contract to Chinese state run companies this May. And although Ivanishvili insists that he is committed to the country’s Euro-Atlantic aspirations – and even promised to lead Tbilisi into the EU by 2030 – he has continuously refused to meet with American diplomats, claiming that a series of legal disputes emerging from a scandal in which a former Credit Suisse banker stole from him, amount to his effective sanctioning.
Georgia’s Western partners have increasingly made clear that they see continuing support for Tbilisi as unsustainable if Georgian Dream is re-elected. The EU, UK and US have all suspended financial support in recent months. They have also increasingly worried that Ivanishvili will use his vast wealth to tilt the vote in his favour, something that the civil society groups targeted by the foreign agents law have also sounded alarm bells about. This could involve subtle moves rather than outright fraud, particularly considering that Strong Georgia is at risk of falling below the 5% threshold for parliamentary representation.
Investors too are worried about the outcome of the vote. Georgia’s Western listed stocks such as the Bank of Georgia, TBC and Georgia Capital, sold off sharply after the passage of the foreign agents law this May. While they have ticked up somewhat since, they have failed to return to their May levels. The country’s sovereign bonds sold off as well — though they have since recovered, in large part due to cuts to Western central banks’ baseline interest rates. The post-election sell-off could be even sharper. The opposition is all but certain to call major protests if Georgian Dream manages to keep a majority of seats. Ivanishvili would be unlikely to take any loss sitting down either, wary that he could face a repeat of Saakashvili’s fate after his 2012 defeat.
Georgia’s elections will be pivotal in determining its long-term future, but the vote and immediate post-election period are sure to bring major turbulence as well.
Maximilian Hess is a political risk and foreign policy analyst based in London. He also serves as a fellow at the Foreign Policy Research Institute in Philadelphia, Pennsylvania. Follow him on twitter at @zakavkaza
