Georgia Adopts Draft Law Despite Venice Commission's Opinion & more–15th June 2023

Gamarjobat from Gracia! This is the Rorshok Georgia Update from the 15th of June twenty twenty-three A quick summary of what's going down in Georgia.

Let's kick off this episode with updates on the EU's twelve recommendations.

On Monday the 12th, the Venice Commission published its final opinion on the draft law on deoligarchization, one of the conditions Georgia must fulfill to get EU candidate status. In the document, the Venice Commission warns against private individuals possessing excessive power without transparency, legitimacy, and accountability. The Commission also said that Georgia's draft law on deoligarchization recognizes wealthy and media-owning individuals, subjecting them to restrictions. However, there is a possibility of political abuse and arbitrary enforcement. Finally, the Venice Commission advised against adopting the revised draft law.

On Tuesday the 13th, despite the recommendations of the Venice Commission, the Georgian Dream or Otsneba passed the deoligarchization bill, with eighty-one votes against two, in its second reading. Anri Okhanashvili, Chair of the Legal Affairs Committee, said the Parliament approved the amended version of the bill, taking "mostly" all of the EU recommendations. Commenting on the Venice Commission's opinion that advised against adopting the revised draft law, Okhanashvili said that it is critical for Georgia to act in accordance with the European Commission, to adopt the deoligarchization law and leave no room for speculation on the fulfillment of EU priorities. The reality is what the Opposition members of the Parliament said that adopting the Georgian law for deloligarchization would sabotage Georgia's EU integration. The selective enforcement is the whole idea of the law as the Venice Commission understood.

On Monday the 12th, Transparency International - Georgia, a local watchdog, published a study that found that twenty public agencies have not published simplified procurement contracts. Among these agencies are key government bodies such as the Government Administration, the Ministry of Internal Affairs, the Administration of the President, and the State Security Service. From twenty twenty to twenty twenty-three, the Ministry of Internal Affairs held 338 procurements through the simplified procedure, while the Government Administration, the Administration of the President, and the State Security Service requested twenty-six, eleven, and forty-one procurements, respectively. Although recent studies by the watchdog mention that there are fewer agencies failing to publish contracts, the TIG calls on the State Procurement Agency and procuring entities to pay closer attention to the issue.

On Tuesday the 13th, the National Bank of Georgia, or NBG adopted the draft amendments to the law thanks to Otsneba, overriding President Zourabichvili's veto. According to the amendment, the NBG will now have four Vice Presidents and a newly-appointed First Vice President who will act as President during the President’s absence, and the number of executive NBG Board members will increase to five. The amendments caused criticism among experts, the opposition, and the IMF, as the Board will consist of five executives who are public servants and could loose their jobs at any time and four non-executive members, eliminating the Board's role as an independent supervisory body since the majority of Board members will be state employees. The rumors are that Bidzina wants to get rid of the head, Koba Gvenetadze, who has done an amazing job and everybody loves, with somebody who will follow orders, because the global experience with non-independent central banks is just fantastic.

Moving on to sanctions.

On Thursday the 8th, at the European Council on Foreign Relations (or ECFR) Annual Council Meeting in Stockholm, Jim O'Brien, Head of the Office of Sanctions Coordination at the U.S. State Department, said the U.S. Government is actively discussing the issue of Russia, Turkey, Kazakhstan, the United Arab Emirates, Armenia, and Georgia circumventing sanctions. He stressed that the European companies selling materials to other nations who then sell them to Russia have allowed Moscow to import crucial electronics for modern weaponry. Later that day, the article by Politico, a global nonpartisan politics and policy news organization now based in Europe, citing O'Brien talking about sanctions, caught the attention of the Georgian media and politicians. The Ministry of Finance, in light of accusations from politicians and media outlets, stated that Georgia fully complied with international sanctions (but did not impose sanctions directly to Russia) and actively collaborated with partner countries. He didn’t mention that Georgia is actively collaborating with Russia to bust sanctions.

On Friday the 9th, Prime Minister Irakli Garibashvili met with German Chancellor Olaf Scholz in Berlin. They talked about Georgia's progress toward joining the EU, the steps Georgia took on its EU integration path, the reforms carried out in the country, and the "significant" progress made in implementing the EU’s twelve recommendations. According to a statement from the German Federal Chancellor's Office, Scholz emphasized that Germany always supports Georgia's sovereignty and territorial integrity within the internationally recognized borders and has urged the Georgian government to promptly and actively implement the necessary measures based on the European Commission's recommendations.

Heading west.

On Friday the 9th, The Government of the Autonomous Republic of Adjara reported that the Batumi Stadium received the Real Estate Oscar at the FIABCI World Congress in Miami. Tornike Rizhvadze, the chairman of the government of Adjara, attended the event and took part in the award ceremony. The soccer-stadium earned international recognition after being nominated for the World's best public infrastructure award. Thousands of companies from over seventy countries attended the event.

On Sunday, the 11th, The Environment Ministry announced that Martvili Canyon and Okatse Waterfall in Georgia's west will now be open to visitors at night, with the installation of an eco-friendly and 3D lighting system. The total budget for 3D lighting systems amounted to 4 million Laris, about 1.5 million dollars. Otar Shamugia, Minister of Agriculture and Environmental Protection, said: "In twenty twenty-two approximately 900,000 guests visited our protected areas, and this year, within five months, the number of visitors has increased by fifty percent compared to last year."

On Monday the 13th, according to Info-imereti, a local news outlet in the Imereti region, the miners in Chiatura went on a hunger strike, demanding fair pay and better working conditions. Employees of Georgian Manganese LLC, a local mining company, went on a week-long protest which caused a complete stoppage of operations across all mines, affecting over 3,000 workers. On Friday the 9th, the company responded to the protests, stating that they have not exported their products this year due to the ongoing decrease in demand and significant price drops in the global ferroalloys market, resulting in plummeting incomes of the Georgian Manganese. Also, the company proposed changes, including a transition to a new work schedule, which involves minimizing administrative costs and shifting from a two-shift, twelve-hour workday to a three-shift, eight-hour workday. However, dissatisfied with the proposal, miners continued the strike.

On Wednesday the 14th, Prime Minister Irakli Garibashvili visited the Kingdom of Belgium. He met with Charles Michel, the President of the European Council, Alexander De Croo, the Belgian Prime Minister, and Olivér Várhelyi, the European Commissioner for European Neighborhood Policy and Enlargement. Varhelyi, after the meeting, wrote that the EU supports Georgia's reform efforts and encourages Georgia to speed up the implementation of the twelve priorities set by the EU Council so the country can advance on its EU path. During the reception dedicated to the international cultural festival "Europalia" and to commemorate Georgia's Independence Day in the Kingdom of Belgium, Garibashvili expressed his support for Ukraine and the importance of upholding modern values and fundamental principles in the international community. He emphasized Georgia's solidarity with Ukraine, the Free World and the firm belief of the Georgian people in achieving their goal of becoming a democratic European nation.

And finally,

On Friday the 9th, the National Statistics Office of Georgia, or Geostat, published a quarterly report on Foreign Direct Investments (or FDI) in Georgia. According to the report, the Netherlands was Georgia's major foreign direct investor in the first quarter of this year with almost 240 million US dollars, followed by Japan with 63.2 million US dollars and the United States with 54.7 million US dollars. Foreign direct investments in Georgia totaled almost 500 million US dollars in the first quarter, with the manufacturing sector receiving the largest share at 226.3 million US dollars. The trade and transport sectors also saw significant investment at 90.7 million dollars and 43.3 million dollars, respectively. Compared to the same quarter in twenty twenty-two, the FDI decreased by almost 14% but increased by 53.3% compared to the fourth quarter of the last year. Netherlands number one? What does that mean? That oligarchs feel that Dutch law firms do a good job concealing ultimate beneficial ownership, that’s what it means.

And that's it for this week. Stay tuned for a new episode of Georgia Ramble coming up next week, where I sit down with Dzerassa Sanakoeva, a young woman who was born and raised in South Ossetia and now lives in Tbilisi, and chat about her life experiences. If you don’t want to miss it, make sure to subscribe to our show on your favorite podcast listening apps, or email us georgia@rorshok.com

Nakhvamdis!