West weighs sanctions against Georgian government as Russia hovers

West weighs sanctions against Georgian government as Russia hovers
The tension between Georgians’ pro-Western aspirations and their government’s actions that seem to align more closely with Russian interests is creating an increasingly polarized atmosphere in the country. / bne IntelliNews/Tornike Mandaria
By bne IntelliNews June 11, 2024

Georgia’s Western partners are weighing sanctions on the country’s populist government for pushing through its controversial “Foreign Agents Law” last month, amid fears that if they are too tough it could push Tbilisi further into Russia’s arms.

The Western moves could also cause turmoil inside the ruling Georgian Dream party, and potentially boost the opposition at the general election this autumn – if they can be blamed on the government.

The tension between Georgians’ pro-Western aspirations and their government’s actions that seem to align more closely with Russian interests is creating an increasingly polarized atmosphere in the country that could come to the boil at the election.

Ordinary Georgians fear that their country's increasing isolation could lead to economic hardship and decreased opportunities for international cooperation and development.

The US has already started to impose sanctions and EU measures are expected to be announced later this month.

In a move that aligns Georgia with countries such as Russia, Belarus, Iran, Syria, and North Korea, last week the United States imposed visa sanctions on certain Georgian individuals, though their names were not revealed.

The sanctions were announced three days after the speaker of the Georgian Parliament signed the laws into effect. The visa restrictions extend to law enforcement officers, private individuals, and the families of those sanctioned. This marks the first time in Georgia’s post-Soviet history that sanctions have targeted government officials.

Deadening effect

The “Foreign Agents Law” mandates NGOs receiving over 20 per cent of their funding from abroad to submit annual reports or face financial penalties. 

Critics say the law is based on a Russian equivalent and could restrict democracy by forcing NGOs and independent media to put themselves under state scrutiny if they continue to accept foreign funding.

Although the law will not come into full effect until next year, opposition parties fear it could already have a deadening effect on independent voices before the country’s election this autumn.

The government rammed the law through despite huge protests, Western warnings and a veto from President Salome Zurabishvili.

Georgian Dream leaders, including Prime Minister Irakli Kobakhidze, have fiercely defended the law, accusing Western critics of attempting to drag Georgia into conflict with Russia. Kobakhidze rebuked Western forces, claiming they sought to “open a second front and Ukrainianize Georgia.” 

Tbilisi Mayor Kakha Kaladze said that the United States and Georgia now seem to be “not partners or friends, but ... enemies”.  

The Georgian Dream government has improved relations with Russia in recent years, culminating in Moscow restarting direct flights to Tbilisi last year. The economy has also benefited as a conduit for imports into Russia, though Tbilisi respects Western sanctions on specific items.

Some observers argue that Georgian Dream is trying to play the West and Russia off against each other in an attempt either to win EU membership from the West, or secure the return of the secessionist territories of Abkhazia and South Ossettia, which are protected by Russia. Western sanctions could therefore be counter-productive by handing Russia a victory.

“Such sanctions could push Tbilisi to improve relations with Moscow, which has praised Georgia’s foreign agent law, having passed a similar law itself back in 2012”, Russian journalist Vladimir Solovyov wrote on the website of NGO Carnegie Europe.

Sanctions loom

But further Western sanctions look inevitable, given the government’s flouting of Western democratic values. The government has also moved recently to target the LGBTQ community with discriminatory legislation in an attempt to whip up a culture war before the election. 

There is an expectation that US will next impose Treasury department sanctions. U.S. Secretary of State Anthony Blinken has also warned about the potential loss of vital aid, including defence funding. 

US Senator Gene Shaheen welcomed the State Department's actions against those responsible for "undermining democracy" and "attacking peaceful demonstrators," and called for more restrictions. 

“My bipartisan bill would make these restrictions permanent, making it clear that this decision is not a short-term consequence,” the Democratic senator wrote on X. 

Meanwhile, the European Union is deliberating potential measures, with a decisive meeting scheduled for the end of June. These measures could include suspending the opening of accession negotiations or new funding programmes.

The likelihood of cancelling the visa-free regime between Georgia and the EU remains low, according to EU Ambassador Pavel Herczynski. 

“I have repeatedly called on the EU that the Georgian people should not be punished and should not have to pay for something they did not do,” he said.

Cracks in the party

The sanctions could also cause internal tensions within the Georgian government to come out into the open.

Georgian Dream – founded by billionaire Bidzina Ivanishvili, who made his fortune in Russia – initially attracted a broad coalition of parties with varying ideologies under its umbrella, including liberal, conservative, pro-Western and anti-Western factions.

Since its first electoral victory in 2012, Georgian Dream has seen several high-profile defections, with significant parties like the centre-left Free Democrats and the centre-right Republicans exiting by 2016. Leaders from these parties had held prominent positions, such as parliamentary speaker and key ministerial roles.

In 2018, Prime Minister Giorgi Kvirikashvili resigned over disagreements about the Anaklia deep-sea port project. Kvirikashvili advocated for American investment, but the government ultimately awarded the project to a Chinese corporation, while maintaining a 51% controlling stake.

The party saw further turmoil in 2021 when Prime Minister Giorgi Gakharia resigned, citing opposition to a police raid on opposition leader Nika Melia. 

Both presidents elected with backing from Bidzina Ivanishvili — Giorgi Margvelashvili in 2013 and Zurabishvili in 2018 — have become vocal critics of Georgian Dream. 

Margvelashvili remarked, "not everyone follows the mindset of one person", a clear reference to Ivanishvili, while Zurabishvili's criticism intensified as the party shifted towards anti-Western policies, prompting Georgian Dream to seek her impeachment.

After the passing of the “Foreign Agents Law”, only a deputy finance minister and the ambassador to France have so far resigned, indicating the current tight grip of the party on its members. 

Gia Khukhashvili, a former consultant to Georgian Dream and Ivanishvili, noted, however, that after imposing sanctions, “I am expecting serious fluctuations”, suggesting more resignations could follow as tensions rise.