Smart Aid
By DAVID L. PHILLIPS
OCTOBER 22, 2008
Wall Street Journal Europe
With the collapse of last week’s Geneva Conference on postconflict Georgia, the mantle of leadership on economic and humanitarian aid in Georgia falls to the European Union, which plans to raise €1 billion at its donors conference with the World Bank today in Brussels.
Of course, Georgia needs resources to assist people displaced by its war with Russia and to restore its broken economy. But “smart support” means more than money. Donors can help consolidate Georgia’s governance and democratization by insisting on strict systems of transparency, accountability and conditionality. These goals can be achieved by monitoring the flow of foreign aid and linking reconstruction funds to democracy benchmarks.
Smart support would also help Georgia’s leaders. I was struck by the pervasive sense of unreality during my recent visit to Tbilisi. It is understandable that the Georgian government is bending over backward to create the appearance of “business as usual.” But it was remarkable to discover that many Georgians believe they actually won the war with Russia.
Make no mistake: Georgia’s defeat was a serious setback. The Georgian army was destroyed, demoralized and disarmed. Civilian economic costs of the war are estimated at $1.2 billion. Investor and consumer confidence has been undermined. The country’s territorial integrity is in tatters, with Abkhazia and South Ossetia lost for the foreseeable future. The war also took a terrible human toll: Hundreds of people were killed and more than 100,000 displaced.
While the West adamantly rejected joining Georgia’s war with Russia, it rallied to provide humanitarian assistance and foreign aid. Within days of the conflict, U.S. military air and sea transports were delivering emergency rations. After Sen. Joe Biden’s visit to Tbilisi in mid-August, the U.S. unveiled a $1 billion aid package. More than half of the money, $576 million, will be disbursed this year with a significant proportion devoted to budget support. Other U.S. funds will help rebuild housing, transportation and other infrastructure destroyed in the conflict. The EU has already pledged €500 million, or about $660 million, and has asked its member states to contribute an equal amount. The International Monetary Fund agreed to a $750 million Stand-By Arrangement with Georgia’s Central Bank. Even the Asian Development Bank, where China plays a dominant role, provided $40 million.
Georgia was a free-wheeling kleptocracy until the 2003 Rose Revolution brought President Mikheil Saakashvili to power. With huge sums in the pipeline, it is important to guard against a return to the kind of corruption that brought down the previous regime and which would have a corrosive effect on Georgia’s continued democratization.
To this end, a board made up of Georgian and donor-country officials should be established to help set priorities and ensure transparency and accountability. Donors should standardize criteria, as requiring Tbilisi to comply with multiple accountability systems would be onerous. Parliament, civil society and independent media can also help monitor foreign aid.
Measures are also needed to strengthen the Chamber of Control, a constitutionally authorized body that monitors the government’s budget. The Chamber needs more resources, stronger enabling legislation, greater professional capacity and active public oversight. Donors should also support NGOs to monitor performance.
The first tranche of U.S. money includes budgetary support, which is prone to misuse and should be avoided. Instead, donors should focus on specific projects to redevelop the economy and rebuild infrastructure. For example, Georgia needs assistance to develop its hydroelectric potential and thereby reduce its dependence on natural gas from Russia.
While early money for humanitarian assistance and stabilization must reach beneficiaries without constraint, donors should link the release of future funds with democracy benchmarks that emphasize Europe’s constitutional heritage of democracy, human rights and the rule of law. The challenge for Georgia is to build a strong and functioning state without compromising core democratic principles.
This goal is entirely consistent with Mr. Saakashvili’s freedom strategy, which he presented at the U.N. General Assembly last month. Democracy advocates in Georgia, such as the Young Lawyers Association, welcomed Mr. Saakashvili’s pledge of a “second Rose Revolution.” They insist, however, that the president should be judged by his actions — not his words.
They call for reform of Georgia’s 2004 constitution, which strengthened executive power and weakened the Parliament. They also seek the decoupling of the powerful Interior Ministry from the Security Ministry, as well as limits on the powerful prosecutor general. The parliamentary supermajority of Mr. Saakashvili’s National Movement compounds Georgia’s weak system of checks and balances by reducing parliamentary oversight, and all five nationally broadcast television stations are subject to government controls.
The opposition vigorously opposes Mr. Saakashvili’s plans to introduce a U.S.-style “Patriot Act” for Georgia. The president maintains that the legislation is needed to prevent Russia supporters from working through Georgian political parties to overthrow the Georgian government. The bill has been greeted skeptically by civil-society groups that are wary of restrictions on civil liberties, press freedom and freedom of expression. They insist that existing statutes provide adequate mechanisms to monitor foreign financial flows and ensure security.
The Georgian government would be more likely to sack such plans if the U.S. were to issue a public statement endorsing political and constitutional reforms. The EU can also reinforce democratic consolidation by affirming that human rights and democracy are nonnegotiable preconditions to eventual membership in Euro-Atlantic institutions.
Friends of Georgia must also warn Mr. Saakashvili against rhetoric and remilitarization that could provoke renewed conflict with Russia. Georgia will never get its territories back by force. For voluntary reconciliation to occur, Georgia has to be different — and better — than it was before the August war. It should focus on building an economically vibrant democracy with firm ties to the West. Becoming an open and tolerant European state, not an illiberal post-Soviet one, will make it a positive model that is attractive to Georgians, and potentially to Abkhaz and South Ossetians.
The Georgian government should welcome accountability and conditionality of foreign aid. Smart support requires an international partnership to help Georgia more effectively address the serious problems arising from its conflict with Russia.
Mr. Phillips is a senior fellow and director of the Forum on Georgia and the Caucasus at the Atlantic Council of the United States, as well as co-director of the Study Group on U.S.-Russian and Georgian Relations at Columbia University’s Harriman Institute.
Comments
No comments yet.
Leave a comment