Wednesday, 05 May 2004

IMPLEMENTATION OF SAAKASHVILI’S NATIONAL REFORM PROGRAM IN IMERETI REGION

Published in Field Reports

By Theresa Freese (5/5/2004 issue of the CACI Analyst)

On 24 April, Gia Giorgadze, the former head of the governing bloc’s National Movement-Democrats office in Imereti region, officially became acting Kutaisi Mayor. The former mayor, Nugzar Poliani, had publicly announced his resignation four days earlier after several months of public pressure from a group of local NGOs, the regional prosecutor’s office, and the Ministry of Finance for alleged corruption related to his private business and abuse of state finances.

Since the Revolution, Mayor Poliani had been a lame duck: He had won his seat during the 2002 local elections as a member of the opposition party, New Rights, and then switched sides to support the former president, Eduard Shevardnadze, reportedly under pressure from the then-governing bloc, For New Georgia.

On 24 April, Gia Giorgadze, the former head of the governing bloc’s National Movement-Democrats office in Imereti region, officially became acting Kutaisi Mayor. The former mayor, Nugzar Poliani, had publicly announced his resignation four days earlier after several months of public pressure from a group of local NGOs, the regional prosecutor’s office, and the Ministry of Finance for alleged corruption related to his private business and abuse of state finances.

Since the Revolution, Mayor Poliani had been a lame duck: He had won his seat during the 2002 local elections as a member of the opposition party, New Rights, and then switched sides to support the former president, Eduard Shevardnadze, reportedly under pressure from the then-governing bloc, For New Georgia. On 6 December, Saakashvili replaced Imereti’s governor, Teimuraz Shashiashvili, with a National Movement leader, Davit Mumladze. Reportedly coerced by the new government, Mayor Poliani fired his administrative staff and deputy mayors, leaving Kutaisi (the seat of administration in Imereti and Georgia’s second largest city) bereft of leadership for months and under the de facto control of Governor Mumladze. New Rights opposition leaders claim that the forced resignation of Mayor Poliani is just one step by the new government to install pro-National Movement-Democrats leaders, continuing the former structure of top-down, one-party control.

When launching the topic of Imereti governance reform with Governor Mumladze on 19 April, he smiled, then pointed to the Protest Committee demonstration outside his window, and explained that a “series of reforms will occur very soon”. Mumladze emphasized that he fully supported the Protest Committee’s actions, noting that the public anti-corruption campaigns had stripped Poliani of any authority, leaving Kutaisi’s city government stagnant and functionless. Once the new mayor was appointed, Mumladze stressed, “If Giorgadze does not perform well he, too, will be replaced.”

The new authorities respond to any criticism by explaining that replacements are important for ensuring an active, transparent, and reliable government capable of implementing Saakashvili’s reforms. Moreover, new appointments will be through an open, transparent system.

Once the acting Kutaisi Mayor is installed, Mumladze expects serious governance restructuring and reform. In particular, the city administration would be reduced from 400 to 150 persons, replacing all positions with new staff. The governor had already replaced the eleven district Gamgebeli (heads of municipal authorities). However, further action at the regional and municipal level would follow national reform.

The anti-corruption campaign, led by General Prosecutor Irakli Okruashvili, is the most visible program to date in Imereti. Authorities conducted a series of high-profile arrests in March, including: The arrest of Bondo Shalikiani, a Kutaisi Sakrebulo (municipal authorities) member and well-known businessman who heads Kutaisi TV station, for illegal ownership of guns and explosives; (Shalikiani’s financial activities are under investigation and the Prosecutor’s Office expects him to pay approximately $7 million to the state budget for illegal activity.) the attempted arrest of Davit Benidze, a well-known New Rights representative of the Kutaisi Sakrebulo who escaped arrest and “disappeared”; the arrest of Nanuli Kiuti, the head of the Gumat-Hesse electro-energy station; and the arrests of two Kutaisi Automobile Factory directors who allegedly stole several million dollars from the factory and whose cases are awaiting decision. The regional prosecutor noted that several further cases of corruption are being investigated. Notably, a number of those being launched had been “frozen” under the old government and never fully investigated.

Authorities interviewed see the arrests not only as providing the Imereti region with a new leadership and as an attempt to clean society of corruption, but also as an effort to add money to the state budget. The Ministry of Finance directed all regional tax authorities to double collection in April. When combining the arrests with the tax authority’s active collection scheme, it appears the new government is trying to fill its coffers in advance of approval of the central budget and tax reform laws, both expected to be public in May. The Imereti tax authority highlighted that arrests had “instilled fear in the population and made tax collection easier”. The collection scheme is not based on real tax figures but on the assumption that under the former shadow economy tax officials pocketed taxes rather than put them into the state budget, while businesses and individuals either hid their taxes or paid protection money instead. A more accurate and transparent tax collection mechanism is expected to follow forthcoming legal reform.

Mumladze explained that the anti-corruption measures and arrests are an integral part of governance reform because one important criminal institution, known as avtoritet (authority), which prospered under Shevardnadze’s weak state, is being eradicated. Under the former government, if a dispute arose between two institutions, rather than turn to the court system, which could be prolonged and end in a negative result, individuals turned to avtoritets. Avtoritets resolved disputes for a fee and became empowered “top robbers”, widely known as the mafia, taking control over social mechanisms. Often, the former government protected avtoritets because they were both businessmen and government officials.

Further, Imereti police are now acting more professionally, responsibly, and transparently. Authorities arrested or replaced many high-level policemen linked with crime. At the same time, police are encouraged by a bonus and promotion system. Consequently, their notorious bribe collection system appears to have been curbed. The governor added despondently, however, that police corruption has not been tackled entirely since it “runs deep”.

For the moment, the anti-corruption campaign and high-profile arrests are having a tangible effect on Imereti. Criminal activities have decreased, tax collection has risen, and loyal leaders are being placed in government. The real test will begin after May, once economic, security, and government restructuring programs are implemented at a national level. In the meantime, Governor Mumladze hopes that his transparent endeavors to pave the way for comprehensive, national reforms will attract donor organizations, private investors, and international institutions to Imereti and assist in its long-term reform efforts.

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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