In March 2023, the “Foreign Agent Law”, which was put to a vote in the Georgian Parliament and suspended after being met with harsh reactions by Western governments and local non-governmental organisations (NGOs), was put to a vote again in May 2024 and passed the parliament. The law, which was expected to enter into force, was evaluated as “an attitude against democracy” by various governments, especially the United States of America (USA), and an important development took place on 31 July 2024. This was the US decision to stop financial aid to the Georgian Dream Party (GRP) in Georgia.
At a press conference on 31 July 2024, US Secretary of State Antony J. Blinken announced that the US stopped its $95 million aid to Georgia due to the “Foreign Agent” law adopted by the Georgian Parliament on 23 May 2024.[i]
This step seems to be mainly targeted at the Georgian government. The rationale given was that these Georgian initiatives were “anti-democratic actions” and “incompatible with the norms of EU and NATO membership”. The US will continue to assist programmes and activities that benefit the people of Georgia by strengthening democracy, the rule of law, independent media and economic development.
US Ambassador to Georgia Robin Dunnigan, in a statement dated 1 August 2024, reiterated the absolute support of the American people for “the people of Georgia” and said, “I hope that we can get back on track and that the Georgian government can take some important steps to help us achieve this.”[ii]
This intergovernmental tension stems from the fear of more transparent control of donations to NGOs once the law comes into force. Since the “colour revolutions” that Western states have carried out in order to establish hegemony and to bring pro-Western governments to power have been carried out through NGO-based initiatives, the creation of a possible artificial crisis in Georgia could trigger the breakdown of the country’s political and social order and serve as a warning to the GRP.
Georgian parliamentarians were quick to respond to this US move. Irakli Kadagishvili, Chairman of the Committee on Statutes and National Issues of the Georgian Parliament, in his statement on the US move, emphasised that the appropriations and salaries of state institutions are not financed by external factors.[iii]
On the other hand, the US suspension of aid could have a negative impact on the Georgian economy in the run-up to the parliamentary elections, causing the ruling GRP party to lose credibility in the eyes of the electorate. On 4 August 2024, Georgian Prime Minister Irakli Kobakhidze stated that it is “imperative” for US partners to take positive steps in accordance with Georgia-US relations. According to the Georgian Prime Minister, the Tbilisi government, while taking steps towards the United States, stated that this situation is not reciprocal.[iv] Georgia’s main idea is to “restart relations” with a view to rectifying the setbacks of the last four years of US-Georgian relations.
The resetting and rebuilding of relations with the United States by the Georgian government officials is a sign that the current situation is irreversible and intractable. The correction of the current situation may mean that Georgia will compromise on the legislation it has introduced and significantly move away from its balanced regional policy. A reset of relations could be considered in order to prevent negative repercussions on the growth rate of the country’s economy and to increase the likelihood that the GRP will be able to present its options to the United States in a diplomatic framework.
This attitude of the GRP is aimed at preventing possible economic or political crises before the elections. Because, according to the information provided by Prime Minister Kobakhidze, the growth rate of the country’s economy in January-June 2024 was 9%, which was the best rate in Europe and the wider region. It is thought that the upcoming parliamentary elections in Georgia, where the growth index of the economy is expected to continue, will be determined by the reflection of the US-centred Western-Georgian relations on the economy and society.
On 29 July 2024, Prime Minister Kobakhidze stated on Imedi television that NGOs, together with political parties, directly participate in election campaigns with non-transparent money received from donors and stressed that Georgian politics cannot be financed from outside the country with non-transparent money and that this is contrary to constitutional principles.[v]
It is aimed to resolve the tension, which is thought to be resolved behind closed doors, before the elections. In case of a possible failure to reach a compromise, it is thought that the NGOs supported by the West will make pre-election propaganda against the GRP. At the same time, it is foreseen that there will be an aim to influence the elections even indirectly in the economic context.
Another crisis to be created in US-Georgia relations is expected to be through Iran-Georgia relations. Georgian Prime Minister Kobakhidze rejected the criticisms against his attendance to the inauguration ceremony of the new Iranian President Pezeshkian, emphasising that high-level officials of the UN and the EU also attended this ceremony.[vi] Considering that the critics are the opposition in Georgia, it is thought that the US and the pro-Washington EU countries will be uncomfortable with the positive progress of Iran-Georgia relations in the region and will have negative effects in the political context.
It is foreseen that the West will try to undermine the GRP’s neutral and balanced position in the Russia-Ukraine war, that a similar situation will be repeated in the Israel-Iran conflict, and that political threats will be imposed by the West to negatively affect Israel-Georgia relations. However, this situation can also be expected to lead to disputes between the far-right governments in the West and the pro-US EU governments.
In conclusion, the current conjuncture of Georgia, due to its rising position in the geostrategic and geopolitical context, pushes it to a regional “forced choice” position and points to the process of transformation into an investment centre by both Western and Eastern states. However, the US attempts to have a say in the region both indirectly through the EU and NATO and directly within the framework of the integration norms imposed by the US may trigger economic negativities in Georgia. The aforementioned “Foreign Agent” law and the possible development of Iran-Georgia relations may be the target of economic threats by the West and especially the US. This may also lead to the possibility of pushing existing foreign investors and capital out of the country.
[i] Antony J. Blinken, “United States to Pause Assistance to the Government of Georgia”, U.S. Deparment of State, https://www.state.gov/united-states-to-pause-assistance-to-the-government-of-georgia/, (Access Date: 05.08.2024).
[ii] “US Ambassador reiterates “absolute” support for ‘people of Georgia’”, Agenda.Ge, https://agenda.ge/en/news/2024/40065, (Access Date: 05.08.2024).
[iii] “Parliament official says pensions, salaries of Gov’t agencies not funded from abroad after pause in US financial support”, Agenda.Ge, https://agenda.ge/en/news/2024/40089, (Access Date: 05.08.2024).
[iv] “Georgian PM: it’s ‘essential’ to see appropriate actions from US partners in response to steps taken by country”, Agenda.Ge, https://agenda.ge/en/news/2024/40083, (Access Date: 05.08.2024).
[v] “Kobakhidze talks about: the president, the opposition and non-governmental organizations”, Georgian Buisness Consulting, https://www.gbc.ge/en/news/politics-news/kobakhidze-talks-about-the-president-the-opposition-and-non-governmental-organizations, (Access Date: 05.08.2024).
[vi] “Georgian PM rejects criticism on joining Iranian President’s inauguration by highlighting presence of ‘regional leaders’, EU, UN officials”, Georgian Buisness Consulting, https://www.gbc.ge/en/news/politics-news/georgian-pm-rejects-criticism-on-joining-iranian-presidents-inauguration-by-highlighting-presence-of-regional-leaders-eu-un-officials, (Access Date: 05.08.2024).
