Georgia at a Crossroads: Can the West Still Compete?

Following more than a month of protests, on 3 May 2024, the speaker of Georgia’s parliament signed off a controversial law on ‘transparency on foreign influence’, better known as ‘the Russian law’. The new legislation obliges all non-profit and media organisations that are receiving more than 20% of funding from abroad to register as entities pursuing foreign interests. The Georgian government insists that the law does not intend to crack down on critical voices but rather ensures transparency of funding. Yet, tens of thousands of protesters as well as the president of Georgia argue that the foreign agents law resembles Russian legislation introduced in 2012 and used against dissent. Many believe that the government will weaponise the law ahead of parliamentary elections scheduled in October 2024 in order to suppress media and watchdogs.

Georgia’s European Future at Stake

The backlash over the foreign agents law indicates that Georgia’s current political crisis is not just about the protection of civil liberties and independent media, but has broader geopolitical implications. Once a champion of democracy in the region, Georgia’s European future is now much more uncertain. The ruling Georgian Dream party is increasingly employing anti-Western rhetoric and claiming that Western funds are in some cases being used to encourage regime change in Georgia. The ruling party’s officials have gone as far as spreading conspiracy theories regarding the alleged existence of a ‘Global War Party’ that is pushing for a repeat of the Ukraine scenario in Georgia.

Georgia, which has remained consistently pro-European and pro-Western over the last two decades with over 89% of citizens favouring EU integration, has never experienced such a swift rise in anti-Western narratives. Ironically, this official mood swing is taking place at a time when Georgia has finally become an EU candidate country, with the prospect of opening accession talks with Brussels in the near future.

In light of recent developments and the country’s democratic backsliding, Georgia’s EU integration process is likely to be officially paused, as indicated by a number of EU officials. According to EU High Representative Josep Borrell, the foreign agents law is ‘incompatible with European values’. On 24 June 2024, following a Foreign Affairs Council meeting where political developments in Georgia were discussed, Borrell clearly reiterated that unless the Georgian government changes its course of action, Georgia will not progress on the EU path. Moreover, in response to the foreign agents law, the EU is considering downgrading diplomatic relations with Georgia and freezing financial aid to the government. Yet, the law is only one example out of a set of divisive laws that the Georgian government has adopted or intends to adopt soon, making the country’s EU integration dream even more distant.

Recently, the Georgian parliament bypassed the presidential veto over the so-called ‘offshore law’ which intends to encourage asset transfers from offshore accounts to Georgia through exemption on taxation until 2028. The law threatens to make Georgia a target of money laundering activities, especially from sanctioned individuals. On 4 May 2024, just a day after the foreign agents law was finally approved, the ruling party brought another piece of legislation forward targeting LGBT propaganda. This initiative comes from the same anti-Western playbook, with the government accusing Western partners of using local NGOs to spread LGBT propaganda.

Despite the unwillingness of the government to listen to tens of thousands of protesters tirelessly rallying in the streets of Tbilisi to protect Georgia's European future, much remains uncertain in the run-up to this year’s elections. The government of Georgia has been increasingly looking for alternative strategic partners such as China, emphasising the economic benefits of bringing Chinese investment into the country. Recently, the Georgian government announced that a Chinese consortium had won the much anticipated major strategic Anaklia deep sea port project. Yet, given overwhelming support for Georgia’s EU integration, it does not appear that Georgians see China as an alternative to the West and the billions of dollars of investment that Western countries, particularly the US and the EU, have made in democracy-building efforts in Georgia. Thus, the stakes could not be higher for the upcoming 2024 parliamentary elections, which will largely be about a choice over Georgia’s foreign policy trajectory.

How Can the West Respond?

The turbulence in Georgia is a reminder to the EU of how state policy can drastically shift during the protracted waiting periods for European candidacy, particularly when reinforced by rival authoritarian states interfering in domestic politics through disinformation, corruption and hard power coercion. Moreover, for the West as a whole, it is a stark warning that promises of integration are no longer enough to incentivise cooperation amid lucrative Chinese economic incentives in the form of development projects and with Russia waging potent disinformation campaigns that are effectively distorting public opinion towards Western values.

This tug-of-war between the West and the rest is particularly noticeable in Georgia and the wider former Soviet Union (FSU). The South Caucasus and Central Asia stand at the crossroads of Europe and Asia, and influence in these regions is key to accessing Eurasia, with the Middle Corridor developing into one of the fastest growing inter-state trade networks. Naturally, this has caught the interest of both the East and the West, with both looking to expand into Russia’s former sphere of interest. However, Western expansion is currently restricted by several factors. First, Russia’s geographic position and historic economic links within these regions still incentivises cooperation. Second, the amount of money that China is willing to throw at development projects within the FSU dwarfs what the West has offered so far. Third, there is growing evidence of state capture in several states in the FSU, such as Georgian Dream’s increasing control over Georgian institutions and media with the aim of limiting external influence from unwelcome parties, which now include the EU.

Despite these limitations, the fact remains that with Russia embroiled in Ukraine, the West has an opportunity to get its foot in the door in the FSU. Currently, the momentum is negligible, as exemplified by UK Foreign Secretary Lord Cameron’s visit to Central Asia, culminating with a commitment of £50 million for ‘assistance’ to the region. Meanwhile, Russian President Vladimir Putin’s recent visit to Uzbekistan saw over £300 million invested in the construction of a nuclear plant, a far more concrete contribution that will pay much larger political and economic dividends in the future. Similarly, France’s supply of military equipment to Armenia has done far more to influence the South Caucasus than the many years of EU ‘peacekeeping’ along the Armenia–Azerbaijan border. If the West wants to increase its influence in the FSU, it must focus on what tangible benefits it can provide and be prepared to foot the bill.

Within the emerging multipolarity of the FSU, there are clear limits to the effectiveness of current EU integration policy. Decades of waiting for approval has empowered individuals with vested interests to extend their influence in domestic politics, while allowing authoritarian powers the time to sway opinion through development projects, economic investment, and disinformation campaigns. Now is the time for a policy reassessment to understand what the EU can tangibly offer these regions that can compete with Russia and China’s authoritarian advantage.

Conclusion

Georgia’s drastic policy shift threatens to further destabilise the geopolitical balance in the South Caucasus. What was once a hub of pro-Western democracy has been swayed by the allure of populism, likely amplified by the geopolitical interests of Russia and China. Despite Georgian Dream’s legislative crackdown, many in Georgia still hold European aspirations, setting the scene for what will be a critical election for the future of Georgia later this year.

This is an opportunity for the West to demonstrate its worth in the South Caucasus and the wider FSU. Geographic proximity, existing economic links, and an authoritarian focus on development projects mean that there is little that Western powers can do to incentivise these states to completely sever ties with Russia and China. The sooner multipolarity in the region is embraced, the more quickly Western foreign policy can begin to compete with expanding Russian and Chinese influence.

The views expressed in this Commentary are the authors’, and do not represent those of RUSI or any other institution.

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