Stakes Climb in Georgian Budget Rift

Repost from EurasiaNet: January 9, 2003

by Jaba Devdariani

Georgian President Eduard Shevardnadze fired a fresh salvo January 8 in an escalating struggle with his political opponents, threatening to veto legislation with greater frequency. Shevardnadze’s threat came after parliament rejected the president’s draft 2003 budget. Political observers attribute the budgetary battle to election-year politics, as both Shevardnadze and his critics struggle for campaign advantage in the upcoming parliamentary vote this fall.

The latest round of political infighting began December 28, when Shevardnadze’s power base, the Citizens Union of Georgia, amassed 116 votes for the president’s draft 2003 budget, two short of the total required to secure adoption. Two days later, the Finance Ministry announced that it would resubmit its draft without major changes and the president accused opposition deputies of caring “more about their careers than about their country.”

This aggressiveness is a reflection of the intense political rivalries currently prevailing in Georgia, where former Shevardnadze allies Mikhail Saakashvili and Zurab Zhvania have joined reformist parties and are striving to position themselves for presidential bids in 2005. When Shevardnadze addressed parliament on January 8, he charged that “a shameless amount of time is spent on issues that parliament does not need to discuss at all.”

After a subsequent meeting with the president, Parliament Speaker Nino Burjanadze told reporters that “the president is often presented with incorrect information about parliament’s work,” adding that she rejected some of the presidential criticism. Burjanadze has said that parliament may take up the draft budget again on January 15. Failure to secure passage on the second attempt would deal an embarrassing blow to Shevardnadze’s government, especially to State Minister Avtandil Jorbenadze, who is responsible for shepherding the budget through parliament.

Shevardnadze continues to deny the opposition’s strength. The president argued that the budget rejection was accidental, claiming that “two or three members of parliament [supporting the draft] were late to show up [on session].” Some observers, though, say that the 116 votes cast for the budget do not represent a stable pro-presidential majority. Rather, these experts say, State Minister Jorbenadze managed to collect the 116 votes by appealing to diverse and, frequently, personal ambitions of some undecided political forces.

The Socialists voted for the budget after their leader, Vakhtang Rcheulishvili, announced his intention to cooperate with Citizens Union on November 26 and won the title of President’s special representative for the South Ossetia. Aslan Abashidze, the head of the breakaway Ajaria region who backs the Revival Union, also cut a concession deal with Jorbenadze on December 25, establishing a working group and deferring the question of tax payments from the separatist region. Both of these deals are highly controversial and risky for the State Minister.

They also failed to get the draft budget through on its first vote, which observers say had been Jorbenadze’s goal. After this maneuver failed, Jorbenadze faced heavy fire from the opposition. Even Speaker Burjanadze, who has a reputation as a moderate, openly criticized Jorbenadze for an “unconstructive,” overly pushy approach to the budget review process. The move may have cost Jorbenadze (and by extension Shevardnadze) some budgetary authority.

Zhvania, the United Democrats leader who declared his presidential ambitions in October 2002, became a prominent voice in the budget debate. The United Democrats proposed to raise the minimum monthly salary from 25 to 115 lari, or approximately $75. Parliament rejected a bid to hinge budget debate on this measure, but Mikhail Machavariani of the United Democrats argued that the administration’s proposed tax increase of 210 million lari can cover the change. The tactic put Shevardnadze’s team in the uncomfortable position of arguing against increased social spending.

There are signs that the opposition’s stridency has led Shevardnadze to moderate his strategy of ignoring other parties. The president continues to abstain from any personal consultations with the opposition and, as his recent remarks in parliament show, he chooses consistently confrontational language for his most ardent opponents. In November, Shevardnadze declined to remove a Tbilisi mayor who had received a vote of no-confidence from the city council, which Saakashvili heads.

Zhvania met with the president on December 22 to push for a minimum-wage increase. This was the first meeting between the two men since Zhvania resigned as parliament speaker in late 2001. However, Zhvania subsequently accused Shevardnadze of “lying” to him during the meeting. Hostility between Shevardnadze and the opposition shows little sign of abating in the coming weeks.

Some observers say Shevardnadze hopes to buy the votes he needs with promises of increased transfers from the state budget. Another tactic by the president would be to play on internal rifts within the opposition, which has proven effective in the past. In the current context, though, the main weight of the opposition is outside of the parliament. The National Movement, Labor, New Rights and United Democrats are all growing parties with stronger representation in local governments than in parliament. Citizens’ Union finds itself in the opposite situation: it failed to clear the 4 percent barrier in Tbilisi local elections in June but retains significant representation in the national parliament. Moreover, opposition parties might suspect that cutting deals with the vulnerable government would hurt their reformist image. If Shevardnadze continues with his confrontational tactics, he may prompt opposition parties into closer coordination.

Even if the government pushes through its budget in January, then, Georgia faces risks of increasing instability during the spring as the election campaign begins to heat up. The political establishment’s need to manage the budget process without thwarting democratic institutions will probably delay reforms in anti-corruption and national security policy. If the government resubmits the draft budget without major changes, and parliament rejects this budget, it may sow confusion as to who among Shevardnadze’s administration, the parliament, and local governmental institutions would take the lead in setting the country’s policy agenda.