Corruption next in Georgian cleanup

Georgia's new president, Mikhail Saakashvili, wants to make the fight against corruption the centerpiece of his administration. He faces an awesome task.

During the administration of Eduard Shevardnadze, Georgia was run by a deeply entrenched bureaucratic network with ties to organized crime. Corruption became a way of life, causing widespread cynicism, eroding public confidence in government, and undermining the country's economic prospects. If Mr. Saakashvili is going to succeed, Georgians must play an active role as proponents of reform and guardians of accountability.

Over the years, Georgians grew resigned to their country's status as a borderline failed state. Citizens lost trust in state institutions with the erratic supply of essential services - such as electricity and water - further undermining confidence. A quarter million refugees became a living reminder of the government's inability to address unresolved separatist conflicts in Abkhazia and South Ossetia.

Under President Eduard Shevardnadze, Georgians became powerless to hold corrupt politicians accountable. While cronies prospered from bribery and kickbacks, more than half the population slipped below the poverty line and almost a quarter lost their jobs. Instead of resisting corruption, many Georgians survived by becoming stakeholders in the country's "shadow economy," which constitutes up to 80 percent of overall output. Smuggling and trafficking in drugs, guns, fuel, prostitutes, and children were widespread. But Georgians are fed up with the shadow economy's corrosive effect and many are prepared to make sacrifices in exchange for a fresh start.

Indeed, instead of the passive response Mr. Shevardnadze expected when he rigged parliamentary elections last November, tens of thousands took to the streets, insisting on new elections. When Shevardnadze resisted, Georgians demanded his resignation and ultimately a peaceful transfer of power ensued - the so-called "Rose Revolution."

Georgians were jubilant as Saakashvili was sworn in as president. To satisfy sky-high expectations, he must use his broad popular mandate to dismantle Georgia's corrupt power structure.

Saakashvili has already sent a clear message to deeply entrenched mafia networks and to the general population that he is serious about fighting corruption. Within days of his election, Georgian Special Forces landed in a helicopter outside a hospital in Batumi on the Black Sea; they stormed the building and arrested the former chief of Georgian Railways, who is charged with tax evasion. He has been joined in detention by other high-profile violators, the former energy minister and the chairman of the Georgian Football Association.

Though Saakahvilli's anticorruption campaign is off to a rousing start, a transparent process is essential to avoid the perception of political or personal motivation. (Russian President Vladimir Putin is using the fight against corruption as a way of jailing and intimidating potential political opponents.) Georgia's new government must take a long-term approach, emphasizing measures to strengthen institutions in the accountability framework.

To this end, the anticorruption campaign should be integrated into the World Bank's overall country assistance strategy with the goal of strengthening the Anti-Corruption Commission and its Coordinating Council. Adequate resources should be provided to the Ministry of Internal Affairs and, to ensure transparency, funding should be appropriated directly by the parliament and not the Finance Ministry. The national parliament, which has been particularly effective in exposing corruption and raising public awareness through public hearings, should continue its efforts, with emphasis on strengthening state audit procedures and harmonizing key legislation and regulations. Persons of the highest ability should be appointed independent of political considerations to spearhead the anticorruption campaign.

Georgia's large and dynamic civil society is one of the country's greatest assets. The government should emphasize effective community participation by those nongovernmental organizations (NGOs) with a reputation for integrity, who should evaluate the performance of government officials, monitor expenditures, and publish irregularities. Government audits should be publicized, using information technologies and an independent media.

Today, Georgians expect more from their government. Fed up with corrupt officials with whom they interact daily, from the corner policeman to the utility agent, they want Saakashvili to downsize the bloated bureaucracy and tackle patronage by enforcing the meritocracy principle.

To restore public confidence, Saakashvili must take steps to replenish the national treasury by collecting taxes and enforcing customs. Indigenous economic activity and foreign direct investment will remain stagnant until the new government improves the regulatory environment and streamlines licensing procedures, which have been a cash cow for corrupt officials.

Georgia's Rose Revolution is the most positive event to occur in the post-Soviet space in more than a decade. It represents a victory for liberal democracy over cynicism. The current euphoria will be short-lived, however, unless the new government is able to improve governance and crack down on corruption. Georgians can not be passive participants; Saakashvili needs their active participation to make Georgia a viable state.

David Phillips is a senior fellow and deputy director of the Center for Preventive Action at the Council on Foreign Relations.

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