“Georgian Dream Meets Reality: The Coalition’s First Term and Future Reform Prospects”

“Georgian Dream Meets Reality: The Coalition’s First Term and Future Reform Prospects”

Ariel Cohen, Ph.D., and Ivan Benovic

October 2016


Executive Summary  

Concluding its first four years in power, the Georgian Dream coalition government has reformed and changed many aspects of Georgia’s public life. The coalition has not only continued along the path toward reforms initiated by Mikheil Saakashvili’s team, but has successfully furthered the fight against corruption, furthered initiatives in the healthcare, education and justice sectors, overhauled the tax and welfare systems, and amended the labor code. This has made healthcare more accessible to the average citizen, rendered the tax system more attractive for entrepreneurship and the welfare system more just, enabled the school system to better meet the needs of employers, and improved the protection of workers’ rights. In addition, an Association Agreement was signed and a free-trade area with the European Union established, further integrating Georgia with the West.

As a result of these efforts, since 2012 Georgia has enjoyed stable and increasingly inclusive economic growth, and seen a substantial decrease in the poverty rate. Since 2014, foreign direct investment continued to flow into the country, making Georgia an attractive regional hub for foreign capital.

Georgia is on track to overcome its Soviet past and prosper. It is now, therefore, crucial that the U.S. and the EU ensure that Tbilisi maintains the momentum of the reforms. Despite its success to date, the prospects for further Georgian progress are still fragile, and much depends on continued foreign assistance. The U.S. Government should contribute to ensuring that the achievements of Georgia’s past four years become a stable and integral part of Georgian society. In particular, the U.S. Government should:

  • Pursue a free trade agreement between the U.S. and Georgia
  • Support more academic exchanges and legislative visits
  • Promote visa liberalization with Western countries
  • Assist Georgia in reaching out to occupied Abkhazia and South Ossetia
  • Further support the fight against corruption
  • Support English language education
  • Combat the influence of anti-Western voices and Russian anti-Western propaganda in Georgia
  • Further invest in Georgian NGOs and training for Georgian journalists
  • Increase funding for the Overseas Private Investment Corporation (OPIC) to facilitate U.S. foreign direct investment (FDI) in Georgia
  • Support the independent business dispute resolution system