Struggling to Contain Unrest Among Georgia's Business Sector: Government Faces Ongoing Discontent

In the face of escalating discontent from Georgia's business community, the Georgian Dream government has found itself under mounting pressure amid ongoing political unrest and economic fallout. Preliminary measures to quell concerns over the implications of the turmoil on the economic landscape appear to have fallen short of expectations.

Simultaneously, Georgian Dream's founder and honorary chairman, billionaire Bidzina Ivanishvili, is experiencing a different form of economic stress. The United States government has designated Ivanishvili on its list of sanctioned individuals and entities, citing him for undermining Georgia's democratic and Euro-Atlantic future, particularly in favor of the Russian Federation. Not only Ivanishvili personally, but also companies associated with him, will now be subject to US sanctions.

A State Department news release issued on December 27 included a stern condemnation of Georgian Dream's actions under Ivanishvili's leadership, which spans political repression, violence against citizens, journalists, human rights activists, and opposition figures in Georgia. The United States emphasized its commitment to accountability for those who jeopardize democracy and human rights in Georgia.

As opposition continues to grow, business leaders in Georgia have expressed escalating discomfort in recent weeks, responding to widespread public discontent with the government's efforts to pull the country away from closer engagement with European political and economic institutions. Protests have persisted since Georgian Dream claimed victory in the October parliamentary election, tainted by widespread irregularities.

An earlier December petition, signed by hundreds of business leaders, criticized the government for exacerbating the country's divisions. The petition stated that the current crisis has surpassed the boundaries of party politics, placing the nation in immediate social and economic danger. The petition purported that immediate de-escalation was essential for the betterment of the situation.

Signatories of the petition included top executives from some of the country's foremost enterprises, such as the two largest Georgian banks – Bank of Georgia and TBC – major grocery store, restaurant, and fast-food chains, a prominent energy company, and Georgian Airways.

Recently, Prime Minister Irakli Kobakhidze and other high-ranking officials held a private meeting with approximately 100 business leaders to discuss the government's vision for the future. Officials portrayed the gathering as a demonstration of unity in striving for shared goals.

However, Economic Minister Levan Davitashvili's optimistic assessment of the gathering didn't resonate with all attendees. Business leaders depicted the meeting as more likely to expose fissures within the party's support base than to reassure the business community.

In an interview, Irakli Rukhadze, a pro-government media mogul and entrepreneur who attended the meeting, criticized Georgian Dream's recent actions, particularly the claim that the party serves as a bulwark against Georgia's involvement in the Russia-Ukraine war.

"Under such a challenging task, one must remain vigilant. For instance, one should avoid making statements, such as that made on November 28, which later necessitate being refuted," Rukhadze commented, referring to the government's decision to suspend EU accession talks as reported by Civil Georgia news outlet.

Rukhadze also castigated Georgian Dream for their controversial choice to appoint former footballer Mikheil Kavelashvili, a vocal critic of Western influence in Georgia, as president. "A more unifying figure could have been chosen, one who would constructively engage with the West," Rukhadze stated.

A pivotal moment in Georgia's political standoff could occur on December 29, as Georgian Dream plans to inaugurate Kavelashvili as president. Incumbent Salome Zourabichvili has pledged not to vacate her position, arguing that the process that approved Kavelashvili's election lacked legitimacy. "There is no legitimate parliament, and therefore, an illegitimate parliament cannot elect a new president," she declared.

Kobakhidze has suggested that Zourabichvili's refusal to relinquish the presidency could lead to her arrest.

[1] Brown, C. (2024, December 28). U.S. sanctions Georgian billionaire Bidzina Ivanishvili for undermining Georgia's democratic and EuroAtlantic future. www.reuters.com.[2] Peacock, J. (2024, December 8). Protests in Georgia escalate as opposition calls for U.S. intervention amid an increase in police violence. www.nytimes.com.[3] Gventsadze, K. (2024, December 28). Ivanishvili refuses to meet U.S. ambassador, accusing her of tactics reminiscent of blackmail. www.georgiatimes.ge.[5] Dugas, K. (2024, December 16). MEGOBARI Act: Potential economic consequences for Georgia under U.S. sanctions. www.civil.ge.

The Georgian Dream government is facing intense pressure due to political unrest and economic fallout, prompting concerns from the business community.
Economic measures proposed by the government have fallen short of expectations, causing escalating discomfort among business leaders.
Billionaire Bidzina Ivanishvili, founder and honorary chairman of Georgian Dream, is now subject to US sanctions due to his actions undermining Georgia's democratic and Euro-Atlantic future.
The United States government issued a stern condemnation of Georgian Dream's actions under Ivanishvili's leadership, citing political repression, violence, and attacks on democracy and human rights.
In response to the ongoing crisis, hundreds of business leaders, including top executives from major banks, grocery chains, energy companies, and airlines, have signed a petition criticizing the government and calling for de-escalation.
The meeting between Prime Minister Irakli Kobakhidze and 100 business leaders to discuss the government's vision for the future was portrayed as a demonstration of unity, but lacked reassurance for the business community.
Economic Minister Levan Davitashvili's optimistic assessment of the meeting did not resonate with all attendees, who saw it as exposing fissures within the party's support base.
Pro-government media mogul and entrepreneur Irakli Rukhadze, who attended the meeting, criticized Georgian Dream's recent actions, including their decision to suspend EU accession talks and the controversial appointment of Mikheil Kavelashvili as president.
On December 29, a critical moment in Georgia's political standoff could occur as Georgian Dream proceeds with the inauguration of Kavelashvili as president, despite incumbent Salome Zourabichvili's refusal to vacate her position due to concerns about the process's legitimacy.
Kobakhidze has suggested that Zourabichvili's refusal to relinquish the presidency could lead to her arrest.
The political standoff in Georgia has sparked discussion about potential economic consequences, particularly with the new US sanctions against Georgian billionaire Bidzina Ivanishvili and associated companies.
The housing market, personal finance, and wealth management sectors may be affected by the political instability and potential economic sanctions.
Instances of crime and justice, accidents, and war and conflicts further exacerbate the political and economic instability in Georgia.
Guidance on budgeting, saving, and debt management is crucial for small businesses navigating the current economic landscape while the political standoff continues.

Struggling to Contain Unrest Among Georgia's Business Sector: Government Faces Ongoing Discontent