Georgian Rose Revolution - Reloaded?
Russian or Georgian Foreign Agent Law | Georgian Civil Unrest | Brawl in Parliament
Dear BWR Subscribers,
“Barbershop Whispers….Russia” begins with “My Takeaways” on the main topic, followed by the main topic discussion. The last two sections of “Barbershop Whispers…Russia” are “Follow-ups” regarding previous publications and “Quick Bites” briefly addressing emerging events.
In last week's BWR, I discussed Russian aluminum exports and the impact of tightening sanctions against Russian aluminum is having on the supply chain and markets.
In this week’s BWR, I will discuss Georgia’s use of Kremlin-like tactics. The ruling Georgian Dream party proposes Russian-like laws, which have caused civil unrest and brawls in the Georgian Parliament Chamber.
For more reading about Russia’s influence in the former Soviet space, see the BWR publication “Russia’s Near Abroad is in Play – Influence Competition” from September 2023.
Takeaways:
RUSSIAN INFLUENCE: Civil unrest in Georgia, sparked by the Georgian Dream Party’s parliamentary reading of the Foreign Agents’ Law, is a symptom of Russia’s influence in the region. The Georgian Dream Party claims the civil unrest is supported and initiated by the Western “Party of War”, but in reality, the unrest stems from a population and opposition party’s desire to align their economic future and country with Europe and the West rather than Russia. What does Russia have to offer Georgia other than occupation and war?
FOREIGN AGENT (Иностранный агент): Putin is successfully reviving and exporting Soviet-era ideas and labels. The return of the Soviet-era “Foreign Agent” label in Russia is a powerful psychological and legal weapon of oppression. Kremlin supporters of the law claim it to be no different from the US Foreign Agent Registration Act. A patently false claim in both spirit and practice.
EU ACCESSION: Georgia's path to EU membership will be long and challenging. The passage of the Foreign Agent Law will only add to the challenge and delay the membership.
Over the past several weeks, tens of thousands of Georgians have taken to the streets of capital Tbilisi chanting “No to the Russian Law” as they march through Heroes Square and protest in front of the Georgian parliament carrying Georgian and EU flags. Georgian Parliamentarians have broken out into brawls in the Parliament chambers.
The protests have been sparked by the ruling Georgian Dream party’s proposal to introduce the Foreign Agent’s law. It would require any organization that receives more than 20% of its funding from abroad to register as an agent of foreign influence. The ruling Georgian Dream party, founded and led by Georgian billionaire politician Bidzina Ivanishvili, says the law is needed to ensure transparency and Georgian sovereignty in the face of foreign influence. Ivanishvili claims the civil unrest is supported by the Western “Party of War”.
Ivanishvili made billions in Russia and allegedly purchased Pablo Picasso’s Dora Maar au Chat for $95M at an art auction in 2006. Forbes estimates him to be worth $4.9B and describes his business model as acquiring companies no one wants for tens of millions and then selling them for billions of dollars. Over the years, he has sold businesses he accumulated during the privatization era in Russia, and invested the proceeds in the Russian stock market.
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The proposed Georgian law is akin to Russia’s Foreign Agent Law. Similar laws have been passed in other post-Soviet countries aligned with the Kremlin. For example, a similar law was passed in 2014 in Ukraine under pro-Russian President Viktor Yanukovych (and later repealed after he fled the country). Kyrgyzstan and Kazakhstan have also passed foreign agent laws. The Kremlin and supporters of the Foreign Agents’ law claim it to be no different than the US Foreign Agents Registration Act. This claim is patently false in spirit and practice.
Putin has successfully revived old KGB tactics of influence and disinformation and exports this mechanism. The Foreign Agent label has its roots in the Soviet period. The Soviets used it to label political dissidents. Returning Soviet army prisoners of war were often jailed on suspicion of being “foreign agents.” The argument was that they had been infected with Western ideas.
Kremlin supporters of the Russian Foreign Agent Law argue it is no different from the American Foreign Agent Registration Act.
The Russian foreign agent law has its roots in the 2006 Russian law on nongovernmental organizations (NGOs), the precursor to today’s all-encompassing Russian Foreign Agent law, which is used to suppress the independent media (no longer exists in Russia) and any opposition to the Kremlin. For example, anyone who has worked with a “foreign agent”, including universities or NGOs, may be included on the Russian Ministry of Justice’s list of foreign agents. Technically, Russian Ministers, Central Bank of Russia board members, and Russian Sovereign Wealth Fund directors are eligible to be labeled as foreign agents because foreign entities have “influenced” them by way of association. They have received graduate degrees in the West or worked for foreign or international government agencies.
I recall in 2005, after establishing a Russian NGO and commercial entities with funding from the United States Agency for International Development (USAID), Russian government officials informally and strongly advised us to change the founders of the entities to Russian nationals. This advice proved critical in preserving the ongoing operations of both organizations post-USAID expulsion from Russia in 2012.
Georgia was accepted for EU accession talks in 2023, but if the draft law is approved, it will jeopardize the country’s path to EU membership, delaying talks at the very least. Gert Jan Koopman, director general of the European Commission’s enlargement directorate, warned that the bill would threaten Georgia’s EU membership.
“There are concerning developments in terms of legislation. The law … as it stands is unacceptable and will create serious obstacles for the EU accession path…the ball is very firmly in the court of the government,”
The Georgian government proposed a similar law last year but withdrew it because of civil protests. This time, the government is showing no signs of backing down.
In a December 2022 poll, 70% to 80% of Georgians expressed support for their country's accession to the European Union and NATO. While the country has a population of less than 4M, an estimated 1,000 to 2,000 Georgians have joined Ukrainian forces as volunteers to fight the Russian military.
Despite Russian occupation of the Abkhazia and South Ossetia regions, which account for 20% of Georgian sovereign territory, the Georgian government has become more conciliatory toward Moscow. In February 2022, the day after Russia began its invasion of Ukraine, then-Georgian Prime Minister Irakli Garibashvili angered Kyiv by saying his country would not join Western sanctions against Russia.
"I want to state clearly and unambiguously, considering our national interests and interests of the people, Georgia does not plan to participate in the financial and economic sanctions, as this would only damage our country and populace more,"
Recently, Prime Minister Irakli Kobakhidze, also head of the majority Georgian Dream Party, lashed out at the US and EU in posts on social platform X, amid pressure from the US and EU against the government’s legislation criticized as mirroring Russia’s “foreign agents’ law.” He accused a former US Ambassador of fomenting revolution in Georgia in 2020 and 2022.
Despite the statements of foreign influence, Kobakhidze hosted NATO Secretary Jens Stoltenberg and posted on X:
“Glad to host Secretary Stoltenberg, a good friend of Georgia. As an aspirant nation, Georgia has consistently demonstrated its commitment as a reliable and capable partner of NATO…”
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Kobakhidze should be careful not to become a target of the Foreign Agents’ Law, given his previous work with Western organizations, e.g., USAID, UNDP, etc., and his Western education.
Follow-ups & Quick Bites:
Follow-ups:
No follow-up this week
Quick Bites
Raiffeisen Bank International Attempted Russian Exit…Not!
Raiffeisen Bank International (RBI) has been considering a €1.5B equity purchase in the Austrian construction group Strabag SE, a company linked to sanctioned Russian oligarch Oleg Deripaska. The shares in Strabag SE would be purchased from an entity believed by the US Treasury to be effectively controlled by Deripaska, the ultimate beneficiary of the sale, and therefore, a violation of Western sanctions.
Österreichische National Bank (ONB—Central Bank of Austria) has warned RBI that the deal could have negative financial consequences if it moves forward without US Treasury consent.
The deal is RBI’s complex exit strategy from Russia. If the deal moves forward, the Strabag shares will be purchased via RBI’s Russian subsidiary, Raiffeisen Russia (RR). RR would then transfer the shares to RBI in the form of a dividend in kind, and RBI would hold the shares in an investment company owned by Stephan Zöchling, an Austrian entrepreneur who has worked for Deripaska in the past and acquired Sberbank Europe in 2023.
Macron and Cameron Troll the Kremlin
In an interview with The Economist this past week, French President Emmanuel Macron again did not rule out the possibility of sending troops to Ukraine. In an interview with “The Economist," he said if Russia were to break through the Ukrainian front lines and Kyiv requested Western troops, it would be a legitimate reason to deploy troops to Ukraine. Macron stated:
“I’m not ruling anything out because we are facing someone who is not ruling anything out.”
This was followed by a statement by British Foreign Secretary David Cameron during a visit to Kyiv this past week, in which he justified Ukrainian strikes inside of Russia. Cameron stated:
“Ukraine absolutely has the right to strike inside Russia because Russia is striking inside Ukraine … You can understand why Ukraine feels the need to defend itself.”
Kremlin spokesman, Dmitri Peskov responded to the comments by Macron and Cameron:
"The statements dangerous and escalatory…. important and very dangerous….Macron continues to constantly talk about the possibility of direct involvement on the ground in the conflict around Ukraine. This is a very dangerous trend.”
The Kremlin has been careful to avoid direct NATO conflict.
Vol 2, No 21 - BWR 05.05.2024
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