Institute for War and Peace Reporting | Giving Voice, Driving Change

How To Fight Plutocracy

Even in developing democracies, political institutions remain vulnerable to capture by the super-rich.
By Ghia Nodia
  • Ghia Nodia, a professor of political science in Georgia's Ilia State University. (Photo courtesy of G. Nodia)
    Ghia Nodia, a professor of political science in Georgia's Ilia State University. (Photo courtesy of G. Nodia)

Georgia, Moldova and Ukraine have many things in common. Their political systems are much more open than those of many other post-Soviet countries and by opting to enter into association agreements with the EU, they have confirmed their strategic choice in favor of the European path of development. However, they are not developed enough to be called full democracies.

In particular, their weak political institutions are vulnerable to capture by super-rich individuals or groups. Fighting against oligarchic - or more accurately plutocratic - influence has become a priority for all three.

There are important differences between them, though. Moldova and Georgia were previously dominated by individuals who first became successful businessmen and then translated their financial resources into political power: Vlad Plahotniuc and Bidzina Ivanishvili. Neither of these leaders had official government positions (save for Ivanishvili between October 2012 and October 2013) but wielded effective power through control over majority parties within parliamentary systems: the Democratic Party (DP) and Georgian Dream (GD) respectively. Ukraine, on the other hand, had a system of plutocratic pluralism, with several super-rich individuals competing for influence, mainly through control over media and political parties. One of them, Petro Poroshenko, served as president.

This year Moldova and Ukraine achieved political breakthroughs through electoral methods, albeit in rather unconventional ways. In Ukraine, it took a political novice, a popular comedian with a very vague message, to mobilise a negative vote against the corrupt political elite. It was the absence of political experience that primarily convinced people Volodimir Zelensky was best qualified for the office of President: for most voters, experience implied corruption. The victory of his Servant of the People party in July 21 parliamentary elections solidified Zelensky’s mandate.

The Moldovan route appeared more traditional. Three parties came out on top in the February parliamentary elections: the DP, the openly pro-Russian Party of Socialists and the pro-European ACUM. Right at the very end of the constitutionally acceptable term, the opposition Party of Socialists and ACUM decided to shelve their deep political divisions and create a government. Plahotniuc was out.

It is too early to say how successful the new governments will be. It’s anybody’s guess what Zelensky’s leadership will bring to Ukraine; in Moldova, two very strange bedfellows may find it difficult to work together. However, the very fact that incumbents had to concede defeat in elections is far from routine in this region, and something to celebrate.

In Georgia, Ivanishvili and his GD party may be losing popularity, but this does not guarantee that they will lose elections. The presidential race last October served as an important test, even though within Georgia's constitutional system the president is a purely ceremonial position. A government-supported candidate won, but amid allegations of intimidation, vote-buying and occasional ballot-stuffing. Many drew a pessimistic conclusion: with these methods becoming the new normal, the government may simply not allow the opposition to win. Moreover, the existing mixed electoral system gives the incumbent a key advantage: in the 2016 parliamentary elections, the ruling party got 48 per cent of the vote in party lists but carried all single-mandate constituencies (73 out of 150 seats).

Recently, the government also scored an important victory in the media space. Back in 2017, the Georgian courts transferred ownership of the main opposition Rustavi-2 TV company to businessman Kibar Khalvashi, believed to be close to the government. Rustavi-2 filed a complaint to the European Court for Human Rights which ordered the suspension of the court decision until its final ruling. However, on the July 18 this year, the ECHR ruled that the Georgian courts had not violated the rights of Rustavi-2 and Khalvashi became the new owner. Whatever the legal merits of the case, the outcome is that media balance will change in favour of the government. There are other independent media outlets in Georgia, but none of them is close to Rustavi-2 in popularity and outreach.

Under these circumstances, street mobilisation appears to be a more successful instrument of resistance than traditional parliamentary politics. On June 20, Sergei Gavrilov, a Russian MP, led a session of the Interparliamentary Assembly of Orthodox Nations from the seat of the speaker of parliament. This caused public outrage. It appeared that the government had put a representative of the occupying power into the driver’s seat. Large demonstrations ensued, led by young people who denied any political affiliation.

The Gavrilov incident might have been a trigger, but the protests developed into a general denunciation of the incumbent government. The speaker of parliament, Irakli Kobakhidze, resigned. Most importantly, the government agreed to introduce a constitutional change according to which the next parliamentary election in October 2020 will be held based on a fully proportional system. Over this particular issue, GD had consistently ignored the opinions of civil society, the opposition, and the international community - but capitulated to the street.

This decision may be a game-changer. Nobody expects a level playing field in the elections, but while the ruling party will probably have a slim chance of an outright majority or will be able to attract enough partners for a majority coalition, the opposition will have a realistic chance to win as well.

But who is the opposition? At the moment, Mikheil Saakashvili's United National Movement (UNM) and European Georgia, its splinter group, are the main players. However, for a large part of the electorate both GD and UNM are equally unacceptable and there will be strong competition for this so far undecided segment.

On July 9, Mamuka Khazaradze, a businessman who ran out of favor with Bidzina Ivanishvili, announced he was going to found a new movement. Pundits started to speculate that this new player might be able to attract a large part of the undecided vote.

Exactly fifteen days later, however, the prosecutor’s office issued money-laundering charges against Khazaradze. The government claims this was just a coincidence, but an expectation was strengthened: Georgia will witness an especially dirty election campaign.

Ghia Nodia is professor of political science in Georgia's Ilia State University.

This publication was prepared under the "Giving Voice, Driving Change - from the Borderland to the Steppes Project" implemented with the financial support of the Foreign Ministry of Norway.

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