Unrest in Georgia over the “Foreign Influence Transparency Law”: “Whichever Way We Go Is a Step Back”

The outsized role that foreign-funded NGOs play in Georgia’s politics, policy-making, and public services has led the country into a chronic crisis of its democracy. 

There is a massive problem at the heart of Georgia’s peculiar political economy. It goes back a quarter of a century, predating the 2003 Rose Revolution. The late president Edvard Shevardnadze had given foreign aid agencies great leeway, so towards the end of his feckless and corrupt rule, NGOs were already a vocal presence in the country’s political discourse and maintained confident relationships with international donors. After years of turmoil and state collapse, Georgians with ideas and convictions had seized the moment to shape their society. It felt fresh, energetic, if driven more by social entrepreneurs than broad-based grassroots movements. After Shevardnadze’s former minister of justice, Mikheil Saakashvili, deposed him in the Rose Revolution, NGO professionals quickly filled senior government posts. The country’s policy space was thrown wide open to any and all foreign-led aid and reform experiments. The calculation behind this was that the net geopolitical and material benefits would far outweigh any drawbacks.

Consistently high foreign aid flows followed, and bilateral aid programs, the World Bank, UN agencies, international development aid groups small and large, and even private Western philanthropies opened well-staffed offices in Tbilisi. To spend all their money, implement their projects, and tick the box saying “consultation and collaboration with the community,” they all needed local NGOs. Demand creates supply, and today, more than 25,000 NGOs are registered in Georgia. According to Georgian authorities, 90% of their funding comes from abroad, but this average conceals that the vast majority of Georgian NGOs have no local funding at all. They would probably find the very notion of asking locals for money absurd, and if they gave it a try, in their current shape and form, they could hardly win fellow Georgians’ support.

Foreign aid agencies and their local NGO contractors have long colonized most areas of public policy and services—education, healthcare, court reform, rural development, infrastructure, etc. 

In practice, this plays out something like this: a major development aid agency or international lender, for example, USAID, the European Commission, or World Bank, has come up with a new model for education reform, which it now plans to roll out not just in Georgia, but typically in a whole host of countries. To give it a veneer of community participation, the aid agency contracts Georgian NGOs to do the everyday footwork: introduce this or that new way of doing things to officials, schools, and teachers and train them in the new skills they supposedly need. No one at this or any other point asks teachers, parents, students, or, for that matter, the electorate at large, what they need and want and how they would improve things. People are left feeling unheard, ignored, patronized – and also inadequate when they fail to reach the benchmarks all this training was supposed to achieve.

The Georgian NGOs that are given grants to implement this work may be local, but they hold considerable power over the Georgian population. This power comes from their access to Western embassies and resources and the legitimacy this conveys rather than from grassroots support. In a functional democracy, the people elect lawmakers and the executive to serve them and represent their interests. In Georgia, unelected NGOs get their mandate from international bodies, which draw up and pay for to-do lists of policy reforms for Georgia. Local NGOs lack an incentive to consider the impact of the projects they implement because they are not accountable to the citizens in whose lives they play such an intrusive role. 

This constellation has eroded Georgian citizens’ agency and the country’s sovereignty and democracy. 

However, the draft law on “foreign influence transparency” tabled by the Georgian government for the second year in a row will not address this massive problem at the heart of Georgia’s political economy. It is not even intended to address this problem. The Georgian government doesn’t really care about Georgia’s sovereignty, and neither do the foreign donors and aid agencies nor the Georgian NGO elite. 

Georgian Dream, the party that has been in power since 2012, has no intention to eradicate all foreign funding from the Georgian political economy. Quite the contrary, they are perfectly happy with the continued flow of foreign aid and how the donor-NGO-industrial complex churns out policies and (sort of) services. Georgia’s politics may be notoriously polarized, but Georgian Dream and most of the opposition parties are remarkably unanimous in their ideology: they all believe in technocratic, neoliberal, de-politicized governance, in which policies are designed by (foreign) experts drawing on supposedly objective data and technology. The more public services can be given over to the market, the better. 

This is illustrated by the fate of the Liberty Act, landmark legislation that prohibits tax rate increases and progressive taxation and caps government spending at 30% of GDP. It was enacted by Saakashvili, has not been repealed in 12 years of the Georgian Dream rule, and Transparency International Georgia (the most implacable of the partisan NGOs leading the protests against the Georgian Dream) has campaigned to keep it.  These political camps may fight tooth and nail over who gets to run the country, but then they all run it in the same way.

The continued outsourcing of policy-making, governance, and service provision to foreign aid donors, local NGOs, and the market suits the tastes of Georgian Dream’s leading cadres. Many of them studied in the West (typically law or public administration) on Western scholarships and started their careers in UN offices, bilateral aid agencies, and, yes, local NGOs. They are drawn from the NGO-professional-managerial industry, which functions as the largest social lift into the middle class (more accurately, the top 10%) in a country where academia, medicine, law, science, or entrepreneurship do not afford middle-class status or lifestyles. Georgian Dream’s leaders’ resumés are much the same as those of their fiercest opponents in the foreign-financed NGO sector. 

In this ecosystem, it is rare to find someone who genuinely cares about people and their well-being. The local NGO landscape is a deeply competitive sector that incentivizes sharp elbows, self-promotion, and duplication rather than collaboration, let alone solidarity. For many industry professionals, working in an NGO is a fast track to high incomes, perks like foreign travel and embassy receptions, and being part of the elite. 

If the Georgian Dream is all for technocratic, depoliticized, donor-driven Ersatz-governance and maintaining the large, foreign-funded NGO sector it requires, why would it risk protests at home and pressure from the EU and US to pass a so-called “foreign agent” law?

Because atop that massive problem at the heart of Georgia’s political economy sits another, much more limited problem, which is a major irritant to the Georgian Dream: a small but powerful clique of NGOs with annual budgets of up to millions of dollars/euros from foreign donors, some of them close to the previous government of Mikheil Saakashvili’s United National Movement, who use their perch to engage in openly partisan politics. For some five years, they have been denying the government’s legitimacy and calling for its ouster, and not just by supporting the opposition in elections, which already crosses ethical red lines for non-governmental organizations (and even more so when they’re funded by foreign states). They agitate for a revolutionary change of power outside democratic, constitutional processes. Previously, they demanded to be put in power as a technical government, but since no one (certainly not the Georgian electorate) picked them up on that offer, they have been venturing into street protests and storming parliament and government buildings. For good measure, they lobby the EU and US to sanction Georgian Dream leaders or slap travel bans on them. 

Georgia’s “foreign agent” law, first tabled in spring 2023 and in its 2.0 version renamed the “law on foreign influence,” aims squarely at this hyper-partisan cluster of well-funded NGOs. There are many theories, some more baroque than others, for why Georgian Dream tabled this draft bill again a year after the abandoned first attempt. One of them is that Georgian Dream expects to win at arm-twisting this time because they consider the opposition weak. Another reason, cited by the Georgian Dream itself, is that for the past year, the government tried to come to an agreement with Western embassies and grant-makers so that they would no longer fund these partisan NGOs or moderate their partisan conduct through self-regulation. But this was rebuffed, if not by all, then at least by some key grant-makers. Behind closed doors, Western diplomats admit that the conduct of the partisan NGOs they finance crosses many lines and that something ought to be done about it. But when pressed on what they will do about it, they get testy. 

Where does this leave Georgian civil society? In a worse place, without any doubt. All NGOs receiving foreign funding would face increased scrutiny and suspicion and would have to perform additional administrative tasks. Worse, such as fines, could be in store. Those NGOs that steered well clear of partisan politics, tried to be mission-driven and not donor-driven, practiced genuine solidarity, and respected citizens’ agency will get caught up in a policy that wasn’t even aimed at them. Never mind that this law would impose financial transparency on NGOs while the corporate sector faces no such obligation. This law won’t restore Georgians’ sovereignty, not in any meaningful sense of re-empowering citizens and re-politicizing policy-making. And for all that trouble, it probably won’t deflate the partisan NGOs or moderate their conduct. It isn’t just a blunt tool but a bad tool. 

The frenzied, faux-patriotic claims of both the government and the opposition belie how little both sides have to offer average Georgians in terms of true democratic empowerment or hope for improving their lives. When one author met with members of a nurses’ union, their mood was unperturbed by the violent rhetoric and sense of crisis. These women were preoccupied with their work, with conflicts with their bosses and the minister of health. They expressed worry about how local authorities were slowly destroying their clinic, one of the few public hospitals left. 

They try to make sense of how international donors and lenders, in close cooperation with the government, transform their communities and livelihoods without informing them, let alone asking them for their expertise and what they would like to see done. 

Why would the World Bank rehabilitate a wing of our hospital? Our hospital supposedly had the budget to do this on its own, but now we don’t know what became of that money. We are not told how the budgets are spent or how decisions are made. When they needed us during COVID, we were called irreplaceable. Now, we are disposable. 

In the most recent meeting, union members showed little interest in the law on foreign influence, didn’t care much about it, and didn’t want the union to take a stand on it one way or another. They were glad to hear that union activists would join neither the protests against the law nor support its adoption. They had heard rumors that it was a Russian law and decided to look into that, finding to their relief that there was nothing to that. As of this writing, this crisis has gone violent. Riot police are using water cannons, pepper spray, and beatings against anti-government protesters in Tbilisi. Pictures of bruises and bloodshot eyes are flooding social media. Over the past weeks, the political climate and public discourse have sunk to new lows, and that is saying something. Georgia’s public square is swept up in lies, hysteria, and manipulation. This, too, only takes Georgia farther away from reclaiming democracy and building progressive politics. There is a sense, expressed by a thoughtful and heavy-hearted Georgian observer, that “whichever way we go is a step back.”

Frustrating and tedious as it may be, we are forced to cut through the lies and the manipulation that swirl around this situation so we can begin to restore a rational conversation. It is galling to see foreign grant-makers lecture the Georgian public with a straight face that there is no such thing as foreign influence tied to foreign money, that donors only want to support a “vibrant civil society” and would never, ever dream of telling NGOs what they should do. Anyone who is at all familiar with how NGOs apply and compete for grants knows that donors set highly specific rules for which types of organizations, which kind of work, and what sort of issue they will even consider for funding, and this is before the unwritten rules and hidden biases determine the selection of grantees. 

Activists in Georgia know all too well what is expected of them and which behaviors are punished and rewarded: being critical of the government on Facebook will net you more grants than being out in the community helping people. A few short years ago, when Western donors considered the Georgian Dream a valuable ally, they would tell Georgian activists to stop criticizing them. Now, they want activists to speak out against Georgian Dream. Donors even monitor activists’ social media profiles, and there can be consequences for posting the wrong things.

The shrill use of the moniker “Russian law” is another cynical manipulation thrown around liberally by Georgian activists, opposition politicians, and also Western officials. We’re told the draft law is copied from the Kremlin’s (fact-check: it’s not) and that it will turn Georgia into Russia and/or off the path of European integration. But this law is a symptom of specifically and uniquely Georgian political realities. Georgia in 2024 is nothing like Russia in 2012, when the latter adopted its foreign agent law – not politically, not in terms of its international alliances, not in terms of democracy and the rule of law, and certainly not in terms of the role played by NGOs. The objectives of Russia’s “foreign agent” law were nothing like those of the Georgian draft bill. 

Even more absurd are allegations that Georgian Dream and its founder, billionaire Bidzina Ivanishvili, are Russian puppets, entirely in the Kremlin’s pocket, and that they tabled this law because Putin told them to. By the same logic, Putin must have also instructed Georgian Dream to pursue EU integration for over a decade, to enshrine Euro-Atlantic integration in the constitution, to score higher than other candidates on reform benchmarks, and to win EU candidate status. But this constant shrieking about a “Russian law” plays on the Georgian public’s fears and resentment as well as on Georgia’s Western partners’ geopolitical idée fixe. 

The most cynical and dangerous game, however, is tying this law to Georgia’s EU accession process. Far-away Western observers get teary-eyed about Georgians’ standing up for their “vibrant civil society,” but on the ground, protesters say unprompted that they are not in the streets to defend NGOs and, indeed, do not much care about them. These vox pop impressions are backed up by years of polls showing Georgians’ low trust in NGOs. Instead, people take to the streets because they have been told that this is a make-or-break moment for Georgia’s future in the EU. 

Georgia’s aspiration for EU membership is the rawest of all nerves in Georgian politics and culture. After three decades of post-Soviet impoverishment, of lives cut short, pain and trauma, chronic stress, insecurity, and humiliation, the idea of EU membership has become an eschatological project for many Georgians: it represents the promise of salvation after long and unjust suffering and sacrifice. The EU stands not just for dreams – of material well-being, safety, dignity, comfort – coming true, but for recognition of Georgians’ inherent “Europeanness,” their specialness, their cultural superiority compared to their “Asian” neighbors. 

Then again, many Georgians out in the street with their EU flags have less metaphysical and rather earthier concerns: in recent surveys, Georgians rank the opportunity to emigrate as their number one reason for wanting to join the EU. Indeed, Georgians have been “voting with their feet”—in 2021 and 2022 alone, more than 5% of the population left, most of them into grim shadow labor markets in Europe. 

But whether it is spiritual redemption or scarce material opportunities, the prospect of EU membership represents something existential for Georgians. This has allowed the opposition, its partisan NGO proxies, and their Western donors to manufacture the “foreign influence law” crisis into a desperate, epic battle for Georgians’ bright future. Worst and most irresponsibly, EU officials have joined in, repeating one after the other that such a law is incompatible with “EU norms and values.” “Norms and values” is conveniently vague, unlike actual EU laws, which do not prohibit regulation of NGO funding. Most recently, an EU spokesperson has stated that adoption of the law would go against the EU’s “values and expectations,” moving the goal posts into the evermore nebulous territory. The supposedly objective and meritocratic EU accession process has turned arbitrary and vexatious.

EU officials threatening to derail Georgia’s accession process feels like unseemly blackmail. Fundamentally, any government’s growing suspicion of foreign donors’ motives for funding hyper-partisan NGOs will only be fueled by forcing the government, via escalating threats, to continue letting such funding in. This is a game of chicken that could go very dark. In these circumstances, with the fronts hardened and people’s existential fears manipulated, a frank debate about the decades-old problems that led to this draft bill and about the law’s effectiveness and appropriateness is no longer possible.