55
31
for 80 citizens. The salaries of law enforcement personnel were low -
approximately $40-50 a month. Those circumstances created the situation when it
was difficult to prevent corruption in the police
80
.
The new government of Georgia took a decision of mass dismissals in the
sphere of law-enforcement. During one day, the whole stuff of the traffic police of
Georgia - 14 thousands of traffic policemen had been fired. By the end of
implementation of the reform of law-enforcement agencies, over 75 thousand
employees had been dismissed
81
. The KGB-style Ministry of Internal Affairs was
abolished in the end of 2006
82
. The old police had been replaced by a modern
police agency: in majority of cases, policemen have a higher education, and are
getting in charge after couple-of-month trainings. Also, the Georgian policemen
received rather high salaries (in comparison to average salary in the country).
Every attempt of corruption within the police and other law-enforcement agencies
has been severely punished
83
. At the very beginning of this reform, the
government employed special people which were hired to provoke the new traffic
policeman to receive a bribe. Those policemen, who took such a bribe, were
sentenced to seven years of imprisonment. Such drastic measures were very
instructive lessons for the others
84
. All kinds of whistleblowing of one policeman
on another were welcomed. It should be stressed out that such steps had extremely
strong effect on decrease of corruption among the policemen in Georgia
85
.
One may say that such radial reforms that end up in mass dismissals and
even complete dissolution of particular administrative unities will make the state
apparatus less efficient. Nevertheless, the case of Georgia has shown that the
majority of reduced administrative unities, such as fire inspection, motor licensing
and car inspection, had been useless. At present moment, the situation in these
spheres is much better than it used to be. For instance, the mortality caused by fire
had declined from 2003 to 2010, even though the fire inspection was closed by the
80
N. Shahnazarian, Police Reform and Corruption in Georiga, Armenia and Nagorno-Karabakh,
PONARS Euroasia Policy Memo No. 232, 2012, p.1
81
Documentary movie, “Theory of improbability”,
http://www.youtube.com/watch?v=lzWNhP2QV44
82
N. Shahnazarian, Police Reform and Corruption in Georiga, Armenia and Nagorno-Karabakh,
PONARS Euroasia Policy Memo No. 232, 2012, p.1
83
Personal interview.
84
Burakova L., «Why Georgia has succeeded», «United Press», 2011
85
Personal interview.
46
32
government. The same happened also in terms of car accident mortality. The
conclusions of this reform is the following: liquidation of ineffective mechanism
of monitoring closed the huge source of corruption
–
all these state controlling
institutions existed only with corruption purposes and did not contribute to the
public health and security
86
.
Coming further with the results of the police reform, it should be
mentioned that according to a number of international surveys, nowadays, the
Georgian police is free of corruption. The behavior and image of the Georgian
police has completely changed: they are polite and do not take bribes. That
information comes from every Georgian citizen
–
from a taxi driver to a
businessman and a public official
87
. Today, the law-enforcement agencies in
Georgia are completely transparent. It does not only mean that it is free of bribes,
but literally, the walls of police offices are made of glass. Every passerby is able
to see through the glass what policemen are doing on their working places. In the
past, the traffic policemen had been hiding themselves along the roads, looking
for a passing cars to take a bribe. Nowadays, the government has set up electronic
devices, which measure speed of cars and in case it breaks the speed limit, a
driver receives quite a high fee. At present moment, the Georgian police officers
patrol the territory in order to check the drivers on alcoholic intoxication. The fee
for drunk drivers are very high and if a driver is caught drunk more then two times
–
he would be sentenced for imprisonment
88
.
Graph 1: One of the least corrupt police forces in Europe.
Source: Transparency International Global Corruption Barometer 2010. - See more at:
http://www.greengeorgia.ge/?q=node/54#sthash.LB8ovDXU.dpuf
86
Burakova L., «Why Georgia has succeeded», «United Press», 2011
87
Personal interview.
88
Georgia
–
Saakashvili’s reforms
, www.besttoday
, (06.06.2013).
43
33
2.3. Thieves in law
A very important place in Georgian system of corruption is occupied by
the thieves in law. This abnormality has spilled far away from the boarders of
Georgia. Even though it is always difficult to fight criminal organizations within
state and despite the loyalty to thieves in law from a part of Georgian citizens, the
new government made a decision to remove such phenomenon from the state
system. According to one of the ministers, they did not want to share the power
with the thieves in law. I would like to mention once again that the thieves in law
used to have large power in the Georgian state system. The new government
created an anti-mafia legislation on the basis of US and Italian experiences. The
main distinction of a criminal and a thief in law is that the last one does not
necessary commit a crime. He is the head of criminal group, where he has an
authority and gives orders. Therefore, it is impossible to catch him on the crime
scene. The Georgian government developed a special law that allowed arresting
thieves in law just because they call themselves with this title. According to the
crimin
al “morality” and code of conduct, the thieves in law could not refuse their
criminal status when they are asked about it. Most of the thieves in law fled to
Russia or Europe after some cases of murdering thieves in law during the police
capturing (it was an order that in case of resistance at arrest, a thief in law could
be captured even dead). The rest of them, around dozen, are still inside the
Georgian prisons. All these actions against the organized crime fundamentally
decreased the level of crime in Georgia
89
.
In case of the Autonomous Republic of Adjara, which officially has been
ruled by mafia leaders, president Saakashvili brought completely new rules
towards this region. He has introduced a temporary direct rule of the Georgian
government, however, the Supreme Council of Ajara stayed in power. In May of
2004, the Supreme Council agreed to dismiss the head of republic Aslan
Abashidze, a person closely connected to Georgian organized crime. Thusm
Adjara became a peaceful Georgian region
90
. Privatization initiated by a new
government took place in Adjara at the fist place. There was only couple of cases
89
Kovarskij N., Georgian Order, www.forbes.ru/ekonomuka-column/vlast/52395-poryadok-po-
gruzinki
, (06.06.2013)
90
Cvetkova M, Russian basis would follow Abashidze,
www.gazeta.ru/2004/05/07/oa_120123/shtml
VB.NET Word: Word Image Adding Guide in VB.NET Common image formats, including gif, jpeg, png, tiff and NET Framework, this Word image adding toolkit also & profession imaging controls, PDF document, image
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46
34
of privatization in this region since the Soviet times. The new Georgian
government has moved the Constitutional Court from Tbilisi to the former
residence of Abashidze. At present moment, the Autonomous Republic Adjara is
a well-integrated part of Georgia
91
.
In order to make reforms work politicians should work on them very
precisely and regularly. A good politician will change his popularity to the
success of implemented reforms
92
. Kakha Bendukidze played one of the major
role in reforming of the Georgian state. When he had to come back to Georgia
from Russia, he understood that something had changed in the country. Very
soon, the Minister of Interior Affairs told him that they were going to fight the
organized crime
–
these criminals would not be untouchable anymore. Such
effective steps of the Georgian government were unbelievable for the Georgian
reality at that time
93
.
2.4.
“Ease of D
oing B
usiness”
Another important purpose of the reforms implemented by Mikheil
Saakashvili was liquidation of large number of limitations and regulations for
private businesses as well as queuing for registration of business, receiving new
passport and other documents. In the previous system all these procedures were
time consuming and in addition, they were creating more bureaucracy and
everyday corruption. There was a decision to create a special registration system
through Internet. As well, there was no need to sign up documents several times in
order to register them if a person made it once. That system removed the lines to
the registry making it easier to start a business as well as to reduce bureaucracy. It
became easier not only to start a business, but also to make a passport. There was
no requirement of bringing all personal documents since everything was already
in the database of the electronic administration system. Such approach of new
Georgian government stressed out that the state does not see a potential villain in
its citizen anymore. This is one of the main reasons, why the new policies have
91
Burakova L., «Why Georgia has succeeded», «United Press», 2011
92
Burakova L., «Why Georgia has succeeded», «United Press», 2011
93
Burakova L., «Why Georgia has succeeded», «United Press», 2011
42
35
been realized much more efficiently then previously
94
.
The World Bank’s project
“Doing Business” rates Georgia as
a unique country. In its opinion, no other
country within the last fifty years has implemented such deep and fast reforms in
different areas
95
. Georgia occupies the 7
th
place in the starting business rank.
Today, in order to start a business, one needs only two days (in comparison to
other countries of Eastern Europe and Central Asia, this process takes 14 days,
and in the counties of OECD
–
12). There are only two procedures required to
register a business in Georgia (in the Eastern Europe and Central Asia
–
6,
counties of OECD
–
5)
96
.
Graph 3: Ease of doing business in Georgia.
Source: http://investingeorgia.org/index.php?m=234
There might appear a question why the old Georgian government could
not apply similar policies as Saakashvi
li’s government.
The simple answer to this
would be that there was a special political will in the executive power after 2004
as well as clear and purposeful activities of the new
president’s cabinet and the
94
Burakova L., «Why Georgia has succeeded», «United Press», 2011
95
Burakova L., «Why Georgia has succeeded», «United Press», 2011
96
Measuring business regulations “Doing Business”, www.doing
business.org/data/exploreeconomies/Georgia/#starting-a-business, (06.06.2013).
32
36
Parliament
97
. The decision that played the biggest role for the success of Georgian
reforms and at the same time, for the fight with corruption, was the following. In
order to build the basis for the future reforms, the political and economic system
of a state should be maximum liberal and should be based on the principles of
freedom of the new economical formation
98
. Definitely, it seems that the Georgian
government has made some kind of miracle, reforming a post-soviet corrupted
system to a completely new and efficient modern system. The truth is the success
lied not only in implementation of the new policies, but also in avoidance of many
mistakes. All this success has happened because of the focused political will of
government on its goal of fundamental transformation of Georgia
99
.
Graph 2: Business and corruption
Source: World Bank, Enterprise Surveys - What Businesses Experience, 2012,
http://www.enterprisesurveys.org
.
2.5. Privatization.
One important step towards reduction of corruption in Georgia was made
by privatization. During the rule of the previous government of Eduard
Shevardnadze privatization took place, however it was very slow. The revenues
from privatization constituted a small part in the state budget. The government of
97
Burakova L., «Why Georgia has succeeded», «United Press», 2011
98
Burakova L., «Why Georgia has succeeded», «United Press», 2011
99
Burakova L., «Why Georgia has succeeded», «United Press», 2011
55
37
Saakashvili outlined a broad privatization plan of national property
100
. Some
economists compare liberalization of Georgian market made by Saakashvili with
the scale of changes brought by Margaret Thatcher in United Kingdom and
Hernando de Soto in Peru
101
. During privatization of agricultural lands, the
government had to deal with the people who occupied the state owned lands
illegally
102
. The major document of governmental reforms - the National Anti-
Corruption Strategy and Action Plan contained the proposition to speed up
privatization of state property and state enterprises. It had to be done in the most
transparent way as possible. The state ownership was supposed to be left only
over the property which has been characterized as necessary to carry out the
functions of the state. Under this reform, majority of state owned land, enterprises
and energy facilities were supposed to be privatized
103
.
2.6. Taxes.
One of another extremely important parts of the National Anti-corruption
Strategy and the Action Plan of the Georgian government was the improvement of
tax administration, customs system and treasury service reporting
104
. These were
high risk of corruption in these areas. High attention was drawn to such a problem
as bribing for tax avoidance (administrative corruption). In order to avoid
administrative corruption it was decided to make the system of taxation, customs
and employment to these spheres transparent as much as possible. The selection
of officials to employment in the high risk areas of corruption had to be improved.
Using the digital technologies which were decreasing the number of live
interactions between citizens and officials together with opportunities for further
education for officials, the new Georgian government managed to reduce
significantly the level of corruption in tax and custom system
105
.
100
Bunich, Georgia: Nationalization and privatization,
www.bunich.ru/encyclopedia/content.php?id_118&gid=70
, (06.06.2013).
101
Nazarov W., Georgian liberal lessons, www. m.forbes.ru/article/php?id=67978, (06.06.2013).
102
Burakova, «Why Georgia has succeeded», «United Press», 2011
103
Anti-Corruption Strategy Action Plan (2005-2006),
http://transparency.ge/sites/default/files/post_attachments/Ordinance%20377%20-
%20National%20Anti-Corruption%20Strategy%20Implementation%20Action%20Plan-
September-E.pdf
104
Anti-Corruption Strategy Action Plan (2005-2006).
105
Anti-Corruption Strategy Action Plan (2010).
56
38
In the pre-revolution Georgia there was practically no system of tax
payment. People of business and regular citizens were obliged to pay to various
informal organizations which had been facilitating their business activities, for
example, to the thieves in law. One of Georgian businessmen was asked by his
Georgian business partner if he pays taxes, he answered: “
Which taxes? I pay to
the police, KGB, to the tax administration…What other taxes should I pay?”
106
The taxation in the old Georgian system before 2003 was so much
complicated and inefficient that there was a decision to reduce the number of
taxes and the tax rates
107
. Since 2004, a completely new Tax Code has been
introduced, which reduced the number of taxes from 21 to 7. A new position of
tax ombudsman has been established by the introduced Tax Code. Value Added
Tax was decreased from 20% to 18%. The flat rate of tax (12%) replaced
progressive tax (from 0% till 20%)
108
. By these actions the Georgian government
established clear and easy tax system that is understandable for the Georgian
citizens. Positive results of fight with thieves in law that will be described further
in this chapter also had a positive impact on paying taxes. Businessmen should not
search help at criminal organizations. Nowadays, the Georgian government is a
protector of business, not informal criminal groups.
In “Doing business” rank, Georgia occupies 33rd place in terms of
easiness of paying taxes. Today, this indicator shows serious improvement in this
sector
–
change in rank to 12 positions up
109
. The European Bank for
Reconstruction and Development proves that Georgia created a fair tax system
110
.
2.7. Reformed education.
The old Soviet examination system was replaced by a new one when the
National Examination Centre of Georgia was created in 2005. This system allows
choosing the best students for further university studies according to their skills. It
106
Personal interview.
107
Anti-corruption Activities by TI, http://transparency.ge/nis/2011/introduction/anti-corruption-
activities
.
108
108
Bunich, Georgia: Nationalization and privatization,
www.bunich.ru/encyclopedia/content.php?id_118&gid=70
, (06.06.2013).
109
Measuring bus
iness regulations “Doing Business”, www.doing
business.org/data/exploreeconomies/Georgia/#paying-taxes, (06.06.2013).
110
European Bank for Reconstraction and Development, www. Ebrd.com
36
39
is clear, transparent and based on the meritocracy principles
111
. Now young
generation cannot imagine that it is possible to enrol to a university by bribing the
person in charge of entering exams
112
.
For Saakashvili, the main compound for his successful reforms is a
fundamental change in mentality. According to him, it is not so easy to make the
people change their habits of social behaviour immediately. In the past, it was an
opinion that in order to get well-educated specialists it was enough to send the
students abroad, particularly to the Western universities. However, this scheme
did not work because those specialists had been coming back to Georgia and were
becoming a part of the old and corrupted system. The major change here was in
the fact that now they could speak
foreign languages. Saakashvili’s
reform of
education is an integral part of all the comprehensive reforms as it helps to change
mentality of a person. If one wants to change the social behaviour of people, all
the reforms should move in one direction
113
.
Graph 4: Georgian citizens pay fewer bribes than EU average.
Source: Transparency International - 2010 Global Corruption Barometer - See more at:
http://www.greengeorgia.ge/?q=node/56#sthash.Jc9aaMmu.dpuf
2.8. Reformed judiciary system.
The reformers acknowledged the importance of jurisdiction in the future
transparent system. The existence of good judicial system and stable rule of law
111
Ministry of Justice, www. Justice.gov.de
112
Personal interview 3.
113
Burakova L., «Why Georgia has succeeded», «United Press»,
2011
55
40
would make things much better than they were during the 90
th114
. In order to clean
judicial system from corruption it was decided to raise salaries for judges and
prosecutors. However, this raise was not symbolic. It has been really tangible
115
.
According to the Directorate General on Human Rights and Rule of Law Georgia
made significant work on that matter, increasing the salaries for judges up to 64%
and for prosecutors
–
up to 32%. Nowadays, at the beginning of their career,
judges receive gross annual payment equivalent to 11 642 euro and the public
prosecutors
–
8 976 euro. At the end of their careers, they receive the following
salaries: judges
–
22 270 euro, prosecutors
–
15 480 euro. The highest salary is
granted to the judges of the Supreme Court and of the Highest Appellate
Courts
116
.
In order to secure and keep the anti-corruption position of judges, the
Government has introduced a life-time appointment for judges. Also, the
government has improved the working conditions of judges as well as possibilities
for their professional development. The Criminal Case Management System
(ICCMS) was established in order to make trials free of excessive amount of
paper documents. Nowadays, all the pieces of evidence, documents, investigation
and prosecution processes have been collected into the electronic system. Citizens
are also taking part in the administration of justice (in form of a jury). In spite of
the fact that the jury system had not been used before 2012, at present moment,
the hearings in Georgian courts are accompanied by the jury. This is a limited
practice though and it takes place only in Tbilisi City Court and Kutaisi City
Court. The use of jury is compulsory, however, if the both parties agree not to use
help of the jury, the court will proceed with hearings without jury. The new
Georgian reform decreased the number of judges
117
. Notwithstanding, the quality
of Georgian courts only increased. The report of the Directorate General on
Human Rights and the Rule of Law is stressing out that Georgia has shown a very
good performance of court cases. The report links this result with success of
recent reforms after witch the citizens started to bring more civil cases to the
114
Burakova L., «Why Georiga has succeeded», «United Press», 2011
115
Ministry of Justice, www. Justice.gov.de
116
Eastern Partnership, Enhancing Judical Reform in the Eastern Partnership Countries,
Strasbourg, March 2013.
117
Ministry of Justice, www. Justice.gov.de
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