Unleashing the storm: Georgia's contentious 'Foreign Agents' law
Foreign Businesses Criticize Georgia's 'Foreign Agents' Law as Harmful to Commercial Interests
Georgia's recent political move, the 'foreign agents' law, has ignited a tempest of controversy, setting the stage for a battle royale over the nation's future direction. This heated debate will likely shape up as a winner-takes-all showdown.
Civil society groups, bracing for the impact of this legislation, are refusing to back down. Instead, they're gearing up for an all-out battle before the scheduled October parliamentary elections. The contentious law demands that organizations which receive over 20% of their annual funding from foreign sources must label their operations as serving a foreign power's interests.
This Georgian legislation sends troubling echoes of Russia's law used by Putin's regime to silence dissent. Georgian non-governmental organizations (NGOs) criticize the government for adopting this "foreign agents" law, suggesting it indicates a waning interest in pursuing European Union (EU) accession, as mandated by Georgia's constitution. Remarks from several EU officials, such as Lithuanian Foreign Minister Gabrielius Landsbergis, highlight this growing concern, warning that the law could halt Georgia's progress towards EU membership[1].
In response, an NGO coalition decried this alleged attempt to implant Putin's rules in Georgia, describing it as a betrayal of their country's ancestors and compatriots. They reiterated their assertion that the Georgian people will not tolerate Russian laws, violence, or separation from the Western world. The NGOs proclaimed their ship was destined for Europe, demanding unconditionally for the government to withdraw this law[1].
The economic landscape of Georgia has been convulsed since the law's adoption. While leaders of government-linked firms support the legislation, numerous small- and medium-sized enterprise owners are rallying with opponents of the measure. Business Association of Georgia, a consortium uniting large enterprises, initially backed the government's claims that the law would enhance transparency and wouldn't jeopardize Georgia's EU membership bid. However, other entrepreneurs, like Women for Tomorrow, have vocally expressed their objections to the law, stating it threatens the nation's interests[1].
The markets, too, voice their disapproval of the 'foreign agents' law. On the day of its passage, the Georgian lari plummeted against the US dollar, then experienced a modest recovery the following day after the National Bank of Georgia intervened to stabilize the currency, announcing it had sold $60 million of the nation's reserves[1]. Shares of the country's two major banks, TBC and Bank of Georgia, dropped by 12% and 15%, respectively, on the London Stock Exchange the day after the law's passage. Georgia Capital, an investment holding company, also witnessed a 9% drop in shares[1].
Economic misgivings have been brewing even before the law's implementation. Foreign direct investment observed a 24% reduction last year, from $2.1 billion in 2022 to $1.6 billion in 2023[1]. Some members of the business community have voiced concerns that the government may be jeopardizing the nation's EU bid.
Concerns are also mounting about the influx of dark money, as parliament amended the tax code in April to provide a tax holiday for those transferring funds from offshore havens to Georgia[1]. Observers warn this move may serve to counter potential sanctions against Georgian Dream leaders, such as the party's honorary chairman, billionaire Bidzina Ivanishvili[1]. Transparency International's Georgia branch asserts the amendments increase the risk of criminal and Russian capital entering Georgia[1].
As Georgia speedily approaches a critical point, a clear winner and loser in the geopolitical struggle for the country's soul will likely emerge. President Salome Zourabichvili, in interviews with foreign media outlets, has foreseen the upcoming parliamentary elections as akin to a referendum, enabling the people to decide and vote for either a European or Russian future for the country[1].
- The controversial 'Foreign Agents' law in Georgia has sparked significant debate in the world of finance, with many small- and medium-sized enterprise owners voicing objections to the legislation, fearing it could harm the nation's business interests and economic progress.
- The news of Georgia's 'Foreign Agents' law has caught the attention of the broader general-news community, including European Union officials and international organizations like Transparency International. These entities have expressed concern over the law's potential implications for democracy, human rights, and EU accession.
- The contentious 'Foreign Agents' law in Georgia has drawn comparisons to Russia's similar legislation, used historically to silence dissent and influence domestic politics. This has led to fears of politicization in the business sector, with civil society groups, entrepreneurs, and international observers raising concerns about the involvement of foreign finance in shaping Georgia's political landscape.
