PM sacks Economy Minister

Georgian Prime Minister Nika Gilauri dismissed Minister of Economic Development Lasha Zhvania from his post on Friday, saying that he was “dissatisfied” with the work of his Ministry. Speaking at a special press conference at which Gilauri summed up the activities of the Georgian Government over the last six months, the PM said the Economy Ministry had failed to provide a proper environment in which investors could fulfill their agreements. Gilauri added that the Ministry did not have effective coordination with other Ministries, as evidenced by problems with power plants and agriculture. “To sum up, I am dissatisfied with the work of Economy Minister personally. He will have to quit his job,” Gilauri stated.

The dismissal did not come as a surprise, as the Georgian media has recently reported “personal conflict” between the PM and the Minister. A memorandum between the Government and JSC Caucasus Energy on the building of a 43 megawatt hydropower plant in Samtskhe Javakheti was quoted as the main reason for this conflict. The Georgian media reported that the project was being hindered because the Economy Ministry had sold part of the land this plant was going to be built on. Caucasus Energy claimed it had asked the Prime Minister to prevent this happening. The Economy Ministry blamed the Ministry of Energy, saying that this Ministry had not provided it with the coordinates of the planned power plant in time. Energy Ministry officials stated they had sent the coordinates to the Economy Ministry twice.

Lasha Zhvania swiftly responded to the Prime Minister’s allegations, calling them “groundless”. “In his statement Nika Gilauri contradicts both the facts and the President, who has spoken several times about my success in attracting investments during my previous jobs as an Ambassador and a member of the Parliamentary Committee on Foreign Relations. That’s why Saakashvili decided to appoint me Economy Minister,” Zhvania said. He confirmed having a conflict with the Prime Minister and his team on economic policy issues but denied any personal conflict. He nevertheless called Gilauri a “weak Prime Minister”, who does not know enough about management. Zhvania said that despite his dismissal he would remain committed to President Saakashvili’s policy. “No matter where I might be and what I might be doing, I will always support Mikheil Saakashvili, who really cares about the country and who is really concerned with the conditions of our population,” Zhvania stated at a special media briefing.

President Saakashvili also commented on Zhvania’s dismissal, hailing him as a “talented and useful person” and referring to him as his friend. The President stated Zhvania, as a professional, should not be “lost”, however he said that the Prime Minister has “full autonomy” taking decisions about the composition of his team, especially in the field of economy. The President said team work is needed in government. “The Georgian Government has my support and the support of the biggest part of society. We should all continue our work in the fields where we can do the most good for our country,” he said, adding that “if anyone is doing a good job we should thank him, and we should speak up if there is a need to solve problems.”

Opposition-oriented analysts say Zhvania’s dismissal will not change anything substantial in Georgia’s economy. Some economic experts say the Government is trying to find a scapegoat for its failures and create the illusion that if the ‘guilty’ person is identified the situation will thus improve. Economic analyst Gia Khukhashvili says the problems attracting investments are not the fault of Lasha Zhvania but the system by which the country is ruled. “It does not matter who sits in that chair, the problem is the system,” Khukhashvili told journalists. Fellow analyst Demur Giorkhelidze also notes that the “system should be changed.” He says the Ministers of Economy should be chosen “more carefully” as “former Economy Minister Lasha Zhvania had no formed concept and has done nothing in the job.”

Analyst and opposition member Nodar Khaduri says it is too early to talk about possible changes in the Georgian economy until the next Economy Minister is appointed. Concerning Zhvania’s work as a Minister Khaduri said he had made some “good statements” when he was appointed to his post. “One of those statements was that he would restore the Anti-Monopoly Service. However he was either unable to fulfill this promise or not given an opportunity to do so,” Khaduri has told The Messenger. “I doubt that the Government will appoint someone planning to restore the Anti-Monopoly Service as the new Economy Minister,” he said.

Overall the PM’s action gives us grounds to suppose that there are some problems within the Government. On the day Zhvania’s dismissal was announced the Ministers of Agriculture, Healthcare and Finance openly criticised their former colleague. These Ministers were of course in post, and presumably aware of any problems, while Zhvania was. We are left to infer that factions have developed within the Cabinet, and Ministers feel it is in their best interests to publicly align themselves with one side or another.