US may suspend 15% of Georgia's financial assistance

By Natalia Kochiashvili

Friday, July 10

The budget bill was approved by the subcommittee of the House Appropriations Committee on July 6th. This time, the bill, with the criteria added and specified in it, has to be approved by the Assessment Committee.

Added to the list of criteria are the requirements for limiting the influence of informal governance of oligarchs or for the effective implementation of electoral reform. Photo: Oxfam

The Fiscal Year 2021 State and Foreign Operations Funding bill approved by the United States House Appropriations Subcommittee on July 6. It proposes making financial assistance for Georgia conditional on the fulfilment of several requirements. The law states that Georgia will receive at least $132,025,000 in aid in 2021, although the preconditions for receiving assistance are also set out: $ 88,025,000 from the European, Eurasian and Central Asian Relief Fund; $ 5,700,000 to fight drugs; $ 1,100,000 to fight terrorism; $ 2,200,000 for military training and retraining; $ 35,000,000 from the International Military Funding Program.

In particular, the transfer of 15% of this amount to Georgia may be suspended until the US Secretary of State decides that the Georgian government will take appropriate steps to fight corruption, strengthen democratic institutions, uphold the rule of law in the private sector and comply with internationally recognized standards.

According to the document, the transfer of 15% is not mandatory until the Secretary of State determines and submits a report to the committees on the fact that the Georgian government is taking effective steps: (A) for the strengthening of democratic institutions, as set forth in the accompanying report; (B) in the fight against corruption in government, including the application of anti-corruption laws and regulations; (C) to ensure that the rule of law in the private sector meets internationally recognized standards, including the right of foreign businesses to operate freely and without harassment, in order to fully realize the commercial and financial benefits of investing in Georgia.

The law says that the suspension of aid will not affect programs that promote democracy, the rule of law, civil society, the media, help a vulnerable part of the population and reduce gender-based violence. It is possible that the transfer of this 15% will not be stopped if the Secretary of State decides and tells the committee that this is important for the US state interests.

An explanation was added to the document submitted by the Budget Committee to the House of Representatives of the US Congress. The document was prepared by the chairman of the committee, Nita Lowe, a representative of the Democratic Party, according to which the US State Department should assess Georgia's progress in complying with the draft law on how successful the election, court and other reforms are in Georgia. Also, how much the Georgian government is taking steps to limit the ‘informal influence of the oligarchs on the Georgian government.’

15% of the funds allocated from the European, Eurasian and Central Asian Assistance Fund may not be given to the Georgian government until the Secretary of State determines and reports to the Budget Committee that the government is taking effective steps to strengthen democratic institutions, fight corruption and enforce the rule of law in the private sector in compliance with internationally recognized standards.

The updated version of the draft budget law also mentions the approval of the constitutional changes reflecting the proportional electoral system by Georgia. Congressmen welcome the fact that most of Georgia's political spectrum supports these changes.

The Secretary of State will determine whether the Georgian government is taking effective steps to implement the electoral reform, release the judiciary from independence and interference, make the necessary reforms for transparency and access to public information, regulate the functioning of civil society, opposition parties and non-governmental media rights in the direction of limiting influence.

The committee calls on the Secretary of State and the USAID administration to prioritize programs aimed at strengthening the rule of law and strengthening democratic institutions in the country to promote transparent and well-functioning government.

“The threat posed by the Russian government to former communist countries, including Georgia, underscores the continued US support for democracy and the rule of law,” reads the document.

The Georgian government says it is too early to discuss the final form of the bill in the House of Representatives. According to the Ministry of Foreign Affairs, the procedure is long-term and requires involvement of the House of Representatives and the Senate.

The emergence of such sharp records in the most important budget bill for the United States is already a cause for alarm for the opposition, as they have not been able to recall a similar fact in the last three decades. At the same time, it is obvious to the opposition that after the approval of the subcommittee, the text of the bill has become even more difficult for Georgia.

The United States also cut aid to Georgia ahead of the 2003 elections. The reason for this was the slowdown in reforms and the development of the economy.