Georgia is in crisis. For once, the cliché that a country is at a turning point is justified. The ruling party seems intent on eliminating all opposition and staying in power at all costs. A mobilised citizenry is resisting. The stakes are high and neither side looks ready to back down. Parliamentary elections in October could be an escape route, but they seem far away at the moment.

The trigger for the crisis is the highly punitive ‘Foreign Influence’ (formerly ‘Foreign Agents’) legislation, which the government’s parliamentary majority will try to make law in the coming days, despite domestic protest and international condemnation. The bill is deliberately imprecise and menacing in intent. It could be used to force media, human rights and monitoring groups that receive foreign funding – a very large number of them – to shut down or their staff to leave the country. Given the erosion of other institutions and the weakness of the formal opposition, these organisations are currently the main checks and balances facing the Georgian Dream ruling party.

The law itself is just one part of the story. Stephen Jones, historian and political scientist, who has written about Georgia for 40 years, says: ‘The Georgian Dream government is at war with Georgian society.’ Others call it a coup d’etat, as the government is flouting fundamental parts of a constitution it vowed to uphold.

Resistance to the draft law comes from across Georgia. The mass street protests on the streets of Tbilisi – its biggest crowds in more than 20 years – are mostly self-organised rather than party affiliated, led by young people who have never known anything except democracy.

Post-independence Georgia has a long habit of acting out its politics on Rustaveli Avenue, Tbilisi’s central thoroughfare. The worst confrontation on this street was in 1992, when fighting broke out, dozens were killed and the country descended into civil war. Since then Georgia has been run on more or less democratic rules – albeit marred by angry inflammatory rhetoric and a winner-takes-all majoritarian political culture. Each governing party in the country, in turn it seems, is doomed to ride the same curve. The previous two regimes both came to power with broad public legitimacy – those of Eduard Shevardnadze and Mikheil Saakashvili – and then became increasingly out-of-touch and abusive, outliving public support. Their leaders made the judgement to give up power without a fight, in the peaceful ‘Rose Revolution’ of 2003 and the election of 2012.

Georgian Dream, which took power in 2012, has travelled the same trajectory; it came to power amid public euphoria and is now subject to disillusionment. Last year its public support fell below 20 per cent, so the same dynamic could apply; but this time the ruling party is playing dirty. The beatings and intimidation that police and hired thugs are meting out to civic activists and opposition politicians are more savage than anything the country has seen in years.

Moreover, previously, in both 2003 and 2012 Western engagement was critical in ensuring that Georgia’s leaders handed over power peacefully. This time, despite saying that they are committed to EU membership, Georgian Dream leaders have rhetorically declared war on both the EU and the United States, demonising them as the ‘party of war’ sponsoring regime change.

Is there a Russian hand here? The common refrain from protestors and media commentary is that this is a ‘Russian law’ and that Georgian Dream’s ambition is to re-align the country with Russia. The picture is a bit more complicated than that.

For sure, the ‘Foreign Agents’ law derives inspiration from legislation first adopted in Russia in 2012 – and since copied elsewhere from Hungary to Kyrgyzstan – but it is a stretch to say that the Georgian version was drafted in Moscow.

There is a lot of bad blood between Georgia and Russia that cannot be overcome easily. Tbilisi broke off diplomatic relations with Moscow after the Five Day War of 2008, Russia’s military aggression and recognition of the two breakaway territories of Abkhazia and South Ossetia. There are still thousands of Russian troops in both territories. Opinion polls show that only around 10 per cent of the population would like to see Georgia join Russian-led institutions, while more than 80 per cent favour joining the EU. It would be political suicide for any Georgian politician to abandon Europe and re-align with Russia.

As for Bidzina Ivanishvili, the founder and funder of Georgian Dream, the two central facts of his biography are that he made his fortune in Russia in the 1990s, and that he also left in 2002. To put it another way, Ivanishvili is formed by Russian business and political culture and is comfortable doing business with the Russians – but seems to want to do so from a position of safety. He shows no sign that he wants to be owned by them. The strategy for now looks to be appeasement of Russia, not alignment with it. Any further moves will surely depend on how Russia’s war with Ukraine and the West proceeds.

What the ruling party evidently wants is ‘Fortress Georgia’, with them firmly in charge. In geopolitical terms that means elements of the following: an economic alliance with Russia; a partnership with Russian, Chinese and Turkish business; the non-aligned status and repressive capacity of Azerbaijan or one of the Central Asian states; the tax-exempt status of the British Virgin Islands; and support from illiberal governments in Europe, chiefly Hungary. It wants to pursue this while espousing a patriotic ‘Georgian traditional values’ ideology promoted by the Georgian Orthodox Church – and without formally abandoning a commitment in the constitution to European integration.

The business part of this is crucial. A little while ago it was possible to talk about Georgia having a government and governing party. Now it makes more sense to talk about state capture by a small business elite centred around Ivanishvili.

Georgian Dream is surely the weirdest ruling regime in the post-Soviet space – beginning with the fact that it derives its name from a rap song by Ivanishvili’s son, Bera. The party first won office in 2012 at the head of a broad coalition, comprising some of the most progressive figures in Georgian politics. They got behind eccentric Ivanishvili as a battering ram who uniquely had the financial power and independence to face down the increasingly undemocratic government of former president Saakashvili.

They could not ignore that Ivanishvili had made his estimated six-billion-dollar fortune in the 1990s in some of the darkest parts of Russia’s post-socialist carve-up, such as the privatisation of the aluminium industry in Siberia, but he committed himself in rhetoric at least to Europeanisation and democracy and pledged to retire from politics — which he formally did in 2013 after serving one year as prime minister.

The 2012-16 government was one of the most successful in Georgia’s post-independence history. It departed from Saakashvili, who was always more interested in Washington than Brussels and talked about building ‘Singapore in the Caucasus’, in prioritising relations with the EU and Georgia and an Association Agreement was signed in 2014. In 2018, the government enshrined in the constitution a commitment to European integration.

True to the laws of Georgia’s majoritarian political culture, the dream darkened. The broad coalition fell apart. By the time of Georgian Dream’s third election victory in 2020 warning signs were already there. All the same the party’s steep descent since then into illiberal authoritarianism has been breath-taking.

Top government jobs are now held only by those who were personally associated with or funded by Ivanishvili. Interior Minister Vakhtang Gomelauri used to work as the head of his personal bodyguard. Before government, the entire CV of Georgian Dream party leader, and former prime minister, Irakli Garibashvili, consisted of work for Ivanishvili’s businesses and charitable foundations.

Georgian Dream has also signed up to the European chapter of what might be called ‘Illiberalism International’. In May 2023 it abruptly announced a move from the European centre-left to the far right, breaking the association with the Party of European Socialists in the European Parliament. Garibashvili turned up at the hard-right CPAC congress in Budapest amid Le Pen supporters and Trumpist Republicans. His successor, Irakli Kobakhidze, made the same hard-conservative pilgrimage this year.

The CPAC host, Viktor Orban, who visited Georgia last October, is an especial source of support for inspiration. Orbanesque messages now issue from Tbilisi about ‘family values’ and the fight against ‘LGBT propaganda’ (due to be enshrined in a new law), and the war with the ‘globalist’ ideology, embodied by George Soros and the interfering West.

In the Georgian case the ‘anti-globalist’ position is enmeshed with the government’s do-nothing position on the Ukraine war. The message is that Georgian Dream is ‘pro-peace’, while Western leaders (even if they say otherwise) are allied with the old domestic opposition, trying to drag Georgia into a ‘second front’ against Russia.

They borrow a discourse, currently beloved of the far left and far right and in Putin’s Russia, of ‘the defence of sovereignty’ against Western hegemony (which is either, depending on the audience, woke-socialist or ‘neo-liberal’). Ivanishvili made a rare speech on 29 April at a rally called to win support for the new law, laden with conspiracy theory tropes, in which he accused a ‘global party of war’ of plotting regime change in Georgia via the NGOs it funded. Georgian prime minister Irakli Kobakhidze told the rally: ‘The examples of Afghanistan and Ukraine proved once again that the only permanent friend of a state is its sovereignty.’

The Soviet legacy lies deep in these words. Traitors are everywhere. As if the 1930s had never gone away, civic activists have seen posters stuck up outside their homes labelling them ‘foreign agents’ betraying the motherland.

The Soviet era also helped fashion a nativist historical narrative of the Georgian nation as a bastion of civilisation surrounded by enemies and subverted by traitors that must fight off perpetual waves of invasion. As Claire Kaiser has set out in her authoritative book Georgian and Soviet, the Georgian Joseph Stalin endorsed this discourse. Stalin personally edited the standard 20^th-century Georgian history textbook by Nikoloz Berdzenishvili and Simon Janashia, first published in 1943 and still taught in schools today, of which Kaiser says: ‘The theme and language of struggle (brdzola) pervades the textbook’s narrative, as various Georgian tribes struggled for independence, unification, and reunification.’

Successive Soviet and post-Soviet Georgian politicians have internalised this entitled and embattled version of their national story. Even some of the demonstrators waving European and Georgian flags on Rustaveli Avenue are not immune to it; some of them also repeat nationalist slogans on the conflicts with Abkhazia and South Ossetia.

This worldview seems especially strong among Georgian Dream leaders such that only one word seems fit to describe it: paranoia.

Georgia’s current leaders did not need to go down this path. Two months ago, although unpopular with the public, they faced no serious public opposition. The sports-mad country was basking in the success of its football team, the first ever from the South Caucasus to qualify for the European Championship. They could have tried to win an unprecedented fourth term in parliamentary elections in October by telling voters a good news story: that they had secured Georgia candidate status in the European Union, that the economy was doing well, and that they had kept the country out of the Ukraine war.

There is a soft but quite substantial constituency for this set of messages, especially outside Tbilisi, where Georgian Dream’s electoral base traditionally resides. Enhancing business relations with Russia also wins support. A clear majority of the public tells pollsters that they want to either deepen trade relations with Russia or leave them as they are. A significant minority, 36 per cent, said they wanted a ‘pro-Western foreign policy’, but that Georgia should also maintain good relations with Russia.

Instead the government revived the law that they had dropped last year and have gone for all-out division and repression. What happened?

The tipping point into crisis may be personal and have come from Ivanishvili himself, as a sense of international paranoia elided with his only personal money troubles.

After Ivanishvili got his fortune out of Russia (or most of it, opinions differ), he invested a large part of it with the Swiss bank, Credit Suisse. For several years, he was embroiled in law suits with Credit Suisse over allegations that he had been defrauded by a rogue banker. One major court judgement went in his favour, but in 2022 as much as £2.7 billion of his assets were frozen, following the war in Ukraine. At the time, Ivanishvili said that he believed this was politically motivated and ‘has a direct connection with the ongoing processes in Georgia’. Some of his allies alleged that the US had ordered the Swiss to freeze his assets to force the government to get involved in the war in Ukraine.

On May 13 US Assistant Secretary of State Jim O’ Brien flew to Tbilisi and met Prime Minister Kobakhidze. A meeting with Ivanishvili was declined, however. Afterwards Kobakhidze raised the Credit Suisse issue and called it ‘de facto sanctions’. He said plainly that Ivanishvili had refused to meet the US envoy (and other foreign officials) because they were blackmailing him: ‘As soon as this blackmail and de facto sanctions end, any meeting can be held right away, but today, this is Bidzina Ivanishvili’s position on this topic. Therefore, just as such blackmail and threats did not fly since March 2022, when his funds were frozen after the war in Ukraine, neither will such blackmail and threats fly now.’

There is more. In parallel with the Foreign Influence law the current government has introduced other legislation to shore up Ivanishvili’s sources of funding and make Georgia more sanction-proof against the West.

For example, the National Bank – whose independent leadership was also replaced in 2023 – has changed its rules on sanctions compliance, making it harder to freeze the assets of a Georgian national who faces international sanctions. New regulations mean that the prime minister is being given the power to administer Georgia’s Pension Fund, which is worth five billion lari (1.68 billion Euros).

Russian business looks like an attractive ally in this autarkic project. Western sanctions have already made all three South Caucasus states important economic partners for Russia. The Georgian government has increased trade with Russia, re-opened direct flights and is under suspicion of evading sanctions. That makes another new law potentially the most important of the lot. This is one which streamlines the rules for the repatriation to Georgia of assets from offshore tax havens, exempting them from taxes. Not only can Ivanishvili and other Georgian oligarchs make use of this new law, but it also opens the door for Georgia to be a potential haven for a flood of Russian assets.

It is not just Russians. Georgia signed a partnership agreement with China in 2023 that will open the country up to Chinese investments. And they are close to Turkish companies, who are the most likely investors in the lucrative hydro-power sector.

The trouble is that the Europeanisation process they helped launch threatens the business model. The EU seems committed to putting funds into areas that were previously neglected in Georgia, such as rural communities, which Georgian Dream, in semi-feudal fashion, regarded as its own and as its main source of electoral support.

Vincenc Kopeĉek, professor of political geography at Ostrava University in Czechia, who has researched the impact of foreign investment on local communities in Georgia, acknowledges some of the perverse effects and failures of foreign assistance in the country, but says he generally gives high marks to the EU. He writes: ‘I do have some reservations about the way EU assistance works indeed, but in general I consider it a positive actor in Georgia and the South Caucasus as such. When I argued that we should think about the impacts of projects on local communities, I meant mainly infrastructural projects, which were typically financed by the Georgian government and/or private donors, and less frequently by the EU or USAID. On the contrary, these donors as well as donors from EU member states play generally a positive role, frequently funding soft projects on language education, empowering youth and women, sustainable tourism and so on.’

Moreover, European and US funding helps those NGOs that scrutinise the basis of the Georgian political economy. Independent media organisations, anti-corruption investigators and environmental groups are all interested in ‘transparency’, which the ruling class would rather avoid. The ‘Law on Transparency of Foreign Influence’ is aimed at stopping all this – while cynically appropriating the word ‘transparency’ in the process.

Hans Gutbrod, resident in Georgia for two decades and professor at Ilia State University in Tbilisi, calls it a ‘repress anyone you like law’. Any non-governmental organisation that receives more than 20 per cent of its funding from foreign donors – almost all of them – will be liable to intrusive inspections and onerous reporting procedures.

Non-compliance will mean a fine of 25,000 GEL (approximately $7,000 Euros), a sum most of these organisations would not be able to afford. An amendment quietly passed in the third reading of the bill made it even more punitive: it extends potential punishment to individuals, and requires them to reveal personal data. Crucially, implementation of the law relies heavily on the discretion of the security services. They will get to target whichever NGOs they want, but the bureaucratic requirements could force a whole range of NGOs to pre-emptively shut down, ranging from rural community groups, local tourism ventures in deprived parts of the country, to a Tbilisi dog shelter. Of course, Georgian business groups, including the country’s biggest charitable donor, Ivanishvili’s Cartu Fund, will be on hand to provide funding for ones who choose to shed their foreign funders altogether.

If Georgian Dream thought they would get opposition only from the ‘usual suspects’ – urban Tbilisi professionals and those whom it could label as supporters of small opposition parties or promoters of ‘LGBT propaganda’ – they miscalculated.

The core of the resistance has come from self-mobilised young people who grew up in democratic Georgia and smell authoritarian rule in the air, though the public as a whole does not seem to like it either. An opinion poll conducted in late April – well before the big rallies began – found that 68 per cent of Georgians thought the law was ‘unnecessary’, while few than half that figure thought it ‘necessary’. Protests have spread beyond Tbilisi to all other cities in Georgia.

The worry must be that the current regime has lost touch with the public and believes its own propaganda – or whoever is whispering it into their ears – and will resort to further repression. The public protests may just fuel their paranoia – and they can always find evidence of conspiracy in some of the more partisan statements and resolutions of European politicians, who never accepted Georgian Dream in the first place.

If the crackdown gets worse and they resort to mass arrests, there is a risk of violent resistance. The spectre of Georgia’s civil war in the 1990s has never fully gone away.

The best hope probably lies in elections, which are due in October, but could perhaps be brought forward. That would take the confrontation off the streets and into electoral politics.

There are problems here, too. Opponents of Georgian Dream have legitimate fears that the ruling party will use its financial resources to try and buy enough voters to secure victory. (It was estimated that even in more prosperous Tbilisi, one fifth of voters were so poor that they were liable to sell their vote in the 2022 local elections.) Both the weakness and strength of the protests is in the fact that they are mostly unaffiliated with political parties. This time around, at least the election will be held by a proportional representation system that will allow small parties to enter parliament.

As Stephen Jones points out, in the longer term, elections are not sufficient to build lasting democracy in Georgia. A more participatory politics is needed, which deals with more systemic problems. The current system also tends to leave a lot of Georgians on the margins and disengaged from civic life, in particular those voters in rural areas and ethnic minority communities.

Still, a more or less free and fair and non-violent election currently looks like the best hope to lead Georgia out of crisis and give Georgian citizens a say. It would also call the bluff of a repressive governing party that still maintains it is interested in democracy, even though everything it does suggests the opposite.