caucasus analytical digest 78

7/24/2019 Caucasus Analytical Digest 78

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www.css.ethz.ch/cad

CORRUPTION

analytical

No. 78 5 October 2015

Overview of the Anti-Corruption Fight in Armenia 2By Khachik Harutyunyan, Yerevan

Anti-Corruption Measures in the Energy Sector: EII in Azerbaijan 6By Hannes Meissner, Vienna

Continuity and Change: Corruption in Georgia 9By Alexander Kupatadze, St Andrews, UK

DOCUMENAION

Te Countries of the South Caucasus in International Corruption-Related Rankings 11

OPINION POLL

Public Opinion on CorruptionComparison of the South CaucasusCountries 2013/14 15Public Opinion on Corruption in Georgia 2014/15 16

CHRONICLE

4 September 5 October 2015 19

digest

caucasus

Research Centrefor East European Studies

University of Bremen

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for Security Studies

ETH Zurich

Caucasus ResearchResource Centers

resourcesecurityinstitute.org www.laender-analysen.de www.crrccenters.org

German Association forEast European Studies

Institute for European, Russian,

and Eurasian Studies

The G eorge Washington

University

The Cauc asus Analyt ica l Di ges t

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CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 2

Overview of the Anti-Corruption Fight in ArmeniaBy Khachik Harutyunyan, Yerevan

Abstract:According to the NGO Policy Forum Armenias estimation, Armenia lost $5.9 billion in 2013 because ofcorruption, and instead of a GDP of $10.5 billion in 2013, it would have had $16.4 billion, if only it hadhad a level of governance comparable to Botswana and Namibia.1On February 19, 2015 Armenia estab-lished a new institutional structure to fight corruption led by the Prime Minister. Tis new setup requiresthe adoption of a new, third anti-corruption strategy for Armenia. Te implementation of the previous twostrategies and their action plans (20032006 and 20092012) have not brought substantial changes in thefight against corruption and most importantly have not increased popular trust in the effectiveness of fight-ing corruption. Tis article will examine Armenias experience in fighting corruption, and then discuss cur-

rent obstacles to success in the context of the new institutional setup.

Overview of the Fight Against Corruptionfor the 20032012 PeriodTe first Anti-corruption strategy and its accompany-ing action plan were adopted on 6 November 2003. Te

Action plan was foreseen for the period of 20032006.Tis was the very first attempt of the Armenian authori-ties to tackle corruption in a systematic and institution-alized manner. Both the strategy and action plan lackedany concrete benchmarks to monitor the progress of theimplementation: it was mainly about creating the legis-

lative foundations necessary for effective anti-corruptionpolicy making.2o measure the effectiveness of the 1ststrategy, one can look at the results of the CorruptionPerception Index of ransparency International (hereaf-ter CPI), which so far is the most utilized internationalindex to understand the effectiveness of measures andactions taken by countries in the fight against corruption.

During the period of 2003 to 2007, Armenia con-sistently received bad scores. able 1 lays out the databehind this assertion:

able 1: Armenias CPI Score from 2003 to 2007

CPI 2003 2004 2005 2006

Score 3 3.1 2.9 2.9

Rank 78 82 88 93

Number ofcountriesobserved

133 145 158 163

1 Corruption in Armenia. 2014. Policy Forum Armenia. Pages 39,41. Available at:

2 See OECD. Istanbul Anti-corruption Action Plan. Update about

actions to implement the recommendations taken during Decem-ber 2006September 2007. Page 2. Available at:

Te institutional setting created during the first strategybasically remained intact during the period of 20092012 (second anti-corruption strategy and action plan)and with some modifications remains in place up tonow. Tere were two main bodies established duringthe first and second strategy, which were tasked to over-see the implementation of the strategy and action plan:the Anti-corruption Council and Anti-corruption Mon-itoring Commission. Te Council was chaired by thePrime-Minister and did not have the status of a perma-

nent body; rather it was operating on the basis of regularmeetings. Te Council was a high-level representativebody, while the Monitoring Commission was supposedto be operating on a day-to-day basis.

Although the institutional setup was not drasticallychanged during the second strategy and action plan(20092012), both the second strategy and action planincluded significant improvements and had concretebenchmarks to measure the progress of the strategy.Indicators for the evaluation of the final results for theimplementation of the strategy were linked to Arme-nias ranks and scores in the CPI and Control of Cor-ruption Indicator of the World Bank. Te objective was

to reach 4.1 CPI scores and 0.05 scores for the Controlof corruption indicator in 2012.

It remains highly controversial whether these objec-tives were met. Te problem is that the CPI method-ology changed in 2012 and scores now are within therange of 1100 instead of 1.010. Te score for 2012was 34 which cannot automatically be translated to3.4 under the old methodology. Nevertheless, it canbe said with full confidence that the 4.1 score underthe old CPI methodology does not correspond to a 34score (the CPI score which Armenia was granted for2012). Tus, it can be said that the first objective was

not achieved.Regarding the second indicator (Control of corrup-

tion, World Bank) the target was not met either. Te tar-
http://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.oecd.org/countries/armenia/41720719.pdfhttp://www.oecd.org/countries/armenia/41720719.pdfhttp://www.oecd.org/countries/armenia/41720719.pdfhttp://www.oecd.org/countries/armenia/41720719.pdfhttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdf


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get for 2012 was to achieve -0.05 while for 2012 Arme-nia received -0.533.

Te Current Institutional Setup and NewStrategy: Critical AnalysisEarly in 2015 the government adopted Decisionno. 195-N by which the structure of the policy bodiesinvolved in coordinating, implementing and monitor-ing of the recently adopted third anti-corruption strat-egy was changed. Now there are three main institutions:the Anti-corruption Council, the Experts Group and aMonitoring Department of Anti-corruption Programswithin the staff of the Government. Te Anti-corrup-

tion Council is assigned the role of main decision-makerand is chaired by Prime Minister Hovik Abrahamyan.It includes various ministers, representatives of the par-liamentary opposition, the Prosecutor General, and thehead of the Ethics Commission for High-level PublicOfficials. As for the participation of civil society, it fore-sees membership for two organizations, but the mem-bership is on a rotating basis.

Te composition of the Council raised doubts amongmembers of society about the seriousness of the anti-corruption fight4. Moreover, of the four parliamentaryopposition political parties, only one agreed to have a

representative in the Council as a member. Similarly,civil society largely boycotted the Council; the only spe-cialized civil society representative in the fieldrans-parency International Anticorruption Center NGO (I

Armenia)declared that it will participate only in thecapacity of an observer and not as a member.5

Te mandate of the Experts Group is purely tech-nical and it acts as a professional unit to provide thenecessary expertise to the Council.6Te MonitoringDepartment acts as a unit which provides technicaland organizational support both to the Anti-corrup-tion Council and the Experts Group.

Te new Council met for the first time on July 28,

2015, and among other issues decided to include thefinal draft version of the new Anti-corruption strategyin the agenda of the Government.7Te strategy and

3 Worldwide Governance Indicators. World Bank. Available at:

4 For example, the former MP from the Heritage political party

Armen Martirosyan mentioned: when wolves become good

shepherds for lambs, then we will have a real fight against cor-ruption. See at:

5 See at: 6 On the mandate of the Experts Group, please see the Regula-

tion on the Manner of Operation of the Experts Group. Avail-able at:

7 Minutes of the July 28, 2015 Anti-corruption Councils meet-ing. Available at:

action plan, after one year and five months of procrasti-nation, were adopted on September 25, 2015.8Te Anti-corruption strategy and Action plan focus on the periodof 20152018. Te strategy chose four priority sectorsto address: collection of state revenues, healthcare, edu-cation and police (only the police function connected

with providing services to citizens).At first glance, both the strategy and action plan,

are well-thought out and carefully drafted. Te chronicproblems for the successful enforcement of anti-cor-ruption strategies in Armenia used to be: lack of polit-ical will; lack of proper monitoring and coordinationmechanisms; and lack of necessary financial and human

resources.As for the proper monitoring and coordinat ion

mechanisms, the strategy largely resolves this problem.Te CPI and World Banks Control of Corruption indi-cator will be again employed to measure the overall effec-tiveness of the strategy. Nevertheless, the issue of finan-cial and human resources remains in place. Last but notleast, the issue of political will is both the most cru-cial concern and priority number one: the strategy wasadopted only on September 25, 2015 after more than ayear of procrastination.9

When discussing the strategy, it is necessary to reflect

on the feasibility of reducing corruption in the four pri-ority sectors. Armenia needs to register quick progress inthe fight against corruption in order to gain public trusttoward the effectiveness of the effort. Te need of trustis conditioned by the fact that 63 percent of respondentsin 2013 mentioned that they do not believe that ordi-nary citizens can make a difference in the fight againstcorruption10and the population of Armenia has lowtrust in politicians.11In other words, Armenia is one ofthe most apathetic societies in the world with regardsto the fight against corruption.12

In this regard, the feasibility of making progressin the four priority sectors is highly questionable. It is

8 See 9 Te Concept of Anti-corruption Strategy and Action Plan were

adopted on April 10, 2014, while the Strategy was adopted onSeptember 25, 2015. Tus, it is one year and five months.

10 Global Corruption Barometer. ransparency Interna-tional. Available at:

11 For public trust in politicians, Armenia has 2.9 points and stands

at the 76thposition out of 144 countries in the Global Com-

petitiveness Report 20142015. World Economic Forum. See

at: page 113

12 National Integrity System Assessment. Armenia. 2014. Main

author-Khachik Harutyunyan. ransparency International Anti-corruption Center NGO. page 33.
http://info.worldbank.org/governance/wgi/index.aspx#reportshttp://galatv.am/hy/news/119869/http://galatv.am/hy/anatylitcs/108829/http://www.gov.am/files/councils/2.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://www.azatutyun.am/archive/news/latest/2031/2031.html?id=27269227http://www.azatutyun.am/archive/news/latest/2031/2031.html?id=27269227http://www.transparency.org/gcb2013/country/?country=armeniahttp://www.transparency.org/gcb2013/country/?country=armeniahttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www.transparency.org/gcb2013/country/?country=armeniahttp://www.transparency.org/gcb2013/country/?country=armeniahttp://www.azatutyun.am/archive/news/latest/2031/2031.html?id=27269227http://www.azatutyun.am/archive/news/latest/2031/2031.html?id=27269227http://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://www.gov.am/files/councils/2.pdfhttp://galatv.am/hy/anatylitcs/108829/http://galatv.am/hy/news/119869/http://info.worldbank.org/governance/wgi/index.aspx#reports


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impossible to have corruption free islands in a countrywith systematic corruption such as Armenia13. But it ispossible to start from a sector which can create a dom-ino effect or chain reaction. None of the four prioritysectors has this potential. Even if theoretically Armeniacould build a corruption-free higher education sector orhealthcare system, it would neither bring quick resultsnor have a spreading effect on other sectors. Te start-ing point for the anti-corruption reforms must be a sec-tor or issue which will start a domino effect and deprivethe corruption monster of its food: money.

Daron Acemoglu and James Robinson convincinglyargue in Why Nations Failthat poor countries are poor

because those who have power make choices that createspoverty.14Tey go even further and say that the politi-cal and state leaders are making bad choices not by mis-take but on purpose. Te validity of this assertion canbe seen in the majority of former Soviet countries, andin this sense, Armenia is not an exception but an ordi-nary case. Te high perception of corruption correlates

with lack of a promising economic situation.

Customs and Competitiono portray in an allegoric manner the recommenda-tions in this article, let us imagine two fabled beings:

the corruption monster and the integrity angel. Bothbeings are feed on money. Te corruption monster is get-ting fed regularly, while the integrity angel barely hasenough to survive. Tus, the monster first of all shouldbe deprived of its food and the angel should be fed bet-ter. Tis strategy requires, first and foremost, focusingon sectors which initiate the flow of monetary resources:customs and anti-monopoly policy.

Neither of those two sectors received special atten-tion and focus in the strategy, while neglecting themis obviously a wrong choice, because, according to the

World Competitiveness Index 20142015, the mostproblematic factor for doing business in Armenia is

corruption.15 Regarding competition and monopo-lies, the Berterlsmann Stiftung in its 2014 BI coun-try report on Armenia notes: As things stand, Arme-nia lacks the necessary combination of critical laws andeffective enforcement, particularly in the area of antimo-

13 Ibid, page 23 and US Department of State, Country Report s for

Human Rights Practices for 2014: Armenia. Available at:

14 Daron Acemoglu and James Robinson. Why Nations Fail.. 2012.

Page 83

15 Global Competitiveness Report 20142015. World EconomicForum. See at: page 112

nopoly and antitrust law. 16Additionally, the Nationsin ransit 2015 report on Armenia explicitly mentions:

Major industries and the foreign trade sector remaindominated by monopolies, creating ample opportuni-ties for corruption.17

Regarding customs, according to the Doing Busi-ness 2015 report on Armenia, for a standard shipmentof goods, it takes exporters 16 days and 1,885 USD toexport, while importers need 18 days and 2,175 USD.18Te same report mentions that Armenia, with a score of68.81 points for trading across borders, stands at 110 inthe ranking of 189 economies in the world.19Its neigh-bor Georgia has 84.02 points and stands 33 rd in the

ranking, which is an impressive result.20Te cleaning of those two sectors will enable small

and medium enterprises to trade more and will pro-vide incentives for getting involved in entrepreneur-ship. Tis, in turn will assist the formation of a middleclass, which is a guarantee against vote buying. Underthis scenario, vote buying incidents during elections

will drastica lly decrease (depending on the size of themiddle class). Fair elections will deliver more account-ability from political parties and individual candidates,

which in turn will result in a more accountable parlia-ment and government.

In addition to those two sectors, there is one moresector which is indirectly linked: protection of employ-ees by having vibrant trade unions in place. In regard totrade unions, the National Integrity System Assessment2014 report on Armenia notes: Tere are even fewerknown unions of legal entities and no actually visibletrade unions.21Tis issue is totally missing from thestrategy, while it is an essential sector in countering themonopoly power of oligarchs.

Another sector which wrongful ly is left out of thestrategy as a priority is the judiciary. Armenia, with 2.9points, stands at 107thplace among 144 countries in

16 Bertelsmann ransformation Index 2014. Armenia countryreport. Bertelsmann Stiftung. Availablet at: 17 See at Nations in ransit 2015. Armenia, Country Report. Free-

dom House. Available at:

18 See able 9.2. Summary of predefined stages and documentsfor trading across borders in Armenia at page 69. Doing Busi-ness 2015. Economy profile 2015. Armenia. World Bank Group.

Available at: 19 See ibid, page 100.20 See ibid.

21 National Integrity System Assessment. 2014. Armenia. Main

Author: Khachik Harutyunyan. ransparency InternationalAnticorruption Center NGO. Page 160. Available at:
http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapperhttp://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapperhttp://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapperhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttps://freedomhouse.org/report/nations-transit/2015/armeniahttps://freedomhouse.org/report/nations-transit/2015/armeniahttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttps://freedomhouse.org/report/nations-transit/2015/armeniahttps://freedomhouse.org/report/nations-transit/2015/armeniahttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapperhttp://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapperhttp://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapper


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its ranking for judicial independence, according to theWorld Competitiveness Index 20142015.22 Its neigh-boring Georgia for the same indicator stands at 65thplace23and even Azerbaijan, which is considered as acountry of the region where the political persecutionof independent thinkers is an ordinary thing, stands infront of Armenia with 3.2 points and occupies the 99thposition24. Tus, the situation of Armenia, in regard tothe judiciary is extremely bad.

ConclusionsPolitical will is the main prerequisite for an effectiveanti-corruption effort in any country. Te previous two

anti-corruption strategies of Armenia failed to bring sub-stantial results. Te new strategy does not prioritize thesectors necessary for success: customs; anti-monopolypolicy, the judiciary and trade unions. Instead of thesefor sectors, the Government prioritized four other sec-tors which do not have the potential to start a dominoeffect and clean other sectors.

Te Government of Armenia should act quickly andmake the anti-corruption fight in the country visibleand inclusive by focusing on the sectors which mustbe tackled first.

About the AuthorKhachik Harutyunyan (University of Zurich, Master of Advanced Studies in International Organizations) is an anti-corruption expert from Armenia. He is co-author of two fundamental studies on good governance and anti-corrup-tion in Armenia, as well the main author of the recent fundamental study National Integrity System Assessment 2014.

Armenia. He also is one of the co-authors of the Concept Paper on the Anti-corruption Strategy of Armenia.

Further Reading Bertelsmann ransformation Index 2014. Armenia country report. Bertelsmann Stiftung. Corruption in Armenia. 2014. Policy Forum Armenia. Available at:

Corruption Perception Index. ransparency International. Doing Business 2015. Economy profile 2015. Armenia. World Bank Group.

Draft Anti-corruption Strategy of the Republic of Armenia and 20152018 Action Plan.

Global Corruption Barometer. ransparency International. Minutes of July 28, 2015 Anti-corruption Councils meeting. National Integrity System Assessment. Armenia. 2014. Main authorKhachik Harutyunyan. ransparency Inter-

national Anticorruption Center NGO. Nations in ransit 2015. Armenia, Country Report. Freedom House. OECD. Istanbul Anti-corruption Action Plan. Update about actions to implement the recommendations taken

during December 2006September 2007. Regulation on the Manner of Operation of Anti-corruption Council, Experts Group and RA Governments Staff s

Department of Monitoring of Anti-corruption programs. Te Global Competitiveness Report 20142015. World Economic Forum. 2014 US Department of State, Country Reports for Human Rights Practices for 2014: Armenia Daron Acemoglu and James Robinson. Why Nations Fail. 2012 Worldwide Governance Indicators. World Bank.

22 Te Global Competitiveness Report 20142015. World Economic Forum. 2014. page 11323 Ibid, page 189.24 Ibid, page 411.
http://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.transparency.org/cpi2014http://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://moj.am/legal/view/article/807http://moj.am/legal/view/article/807http://www.transparency.org/gcb2013http://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://transparency.am/files/publications/1430407572-0-563326.pdfhttps://freedomhouse.org/report/nations-transit/2015/armeniahttps://freedomhouse.org/report/nations-transit/2015/armeniahttp://www.oecd.org/countries/armenia/41720719.pdfhttp://www.gov.am/files/councils/2.pdfhttp://info.worldbank.org/governance/wgi/index.aspx#reportshttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdfhttp://info.worldbank.org/governance/wgi/index.aspx#reportshttp://www.gov.am/files/councils/2.pdfhttp://www.oecd.org/countries/armenia/41720719.pdfhttps://freedomhouse.org/report/nations-transit/2015/armeniahttps://freedomhouse.org/report/nations-transit/2015/armeniahttp://transparency.am/files/publications/1430407572-0-563326.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://gov.am/u_files/file/councils/ardzanagrutyun.pdfhttp://www.transparency.org/gcb2013http://moj.am/legal/view/article/807http://moj.am/legal/view/article/807http://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.doingbusiness.org/data/exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdfhttp://www.transparency.org/cpi2014http://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdfhttp://www.bti-project.org/reports/country-reports/pse/arm/index.nchttp://www.bti-project.org/reports/country-reports/pse/arm/index.nc


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Anti-Corruption Measures in the Energy Sector: EII in AzerbaijanBy Hannes Meissner, Vienna

Abstract:Azerbaijan eagerly joined the Extractive Industries ransparency Initiative (EII) because doing so helpedlegitimate the election of President Ilham Aliev in 2003. Since EII focused on transparency in governmentrevenue, it did not harm the elites ability to spend state money in corrupt ways. Accordingly, the initiativefailed to ensure that oil money went to societys benefit and, as the government began to intensify its crack-down on local civil society, EII downgraded Azerbaijan from its once exalted status. Since Azerbaijan nowviews itself as a rising regional power, and is less concerned about its standing within the international com-munity, it is not clear if the EII downgrade will influence government actions.

Corruption Patterns in Azerbaijan and theEIIIn Azerbaijan, corruption is structurally rooted, affect-ing almost all spheres of public life. Te majority of gov-ernment institutions are badly affected. Tere are onlysome isolated areas kept free from corruption, such asthe State Oil Fund, the State Exams Committee, theDiplomatic Service and a recently established agencyfor public service delivery, ASAN. Te government pur-posely upholds these institutions as best practise showcase examples. However, as corruption is highly central-ised, the ruling elite plays a major role in related practises.

Regarding corruption channels, a major differencecan be drawn between general corruption outside theoil and gas sector and corruption strategies related tothe countrys wealth of natural resources. General cor-ruption practises go back to Soviet (and pre-Soviet) ruleand can be found in many resource-poor countries inthe post-Soviet space. Tey are related to a centralisedsystem of bribes. In this context, people pay money inorder to get their matters arranged more quickly andmore effectively, or to gain material advantages at theexpense of others. Besides, public positions are sold.Parts of the money then flow upward in the informalpyramid system that pervades the public sector. How-

ever, in Azerbaijan, such practises have obviously lostimportance during the last couple of years. Te estab-lishment of the ASAN Service Centres was a milestonein this context. Moreover, both locals and foreign busi-nesspeople report that it has become more difficult to get(small) things done, as there are fewer informal contactpersons present today. Te decrease in low level pettycorruption goes hand in hand with a slight improvementin the countrys ransparency International CorruptionPerceptions Index (CPI). While the 2010 CPI rankedthe country 134 out of the 178 states that it tracks, thecountry was ranked 126 out of 175 countries in 2014.

Te general view is that these improvements havetaken place as the ruling elite are less dependent on suchsources of income today. In fact, the influx of huge oil

incomes since 2006 has opened up new, and enhancedold, business and rent-seeking opportunities. In Azer-baijan, the president informally acts as the central powerbroker between the seven most influential persons/fam-ilies and their clientelistic networks. While two of thesegroups are mainly political actors, two other groups aresolely active in the business sphere with large holdings.Te other three players unite both political and economicpower, as they are not only ministers, but also controlhuge holdings. Besides legal business activities, thesegroups are engaged with the private consumption of oiland gas incomes at the expense of the society. In this

context, corruption patterns are centred on the expen-diture side of public resources, particularly when hugesums are directed from the intransparent state-budgetinto in the countrys bloated construction sector, con-trolled by the ruling elite own enterprises. Accordingto insiders, 40 percent of the over 13 billion U.S. dol-lar state budget of 2009 was spent on public invest-ment projects. An estimated 70 percent of this money

was spent inefficiently, disappearing in murky channels.Rent-seeking and inefficiency in public resource man-

agement are problems characteristic of most resource-rich countries worldwide. As such, these are problems,the Extractive Industries ransparency Initiative (EII)

directly addresses. Te initiative claims that naturalresources can lead to economic growth and social devel-opment. However, when poorly managed they too oftenlead to corruption and even conflict. As a response tothat, EII was launched to ensure that all citizens seeresults from the extraction of their natural resources. oimprove openness and accountability in the managementof revenues from natural resource production, EII pro-vides an institutional framework for cooperation betweenthree stakeholder groups, in particular extracting com-panies, governments of resource extracting countries andthe local civil society. Te initiative addresses transpar-

ency at the income side of public resources, as it ensuresthe full disclosure of taxes and other payments made byextractive companies to governments.


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Te following discussion deals with the EII in Azer-baijan. Te next section sums-up the history and the cur-rent status of EII implementation in Azerbaijan. Tis isdone very briefly, since the EII Validation report avail-able online offers an in-depth documentation of EIIimplementation in Azerbaijan. Subsequent sections gobeneath the surface. What are the initiatives outcomesand non-intended side effects in this particular coun-try case? Tis article draws on recent publications andbackground conversations as well as on field researchcarried out in Baku in 2009 and 2010.

EII Implementation in Azerbaijan

For a long time, Azerbaijan was praised as an EII pio-neer and pilot country. In fact, EII implementation

was favoured by the fact that the government regularlyexpresses its willingness to carry out reforms. Both domes-tically and internationally, President Ilham Aliyev declares

his strong support to transparency and efficiency in rev-enue management to the benefit of the entire population.

At the first EII-conference on 17 June 2003 in Lon-don, Ilham Aliyev announced the governments decision,to take part in the EII and to actively support all inter-national efforts to enhance transparency in the extractingindustries. Azerbaijan became a candidate country in 2007.

As a result of rapid EII implementation, Azerbaijan wasawarded compliant status as the first country worldwideon 16 February 2009. Te audit report concluded that

Azerbaijan has complied with all the indicators containedin the Validation Guide and that additionally, the pro-cess is consistent with the EIIs Principles and Criteria.

However, on 15 April 2015, Azerbaijan was gradeddown to Candidate Country again, following reports ofinterference in NGO functioning. During the last decade,

Azerbaijan has seen a continuous and gradual increase inauthoritarianism. However, against the background ofthe Arab Spring, the Maidan revolution and economiccrisis due to recent oil price shocks, the government has

significantly increased pressure on civil society. As the lat-est EII validation report puts it, in order to resume theirrole in EII, the national NGO Coalition (EII Coali-tion) members have to be able again to access their bankaccounts and register new grants for EII implementationactivities; speak freely about the EII process and expressviews without fear of reprisal or harassment; and organisetrainings, meetings and events related to the EII process.

OutcomeTe question of the outcome of EII in Azerbaijanaddresses two basic aspects. Firstly, did the initiative

enhance transparency and efficiency in public resourcemanagement? Secondly, does the initiative strengthen civil

society? Point two is also crucial, as the initiative not only

aims at short-term results, but also at creating a criticalpublic in order to push the government to more transpar-ency and efficiency from the bottom-up in the long term.

In terms of question one, it was a common viewamong local experts in Baku in 2009/10 that the EIIis inadequate to ensure transparency, efficiency and sus-tainability in revenue management. As a Western diplo-mat in Baku pointed out, he doubts whether the EIIis the right instrument to guarantee transparency. He,as well as other experts, pointed to the reason that EIIis limited to transparency in the field of revenues, whilethe ruling elite can persist with its corruption and rent-seeking interests in the field of expenditures. As a former

member of the EII Board put it, EII relates to oneaspect of transparency only. In fact, the problems withcorruption persist, as the expenditure side is more sen-sitive (in the case of Azerbaijan). A leading member ofthe national NGO Coalition was particularly sceptical:

Before the EII was implemented, the government insti-tutions could do with the oil revenues what they wanted.

As the initiative has been implemented now, nothing haschanged in this regard. () Given that, we do not believethat the EII process will have a deeper impact on society.

Despite this, the vast majority of local NGOs contin-ued their work in the EII Coalition. Te head of an

opposition party underlined his pragmatic view, stressingthat if the EII did not exist, the entire situation wouldbe even worse. Unlike in the past, basic information onoil revenues is now available. Moreover, as severa l NGOleaders positively highlighted, EII created a platform,enabling the exchange their own positions with those ofthe government. Tis is, in fact, a major opportunity ofthe initiative. Cooperation frameworks, within whichcompanies and civil society can work together with therespective government are usually weak or do not existat all in authoritarian environments. However, in recentyears, EII in Azerbaijan turned out to be incapable ofmaintaining a minimum degree of political freedom,

necessary for such cooperation frameworks to work. Itremains to be seen whether the countrys downgrade toCandidate Country will generate enough political pres-sure on the government to change this.

Already before the recent clampdown on civil society,in 2009/10, local observers were sceptical about whetherthe initiative could strengthen civil society and createa critical public. Some argued that the civil society of

Azerbaijan is too weak to use the EII as a first step inpromoting transparency. As the head of an oppositionparty criticised, civil society has no mechanisms at all toensure public control over oil management. We have to

admit that there is no real civil society and no transpar-ency. Te president (of Azerbaijan) is the one who takesany decision. It (the oil money) is his money. Others


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noted that nobody living in the countryside of Azerbai-jan is interested in the opinion of the EII Coalition anyway and that they are not even aware of its activities.

Non-Intended Side EffectsAs a local civil society representative in Baku criticised,the government could not wait joining the EII, as theyrealised that the initiative is not adequate to tackle cor-ruption and to bring more influence to civil society while,at the same time, bringing about considerable advantagesfor them. Several civil society experts in Baku highlightedthat the government uses the EII to boost its own image.

As a member of the EII Board put it, when you are

`number one in the EII, it means that you are trans-parent. A local finance expert criticised, in this way, thegovernment misuses the EII as imitation. Te regionalcoordinator of an institute working on revenue transpar-ency took a similar view, highlighting that the govern-ment uses the EII as shield against criticism. A leadingmember of the local EII Coalition, in turn, pointed outthat the EII allows the government to cover its corrup-tion practises and to boost its image at the internationallevel. However, there is another problematic aspect in hiseyes. By being committed to the EII, they send the sig-nal to the population that they are transparent. () Tey

demonstrate, even if there are people in Azerbaijan notsatisfied with their style of governance, the entire inter-national community supports them.

In other words, the government uses the EII tolegitimise its rule both external ly and internally. Accord-ing to a local finance expert, the best example of this

were the events surrounding the illegitimate transfer ofpower from the former president Heydar Aliyev to hisson Ilham by rigged elections in 2003. Tis was a criti-cal juncture for the ruling elites hold on power. For thisreason, the government tried to strengthen its positionat the international level. For the president, the EII(that had just been launched) offered an opportunity

to integrate himself into the international community.Particularly in the early years, the EII fell on fer-

tile ground in Azerbaijan, as international recognition is

important to the government to a certain degree. Besides,it also fulfilled economic purposes. As a local financeexpert highlighted, Azerbaijan shall become econom-ically attractive to foreign investors as a hub betweenEurope, the USA and Asia. However, during the last cou-ple of years, such aspects increasingly lost importance.Tis is related to the governments new self-image as arising political and economic power in the region, lessresponsible to the international community.

ConclusionsIn Azerbaijan, EII has been successful in guaranteeingtransparency on the revenue side of public resources. How-

ever, the ruling elite can persist with its corruption and rent-seeking practices in the field of expenditures. Only if EII isextended to the expenditure side, it will ensure transparency

and efficiency in public resource management. Althoughthe new 2013 Standard cautiously tries to expand the ini-tiative, the focus remains on revenue transparency.

However, if the EII is extended to the expenditure-side, the question will arise of how to force governments toimplement the initiative. Te Azerbaijani government was

willing to implement the initiative for the reason that EIIbrings about significant political and economic advantages,

while, at the same time, not posing any real threat to the

ruling elites hidden interests. In this context, the initiativehas even had non-intended contra-productive side-effects.A major opportunity of EII lies in creating a coop-

eration framework between companies, civil society andgovernments. However, the initiative can only strengthencivil society in the long-run, when there is a minimumdegree of political freedom. In Azerbaijan, this is notthe case anymore. Consequently, EII has come underpressure to take actions against Azerbaijan. However, thegovernments new self-image as a rising political and eco-nomic power in the region and threats to quit the EIIraise doubts as to whether Azerbaijans downgrade toCandidate Country will change this constellation.

About the AuthorHannes Meissner works as a senior researcher and lecturer at the Competence Centre for Black Sea Region Studies, Univer-sity of Applied Sciences BFI Vienna. Tis analysis draws on material of his PhD thesis (published by LI Verlag) about theresource curse and the future of initiatives to enhance accountability and transparency for oil and gas revenues (EIIetc.), which he concluded at the University of Hamburg and the German Institute of Global and Area Studies (GIGA).

Further Reading: A longer version of this publication as a conference paper from the Tird Global Conference on ransparency Research:

oby McIntosh: EII, OGP Face Challenges Handling Civil Space Issues,
http://campus.hec.fr/global-transparency/wp-content/uploads/2013/10/Paper-Meissner-Transparency-Initiatives-v2.pdfhttp://www.freedominfo.org/2014/11/eiti-ogp-face-challenges-handling-civic-space-issues/http://www.freedominfo.org/2014/11/eiti-ogp-face-challenges-handling-civic-space-issues/http://www.freedominfo.org/2014/11/eiti-ogp-face-challenges-handling-civic-space-issues/http://www.freedominfo.org/2014/11/eiti-ogp-face-challenges-handling-civic-space-issues/http://campus.hec.fr/global-transparency/wp-content/uploads/2013/10/Paper-Meissner-Transparency-Initiatives-v2.pdf


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Continuity and Change: Corruption in GeorgiaBy Alexander Kupatadze, St Andrews, UK

Abstract:Georgia has become one of the least corrupt countries in Eastern Europe. Te Georgian Dream govern-ment has continued to maintain and upgrade public service standards to ensure low levels of bribery in thesectors where state and citizenry interact. However, as in the era of Mikheil Saakashvilis United NationalMovement (UNM), concerns remain about the particularistic distribution of public resources and variousforms of legalised corruption. Tis article analyses the changes as well as the continuity of practices sincethe defeat of the UNM government in October 2012.

Policy Changes

Te anti-corruption policy of the Georgian Dream (GD)government prioritises long-term planning and engage-ment with a wider spectrum of stakeholders than did theUNM top political leadership, which combined decisiveand quick actions on the ground with concentrated deci-sion-making. Saakashvilis post-Rose Revolution gov-ernment had low regard for anti-corruption strategy onpaper and largely rejected the advice of various interna-tional institutions that advocated a slow pace of reform.In contrast, the Georgian Dream government started towork on a long-term strategy straight away and adoptedits 201516 anti-corruption action plan in April 2015.

Another policy shift is the abandonment of libertar-ian policies. Te new government has adopted a numberof new regulations for businesses, including in the con-struction and food production sectors, which increasemonitoring and safety standards, but ultimately alsomay increase corruption risks.

Despite these changes, the continuation of signif-icant unethical and corrupt practices can be observedsince the new government came to office in 2012.Importantly the public exposure of these practices alsoincreased due to a more open and critically-orientedmedia, particularly Rustavi 2 and abula V, and effec-tive NGOs, such as the Georgian chapter of ranspar-

ency International and the Institute for the Develop-ment of Freedom of Information (IDFI).

Collusion between Politics and BusinessEven though the government made steps to increase thetransparency of the public procurement system, numer-ous cases suggest that collusion between politicians andbusinessmen, especially at the regional level, underminesand corrupts the process. Companies directly or indi-rectly owned by high ranking officials often win pub-lic procurement contracts, especially through tenders

which are exempt from the requirements of open and

competitive bidding and which can be implementedthrough simplified procedures, leaving more room forthe discretion of public officials. Te media revealed

many such cases in the regions as well as in the capi-

tal bilisi. For example, in Senaki two companies bothlinked with the local head of the Georgian Dream polit-ical party won public tenders in 2014. In Gori compa-nies owned by the mayors brother-in-law won a sim-plified public procurement contract. Ironically thepublic tender commission did not forget to make a dis-claimer about the absence of conflicts of interests.1In

June 2015 Koba Arabuli, the vice-governor of Mtskheta-Mtianeti region, spoke about the widespread corruptionrelated to public tenders in his region. According to him,much more money is allocated to repair and construc-tion works than is needed. For example, more than 2.5.

million GEL was allocated for the construction of the2.5 km long road in Dusheti while only 100,000 GEL isallocated for similar work in other projects. He allegedthat the MPs elected from regional precincts are ofteninvolved in these cases and influence the outcomes ofpublic tenders. However later, after attending a meetingof the GD political council, Arabuli retracted his alle-gations and said that his statement about the MPs wasmisinterpreted.2In March 2015 the newly appointedDeputy Minister of Infrastructure Nodar Javakhishviliadmitted that lots of money is made on road construc-tion related to public tenders. In the majority of thesecases the required work is not done properly and pub-

lic money is pocketed by individuals and companies.Similar to the UNM era, the companies that often

win public tenders also contribute to the coffers of theruling Georgian Dream coalition. For example, the own-ers of Nil LD have transferred more than 120,000 USDto GD after winning public tenders worth three millionUSD in 201314.3Hence public-private collusion andmanipulating the state in private or group interest con-tinues, but before October 2012 the purpose was consol-idating political power, rather than private profiteering.

1 2

3
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For example, in 2013 bilisi Mayor Gigi Ugulava wascharged with misspending USD 28.2 million in publicfunds from the capital citys development fund in 201112 by illegally channeling money to the UNM and itsactivists by creating fictitious jobs (Civil Georgia 2013).

Open abuse of public funds to help a specific polit-ical party are less common nowadays because the rul-ing coalition is funded by a billionaire oligarch. Instead,state capture is more privatisedparticular companiesor networks are influencing state behaviour to extractprivate benefit. For example, in 2013 the Culture Min-istry and presidents office stripped one of the worldsoldest gold mines in Sakdrisi of its status as an archeo-

logical site of national importance thereby allowing theRMG company to illegally starting mining operationsthere. According to the NGO Green Alternative, RMGand its legal predecessors, Madneuli JSC and QuartziteLD, benefited from illegal political connections underboth the UNM and GD governments. In another case,the government tried to establish administrative andlegal barriers on the market to give the Georgian PostalService a privileged position. Tese kinds of cases raiseconcerns about state capture by private interests and therelated risks of corruption.

More importantly, the Zedelashvili-Jankarashvili

clan, the group of former government and GD officialswho are close relatives of Prime Minister Garibashvili,is widely believed to influence policies and various stateinstitutions for the sake of private benefit. Te networkhas a significant degree of control in a number of keygovernment ministries, including the Ministry of theInterior and the Ministry of Infrastructure. Te lat-ter grants most of the lucrative public contracts, whilethe former fights against corruption [at least that wasits task before the summer of 2015, when the Minis-try of Security was established to handle this function].Unsurprisingly the companies owned by the key actorsof this network, as the case of Serpatine LD suggests,

have been widely reported to disproportionally bene-fit from public procurement contracts.4Unfortunatelysome of these corrupt practices go beyond the revolv-ing door phenomenon because, apart from leveragingnetworks for illicit benefit, there have been illegal take-overs of businesses and forcing competitors to give upmarket share through blackmail and the use of the crim-inal justice system.

So far, the GD governments anti-corruption effortshave mainly focused on members of the Saakashvili gov-ernment. Tis selective justice exacerbates perceptions ofpolitically-motivated prosecutions because since Octo-

4 ;

ber 2012 there has not been a single high-profile cor-ruption prosecution among the ranks of the GD gov-ernment. Te current situation stands in contrast to theprosecution of 6 members of Parliament and 15 actingdeputy ministers from 2004 to 2010. Te GD leader-ship often prefers to deal with corruption cases quietly,

without much public discussion. In the case of scandalsrelated to the Zedelashvili-Jankarashvili clan, the GDpolitical leadership decided to cut its influence by sack-ing its key members from government positions ratherthan going through the due legal process of examin-ing and investigating the publicly available evidenceof corruption.

Nepotism and BonusesPayment of large bonuses to high ranking officials isanother form of legalised corruption that has been per-petuated. Te practice resembles political clientelismbecause there are no criteria for determining and award-ing excellence in public office, so decisions are mainlybased on discretion. Te bonus payments made by theheads of these institutions disproportionally benefit theleadership of the ministries and departments in a mannerthat resembles a patrons distribution of resources to hisown clientele rather than incentivising performance. In

certain instances the spending for bonuses increased afterthe change of government. For example, in bilisi morethan 18.2 million Georgian Laris have been spent forbonuses in 2014 compared to 7.2 million GEL in 2012.However, in other regions, such as the Achara Autono-mous Republic, the overall value of similar payments hasbeen decreasing. In July 2015 the government passed adecree to regulate the system of bonuses in the publicsector. However the decree just provided the definitionand stipulated the conditions under which bonuses canbe granted without providing specific criteria for deter-mining what constitutes outstanding performance. Asa consequence of the governments new regulations, in

many public institutions the old system has been keptintact, but the terminology changedbonuses are nowreferred as lagniappes or inducements.

Nepotism is perceived to be on the rise. Te 2013 pub-lic opinion poll administered by the Caucasus ResearchResource Center showed that 30 percent of the respon-dents think connections is most important factor ingetting a good job, up from 19 percent in a similar sur-vey conducted in 2011. Perceptions about the impor-tance of connections have likely increased for several rea-sons: more exposure of nepotistic practices by the mediaand NGOs; public statements of high-ranking officials,

including former Prime Minister Ivanishvili and his suc-cessor Garibashvili describing nepotism as an acceptablepractice; and, perhaps most importantly, a growing con-
http://www.netgazeti.ge/GE/105/News/38556/http://pirveliradio.ge/?newsid=19613http://pirveliradio.ge/?newsid=19613http://pirveliradio.ge/?newsid=19613http://pirveliradio.ge/?newsid=19613http://www.netgazeti.ge/GE/105/News/38556/


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sensus among observers that the cases of nepotism havegenuinely increased. Nowadays nepotism plays a deci-sive role in hiring as well as promoting public employees.However one needs to acknowledge that the practicesvary from institution to institution and some ministriesdo better than the others, as one recent study found.5

ConclusionOverall Georgia is stuck somewhere betweenneo-patri-monialism, namely a particularistic governance regime

with the state captured by private interests and a distri-bution of resources that benefits privileged individuals,and ethical universalism, under which there is an impar-tial governance regime based on the norms of fairnessand citizen equality and the state remains autonomousfrom private interests (Mungiu-Pippidi 2013).

About the AuthorDr Alexander Kupatadze is a lecturer at the School of International Relations, St Andrews University since 2014. Pre-

viously he held postdoctoral positions at George Washington University (201011), Oxford University (201213) andPrinceton University (201314). He is also an affiliate fellow at the Extralegal Governance Institute, Oxford Univer-sity, and a member of the Global Initiative against ransnational Organised Crime.5

Bibliography Civil Georgia, 2013. 20 January available at Green Alternative, Natural Resource Management and Factors Conducive to Elite Corruption, Research funded

by the Open Society Georgian Foundation, bilisi, 2015. Mungiu-Pippidi, A. (2013). Controlling corruption through collective action. Journal of Democracy, 24(1), 101115. ransparency International Georgia, Competition policy: the Georgian postal service market, February 2015.

5

Te Countries of the South Caucasus in International Corruption-RelatedRankings

Corruption Perceptions Index

Prepared by: ransparency InternationalEstablished: 1995Frequency: AnnualTe data refer to the previous 24 months.Covered countries: at present 175URL:

Brief Description:

Te Corruption Perceptions Index is a composite index that draws on multiple expert opinion surveys that poll per-ceptions of public sector corruption in countries around the world. It originally scored countries on a scale from zeroto ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption.

Since 2012 countries are scored from 0 (highly corrupt) to 100 (very clean). o ensure comparability the previous datawere subsequently multiplied by the factor 10.

DOCUMENTATION
http://www.civil.ge/eng/article.php?id=25660https://gipa.ge/uploads/files/kvleva_sajaro%20samsaxuri.pdfhttp://www.transparency.org/http://www.transparency.org/https://gipa.ge/uploads/files/kvleva_sajaro%20samsaxuri.pdfhttp://www.civil.ge/eng/article.php?id=25660


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Figure 1: Corruption Perceptions Index 2014: Scores and Rankings of Selected Countries

61

52

51

43

37

36

31

29

29

27

27

26

23

18

17

35

50

53

69

94

100

119

126

126

136

136

142

152

166

169

Poland

Georgia

Czech Republic

Romania

Armenia

China

Belarus

Azerbaijan

Kazakhstan

Kyrgyzstan

Russia

Ukraine

Tajikistan

Uzbekistan

Turkmenistan

70 (figure in

column) =

score

25 (figure

in box) =

ranking

highly corrupt very clean

Figure 2: Corruption Perceptions Index 19992014: Scores

0

10

20

30

40

50

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Georgia

Armenia

Azerbaijan

highlycorru

ppt

very

clean

able 1: Corruption Perceptions Index 19992014: Scores

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Georgia 23 * * 24 18 20 23 28 34 39 41 38 41 52 49 52

Armenia 25 25 * * 30 31 29 29 30 29 27 26 26 34 36 37Azerbaijan 17 15 20 20 18 19 22 24 21 19 23 24 24 27 28 29

Note: Missing values for Armenia (2001 and 2002) and for Georgia (2000 and 2001) have been replaced with moving averages.


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Freedom House: Nations in TransitPrepared by: Freedom House (Washington, USA)Established: 1997Frequency: AnnualTe data refer to the respective previous year.Covered countries: at present 29URL:

Brief Description:

Nations in ransitmeasures progress and setbacks in democratization in countries and territories from Central Europeto the Eurasian region of the Former Soviet Union. Te rating covers seven categories: electoral process; civil soci-

ety; independent media; national democratic governance; local democratic governance; judicial framework and inde-pendence; and corruption. Te ratings are based on a scale of 1 to 7, with 1 representing the highest and 7 the low-est level of democratic progress.

Figure 3: Nations in ransit: Corruption in 2015 (Selected Countries)

3.50

3.50

3.75

4.50

5.25

6.00

6.25

6.25

6.25

6.50

6.75

6.75

6.75

6.75

1 2 3 4 5 6 7

Czech Rep.

Poland

Romania

Georgia

Armenia

Ukraine

Belarus

Kyrgyzstan

Tajikistan

Kazakhstan

Azerbaijan

Russia

Turkmenistan

Uzbekistan

more democratic progress less democratic progress

able 2: Nations in ransit: Corruption 20012015

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Armenia 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.50 5.50 5.5 5.25 5.25 5.25 5.25

Azerbaijan 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.26 6.50 6.50 6.50 6.50 6.75 6.75 6.75

Georgia 5.25 5.50 5.75 6.00 5.75 4.75 5.00 5.00 5.00 5.00 4.75 4.50 4.50 4.50 4.50
http://freedomhouse.org/reportshttp://freedomhouse.org/reports


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Worldwide Governance IndicatorsPrepared by: World BankEstablished: 1996Frequency: Annual, between 1996 and 2002 every two years.Te data refer to the corresponding year of evaluation and are published one year later. Data for 2014 are not yet available.Covered countries: at present 215URL:

Brief Description:

Tis index measures six dimensions of governance. Te indicators are based on several hundred individual variablesmeasuring perceptions of governance, drawn from 31 separate data sources constructed by 25 different organizations.

Te relevant index value shows the average of all relevant sources according to their reliability. Virtually all scores liebetween -2.5 and 2.5, with higher scores corresponding to better outcomes.

A number of revisions to the underlying source data have been made since 2011. Te deletions from and revisionsto the data from previous years on average have only minimal effects on the 19962009 data.

Figure 4: Worldwide Governance IndicatorsControl of Corruption 2013 (Selected Countries)

0.55

0.36

0.19

-0.2

-0.47

-0.52

-0.9

-0.9

-0.99

-1.09

-1.12

-1.19

-1.23

-1.34

-1.5 -1 -0.5 0 0.5 1

Poland

Georgia

Czech Rep.

Romania

Armenia

Belarus

Kazakhstan

Azerbaijan

Russia

Ukraine

Kyrgyzstan

Tajikistan

Uzbekistan

Turkmenistan
http://info.worldbank.org/governance/wgi/index.asphttp://info.worldbank.org/governance/wgi/index.asp


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Figure 5: Worldwide Governance Indicators: Control of Corruption 19962013

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Georgia

Armenia

Azerbaijan

morecorrupptio

n

lesscorruption

able 3: Worldwide Governance Indicators: Control of Corruption 19962013

1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Armenia -0.48 -0.74 -0.66 -0.65 -0.55 -0.62 -0.64 -0.60 -0.73 -0.61 -0.57 -0.67 -0.62 -0.53 -0.47

Azerba ijan -1.26 -1.13 -1.10 -1.06 -0.94 -1.08 -0.99 -0.98 -1.02 -1.02 -1.10 -1.17 -1.13 -1.07 -0.90

Georgia -1.39 -0.79 -0.88 -1.14 -0.69 -0.60 -0.36 -0.08 -0.24 -0.27 -0.28 -0.16 -0.04 +0.25 +0.36

OPINION POLL

Public Opinion on CorruptionComparison of the South CaucasusCountries 2013/14

Sources: Caucasus Research Resource Centers (CRRC) opinion polls: Caucasus Barometer 2013; Attitudes towards the Judicial Systemin Georgia, 2014

Figure 1: Which Problem is Currently the Most Important One in Our Country? (Percentage of

Respondents Mentioning Corruption, 2013/14)

1% 5% 7%

39%

26%

0%

10%

20%

30%

40%

50%

Georgia Armenia Azerbaijan Russia 2013 Russia 2014


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Public Opinion on Corruption in Georgia 2014/15All surveys conducted by the Caucasus Research Resource Centers (CRRC); Details about the surveys aregiven at the end of this section.

Figure 1: During the Last 12 Months, Have You Or Your Family Member Been Asked o Pay aBribe (Both Monetary Or Non-Monetary) For a Public Service?

Source: ransparency International Georgias public opinion poll, 2015

Figure 2: Concerning Corruption, How Do You Tink the Situation Has Changed In GeorgiaCompared o October 2012?

Yes

0

No

99

DK/RA

1

for the better

11

no change

46

for the worse

28

DK/RA

15

Source: NDI public opinion poll, April 2015

Figure 3: In Your Opinion, since parliamentary Elections Of October 1, 2012, How CommonIs It For Georgian Officials o Use Teir Position For Own Purposes?

Source: I Georgias public opinion poll, 2015

not common at all6

not really common11

partly common,

partly not

31

rather common

21 very common

4

DK/RA

27


17/20


Figure 5: What Do You Tink Happens o Te Money Collected Trough axes Paid By Te Geor-gian Citizens? Te Money Illegally Goes o Te Pockets Of Government Representatives

Mentioned

23

Not mentioned

55

DK/RA

22

Source: public opinion pollVolunteering and civic participation in Georgia, 2014

Figure 6: In Your Opinion, How Justified Or Unjustified Is It For Georgian Officials o EmployTeir Relatives, Friends Or Fellow Party Members In Te Public Sector Without FairCompetition?

not justified at all

48

rather not justified

20

partly justified, partly

not

17

rather justified

4

completely justified

1DK/RA

11


Figure 7: o What Extent Do You Agree Or Disagree With Te Opinion Tat Judges In Geor-gia ake Bribes?

Note: Te question was converted from a 10-point scale into a 5-point scaleSource: public opinion pollAttitudes towards the Judicial System in Georgia, 2014

completely disagree

39

somewhat disagree

9

neither agree, nor

disagree

14

somewhat agree

6

completely agree

3

DK/RA

30


18/20


Figure 8: Do You Agree Or Not With the Statement Tat As a Result Of the Change In thePrescription Policy, Corruption Appeared In Pharmacies?


Yes

11

More or less

18

No

26

DK/RA

46

Results and documentations of the public opinion polls quoted above are available online:

Caucasus Barometer (results) (documentation)

I Georgias public opinion poll

(documentation)

Public Opinion PollAttitudes towards the Judicial System in Georgia (results) (documentation)

NDI public opinion poll, April 2015 (results) (documentation)
http://www.crrccenters.org/20146/Online-Data-Analysishttp://www.crrccenters.org/20119/Project-Overviewhttp://www.crrccenters.org/209131/CRRC-Georgia-conducted-first-full-scale-tablet-based-survey-for-Trhttp://www.crrccenters.org/209131/CRRC-Georgia-conducted-first-full-scale-tablet-based-survey-for-Trhttp://caucasusbarometer.org/en/ji2014ge/codebook/http://www.crrccenters.org/20587/Attitudes-towards-the-Judicial-System-in-Georgiahttps://www.ndi.org/April-2015-Public-Opinion-Poll-Georgiahttps://www.ndi.org/NDI-Poll-Georgians-concerned-about-jobs-economyhttps://www.ndi.org/NDI-Poll-Georgians-concerned-about-jobs-economyhttps://www.ndi.org/April-2015-Public-Opinion-Poll-Georgiahttp://www.crrccenters.org/20587/Attitudes-towards-the-Judicial-System-in-Georgiahttp://caucasusbarometer.org/en/ji2014ge/codebook/http://www.crrccenters.org/209131/CRRC-Georgia-conducted-first-full-scale-tablet-based-survey-for-Trhttp://www.crrccenters.org/209131/CRRC-Georgia-conducted-first-full-scale-tablet-based-survey-for-Trhttp://www.crrccenters.org/20119/Project-Overviewhttp://www.crrccenters.org/20146/Online-Data-Analysis


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19CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015

CHRONICLE

Compiled by Lili Di Puppo

For the full chronicle since 2009 see

4 September 5 October 20154 September 2015 Norways Foreign Minister Brge Brende says in bilisi that Georgia can rely on the support of Nordic

and Baltic states, including during the forthcoming NAO summit

7 September 2015 Armenian President Serzh Sarkisian secures 200 million USD during a visit to Russia to be used to mod-ernize the Armenian military as well a s a 25 USD gas price cut

8 September 2015 Georgian Prime Minister Irakli Garibashvili meets with Kyrgyz Foreign Minister Erlan Abdyldaev dur-ing a stopover in Bishkek on the way to an official visit in China

9 September 2015 Georgian Defense Minister ina Khidasheli starts a tour of European countries, including Poland, theBaltic States and the United Kingdom, as part of an effort to consolidate support for Georgia ahead ofthe NAO summit in Warsaw next year

10 September 2015 Georgian Prime Minister Irakli Garibashvili meets with Chinese Premier Li Keqiang on the sidelineof the World Economic Forum in the Chinese port city of Dalian to discuss launching free trade talk s

between the two countries11 September 2015 Azerbaijan cancels a visit by a European Commission delegation citing a European Parliament resolution

that condemns the countrys human rights situation

12 September 2015 Armenian police in the capital Yerevan use force to clear demonstrators protesting recent electricity pricehikes

14 September 2015 Georgian Prime Minister Irakli Garibashvili slams a protest by grape growers over low prices in Geor-gias eastern region of Kakheti as a provocation by the opposition United National Movement party

15 September 2015 Azerbaijani President Ilham Aliyev criticizes a European Parliament resolution that condemns Azerbai-jans human rights situation during a joint press conference with Czech President Milos Zeman in Baku

15 September 2015 Te head of the EU Monitoring Mission (EUMM) in Georgia, Kstutis Jankauskas, meets with Rus-sian Deputy Foreign Minister Grigory Karasin in Moscow as part of the first visit of a EUMM head toRussia since 2011

17 September 2015 Former mayor of bilisi and one of the leaders of the United National Movement opposition party, GigiUgulava, receives a prison sentence of 4.5 years for misspending public funds while serving as mayor

22 September 2015 A taxi driver in the Azerbaijani city of Sumqayit dies following a self-immolation to protest alleged mis-conduct by local police in the seventh self-immolation protest since the beginning of 2014

25 September 2015 Georgian Energy Minister Kakha Kaladze meets with chief executive of Russias Gazprom Alexei Millerin Brussels to discuss cooperation in the gas sector

25 September 2015 Armenian police say that three civilians have been killed by gunfire from Azerbaijani forces in villagesnear the two countries border

26 September 2015 Armenian President Serzh Sarkisian tells a government commission that Azerbaijan is guilty of a blatantviolation of the cease-fire signed in 1994 to end the Nagorno-Karabakh conflict

28 September 2015 Georgian President Giorgi Margvelashvili signs a bill into law that introduces new rules for electing thechief prosecutor

30 September 2015 Foreign Ministers of Georgia, Moldova and Ukraine hold a joint meeting with US Deputy Secretary of

State Antony Blinken on the sideline of the UN General Assembly to discuss security challenges andregional cooperation

1 October 2015 Georgian Prime Minister Irakli Garibashvili says that Georgias future is bright during a speech beforethe UN General Assembly, while stating Georgias NAO aspirations and mentioning developing strongrelations with China

5 October 2015 Te Armenian parliament votes to hold a referendum to change the constitution in order to introduce aparliamentary republic whereby the president will no longer be elected by direct vote, but by parliament

5 October 2015 Opposition groups protest against proposed changes to the Armenian constitution outside of the Parliamentin the capital Yerevan, fearing that these changes would allow President Serzh Sarkisian to remain in power

5 October 2015 A court in the Georgian town of Kutaisi orders the pretrial detention of three activists of the UnitedNational Movement opposition party over an incident involving a confrontation with a lawmaker of theGeorgian Dream party


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Editors: amara Brunner, Lili Di Puppo, Iris Kempe, Natia Mestvirishvili, Matthias Neumann, Robert Orttung, Jeronim Perovi,Heiko Pleines

Te Caucasus Analytical Digest (CAD) is a monthly internet publication jointly produced by the Caucasus ResearchResource Centers (), the Research Centre for East European Studies at the University of Bremen(), the Institute for European, Russian and Eurasian Studies of the George WashingtonUniversity (), the Resource Security Institute in Washington, DC (),the Center for Security Studies (CSS) at EH Zurich (), and the German Association for East European Studies(DGO). Te Caucasus Analytical Digest analyzes the political, economic, and social situation in the three South Caucasus statesof Armenia, Azerbaijan and Georgia within the context of international and security dimensions of this regions development.CAD is supported by a grant from ASCN ().

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