The Impact of US Sanctions on Georgia’s Richest Man, Bidzina Ivanishvili
Introduction
Last spring, when tens of thousands of Georgians were protesting against what they saw as a clear sign of Russian influence on the country’s politics, Georgia’s parliament rushed through amendments to the nation’s tax code. Transparency International (TI) Georgia, the anti-corruption watchdog, wrote at the time that the change – which allows tax-free transfer of assets from offshore accounts to Georgia – may have been introduced to serve the interests of the country’s richest person and former prime minister, Bidzina Ivanishvili. He is the founder and honorary chairman of the country’s ruling party, Georgian Dream.
The Wealth and Influence of Bidzina Ivanishvili
With an estimated wealth of $4.9bn (£3.9bn), Mr. Ivanishvili made his money in 1990s Russia, in computing, metals, and banking. Most of his wealth is believed to be tucked away in offshore companies. Georgia was plunged into political crisis and daily street protests last May when the country’s MPs passed the contentious “transparency on foreign influence bill”, often dubbed the “foreign agents law”. Under this legislation, media and non-governmental organizations that receive more than 20% of their funding from abroad have to register as “organizations acting in the interest of a foreign power”, submit themselves to stringent audits, or face punitive fines. It was widely seen as a move to prevent US and other Western influence on the country.
US Sanctions and Potential UK Sanctions
In response to the crackdown on protesters, the US government announced sanctions against Mr. Ivanishvili at the end of last year. There is also the possibility of sanctions from the UK, with a Liberal Democrat MP calling on the government to impose sanctions on Mr. Ivanishvili. TI Georgia estimates that if the UK imposed sanctions on Mr. Ivanishvili, his entire business empire would be affected due to holding companies registered in British Overseas Territories.
The Economic Impact of Sanctions
Nika Gilauri, former prime minister of Georgia, now leading a private company called Reformatics, warns of the negative impact of political instability and international isolation on the economy. While the Georgian government touts a $6bn inward investment agreement with UAE property group Emaar, research from Policy and Management Consulting Group (PMCG) paints a bleak economic outlook due to political turmoil and the suspension of EU membership talks.
Conclusion
The US sanctions on Bidzina Ivanishvili have sparked a debate on the influence of wealthy individuals on politics and the economy of Georgia. The potential for further sanctions from the UK and the contrasting views on economic growth highlight the complex challenges facing the country.
FAQs
What are the implications of US sanctions on Bidzina Ivanishvili?
– Freezing of assets and restrictions on US citizens and companies from doing business personally with him.
– Potential impact on his business empire due to offshore holdings and investments.
How is the Georgian economy affected by political instability?
– Negative effects on foreign direct investment (FDI).
– Bleak economic outlook, with forecasts of zero growth and potential budgetary, currency exchange, and job creation problems.