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Georgia Defense Budget – Priorities, Risks and Tin Horn Dictators
2013.03.12 10:39
Georgia's current defense management policy is insufficiently developed and still in a state of flux, which was exacerbated by last years' Parliamentary elections. The last few months have been a transitional period for the new government it is clear that much money has been wasted, especially in the spheres of national security and the overall defense budget. 
 
Even before the new government came to power layers of competing and vested interests, with short term political agendas, were shaping this policy; national security was not its guiding principle. It is now clear that many of the purchasing decisions of the Ministry of Defense were economically and politically driven, especially in the run-up to the 2008 Georgia-Russia war. Georgian and international media outlets have documented cases of corruption in arms and food procurement, such as the case of Meals Ready to Eat (MREs), and the scandal back in 2008 of substandard weapons and ammunition being supplied to the Georgian Army. 
 
It is clear that many of the instances of corruption in the Georgian MoD were discussed when Robert Muller, the former FBI Director, visited Georgia in early May 2010 and held closed door meetings with Minister of Internal Affairs Vano Merabishvili and Minister of Justice Zurab Adeishvili. Such violations as corrupt procurements, arms trading and the other alleged "side deals" reported are breaches of the US Foreign Corrupt Practices Act when US citizens are involved in paying kickbacks to members of the Georgian government.
 
Muller's visit lasted several hours but still, to this day, the full details of how widespread the corruption was have not been revealed. But the Georgian media has since published the names of specific individuals involved in it and there is clearly a connection between them, especially people such as David Kezerashvili, the former Minister of Defense and Temur Alasania, the uncle of the Georgian President. Such individuals are vying for first place in what appears to be a real power struggle, deriving from their respective positions in government, past and present, and their continuing spheres of influence and networks of patronage. American sources suggest that the main suspect in the weapons smuggling known to have taken place through Georgia, Daniel Alvares, has also been charged with corruption related to weapons sales made in association with members of the Georgian government. 
 
On a micro level, a recent audit of the Ministry of Defense (MoD) revealed many instances of corruption, notably the purchase of 3,000 bullet-proof vests costing a total of 2,800,000 USD from Ukraine. It was determined that these were of low quality and totally unsuitable for military purposes. Another such case was that of the multi-launch systems which rained down tube launched cluster bombs short of their targets, on Georgian villages and troops near the front, in 2008.

 Furthermore, the purchase of ten luxury cars, costing the state 1,537, 313 GEL, was not justified. Often it is difficult to even understand what items were purchased by the MoD, or whether it was even for military purposes, as much of what is bought is listed as Top Secret as it is for the use of high-level MoD officials. 

President Mikheil Saakashvili's government and the MOD apparently spent more than 8-9% of Georgia's GDP on defense, especially in the period 2008-2009, one of the highest proportions in the world. However, it is becoming ever more apparent that much of this amount was not even spent on useful items but either embezzled or squandered. Even Transparency International, (TI), the international anti-corruption agency, confirmed in a May 2012 report entitled "Government Defense Anti-Corruption Index" that Georgia remains vulnerable to real challenges which can readily put its national security goals and missions at risk. This report also confirmed that a high level of elite corruption has long pervaded defense spending. An atmosphere of secrecy still dominates the military sector but it is debatable if this was imposed for security reasons or is driven more by the need to conceal misappropriations and incompetence. 
 
The formal oversight powers of the legislature have not been applied to the defense sector to any substantial degree, and this may have contributed to a breakdown of checks and balances in defense budgeting. It also highly debatable whether the legislature could ever properly monitor some apparently off-the-books sources of government income, mostly in the real estate sector, which apparently provide funds earmarked for defense procurement. Even the internal audits which are undertaken are never published, and nobody is ever held accountable.
 
Given Georgia's record in military procurement it is clear to see why there are no clear public figures, in actual percentages, of how much of the national budget is being secretly spent, or records of where this money comes from, and it now evident that the legislation for making sure Georgia gets the most bang for its buck never envisioned many of the side deals concluded by the former government. Research has shown that procurement is largely opportunistic in nature, rent seeking, and there is no formal acquisition strategy or transparency. According to the TI report 42% of all government procurement is single-sourced, and this figure may be even higher when the MoD is involved. 
 
This all demonstrates that current national defense policy planning is far from efficient; it should be concluded that it is very similar to those of former banana republics with their tin horn dictators. The previous government troika of Vano Merabishvili, PM and former Minister of Internal Affairs, David Kezerashvili, former Minister of Defense with close connections with the Israeli Defense Industry (Mossad), and Bacho Akhalaia, also a former Minister of sDefense and of prisons who is currently jailed for various alleged crimes, was aided by Zurab Adeishvili, the former State Prosecutor alleged to be one of the main players in the illegal arms trade, as confirmed by Georgian and other media sources. 
 
On the same level as the notorious Russian-KGB/FSB arms dealers (generally labeled as the "Siloviki" grouping, with direct links to the Kremlin), these above-named individuals are alleged to have been closely involved in illegal arms dealing and trading, believed, based on some sources, to be worth up to $2-3 billion annually. It is now clear that the business activities of this troika not only involved "black deals" of illegal arms but also forging links between the "big transit" corridor routes of the illegal arms trafficking trade cartels, such as that of former high stakes arms dealer Viktor Bout, AKA the Merchant of Death, which many suspect continues to operate in Georgia to this day.
 
It is very much conceivable that Mikhail Saakashvili's personal network, run largely by his uncle, the former senior KGB officer Temur Alasania, has provided him through these deals with the political resolve, resilience and audacity in the face of all odds which kept his authoritarian regime in power for so long. Georgia has signed the United Nations Convention against Corruption and other international anti-corruption and arms trafficking conventions, but these have not prevented the illegal deals of the past eight years. 
 
There is still clear evidence that the illegal arms trade flourishes in Georgia, despite some joint anti-proliferation initiatives, including a restriction on conventional weapons systems proliferation, undertaken with the USA's Defense Department. Certainly is quite true story that in a country with a "failed state" image is often engaged in international relations precisely because it can thus play a role in illegal arms trafficking and weapons for drugs swaps, as only then does it become an attractive partner for successful states. Moreover, it is also clear that a lucrative "hook" was provided for senior members of the previous government through these off-the-books cash flows and sweet deals. 
 
In conclusion, Georgia's defense policy needs a radical overhaul or it will continue to be on the verge of collapse; many international NGOs and civil society representatives have stated clearly that the new government must distance itself from business as usual and stop turning a blind eye to the many instances of arms trafficking and other illegal financial operations which put national security at risk and drain the national budget, particularly when Georgia has so many pressing social issues. 
 
GT will continue to publish investigative reports on this issue, providing a clear view of what is going on in this sector.

 

By Dr. Vakhtang Maisaia , The Georgian Times
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