Companies in Georgia embark on a protest by ceasing operations
Georgia's Business Community Spearheads Protest Against Political Crisis, Expressing Concern Over Economic Instability
Georgia's political crisis, which intensified towards the end of 2024, has led the business community to take a stand against the Georgian Dream government. In an attempt to alter the country's political course, hundreds of businesses participating in a three-hour "warning strike" closed their doors and workers took to the streets on January 15, demanding a fresh parliamentary election and the release of detainees deemed political prisoners.
Although traffic was disrupted briefly during the protest, sustained disruption remained minimal. Baia Pataraia, a human rights defender and organizer of the strike, indicated that the regime was adjusting to every new form of protest, spurring the need for innovative methods to capture public attention and engage more people, including the private sector.
Pataraia expressed fear that without EU integration, Georgia's economy would stagnate if the country was politically isolated. In response to democratic backsliding, the European Union and United States have implemented punitive measures such as diplomatic visa restrictions and suspended aid, leaving millions in assistance from Western donors unavailable.
The Georgian Dream government has faced criticism for manipulating October's parliamentary vote, overseeing violent crackdowns on pro-EU protesters, and steering the country away from EU integration. Fitch Ratings revealed some concern that the political crisis could destabilize the economy, stating that a protracted political crisis could undermine the institutional framework, affect investor and domestic confidence, and exert pressure on external liquidity and the exchange rate.
Although economic statistics have presented an image of economic stability, concerns persist due to the fragile outlook. In 2024, trade turnover saw a significant increase, which the Georgian Dream officials claimed as a victory. However, the annual inflation rate in December was only 1.9 percent, a fact that may offer reassurance but also fails to fully dispel unease about the country's economic future.
A World Bank report issued in October projected that the Georgian economy would grow by more than 5 percent in 2025 and 2026. However, this positive economic forecast did not factor in developments since November 28, when Georgian Dream shelved the country's EU bid, initiating the current political turmoil.
As part of their efforts to influence domestic politics, business leaders signed a petition demanding new elections in December. The brief strike on January 15 served as a prelude and test of interest for employing similar tactics in the future. Organizers emphasized that the private sector's participation in the strike is critical in addressing the political crisis.
Large Georgian companies demonstrated support for the strike, with workers from various offices of a trade and business center in Tbilisi participating. Both TBC Bank and Bank of Georgia, the country's two largest banks, took a hands-off approach in regards to employee participation in the walkout.
Political uncertainty following the protracted crisis poses a significant threat to Georgia's economic stability. The business community remains concerned about policy instability, deteriorating investment climate, and an uncertain regulatory environment. These factors are crucial in maintaining economic momentum during times of political turmoil.
In light of this delicate balance, it becomes evident that Georgia's economy, built on strong fundamentals, remains at risk of being undermined by the ongoing domestic political conflict.
Sources:1. European Commission Economic Forecast Report (2025)2. Fitch Ratings Statement3. Local Media Reports4. World Bank Report (October 2024)
- The business community in Georgia, including large companies like TBC Bank and Bank of Georgia, has expressed concern over the country's economic stability, amidst the ongoing political crisis.
- The Georgian Dream government's political maneuvers, such as shelving the country's EU bid and manipulating the parliamentary vote, have garnered criticism from the finance sector, with potential ramifications for investor confidence.
- As the political crisis in Georgia persists, general news outlets have been reporting on the impact of the instability on the business environment, with concerns about policy instability and a deteriorating investment climate.
