Billionaires' Elections: Czech Republic and Georgia

Jimmy Greaves, the famous English goal scorer and pundit, coined the phrase “football's a funny old game.” Politics can also be classified under the same category.
 
Its humor can at times bring tears to one's eyes, although less laughter and more deep sighs are normally heard. Usually it is elections that bring forth joy to one side and despair, along with commiserations, to the other unsuccessful candidates.
 
This past week the post-communist world has witnessed exactly such sentiments. The Czech Republic held a parliamentary election, whereas Georgia held a presidential election. The former was an important member of the Eastern Bloc, whereas the latter was part and parcel of the Soviet Union. Both countries were bitterly divided over whom to support, holding strong views concerning their respective political opponents. Both elections were also a long time coming, with some electorates taking months before people could finally cast their votes.
 
Czech Republic
 
The Czech election was thought to be the more fluid and unpredictable one in terms of its outcome. The polls had predicted the Social Democrats to do very well and win the election having spent seven years in opposition. The election was an early one (seven months premature) as parliament had chosen to go to the polls before its term had expired.
 
The election was dominated by the repercussions of a scandal associated with ex-Prime Minister Petr Necas' affair with an aide. The issue was not a moral or an ethical one, but centered on the aide being arrested and accused of directing military intelligence to gather information on her lover's estranged wife. When this news broke in June, Necas resigned as prime minister, and the first directly elected head of state, President Milos Zeman -- who used to lead the Social Democrats in the 1990s -- asked for a caretaker government composed of technocrats, with his economics adviser as premier, to be formed. It duly was. When it came to ask for a vote of confidence in parliament in August, the MPs surprisingly refused to grant it legitimacy, preferring to take their chances at the polls on Oct. 25.
 
Aside from lingering thoughts about calls of judgment, love triangles, abuse of power and intelligence gathering -- all associated with Necas' center-right party -- there was also concern with regard to the imposition of an unelected government by the president. Some political parties saw it as an attempt to grab political power, while avoiding responsibility. The results of the election reflected the dissatisfaction with the established political parties, which were considered by the electorate to be equally tarnished by the scandal as well as the remedy offered.
 
The Social Democrats, however, emerged as the largest party with 20.45 percent of the vote, but could not claim to have won the election as they fell short of forming a single party administration. What came as a shock to observers was the elevation into second place with 18.65 percent -- separated by less than 2 percent -- of the ANO Party, which only two years ago was established and financed by billionaire businessman Andrej Babis, who has extensive agricultural interests.
 
The Communists came third with just under 15 percent, and the two right-of-center parties polled approximately 20 percent together. The extreme right-wing Dawn Party entered parliament with just under 7 percent, so did the Christian Democrats, forming the smallest party group with 6.8 percent of the popular vote. Needless to say, the mass desertion by the electorate of the center-right parties was not a surprise given the scandal associated with Necas. What is difficult to understand, however, is why the Social Democrats could not capitalize on such a promising plain.
 
It is precisely this lack of an explanation that led to the party leadership to lay the blame squarely on the shoulders of the party leader Bohuslav Sobotka. While party leaders ultimately carry responsibility for electoral defeats as well as victories, would it have made a dramatic difference if someone else were at the party's helm? What one needs to focus more on is the impact of a protest party coming within a whisker of being the largest party in parliament.
 
One should not forget the highly successful campaign in Italy of the Beppe Grillo-led protest party the Five Star Movement, which came third in the elections in February with a quarter of the vote. The Czech electorate, similar to the Italians, is dissatisfied with the status quo parties and has expressed its dissatisfaction at the ballot box. The relatively strong showing of the Communists is another indicator of this interpretation. If a coalition with them could have been possible, few believe that there would be calls within the Social Democrats asking for the head of Sobotka.
 
Despite such pressures, however, Sobotka tried to convince ANO and the Christian Democrats to form a coalition as their collective number of MPs would reach 111 out of a total of the 200 represented in parliament. Given that parliament will convene on Nov. 25, there are many weeks, if not months of negotiation awaiting these parties, with talk already of a provisional budget being penciled in for 2014, limiting spending to this year's levels.
 
Georgia
 
The Georgian presidential election guaranteed a new person would be at the helm in Tbilisi before any votes had been cast as President Mikheil Saakashvili was prevented from competing due to term limits. The result was similar to the parliamentary election that was held last year, as the candidate of the Georgian Dream coalition, Giorgi Margvelashvili, easily won. This result means that both the Prime Ministry and the Presidency are held by the Georgian Dream coalition that was established last year by Bidzina Ivanishvili, reputedly the richest man in Georgia, with his personal wealth of $6.4 billion equaling a third of Georgia's gross domestic product (GDP).
 
As leader of the party, he created he became prime minister after the October 2012 elections but has recently vowed to resign his office on Nov. 24, supposedly to put an end to personalities dominating Georgian politics and ridding the nation of the "Messiah complex." Given the personal animosity between himself and ex-President Saakashvili, it seems that Ivanishvili simply wanted to end his opponent's political career, although this was a given due to term limits. It remains to be seen whether he will carry out his promise later this month.
 
Looking towards Georgia's future, the newly elected President Giorgi Margvelashvili has vowed to pursue Georgia's path towards integrating with Western international organizations such as NATO and the European Union. He has also underlined the fact that he would like to have closer bilateral relations with the Russian Federation, something which Saakashvili strongly opposed, even more so after the 2008 war.
 
The drive to the West pursued by Saakashvili has benefited Georgia in several ways. Accepting that the long-term economic growth of the country rests with a higher grade pool of human capital, much was made of learning and being taught in English in order for current and future businessmen to become adapted to the globalizing world. An efficient state administration was also a high priority for Saakashvili, who successfully reduced corruption, especially in the police and security forces, thus receiving plaudits from international financial institutions.
 
Given the natural beauty of the country, tourism was designated as a major area in which investment was channeled into and foreign investment attracted to. A good example to illustrate this point is the development that has taken place in the Black Sea city of Batumi, which regularly attracts thousands of Turkish citizens, either crossing the land border, or flying directly from İstanbul. Foregoing the necessity of traveling with a passport and accepting national identity cards have made Batumi much more attractive to Turks, as well as, of course, the visa waiver scheme. The new president is likely to pursue these business friendly policies without ever acknowledging the principle of continuity. Be that as it may, such policies will benefit not only Georgia but the Caucasus region as a whole.
 
Doppelgänger
 
Both Georgia and the Czech Republic have made strides towards democratization, open markets and the rule of law. Czech membership in NATO and the EU quite naturally puts it into a much higher category when compared to Georgia. While this is definitely true, looking at the internal political dynamics of the two countries there are notable similarities. Both have experienced a volatile political process that has led to the fragmentation of political parties, thus preparing the ground for new political movements to take root. Especially so when backed by billionaires.
 
This situation has a very prominent precedent in the south of Europe. Silvio Berlusconi -- the richest man in Italy -- also established his political movement named Forza Italia in December 1993 and swept into power in March 1994 through garnering the protest vote. After his legal trials and tribulations, two months ago Berlusconi once again has resurrected his Forza Italia. In the meantime, Italy lost much international credibility due to the billionaire's extravagant behavior, illegal actions and idiosyncrasies.
 
Time will tell if Georgia and the Czech Republic will also endure similar developments. Should they do so, which is inadvisable, the financial repercussions will be much more severe for the two countries, as their economic strengths pale into insignificance compared to the scale of the Italian economy.
 
The two post-communist countries would do well to recall that the path to economic growth and political stability lies very much in strong democratic state structures, as well as an evolving political culture that attaches great importance to the rule of law, the prominence of human rights and a sincere strive towards maintaining national unity.