Mart Laar blog

Recent elections in Georgia demonstrated that democracy still works in this part of the World. The basicly free and fair contest helps repair Georgia’s international image, which suffered when after November’s clashes between opposition protesters and police Georgian government declared the emergency rule. To really demonstrate its commitment to democratic values Georgia invited large amount of foreign observers to follow the elections. This was very different attitude demostrated by Russia practically blocking foreign observers from its elections. In this context it is specially interesting that namely Russia is only country which declared the Georgian elections un-democratic and rigged. Foreign observers in Georgia had different opoinion. They found several misgivings in elections, but concluded that these were not result of bad will and that elections represented the will of Georgian people.

The opposition has not agreed to this. This is not practical attitude either. The European Union rightly called on the opposition to recognize the results. At the same time, Mr. Saakashvili’s bloc must learn to work with the opposition, and before the parliamentary vote due this spring, address shortcomings that election observers have noted. This is all part of the process called democracy. The time of street policy must be over, time for parliament fights must come. Parliamentary elections held in some months propose for this excellent possibilities. There not accusations against eachother but different programmes and proposals can fight. It is now time for Georgia to look to the future.

Yesterday died in Tallinn internationally most known Estonian writer Jaan Kross. Jaan Kross was born 19.02.1920 together with independent Estonian Republic. He belonged to the promising generation, which was born and educated in independent Estonia. The hopes and dreams of this generation were unfortunately destroyed on 23.August 1939, when two totalitarian dictatorships – nazi Germany and communist Russia signed Molotov-Ribbentrop pact, starting the Second World War and dividing World between themselves. In 1940 was Estonia occupied by the Soviet Union and times of terror started. As other members of its generation Kross joined resistance movement against both dictatorships. In 1944 was Kross arrested by SD and when attempt to restore the independence was crushed and Soviets returned, Kross was arrested again – for the same reason as in nazi times – restoration attempt of Estonian independence. Kross had to spend several years in GULAG. When after the death of Stalin prisoners were released, Kross returned to Estonia and made its debute in literature. At the beginning there were poems, then plays and then novels. Kross studied first Estonian history, describing hard choices between resistance and will to live. His work helped to keep national spirit during most difficult times of Soviet repressions. After the restoration of Estonian independence, Kross turned in several novels to the fate of its generation between nazi and communist dictatorships. At the same time his novels became internationally more and more known, translated and recognized. Kross was several times presented to the Nobel Prize of literature, but unfortunately never got it. For some people in West Kross has not been most comfortable figure. His works remembered too well that there is actually no difference between nazi and communist crimes and it was and is necessary to fight against both evils, keeping human identity alive. Jaan Kross is dead, but his work is living on.

Ivars Godmanis, head of Latvian government in 1990-1993, has been set up as Latvia’s new Prime Minister. I believe this to be good news both for Latvia and the Baltics as a whole. I remember him from times past as a good partner and also a government leader daring to take unpopular but necessary decisions, even at the cost of personal popularity. Back then, Godmanis was especially interested in energy. I hope this will continue to be the case. Dependence on Russian gas and lack of necessary interconnectors in the European direction requires a greater unity between us than we have had up to now. We are under strong political pressure. By playing on the interests of various circles in different Baltic States, it is regrettably quite easy for Russia to divide us. We should also not forget that the Eastern side may soon start experiencing difficulties with supplies, as the necessary investments into new gas fields and infrastructure have not been made.

The Baltic States need to upgrade their cooperation to draw their European partners’ attention to the fact that the European Union should not be abandoning the Energy Charter Treaty which represents EU values, free markets and the rule of law. More specifically, this means making the European-Russian cooperation dependent on the ratification of Energy Charter by Russia. By signing the Energy Charter, Russia of her own free will agreed to its conditions and requirements. Therefore, she must now keep the legal commitments she has undertaken. Pursuant to Energy Charter article 45(1), Russia is legally bound even if the treaty has not yet been ratified by her.

In case of possible cut-offs of gas supplies or threats of that kind, it provides a functioning mechanism of dispute settlement, which will be helpful in cases like Druzhba in Lithuania, for instance. Energy Charter is also a better opportunity than the NordStream for timely and well priced supply of gas into Europe. When it comes to the Baltic States, it reduces their dependency on Russia. Energy Charter also supports open energy markets, which in turn can be used for easing the hold the Gazprom monopoly has both in Russia and Europe. The energy relations on the Eastern direction currently lack rules and norms. Therefore, the EU must in no way back off from the Charter’s requirements nor water then down. It is in the best interests of the Baltic States themselves to take coordinated action in this field and to make joint comments. The stabilization of the political situation in Latvia would be a major factor in helping achieve that goal.

Republican President candidates have started their tax debate well. It has been sad, that Bush administration failed so badly in their tax reform approach. Praising abroad radical tax reforms as introduction of flat tax in Estonia or Slovakia, President Bush failed to do the same at home. It is now unfortunately harder than some years ago as the Republican majority in Congress is lost. In this context it is specially good that at least the Republican candidates have made proposals on radical tax reform, promising not only to cut taxes but to simplify the tax system. When in former campaigns Steve Forbes has been lonely voice campaigning for flat tax, then now sales tax or some sort of flat tax looks to become more main stream topic. It is however necessary to be more precise on these plans. As in other countries, these plans will be furiously attacked from other side. Republicans must have clear understandings, what they are planning to do and party must have clear and common position on this subject. Otherwise the campaign for tax reform can backfire on the same way how it happened in last German elections.

Recent events in Georgia have shocked many people, who welcomed years ago „The Rose revolution” and had supported the Georgia’s turn to West, its radical reforms and build-up of democracy. Their hopes were badly hurt as a result of violent demonstrations and use of force against them, closure of independent media and declaration of emergency situation. Georgia’s international image and specially President Mikhail Saakashvili’s personal reputation was seriously damaged as a result of all this. Warnings of Saakashvilis „uncontrolled temper” and unpredictable decisions suddenly looked to become true.


The situation in Georgia nevetheless is more complicated. Looking to it from outside, it is easy to get a wrong or too simplified picture. I visited Georgia on last weekend, met both from people from government and outside it. So these are some of my impressions. First of all the decisions on emergency situation was not passed by President alone, but by President Council, where nearly all Georgia’s political leaders, included speaker Nino Burjanadze took part. So when it was mistake, then it was common mistake. It’s clear that the government overreacted and made mistakes, but from other side it must be recognized, that the activities of some opposition politicians, speacially oligarch Badri Patarkatsishvili were not responsible either. Everything was made to provoke government to use force and unfortunately authorities fell to the trap. The situation in Tbilisi to the evening of 7 November was so near to larger conflict that probably only thanks to the declaration on emergency situation, Georgia avoided loss of lives. Most important was, that the government coalition did not answered to opposition demonstrations with demonstrations of their supporters, calming so the situation down.

The evening of 7.November was clearly low-point for Georgia during this millennium. From this on, the situation has started to improve – slower as supporters of Georgia want, but with every day with better speed. The Western States were first of all ready to act quickly, condemning the step back from democracy and suggesting Georgia to abolish the emergency situation and start negotiations with opposition with the goal to find political solution to the conflict. At the same time countradictory to some expectactions Georgia was not left alone, it was not isolated. This helped Georgian leaders to calm down, analyze the situation and move forward.


First positive step in positive direction was President Saakashvili’s announcement that he is holding snap president elections on January 5, 2008. With this the politics moved back from the streets to election polls and hopefully it stays there at least till elections. The referendum on time of parliament elections will be held at the same time. Next step forward was the start of negotiations with opposition on changes in election code, which by have have lead to positive results. Even more important was decision to lift emergency situation in Georgia from 16.November 2007.


The Georgian authorities must nevertheless understand that these are only first steps toward normalization of situation and restoration of democracy. Freedom of media must be restored. Opposition must be granted all possibilities to participate and campaigne in elections without fear. The cooperation and negotiatons with opposition must continue, the government must recognize, that the opposition politicians are not Russian spies or collaborators. From the other side opposition must act responsibly aswell. Calls for violence and overthrow of „fascist regime” must be canceled. It will be practical for democratic opposition to make clear cut between themselves and people like Okruashvili or Patarkatsishvili. Both sides must make absolutely clear, that they recognize results of democratic elections, whatever these would be. Recent calls from part of opposition on new demonstrations are counterproductive and can be lead to new clashes. Georgians must understand, that when the politics will be moved to the streets, Georgia’s future will be under serious doubt. It looks that some opposition politicians are just afraid of real elections, happily other parts of it are looking for solutions. 


Georgian history would ofcourse not end with President elections. Way to democracy would not be easy and short. Will it be succesfull, it depends mostly from Georgian’s themselves. We can try only to share our experiences from the same road and to give good advice. It is important also to move away Russia’s pressure on Georgia and not let anybody to intervene to Georgia’s interial affairs. It must be made absolutely clear that no country is having right to block Georgia’s integration with European structures. Georgia is not lost, it’s future lies in the hand of Georgia’s people. 


On 9.November 1989 the Wall went down. This was great day not only for Germany but all World – now it was clear, that the evil empire would be finished in near future. I spent this year this day in Berlin. It did not look so, that too many people remembered this day. There were candles on the graves of victims of Wall, some events, but nothing extraordinary. Logical result of such ignorance is seen in German newspaper “Die Welt” 10.november, where is described study made among German students from both former Western and Eastern Germany 15-17 age. It was schocking to see how few young people knew on German history. Only 48,6% of students found, that Eastern-Germany was a dictature, 28,1 thought that not. The DDR was for young people funny but not dangerous system, STASi intelligence agency as any other and nearly 20% thought, the “The Wall” was build by West. There is not so much to comment. When the World continues not to condemn the communist crimes at the same way how nazi crimes are condemned, real picture from the past will never prevail.

On one of the most sad days in the World History – on 90th anniversary of so called October Revolution in Russia 1917 – the just launched European Council of Foreign Policy launched its “Power audit” on European Russian policy, which crititizes current situation in Europe, which allows Russia to split Europe and play some parts of it against anothers. The only solution for Europe is to develope common foreign and security policy, guaranteeing so more fruitful relations with its big neighbour. At the same time we must mourn today more than 100 million killed people – sad result of communism – and even more hundred millions tortured, jailed, repressed people in different countries. Any other teaching in the World has resulted with such massive killing as communism. It’s time to condemn it at the same way how the World have done with “killing machine on the second place” – fashism.  

Yesterday the documentary from Jim and Maureen Tusty was presented first time in Canada, Toronto on Estdoc Festival. The audience received the movie with standing ovations. This is actually not a suprise. Tusty’s documentary describes very well the fate of Estonia between nazi ja communist dictatorships, the fight against the tyranny and victory, achieved during the “singing revolution”. This is extraordinary and true story, which is at the same time very moving. In some weeks “Singing revolution” will arrive cinemas across the United States. When You want to see this extraordinary movie in Your cinemas, please register in the homepage of the documentary. It is really worth to see it.

In the recent World Bank study “Doing Business 2008″ Georgia which some years ago was on 122th position has raised to 18. place, immadiately after Estonia. This is best proof, that radical liberal reforms have really worked in Georgia. Georgia has liberalized its economy, moved away from lot of regulations, fought down corruption, introduced flat rate 12% tax, abolished most of custom tariffs. This has created real economic boom in Georgia, bringing in nearly 3 billion USD investments this year. It is easier to do business in Georgia than in any other transition country except Estonia. Looking on so called “developed” countries, Germany is on the same list on 20th, France 31th, Italy on 53th position. Georgia is really now in the mind of business.

As one of the lastest in the Black Sea region Bulgaria is after Russia, Ukraine, Georgia and Romania moving to the flat tax, introducing it on the lowest level in the World – to 10 percent. Ruling socialist-lead coalition has soon adopted ta plan and it is now under discussion in Parliament with other legislation connected with 2008 budget. This bold move is following last years radical tax cut, when Bulgaria slashed its corporate income tax to flat 10 percent. IMF issued its usual warnings, that such cuts are very bad as they threaten the balance of budget. Results of first year low corporate tax had proved opposite – earnings from it have been  more as 40 higher  as predicted.  This has encouraged  to  do the same with personal income tax.  Bulgarias example proves  once again, tax low taxes boost economic growth and hit hardly informal or grey sector.  Meeting with the Prime Minister Stanishev I encouraged him to continue on the radical way of reforms, boosting so Bulgarias growth and recovery. It was good to see, that on the flat tax, the Prime Minister did not needed actually encouragement – he has made its decision and keeps it. So we can wish all the best.