Rescuing Georgia

Georgia will receive its Christmas and New Year's present late this year, but the wait will be worth it. For the presidential election to choose a successor to President Eduard Shevardnadze, scheduled for January 4, 2004, offers the country its first real hope since independence in 1991. A peaceful "Rose revolution" brought this about, but economics, not politics, will determine whether Georgia prospers or endures another lost decade.

Eduard Shevardnadze's time had long since past. He lifted Georgia out of civil war in the early 1990's, but then held it together by playing one powerful clan off against another. During his 10 years in power, the economy tanked and hundreds of thousands of his ablest countrymen emigrated.

Shevardnadze's initial term did bring a liberal foreign investment code and the foundation of a state based on the rule of law. Investment, particularly in energy, flowed in, as Westen companies hoped that oil and gas deposits in neighboring Azerbaijan meant that there must be some in Georgia, too.

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