Georgia’s backlash against foreign landowners

After years of welcoming outside investment, the small state now worries too much land is being sold to non-citizens.

Georgia countyside
Most farmland in Georgia is not registered, meaning owners are not able to sell their plots in a legal way [EPA]

John Wurdeman, now 37 years old, first came to the Republic of Georgia in 1995 as a young American artist collecting polyphonic folk music in villages across the mountainous country.

He felt welcome and soon became part of the social fabric of this tiny nation, co-founding businesses that include a boutique winery, a restaurant, two wine bars and a tourism company that organises wine tours mainly for foreigners.

“Georgians are very hospitable and received me well. I spoke Georgian and loved the local culture, which also assisted a lot,” Wurdeman told Al Jazeera.

But Georgia, which welcomed Wurdeman with open arms, has become less hospitable to foreigners in recent years, as politicians and some farmers have protested against rising foreign land ownership.

In January 2013, hundreds of Georgian farmers demonstrated, calling for the preservation of “Georgian land for Georgians”. Opposition politicians fretted about grave dangers to the country when Indian farmers began coming to Georgia to invest in agriculture.

Starting in 2012, about 2,000 Punjabi Indian farmers have settled in Georgia’s rural Kakheti region to work the land and grow vegetables.

I don't want foreign citizens to settle down on Georgian soil. The time will come when Indians will buy up all of Georgia.

by - Givi Gzirishvili, farmer from Tsnori

Soon, “farmers from Punjab” became worrying words for Georgians who take the risk of losing its hard-won independence from Russia seriously, and are constantly reminded by politicians that the Russian enemy is just tens of kilometres away from the capital Tbilisi, occupying 20 percent of the country’s territory.

“I don’t want foreign citizens to settle down on Georgian soil. The time will come when Indians will buy up all of Georgia,” Givi Gzirishvili, a farmer from the Tsnori region told the online publication Voice of Kakheti

Decade of open arms

Starting with the Rose Revolution of 2003, the young, pro-Western government of President Mikhail Saakashvili began opening the country to foreign investments.

The country sold off or leased many strategic state assets to foreign companies, including mining company Madneuli (2005), water utility Tbilisi Water (2007), electricity provider Telasi (2003), and the ports of Batumi (2008) and Poti (2008).

Saakashvili enacted a series of laws to attract foreign investment, and in 2012 Georgia’s Constitutional Court abolished all of the country’s restrictions on foreigners wishing to buy plots of land.

The foreigner-friendly attitude, however, seems to have diminished soon after Saakashvili’s government lost in October 2012 parliamentary elections and the Georgian Dream party – led by billionaire businessmen Bidzina Ivanishvili, now prime minister – came to power. 

“Only a Georgian citizen should be an owner of the Georgian land and forests, and pasture lands should belong to self-governing institutions. This way neither Indian, nor Pakistani and Punjabi farmers will be able get hold of Georgian lands,” Kakha Kukava, leader of the Free Georgian party, told Net Gazeti.

On June 28, the Georgian parliament passed a new law suspending the sale of agriculture land to foreign citizens or to entities established by foreign nationals until the end of 2014. The bill went into force on July 17 after it was signed into law by President Saakashvili.

Shalva Pipia, Georgia’s agriculture minister, does not think foreign investment will dry up as a result of the new law. The number of major investors in Georgian agriculture is low, Pipia told Al Jazeera. He considers the more than 2,000 Indian farmers who bought hundreds of hectares of land in eastern Georgia to be ordinary farmers “who shouldn’t be confused with real investors”.

“The real problem in Georgian agriculture,” Pipia said, “is the fact that 80 percent of lands are not registered, so owners are not able to sell, lease or loan their plots in a legal way. The period of moratorium needs to be used to measure and register these lands and to polish legislation that refers to agricultural lands.”

However, the Tbilisi-based watchdog Transparency International Georgia considers the new law to be unconstitutional and intends to file a claim in the constitutional court, requesting the invalidation of the restrictions.

The real problem in Georgian agriculture is the fact that 80 percent of lands are not registered, so owners are not able to sell, lease or loan their plots in a legal way.

by - Shalva Pipia, Georgia's agriculture minister

“This legislative amendment places foreigners in a different legal regime and a discriminatory state, thus contradicting Article 21 of the Constitution of Georgia. Pursuant to this Article, the annulment of the universal right to property, of the right to acquire, inherit, or be transferred property, shall be impermissible,” said TI Georgia in a statement released in July.

Along with its alleged unconstitutionality, the law is also considered to be ineffective. The founder and president of the Georgian Farmers’ Union, Raul Babunashvili, insists that a moratorium on land sales will not have any effect and foreign nationals will still find a way to buy land from struggling Georgian farmers.

Foreign nationals interested in purchasing land can easily do so by simply taking Georgian citizenship, which is not a complicated procedure, he said. “We shouldn’t be forbidding foreigners to come here and work the land. We should just support local farmers so that they become strong competitors to foreign ones, so that it becomes less profitable for them to buy land here,” Babunashvili told Al Jazeera.

Small nation syndrome?

The reason why some Georgians panicked after foreigners showed strong interest in agricultural land may be because of the country’s small size and the lack of arable land.

According to the National Statistics Office of Georgia, the country contains only 69,700 square kilometres and just 2.6 million hectares are usable for agricultural purposes. Moreover, almost 20 percent of Georgia’s area lies in the breakaway regions of South Ossetia and Abkhazia.

“As of today, there is a real threat of the irrational privatisation of land, which may have negative consequences on the country’s economic security, environmental protection and state security, and it may also significantly damage the local rural population,” read an explanatory note accompanying the new law that restricted foreigners from purchasing land plots in Georgia.

There are no statistics available on what share of agricultural land is owned by Georgians or foreigners.

Despite the country’s changing attitude towards foreign investments, Wurdeman, the American investor, remains confident that there is no threat to his businesses in the country. His faith in Georgian society remains strong.

“Georgians have made wine for more than 8,000 years. Everyone seeks good cuisine and good drinks,” he said, regardless of their politics. “This transcends all politics: it was, is and will be,” he said.

Follow Tamila Varshalomidze on Twitter: @tamila87v

Source: Al Jazeera