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Corruption governs market in Georgia's chaotic economy, says Fulbright scholar

By David J. Craig

When Valerian Melikidze looks at the graduate students in his global development seminar at the University of Tbilisi in Tbilisi, Georgia, he does not see future lawyers, statesmen, or professors. Instead, he sees young people who may support their families peddling produce or housewares in one of the city's outdoor marketplaces after graduating.

	Valerian Melikidze, a Fulbright scholar visiting BU from the University of Tbilisi in Tbilisi, Georgia, says that rampant corruption has devalued education and job training in his country, as employers look not for the most technically qualified workers, but ones they feel they can trust. Photo by Vernon Doucette

That the future of Melikidze's students is so precarious is no reflection on his university -- it is Georgia's most prestigious. Yet the nation's economy is in such shambles that even the best educated Georgians, who had professional careers when their nation was a republic of the Soviet Union, today often are relegated to menial work, if they can find work at all.

"In Georgia, a college degree is practically meaningless," says Melikidze, who is conducting research on a Fulbright Scholarship at the School of Education's department of administration, training, and policy studies until May. "But there is a strong tradition of sending children to college in my country, and so many people still do. As a result, Georgia is one of the best-educated and most underemployed countries in the world."

There are few reasons to earn a college degree in Georgia other than tradition, partly because employers there do not highly value training and education. The research project Melikidze came to BU to finish last August has shown that in Georgia there is no correlation between a job applicant's education and his or her chances of being hired for most professional jobs.

"That surprised even me," says Melikidze, a native of Tbilisi, Georgia's capital. "But except when hiring for a very specialized position, such as in engineering, Georgian companies tend to hire family members or relatives of close friends, simply because they can be trusted."

Additional Fulbright scholars at BU this semester: Frederic Boissay, a Ph.D student at CREST's Macroeconomics Laboratory in Malakoff, France, is researching the differences between the financial structures of French and American small enterprises, at the CAS department of international relations. Tuulikki Pietila, a researcher at the Finland Foreign Ministry's department of social anthropology in Helsinki, Finland, is studying postcolonial subjectivities and the private sphere in Kilimanjaro, Tanzania, at BU's African Studies Center. Anna Vale Martinez, an assistant professor at the University of Barcelona's department of psychobiology and methodology of health sciences in Bellatera, Spain, is researching the effects of selective cholinergic lesions on recognition memory and on episodic representations at the CAS psychology department's Laboratory of Cognitive Neurobiology. BU faculty members visiting other countries as Fulbright scholars this semester: Paul E. Barbone, an ENG assistant professor of aerospace and mechanical engineering, is researching and lecturing on quantitative freehand elastography for the detection and diagnosis of breast cancer at the Royal Matsden Hospital in Surrey, England. Michael T. Corgan, a CAS associate professor of international relations, is lecturing on political science and international relations at the University of Iceland in Reykjavik. Victor Manfredi, a research fellow and instructor at BU's African Studies Center, is lecturing on sentential superstructure in Kwa (Niger-Congo) at the University of Venice in Venice, Italy. Robert W. Rosenthal, a CAS professor of economics, is lecturing on paradigms of rationality, bounded rationality, and irrationality in interactive decision making at the University of Siena in Siena, Italy.

Personal reference is of prime importance, Melikidze says, because payoffs to government officials and bill collectors, rather than pure market forces, drive Georgia's economy.

"A company's ability to compete in Georgia is determined not so much by the quality of its goods or services, but its ability to impose them on the marketplace," says Melikidze. "That means utilizing your ties to government officials to ensure that you have the proper channels for selling your product, and making sure your competitors do not. In that environment, the loyalty of your employees is the first and foremost priority."

The failure of the Georgian government to control corruption, Melikidze believes, has caused a volatile situation. "To churn out well-trained people only to leave them unemployed or underemployed leads to trouble," he says. "The dissatisfaction of educated people was one factor that led to the Russian Revolution in 1917."

Melikidze, who has also completed studies about living and working conditions in Georgia for the International Red Cross and the United Nations, came to BU because access to current literature on the history of economic development is difficult in Georgia.

Currently he is writing a book about development in formerly socialist nations, which he hopes will lead to discussions in Georgia about some of the hard changes that are necessary to save the nation's economy. He says government officials can start by considering how higher education fits into the nation's future economy.

Melikidze finds it frustrating that of the former Soviet republics, Georgia at one point seemed best poised to successfully embrace capitalism and join the global economy. Its population is well-educated, it attracted foreign investment in the wake of the Soviet Union's collapse, and its president, Eduard Shevardnadze, had been touted as the most prodemocratic of the leaders of the former republics.

Nevertheless, nearly 25 percent of Georgia's workforce is unemployed, most residences and businesses in Tbilisi have heat and electricity for no more than a few hours a day, and the government has only tenuous control over several of its territories.

"Developing countries generally do not have enough well-educated people, whereas in Georgia, the well-educated people are emigrating," says Melikidze. "Georgia has failed because we don't know who we are, where we stand in the global economy, or where we're going. Meanwhile, our government has proven that it is completely unable to control corruption and that it is corrupt itself. I don't know how Georgians can expect help from the West when we ourselves have failed to redesign our country."

23 February 2001
Boston University
Office of University Relations