November 28, 2014
On November 15th, thousands of protesters gathered in the center of Tbilisi to deliver a message to Vladimir Putin. They wanted to tell him to leave both Ukraine and Georgia, where many believe that the Russian President is preparing to annex the breakaway province of Abkhazia, on the Black Sea. They also came to tell their own government to stop steering Georgia away from the West, toward Russia. Last, they had come to honor a man who was an important ideological opponent of Putin.
“The fight just got so much harder,” a young woman said, as a photograph of Kakha Bendukidze—the Georgian multimillionaire, reformer, and educator, who died at fifty-eight on November 13th, from apparent heart failure (he had recently had heart surgery)—filled a giant screen. Bendukidze, who undertook a libertarian overhaul of the Georgian economy, had strong supporters and opponents across the former Soviet states. A big man with outsized wit and a personality to match, he was a model for many struggling liberal reformers in the region.
A molecular biologist by training, Bendukidze started out in business by founding a biochemical manufacturer. When, in 1992, the government began privatizing state industries, he expanded his holdings by buying, among other enterprises, the legendary heavy-machinery factory Uralmash. Like most of the other people involved in these privatization deals, Bendukidze became very rich.
Bendukidze became an influential voice in favor of opening the Russian economy. But, by 2003, he later said, he saw signs of Putin’s increasingly controlling approach to economic policy. A year later, he sold all his holdings in Russia and returned to his native Georgia, where, following the country’s Rose Revolution, a new, liberal government asked him to come on as the minister of the economy.
The new Georgian President, Mikheil Saakashvili, had been elected after the resignation of former President Eduard Shevardnadze. Saakashvili and his young, liberal advisers inherited a failed state with almost no functioning institutions, sporadic electricity, and very few roads. They promised to turn the country into a prosperous, modern democracy, but they had no idea how. The country became a laboratory for Bendukidze’s radical libertarianism. Governments across the former U.S.S.R. watched in disbelief as he not only rapidly privatized state industries but also abolished most of the country’s regulatory agencies. Bendukidze cut income and payroll taxes and abolished other taxes, customs tariffs, and nearly eight hundred government licenses and permits. “Each government permit was a corruption tool that allowed the state to take bribes,” Fady Asly, the chairman of Georgia’s International Chamber of Commerce, said. “Kakha just eradicated that whole system."
When Bendukidze began his reforms, the country was heavily dependent on the support of usaid and other development agencies and organizations. They felt that they deserved a say in Georgia’s economic policies; Bendukidze thought that they did not. On one occasion, his deputy at the time, Vato Lezhava, recalled, Bendukidze told a usaid representative to “fuck off.” Bendukidze, who often swore in public, walked out of meetings and tolerated no dissent from his belief that liberalization was Georgia’s only salvation. He was nonetheless “a masterful tactician,” Lezhava said. “He knew the times called for radical measures, that the window for opportunity to implement such massive changes would close fast. He had to break the mentality shaped by years of Communism.”
The result, his allies point out, was astonishing. By 2005, Georgia’s budget had tripled—largely because taxes, though lower, were being collected—and its G.D.P. was growing by ten per cent each year. By 2009, the country had climbed from a hundred and forty-seventh to eleventh place in the World Bank’s “ease of doing business” index.
But the government reforms, which included the overhaul of the public sector at the expense of thousands of jobs, were deeply unpopular in Georgia. Bendukidze became a target for public discomfort about the rush toward privatization. The road to his office was often blocked by protesters, who called him a “Judas” and accused him of “selling the whole of Georgia.” His photograph was held up at anti-government demonstrations. In 2009, a television talk-show host asked Bendukidze why he had sold “forests and river beds.” “That’s just idiotic; of course we haven’t sold forests and river beds,” he said, explaining that some woods had been leased, but none were sold.
In 2009, Bendukidze was asked to resign from the government, but chose not to go into the opposition (which he described as “morons uninterested in economy”). Instead, he invested tens of millions in founding a new Georgian university, one that would stand out in the grim landscape of post-Soviet education. He called it Free University, and said that it would be a place that would force young Georgians to think. Students, who called him Bendu, remember his giant figure, in a black sweatshirt with the “Free Uni” logo, wandering the corridors, talking and arguing with students and faculty. In 2011, he also bought Georgia’s dilapidated Agricultural University. The two universities, with a combined student body of nearly four thousand, are now considered the country’s best schools.
Saakashvili’s party lost the 2012 election to the new “Georgian Dream” coalition, cobbled together by the billionaire Bidzina Ivanishvili, who, like Bendukidze, had made his fortune in Russia in the nineties. From a palatial modernist house high on a Tbilisi hill, Ivanishvili promised voters new factories, new jobs, and higher pensions. His coalition campaigned on the promise that Ivanishvili would “give five million to every village.”
Within a few months of taking office, the new government had arrested several high-ranking officials from the previous administration and filed criminal charges against the former President, which the U.S. State Department has said appeared to be politically motivated. Ivanishvili’s government also launched a criminal investigation into the privatization of Agricultural University. Ivanishvili personally spoke against Bendukidze and his control of the university. “It was because of Bendukidze’s ideology that the Georgian village is dead and bankrupt,” Ivanishvili said. “What business has he now teaching agriculture to others?”
With many of his closest allies in jail or exile, Bendukidze left Georgia for Ukraine, where President Petro Poroshenko asked him to become his economic adviser. Even though he was unsure whether Ukrainians would accept the changes that he wanted to carry out, he agreed to work with Poroshenko, friends say, because he saw Ukraine as the frontline of the battle for liberal reforms in the former Soviet states. With the same tough love that he had inflicted on Georgians, Bendukidze urged Ukrainians to stop blaming others for their problems. “You have broken every world record in idiocy,” he told an audience at the Kyiv School of Economics, in July. “You keep electing populists, people who promise you more. This means you are electing the worst.” He advocated cutting government spending, reducing retirement benefits for public servants, and radically deregulating the economy. Ukraine, he said, in one of his last interviews, had too many ministries and agencies. ”Who needs them when the government's sole function these days is to take money from the International Monetary Fund and pass it on in payment for Russian gas?" he asked.
Bendukidze’s death, in London, came only days before he was expected officially to join Poroshenko’s cabinet. Instead of the expected announcement, Poroshenko posted the following message on his Facebook page:
“On behalf of the Ukrainian people, I express my sincere condolences to the relatives and friends of Kakha Bendukidze, and millions of those for whom he was and will remain the engine of great change.”