Batumi is a popular tourist destination on Georgia’s Black Sea coast.
As the first year of the Trump administration approaches its end, the need for good investigative research about the sprawling Trump real estate interests remains of great importance. This kind of reporting sheds light on the extent and complexity of our president’s corruption and avarice. Moreover, given the ties between Trump’s 2016 campaign and the Kremlin, Trump’s business activities in Russia or any of its neighbors should be scrutinized.
Those seeking to shed light on Trump’s businesses practices should, however, be careful to avoid collateral damage of the kind that made its way into a New Yorker article that explored the topic of corruption in the Trump real estate business. In that piece, which ran on August 25, the author, Adam Davidson, portrayed the President’s connections to shady developers, bankers and foreign governments, but in his major case study didn’t tell the whole story. Davidson cited a stalled Trump project, more accurately licensing agreement, in Batumi, a resort town on Georgia’s Black Sea coast as an illustrative example of Trump’s business practices and erstwhile partners, but his description of the economic and political climate in Batumi overlooked some important points.
If you want to open a window to explore whether there is a global network of corruption that surrounds Trump’s businesses, Davidson’s piece may be helpful, but if you are looking for an understanding of what has occurred in Batumi over the last decade or so, despite Trump’s misadventures there, the piece is considerably less useful. For many readers of The New Yorker the characterization of Batumi as a run-down post-Soviet beach town where nobody would want to invest, as suggested in the article, conjures up images of rusted Soviet ships, dilapidated Intourist hotels, restaurants serving slop and the like.
Batumi today is nothing like that. Moreover, Georgia’s president at the time of Trump’s investment in Batumi, Mikheil Saakashvili, who was in the midst of a difficult election year, undoubtedly sought to leverage Trump’s visit to Georgia for political gain, but the notion that building luxury apartments in Batumi in 2012 was prima facie absurd or evidence of ethical misdoings is wrong. Davidson rightly points out that there were no luxury apartments of the kind in Batumi in 2012, but that does not mean it was an unreasonable speculative investment at the time. Indeed by 2012, Batumi was in the midst of a renaissance that has made it one of the most desirable Black Sea vacation spots, not just for Georgians, but for Russians, Ukrainians, Armenians, Israelis, Turks, Iranians and others as well.
I first visited Batumi in 2003 when there were no international hotels, almost no foreign tourists, very little international development and a deeply corrupt local government, and have returned many times since. Every time I go, I find a more vibrant tourist town, with more beachgoers, restaurants and things to do in the evening. An afternoon on the pebbly beaches of the Black Sea or poolside at one of the many nice hotels there, followed by an evening of shopping in the old city and dinner at a great Georgian restaurant sharing a bottle of Mukhuzani (a famous Georgian wine variety) with some friends, is a great way to spend a summer day.
Because Batumi is such a desirable vacation spot, there has been a great deal of foreign investment there in recent years. That investment occurred because Georgia has become, over the last 10-15 years, a good place to do business, particularly relative to the its neighbors. Rule of law is now much stronger there than other countries in the region; foreign investment has flowed into the country over this period; and most importantly from the investors perspective, there is money to be made in Georgia. The ill-fated Trump project in Batumi was a failure, and another example of his ethically repugnant conduct, but was surrounded by numerous other successful projects including luxury apartments and the construction of several international brand name four and five star hotels. The transformation of that city is a success story for which the current and previous Georgian government can both claim some credit.
It is also unfortunate that the Trump Batumi project that was described in The New Yorker may become one of the few things that readers of that venerable and very high quality periodical now know about Georgia. Although, as the article noted, high level corruption remained a problem even as rates of low level corruption plummeted under President Saakashvili, Georgia today is considerably less corrupt than Russia, Azerbaijan, Kazakhstan or many other countries in the region.
Most of the bankers and businesspeople discussed in the article were indeed Georgian and also Kazakh, but the Georgian government who sought to accelerate the deal, not least for their own political advantage in an election year, is no longer in power. Despite this project being stalled, others in Batumi and, for that matter, throughout Georgia are moving forward or have been completed in the five years since the Trump-Saakashvili in summit. Batumi remains an appealing and fun, if exotic and distant, vacation spot as well as a good place to invest, regardless of what Donald Trump did or did not do in that town.