After the disintegration of the Soviet Union, the turbulent and puzzled transition process began. This was the historical moment when because of the concurrence of some historical events such as fall of the Berlin Wall and dissolution of the USSR it could be easily believable that Francis Fukuyama’s prediction was materializing and liberalism won the battle firstly against absolutism, later against Bolshevism and fascism, and then against Marxism. Fukuyama anticipated that Western liberal democracy has reached the unequivocal and decisive victory and this trending set of ideas was monopolizing the entire planet including newly born independent states of the former Soviet bloc. This was the momentous episode of history when there was not any more alternative for the Western liberalism and the era of ideological confrontation seemed to have elapsed. It was naively believed that Western liberal democracy was the pinnacle of humankind’s ideological evolution and universalization of this ideology was the only decision for developing the best possible model of government. The post-Socialist countries did not have any alternative besides adopting the prescription for their transition process made in the Western world.

What was the prescription which carried an absolutely imperative meaning? It was a full package of reforms with political, economic and social dimensions. Each dimension had its own instructions which were expected to be strictly followed. The political aspect of the reforms included construction of liberal-democratic regimes, which would guarantee the rule of law and protection of human rights. The economic expression of the reforms was to enact free market principles consisting of free trade with the hope of immense economic progress. On the social level, the reforms were supposed to bring prosperity, wellbeing, security and westernized civil society, which was assumed to be one of the strongest pillars of liberal democracy.

Promises were made by political elites and expectations of the Eastern European countries were too high. But the stakes were too high as well. Georgian society, as the entire Eastern European population, fully trusted in the promises and was waiting for rapid democratization and economic development. However, what occurred in Georgia, as perhaps in other Eastern European countries, was not the scenario which was planned by the International Monetary Fund (IMF) as the leading institution for channeling international assistance to post-Soviet countries. Their method of “learning by doing” and “Shock Therapy” showed itself to less successful than it was supposed to be. The consequences of “Shock Therapy” were meticulously demonstrated in the case of Russia.

As people were told before by the ruling class leading the transition process, capitalism was expected to bring unprecedented prosperity and progress, though it brought unprecedented poverty and rising inequality. If we look at the various statistics we will see that poverty in Russia has increased from 2% to 40-50%, depends on the statistics we refer to. Basically, what nomenklatura did in Russia was rapid privatization, the deregulation of the market, the elimination of price controls for commodities, the liberalization of prices and the implementation of free-market principles with the result of hyperinflation. The privatization process has converted the political power of the Soviet nomenklatura into economic power. Within this completely corrupted process the country’s capital turned out to be concentrated in a few oligarchs’ pockets. Pushing privatization, making it the excessive and uncontrollable process was one of the crucial mistakes which were done under the ‘Shock Therapy’.

There is the myth that Poland was pretty much successful with its ‘Shock Therapy’, but what happened, in reality, is quite different. As Stiglitz is claiming what Poland did was regulation of the abnormally high level of inflation and keeping it under the reasonable levels, such as 15-20% in a year. Later they took gradualist policies to reconstruct their society. [6] Compare to this what happened in Georgia, which can be labelled late Shock Therapy, inasmuch as it was promptly started after gaining independence with an immense economic decline, but it was moved to a new level after the Rose Revolution. From 2003 onwards, an accelerated neoliberal modernization project was believed to fundamentally restructure the country’s politics, economy, and culture. Even though, neoliberalism proved to be quite conflicting with democracy.