Developing democracy, transitional economy and (in)dependent media

Maka Ghaniashvili

Batumi hosted the third international conference on ‘Georgia’s European Way– Implementation of the European Neighborhood Policy/ENP Action Plan in Georgia’ in July.

Together with other participants, Publiuc Defender Sozar Subari delivered a speech on the conference. He once again has highlighted facts of human rights’ violation and has remarked: ‘when a country faces these type of obstacles, mass media is obliged to reflect it. This is the first and the most important function of it. Government of Georgia is proud of actually one of the most liberal legislation that should maintain freedom of speech in the country. Although the situation in this regard is extremely difficult and it resembles Soviet past. Due to the authority’s purposeful actions there is not single independent television broadcasting in the country, except for ‘Kavkasia’ (Caucasus) that broadcasts only in Tbilisi. Other televisions operate under a stick state censorship and manage information policy according to state official’s orders and instructions. Such a significant type of reporting as Investigative journalism has been totally neglected… currently businessmen are under pressure, so that they do not take their advertisements to Kavkasia…’
The fact that advertisement is one of the major sources of income for media means has been confirmed even by recent scandal about ‘Kavkasia’. Director of the channel Nino Jandgirashvili states at the above mentioned conference: ‘authority was greatly concerned regarding the financial improvement of Kavkasia that had attracted number of advertisements and planned to expend even more’. At current stage implementation of certain projects has stopped due to a fact that, as the TV broadcasting states, the businessmen that used to advertise via Kavkasia are being under pressure. This is considered to be one of the ways of barring financial means. Difficult situation refers to printing media as well, that has a lack of advertising campaign. This is directly reflected on its independence level. It has long been a fact that freedom of media is not only related to being independent from government and political circles. According to Albert Camus: ‘The Press is free when it does not depend on either the power of Government or the power of money’. Freedom of media depends on three major factors:
1. Finances from realization of product and from advertisements are the basis of freedom of media. In case media means has an enough financial income directly from its activity, it has all objective reasons to be free and independent;
2. Next condition on which the freedom level of media depends is a stability of democracy in a country and a political willingness that does not pursue journalism and does not hamper its development. It refers to all countries as there is no state in the world that accepts freedom of media harmlessly. Each authority requires authoritative media to be adjusted to it. Ruling circles including those of the most democratic states, attempt to ‘decorate’ information and deliver it to a society the way suitable to authority. The other side is whether the media adjusted to authority manages to be trustworthy and meet requirements of a society.
3. Third source of media independence is related to honesty and professionalism of journalists that do not enable them to sell their profession to politicians, businessmen or someone else.
The above mentioned factors condition level of media freedom in various countries. This time, we’ll concentrate on the first factor – economic independence and we’ll discuss the importance of free market economy development for freedom and independence of media. Let us discuss level of media independence in countries with developing economies and transitional democracy (namely, post soviet union states). How do economic development indicators influence the level of media freedom?
Financial independence of media and its importance
Freedom of business and developed market economy is a pre-condition of press independence. Objective and an independent press is one of the bases of a stable and democratic development of a country. In countries with developing economies and democracy, including post soviet states, the censorship, major hampering factor for free media has been substituted by economic pressure. How can a financial independence be reached and can we speak about total freedom of media considering the market economy development level in Georgia?
Media business has a dual nature – it delivers its product to public and the latter to orderer of an advertisement. Therefore media should be a means of informing public and expressing public opinion. At the same time media should be a profitable business. Can Georgian press, being in the transitional condition of development, implement double function – serve a society and be a profitable business?
UNESCO 1991 declaration reads: “By an independent press, we mean a press independent from governmental, political or economic control or from control of materials and infrastructure essential for the production and dissemination of newspapers, magazines and periodicals”
Economic freedom can not be reached if a newspaper is not developing only with its own financial resources – incomes from sales and advertisements. The latter is a major source of income for a newspaper and it refers not only the countries with developing democracies. Selling an advertisement space is a significant source of keeping independence. Although forming publicity business, as well as market economy as a whole, is related to number of challenges in developing countries. In each developing country, with the lack of democracy, business keeps monopolization over certain segments. The same is true about Georgia – almost all segments of business are monopolized by one or two companies. For instance, internet market is monopolized by a large provider ‘Caucasus Online’, mobile phone network is taken over by 2 large companies – ‘Geocell’ and ‘Magti’, pharmaceutical market by – PSP and Aversi etc. So, when does a businessman implement an aggressive, intensive publicity campaign? When he/she wants to sell own product to as many segments of the market as possible. Anyway, a company doesn’t need to make an advertisement when it controls certain segment of a market and is well aware about the absence of a competitor. Such type of business hampers the development of advertising industry. On the other hand, small number of advertisements will not maintain corresponding financial independence of media. This is especially true regarding printing media. The above mentioned as well as other monopoly companies in Georgia make advertisements in electronic media. Therefore press remains without significant advertising campaign. This is obvious even according to 2005-2007 statistical data of advertising market of Georgia: advertising market volume in 2005 amounted to USD 16 million, in 2006 – 14 million and in 2007 – 12 million. Advertisement market volume decreases every year (that has been caused by advertisement restrictions on tobacco and alcoholic beverages) and share of printing media publicity in these indicators is quite small – 12%, while electronic media (TV and radio) occupier 85% of the total share. The rest 3% is taken by internet advertisements. 12% of 12 million amounts to around million and a half USD, that is not enough for keeping hundreds of print Medias existing on Georgia’s market. Taking all the above mentioned circumstances into consideration, it becomes obvious that oligarchs, politicians or businessmen lobby majority of newspapers and therefore the letter adjust to the interests.
Freedom House report 2008 reflecting freedom of the world press
Freedom House report 2008 on freedom of the world press – ‘Press Freedom in 2007 A Year of Global Decline’ points to declines on a global scale in 2007. According to it, rating score of Georgia’s press freedom has declined with three items in 2007. According to previous report that covered the period of 2006, Georgia belonged to the countries of ‘Partly Free’ category and occupied 120th place among 195 states. Georgia’s rating score was 57. According to report 2008 Georgia has kept ‘Partly Free’ status but its total score now is 60 and it has shifted to 128th position. Those courtiers that share ‘Not Free’ status have 61 scores. While talking about limiting freedom of speech in Georgia Freedom House experts point at other factors too besides events of November 7: ‘ Information about media owners is not transparent and often journalists and reporters do not know the real owner of the media company for which they work’.
The above mentioned report clearly reflects the affect of economic development indicators on press freedom. Situation in other countries, indicators of economic development can be easily compared to the level of press freedom. Let us not discuss US and developed Western European countries and concentrate mainly of post soviet union states. The following countries share the status – ‘Not Free’ according to Freedom House report: Azerbaijan (77 scores) and Armenia (66 scores). Ukraine is ‘Partly Free’ (53 scores). Media is free in Estonia (16 scores), Lithuania (18 scores), Latvia – (22 scores) and Poland – (24 scores). (The lower the rating score, the higher the level of media freedom).
To have clearer understanding of figures, we need to discuss the methodology of Freedom House while determining a rating: examination of the level of press freedom in various countries comprises three broad categories – political influence and dependence on political circles is estimated with 40 scores out of total 100. Legal environment as well as economic independence is appraised with 0-30 points.
ECONOMIC ENVIRONMENT (0–30 POINTS)
1. To what extent are media owned or controlled by the government, and does this influence their diversity of views?
2. Is private media ownership transparent, thus allowing consumers to judge the impartiality of the news?
3. Limitations over journalists’ activities and freedom of expression;
4. Does the state place prohibitively high costs on the establishment and operation of media outlets?
5. Do the state or other actors try to control the media through allocation of advertising or subsidies?
6. Do journalists receive payment from private or public sources whose design is to influence their journalistic content?
7. Does the economic situation in a country accentuate media dependency on the state, political parties, big business, or other influential political actors for funding?
These are the items according to which Freedom House experts determine the level of economic freedom of media. Let’s now compare rating scores of post soviet union states, their GDP per capita – one of the most important indicators, that shows a country’s development level.
The result is quite obvious; level of media economic freedom directly corresponds to the indicators of economic development. The higher the economic development level is, the more independent the level of media freedom can be. The same is mentioned in Freedom house experts’ overviews. According to them, majority of newspapers in Armenia are controlled by the government. Only small part of print media is self-sustainable and most are dependent on
business groups with government ties. Distribution networks are private-owned, but not effective in distributing newspapers across the country. Most TV stations were owned either by pro-government politicians or businessmen with ties to the ruling party. Despite the intimidation, there remains a relatively large number of opposition and independent media in Azerbaijan. However, with distribution channels run by pro-government companies and most newspapers having to print in government-owned publishing houses, the print media is not readily available across the country.
With hundreds of state and private television and radio stations and numerous print and electronic news outlets, Ukraine’s media remained diverse. However, many major outlets are owned by regional business magnates with close ties to the government while others are dependent on state subsidies, making self-censorship widespread and slanting news coverage in favor of specific economic or political interests.
Most of print and broadcasting media are owned by private owners in Poland. Although several channels remain public owned, still private sector share grows more and more.
More than 300 privately owned newspapers are published in Lithuania. Investors in the country’s media market include both domestic firms and foreign companies, mainly from Scandinavia.
According to the market research company TNS Latvia, Lithuania’s media advertising market volume increased by 15.6 percent in 2007 compared to 2006 (while Georgia’s media advertising market volume has been decreasing since 2005 and together with that press independence score declines); television accounted for more than 45 percent of Lithuania’s total advertising market share, followed by newspapers with 25 percent. The print media is mainly independent and privately owned in Latvia. Foreign companies own or control a considerable portion of Latvia’s print and broadcast media, as well as media distribution and printing facilities; According to the market research company TNS Latvia, Latvia’s media advertising market volume increased by 24 percent in 2007 compared to 2006; television accounted for 35 percent of Latvia’s total advertising market share, followed by newspapers with 22 percent. There are nearly 150 newspapers in Estonia. Advertising market is small therefore advertisement revenues are not as high as that. However, media advertising market volume increased by 28 percent in 2007 compared to 2006, with newspapers accounting for 40 percent of Estonia’s total advertising market share;
As we can see, according to Freedom House data, Baltic States have far better conditions regarding journalistic than Georgia, Armenia, Azerbaijan and Ukraine. Besides, we can provide ‘The Global Competitiveness Report 2007 – 2008’ data – significant tool for political leaders and businessmen while forming better economic policy as well as institutional reforms. The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the Report. This year, over 11,000 business leaders were polled in a record 131 countries. Application form included wide range of factors affecting business environment. The report also includes the detailed survey of strong and weak sides of countries competitiveness. Georgia occupies the 90th place in Global Competitiveness Index, Armenia – 93rd, Azerbaijan – 66th, Ukraine 73rd. As for Baltic states: Estonia – 27th, Lithuania – 38th, Latvia – 45th, Poland 51st.
According to the above given data it becomes easy to answer the question: what hampers the formation of free market economy and correspondingly freedom of the press? In fact, Baltic states have better positions than Georgia, Armenia, Azerbaijan and Ukraine in various rankings and statistical data showing economic development. The answer is quite simple: it is really difficult to talk about freedom of the press when advertising market is not well developed, business development coefficient is not normal anywhere: in Georgia or in other developing country. Each step of media pyramid (TV, radio, print media, internet) should be bounded by pyramidal method. Every day TV expenditures significantly exceed print media expenditures and it is natural that expensive advertisements are directed to broadcasting. However, the point is that media market self regulation balance is violated. When the self regulation principle is lost, the freedom of press is limited. Analysis clearly shows the low level of media freedom in Georgia while media can give political and economic directions to the society, can involve it in significant processes and inform about the most important matter- real events. Does Georgian media fulfill these functions and is it one of the components while building free civic society? The question remains important everywhere as even in the most democratic states, government tries to limit peoples rights and attempts to influence the information delivered to them. Besiders, there are informational characteristics of economic processes in developing countries, when the information is used as a tool for political fight that is followed by providing wrong statistical data, budgetary as well as micro and macro indicators. Journalism (considering the above mentioned level of independence) quite often turns into means of PR for governmental economic reforms or for some business organizations. All these make transparency of economic processes quite vague and suspicious. Correspondingly question rises – what is the media role in this case, is it an opponent or PR for economic reforms?
Within globalization the world events develop and change as a whole, as one unity. Therefore it is impossible to discuss any analysis or outcome separately. Events are interrelated in any sphere. Nothing remains isolated and separate. Traditional borders among politics, economy and media disappear. Everything is mixed- economics with politics, politics with media, media with PR. Borders are deleted and if we do not analyze processes on crossroads, we’ll not be able to get the idea of a process. Development of market economy, advertising market and business is the first source for freedom of press. The letter is a guarantee for business transparency, competitive environment and property right observation. Right of property is a basic human right that is directly connected to the existence of democratic state. As it has been already mentioned, one of the hampering conditions for the development of independent press in Georgia is a low level of business development, competitiveness and monopolization of certain segments of business. All the above mentioned hampers the development of advertising market. low revenues from advertising market turns different media means dependant on someone. The someone is mainly either a politician or a businessman. Therefore, we go back to the beginning.