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Tuesday, 25 October 2016


Reforms towards ruin

2009-04-23 15:05

4/8/8/2488.jpegDavid Bakradze, Speaker of Georgian Parliament, went to Vienna to take the World Bank Award. According to the World Bank's International Financial Corporation (IFC) Georgia is recognized as number one reformer among Central Asian and European countries.


According to Kommersant radio the IFC report stipulates that Georgia is the leader in implementation of economic reforms carried out within 5 years. The report contains data on 150 countries. According to Georgian Finance Minister Kakha Baindurashvili this fact is great success for Georgia implying additional investments first of all. He says this is another proof that reforms in Georgia have really had effect.

It is unclear then why such effective liberal reforms have led to the political and economic crisis. Why have the transformations so highly appraised by the international experts brought people to poverty and the country to the highest unemployment rate in the Caucasus? Even Mikheil Nikolaevich while depicting the image of the Georgian opposition that has been exciting the country with its protest actions for a fortnight already, noted that his resignation was primarily wanted by the people that had lost their jobs as a result of the reforms - and there are approximately 250 thousand of those. "High percentage of these people could not find themselves in the new economic situation. As a result of struggle against corruption and crimes we imprisoned thousands of people. All their relatives are now on the streets urging me to step down", - Saakashvili remarked.

What is the essence of reforming then? IFC presents similar ratings annually. In 2006 Georgia was named the leader in economic reform rates: it became much easier to register a private enterprise, obtain a loan or hire staff. However these novelties did not lead to people's desired prosperity. So it's no wonder the IFC report was ambiguously received by the business community. Niba Invet company founder Niko Lekishvili states that a lot has been done in order to promote business activity in the country. "From the legislative point of view procedures were simplified, certain benefits were introduced. However I find it difficult to discuss to what extent Georgia really is the top reforming country in Europe", - Lekishvili is quoted by Kommersant radio.

Many business people withhold comments unaware of the criteria for awarding the top reformer status to Georgia as the results of the 5-year period have been taken into account. And by the way in 2008 IFC recognized Azerbaijan as the number one reforming state. In January reported it had been announced by Azerbaijani President Ilham Aliev in his greeting to the people on the Day of Solidarity of Azerbaijanis and the New Year. "This is a great achievement that shows how political and economic reforms in Azerbaijan contribute to our country's full-scale development making it more powerful", - Azerbaijani media quoted the president.

Over the 5-year period Georgia has turned out to be the winner. By the way Kakha Bendukidze, the father of Georgian economy, was forced to resign this year. On his return to the motherland he said the state should help business people and not interfere and declared that everything was sold in Georgia except for conscience. The legislation underwent reformation, it is true but... The industries suspended in the 1990s have not been restarted; the standard of living has not gone up either.

Why have the liberal reforms yielded no practical results? The World Bank's IFC financial analysts seem to have omitted this issue. Many Georgian experts believe that at the time of crisis the business reforms should have started but this hasn't been done.

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