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Saturday, 22 October 2016


Whom Kobalia plans to dispossess

2010-10-20 20:02

9043.jpegGeorgia's minister of economy and sustainable development Veronika Kobalia finds her job description too short. The president is ready to share his mandate of authority entrusting young Vera with expropriation of property for public needs in the Caucasian republic. These powers are already approved by the parliament in the form of relevant amendments to the law waiting to take effect in a couple of weeks.


The law draft that will help the female minister become the country's number one expropriator was proposed by well-known head of sectoral economy committee Georgi Meladze, and first deputy head of parliament's legal committee Lasha Tordia pushing privatization of Georgian strategic facilities as well as amendments to the law on freedom of information and restrictions for "third parties".

But how will the frail lady carry out expropriation in favor of the state? According to certain information, it used to be the president's task. Naturally, he wasn't directly involved in "dispossessing" unwanted companies - under law only the Ministry of Interior Affairs and Ministry of Justice can do that. So it's little wonder that pronouncing Mikheil Saakashvili we imply Vano Merabishvili, or vice versa. So what is Veronika Kobalia supposed to do apart from tourism development and vacancy contests in her ministry?

It's clear that good deeds are not done under such a title. Besides, expropriation, a time-worn instrument for political risk management is a huge problem in Caucasus where dubious practices with big businesses assisted by corrupt state structures absorbing ownership are regular. Unluckily to many business structures, national governments are sovereign. They carry out regulating functions, impose taxes, control business and investments activities within the borders of their state - at their full discretion. No wonder, this potency has turned heads of the Georgian government.

Since expropriation is always involuntary for a company, in some cases it envisages compensation. Most often the compensation amount is paid in foreign currency subject to exchange at a very unfavorable rate. Veronika Kobalia can use cunning methods like squeeze-out procedures against minority shareholders. The economy minister must know everything about it, mustn't she?

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