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Wednesday, 26 October 2016


Anti-crisis steps and the Georgian feast

30.06.2009  |  13:03

3200.jpegAt the end of last week, Prime Minister of Georgia Nika Gilauri announced that the Georgian economy started to get out of the crisis. Before that, the similar statement had been made by Ministry of Finance. According to the authorities, the country has been facing no crisis except for certain tendencies. These words reveal the ostrich policy. However, despite the signs of stabilization, the experts have got different opinion as to the future of the Georgian economy.


"The Georgian economy is getting out of the crisis; however, the last nine months turned out to be most difficult for it", - Prime Minister Nika Gilauri said. According to the Commersant radio station, this was stated at the international banking conference held in Tbilisi last Friday. 

Representatives from over 20 major banks and international financial institutes took part it the conference. It was for the first time that an event of such scale was held in Georgia.

Shortly before the conference, the National Bank of Georgia (NBG) published a report which showed certain signs of the national economy stabilization: the money supply indicators have stabilized and there is a certain growth of deposits in the banking sector.

A tendency for the better was also announced by businessmen. The motor car importers started speaking of the first signs of stabilization in the car market. Specifically, this was noticed in the Cadillac and Opel representative offices. Head of Iberia Business Group Tariel Khechikashvili confirms positive changes in the car market environment. "The situation has been hard for several months in the field of retail sales; however, it has significantly improved during the two weeks, the sales indicator having grown", - Khechikashvili says.

According to the Georgian business media, some advertising campaigns managed to retain their clientele. The Georgian experts say that within last several weeks stabilization of prices can be seen in the real estate market. Lately, prices on certain product groups, especially metals, have also grown, which is going to enhance the resumption of export earnings.

However, Deputy Minister of Finance Irakli Gvaladze believes that the necessary condition required to manage the economic crisis in Georgia is the political stability. "Many countries in the world have already announced the beginning of the crisis management process and are trying to forecast its rate. We need political stability to improve the situation. Georgia is indeed facing the economic crisis slow-down; still, political stability is essential for obtaining more tangible results", - Commersant is quoting Irakli Gvaladze. This point of view is rather popular.

According to GHN, on June, 27, President Saakashvili again said that the protest actions held by the radical opposition are causing serious damage to the Georgian economy, and that each tenth position is lost because of those actions. In his opinion, businessmen refuse to make investments within an unstable environment. "One often wonders why businessmen in Georgia and abroad do not want to sponsor the destructive actions of the radical opposition. I want everyone to understand that any businessman is aiming at positive construction. No businessman wants unsteadiness. You are not going to get any money with a slogan like "close, block, finish", - the Georgian leader stated.

As to the oppositionists, they are sure of their protests being aimed at improving the economic situation and leading the country out of the crisis. However, you can postpone politics but never a dinner. For instance, European Bank for Reconstruction and Development (EBRD) declared that one should not be excessively optimistic at the world economy reconstruction. The Bank stated that in the context of financial crisis its top priorities include support of the Eastern Europe banks affected by crisis and debt restructuring.

"I would not be that optimistic. Social consequences of the crisis will to be faced later on but they are going to be rather sever", - Thomas Mirow, President of EBRD, stated. Besides, he added, the growth of "bad" debts has not yet reached "the expected peak", and the companies' failure to fulfill their debt liabilities will have late effect. This being the case, the EBRD president believes it necessary to act simultaneously at both fronts, maintaining the banking system and performing the debt reconstruction, RBK reports.

The EBRD president's statement was commented upon by the Georgian experts. According to David Narmania, Doctor of Science, Economics, a serious wave of the world economic crisis is coming. "In autumn, we expect the so-called Asian wave of crisis. In other words, the crisis is going to shift from Europe to Asia. The Georgian economy is closely related to the Asian investments", - the expert pointed out.

At the same time, the monetary politics of Georgia was criticized by the Nobel prizewinner Robert Mandel. He made a report at the abovementioned conference, stating that "the government should think of the industry development in the country". Mandel also noted that the excessive pressure of taxation in Georgia should be lowered. 


Irina Ptashkovskaya

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