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Saturday, 22 October 2016


Georgian economy: no minister

24.08.2009  |  18:26

3748.jpegAs autumn came, which time is traditionally going to be stormy, Tbilisi started demonstrating unpredictability and paradoxicality. Recently, the Georgian Prime Minister publicly stated that the trust put by the international economic community in Georgia has grown and the government financial package will become more effective by September. Prime Minister Gilauri also promised the growth of economic activity in the nearest future and said that the investors will become more active as well. Having said so, he immediately dismissed Minister of Economic Affairs of Georgia for being unable to fulfill his responsibilities.


As the prime minister explained at the briefing, the reason for dismissing the minister is the unsatisfactory performance of the administration headed by Lasha Zhvania.

According to Nika Gilauri, Zvania's performance is unsatisfactory due to "failures in investments implementation and attraction", as well as "the irrelevant privatization process", as the Commersant radio station reports. Well, the fellow citizens are obviously facing a strange situation.

Indeed, it is a difficult task to define whether there are any investments and whether one should really expect any economic improvement. Head of the government makes promises but in several days he dismisses the head of the most important ministry in this poor country for his bad performance, so it turns out that no one will account for the absence of the expected improvement. If one chooses one may go to the meeting promised by the opposition, which is demanding the resignation of the president and his associates. However, responsibility for economy will be placed on another minister...

One should note that Lasha Zhvania managed to maintain his office within 8 months. At the end of last year, Saakashvili decided to renew the Cabinet. This was widely rumored in Tbilisi right after the August events. The prime minister was also replaced in three months. Former Head of Ministry of Finance Nika Gilauri was assigned instead of Grigol Mgaloblishvili who had been the prime minister for 92 days and resigned for reasons of health (according to the non-official version that seems to be more probable, his resignation was attributed to a conflict with the president - ed.). Lasha Zhvania immediately stated that the government's priorities remain the same, that is, creating new workplaces and much investment. Considering Georgia's rushing into the August war and the break-out of the financial crisis that followed, it would be a miracle to realize these plans in a country, which is not very rich, to put it mildly. Soon, the Georgian media started talking about a conflict between the young prime minister and minister of economic affairs (both of them are 35). According to the Business-Georgia Internet portal, the young politicians "failed to divide" the hydroelectric power plant in Samtskhe-Javakheti. The bone of discord was the memorandum drawn up between the state and Caucasus Energy OJSC, according to which, a 43 megawatt hydroelectric power plant was to be constructed in Samtskhe-Javakheti. This plant was to solve the problem of employment and electric energy. However, realization of this state-level project was delayed. Zhvania's administration auctioned part of the plant territory. In its turn, Caucasus Energy OJSC applied to Gilauri with a request not to sell this object to a third person.

Zhvania's administration accused the minister of energy of being indifferent. They say it was Ministry of Energy that failed to timely submit the data on hydroelectric power plant location. The Ministry of Energy fiercely denied the accusations addressed to Zhvania's administration, saying that they had sent this information twice to the minister of economic affairs. This was how the confrontation between the ministers of economy and energy started, which they do not, however, recognize in public. According to Imedi, the problem is currently solved, and the winner-company is going to start construction works in October.

However, the confrontation between Gilauri and Zhvania went on. The Commersant radio station reported that the main reason was the recommendation given by EU. Minister of Economic Affairs Lasha Zhvania asked to urgently consider the EU recommendations. The point is the Competition Law, which passing is one of the conditions made by European Union for executing the free trade agreement. For the first time, Minister of Economic Affairs admitted to the Georgian media that there is no common opinion on the matter in the governmental team.

In his turn, Nika Gilauri refuted the fact of being in confrontation with the minister of economic afairs, though he agreed that they differed on certain matters. It should be noted that this was stated by the prime minister during his visit to the "free industrial zone" (FIZ), where Fresh, an Egyptian company, started to realize the promised investments. Let us also remind you that the investments of this Egyptian company have become a subject of legends in Georgia. The government promised unprecedented investments in FIZ in Kutaisi, that is, up to 2 bln dollars, and the opposition laughed at these promises.


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