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Monday, 23 April 2018


Is the Georgian economy free?

21.01.2010  |  23:27

5144.jpegNot so long ago, the American Heritage Foundation revealed the annual economical freedom index where Georgia has won 6 positions in comparison with the 2009 data, having occupied the 26th place in the list of 183 countries of the world. The index is calculated on the grounds of such indicators as business freedom and trade, the level of the government's interference, the freedom of private ownership and investors, the level of corruption and freedom of labor. Is the Georgian economy really capable of breathing freely?


GeorgiaTimes correspondent asked the Russian and the Georgian economical experts and political analysts to give their comments.

Is the economical freedom really that much developed in Georgia, in your opinion?

Pavel Danilin, a political analyst and expert of the Efficient Politics Foundation

No, of course not. Georgia is currently facing a difficult situation both in terms of political and economical freedom. The Georgian stock market might be compared to an old broken car. Besides, the Georgian officials receive their salaries from the USA treasury, and one can say that in this aspect, Georgia is the poorest state of the USA. Thus, one cannot speak about Georgia's economical freedom and success.

Georgiy Khukhashvili, the economical issues expert

It depends on the subject. If we are talking about the technical provision of economical processes, there is certain progress, including the registration of the companies and the issue of licenses, i.e. the progress in the so-called bureaucracy. Speaking about the system problems in such fields, as the development of competitive ability, there are definite problems there.

Sergey Demidenko, the expert of the Institute of strategic evaluations and analysis

On the whole, one can say that Saakashvili achieved certain progress in the socio-economical field. Still, one cannot say that the Georgian economy managed to make a significant success. The country is still facing the same problems, including corruption. Besides, the Georgian business does not feel free either. One can remember the cases when the republican businessmen were liable for taxes on the part of authorities and the charges were transferred to foundations under the pretext of making payments to Georgia's economic development. Nevertheless, there is certain objectiveness in the figures provided by the Heritage Foundation.

Irakliy Menagarishvili, director of the Center of Strategic Investigations of Georgia

Those dimensions, according to which the Heritage Foundation judges the economical freedom of Georgia, are true. For instance, you may come to Georgia, register the company within two hours, ask for the necessary details and start working in 48 hours. Moreover, the republic is characterized by one of the lowest indicators of tax load in the whole of the post-Soviet territory.

Can one really trust this rating, considering the fact that Georgia is mentioned as "partially free" in the political freedoms rating?

Pavel Danilin

I would not trust such rating, for it is too much politicized. It is enough to remember Russia's 143d position in this rating.

Georgiy Khukhashvili

This rating is published on the grounds of the data received by the Heritage Foundation. On the whole, the rating is based upon the technical side of the whole affair, that is why, in this case the notion of "economical freedom" does not mean the independence of the judicial system. However, there is definite progress in the socio-economical life of the country. The Georgian bureaucracy is really raised up to the European level. For instance, in our country you may communicate with the tax instances via the Internet without having to stand in a queue.

Sergey Demidenko

No rating can be trusted to the full extent, irregardless of who has made it up. Sometimes, even the world-famous analytical structures find themselves in the mire, and there are many such examples in practice. Moreover, one should remember that such ratings may be easily tailored to the expected result.

Irakliy Menagarishvili

Talking about the dimensions of the investigation carried out by the Heritage Foundation, the investigation was carried out correctly. Nevertheless, it means that Georgia is not facing any problems connected with the business. Normalizing the general economical situation will require a lot of efforts.

What are the real prospects of the Georgian economy?

Pavel Danilin

There are definite prospects, especially if Georgia resumes its cooperation with Russia. One should not forget about Georgia's potential and about the high-tech productions that were once operating in the republic.

  Georgiy Khukhashvili


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