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Friday, 21 October 2016


Financial pyramid of Georgian “independence”

16.08.2010  |  17:56

6674.jpegGeorgia's foreign debt grew approximately by 119 million dollars within a month. Besides the state's 3,6-million-dollars obligations to donor countries and global financial organizations, commercial entities owe the credit amount of about 5 million dollars. Moreover, Georgia continues begging for allowances, trading on the miserable state it has developed in the course of military actions, and Mikheil Saakashvili's liberal economy now resembles a financial pyramid.


It looks like the Georgian president is attracted not only by imperatorial laurels but by those of Sergey Mavrodi's as well. The idea is simple: first, the pretty Vera Kobalia is standing at the entrance door of Ministry of Economy and Sustained Development of Georgia waiting for the investors rushing to invest their money into banking sector, knocking each other down. Then, she declares tax deduction, which, by the way, should encourage the financial inflow more than the Economy Minister's young face.

Nevertheless, the fact that Georgian economy keeps borrowing money for its own development cannot positively affect the attraction of additional investments, for today's taxes, however low they are, speak for the fact that their further indexation is inevitable to repay the debts permanently spent on Mikheil Saakashvili's incredible plans.

To settle today's debts, in 2013 Georgia will have to borrow money again to pay back the aggregate foreign debt of 8,8 billion. For today, international reserves of the Georgian National Bank are only 1,9 billion dollars - just the amount given to charity by one of the planet's richest people and philanthropist Warren Buffett this year. Thus, even if Georgian National Bank runs the pockets out it will not do without creditors. If you scratch the inscription of "Georgian liberal economy", I am sure, you will see three letters "M" with a Georgian flavor.

However, Mikhail Saakashvili keeps putting up a good front. It looks like he hopes to find a way out with the help of his American friends. US have stated that they would allocate 83 million dollars to Georgia for the irrigational system restoration and municipal system development  in five municipalities touched by the Georgian-South-Ossetian conflict, as well as for assisting the forcibly displaced persons. But even the American experts are apt to think that the allegedly partnership relations of Georgia and US acquire a "vassal-suzerain" nature. Last time, in exchange for American dollars, Georgia attacked the sleeping Tskhinval and it would be difficult to suppose what price Georgian authorities will have to pay for being saved from a technical default.

Meanwhile, Mr. President should keep his eyes on the ball: the "aggressive" Russia has increased its influence in his country's bank VTB Georgia Bank up to 96%, having repurchased Eurobank's share according to the agreements reached in 2006. So, who is really trying to help develop the Georgian economy?

- I would not divide the countries on the basis of assistance and, looking into the future of the bank transactions, I would say: there is about one million Georgians in Russia who earn money there, thus supporting their relatives in Georgia. And, perhaps, this is more of assistance for than Georgian people than banking operations and other investments. As for America, it helps as well by making large investments into economic recovery. So, both sides help Georgia in their own way. The model where Georgia is oriented only at America and is opposed to Russia is very primitive. As for the restoration of the broken trade and economic relationship, there is no other way out historically. The break is beneficial for neither party, - political analyst Ramaz Sakvarelidze believes.

Thus, Georgia keeps pursuing the policy of criticizing Abkhazia and South Ossetia for proclaiming independence, as if these states cannot be sovereign. One has the desire to ask: does Mikhail Saakashvili really believe his country to be truly independent when it has to bark at Russia for a bowl of American broth?

Ilona Raskolnikova

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