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Friday, 28 October 2016


A reprieve for business – but not for the regime

03.04.2009  |  09:49

2/3/9/2239.jpegIll-fated April with its planned protest actions has now arrived. The authorities are affirming again and again that they will not be stepping down, but they are more than happy to discuss economic issues. That is probably why in the last few days businessmen have started talking about the need for a financial amnesty. Many people think that the tax burdens of previous years are merely putting a brake on business during the crisis. So will the leadership provide an "amnesty" for businessmen or not?


This time, the initiative was put forward by the leader of the opposition "Alliance for Georgia", Irakli Alasania. "The rights of those who suffered through no fault of their own should be restored. I think that an economic amnesty is necessary," he told the publication Kviris palitra. This idea has since then become more concrete. And a few days ago, Georgian businessmen put forward their own vision of the need for an economic and financial amnesty.

Hence the president of the Coca-Cola Bottlers Georgia company, Temur Chkonia, as Radio Kommersant reports, even sent a letter to the Georgian president to keep him up to date with events. "Today business is paying off the debts which accumulated before 2004. Some cases went to trial. It is interesting that the sum involved is not reflected in the budget. In reality, the budget does not lose anything. On the contrary, more investment will be made to business. That is why an amnesty needs to be declared," says Chkonia. The head of the Kazbegi company and leader of the party "Industry will save Georgia", Gogi Topadze, supported his colleague. The director of the company Toyota Centre Caucasus, Irakli Gurchiani, also thinks that if this happens, "companies will use the sums which have been freed up for development, and instead of laying off jobs they will guarantee that citizens will remain in work."

For a long time the authorities did not react to these proposals, putting off the problems experienced by business until the political situation is normalized. Not forgetting, however, to stress that political destabilization will have a negative impact on business, which even without this is having a tough time during this crisis. Hence the Minister for the Economy, Lasha Zhvania, remarked: "The expectation of actions has already created problems in itself". Now the situation has developed in such a way that an economic amnesty is likely to be declared. But the authorities are not yet prepared to make any concessions. The chairman of the Supreme Court, Kote Kublashvili, commented on some easing of the tax burden, as Radio Kommersant reports, declaring that "the political and business environment need to assessed, and the question needs to be studied in some depth. It's not that easy to solve."

It is worth noting that whilst businessmen are insisting on an amnesty, the state is putting the assets of two Georgian businessmen, Kibar Khalvashi and Gochi Dzaskohova, to auction. Moreover, it is unclear whether this fate befell the businessmen on economic or political grounds. (Both businessmen left Georgia after they openly criticised Saakashvili, and in response they were implicated in kidnappings, fraud and non-payment of debts. - I.P).

Saakashvili's government knows what economic amnesties are about. One was carried out after victory in the Rose Revolution. Admittedly, it was only declared after the high-profile arrests of famous businessmen close to Shevardnadze's government. The guilty men were only released after they made "voluntary donations to the state budget". That is perhaps why this amnesty declared by the authorities failed. Saakashvili's statement from the time comes to mind: "If they say that they have a million, they will pay 1 percent of this sum into the budget. If they say that they have 10 million, then they will pay 1 percent of 10 million accordingly." But nobody came, nobody said anything and gave money to the state budget.

So should an experiment that has failed before be repeated? Will another amnesty help business during the crisis? And will the Georgian businessmen return who since 2003 have preferred to live in more peaceful countries? Economic expert Niko Orvelashvili answered these questions to your GeorgiaTimes correspondent: "A financial amnesty won't help anyone at the moment. It could bring benefits in a country where there is equality before the law. But in our country, some businessmen have been robbed for five years, and they have also been left with debts. The nomenklatura businessmen have merely multiplied their capital at the expense of the state budget, but they also still have debts from previous years. It is the case that the amnesty would write off the debts of both of these groups." Orvelashvili thinks that in order to implement any economic initiative, to begin with the supremacy of the law needs to be guaranteed. And this means that the leadership should resign because it has been unable to cope with any of the existing problems.


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