"Produce in Georgia": business dream at the expense of taxpayers?

"Produce in Georgia": business dream at the expense of taxpayers?The state program "Produce in Georgia" presented on Monday by Prime Minister Irakli Garibashvili has been approved by the government. The Minister of Agriculture, Shalva Pipia, said that this program will cover a number of areas which contribute to the development of local production. The project will be implemented jointly by the Ministry of Agriculture and the Ministry of Finance. One of the key aspects of the state program is the participation of the state in giving loans to businesses. The program promises $2 million to entrepreneurs who want to start new businesses.The state will pay at least 10% of the interest rate on a loan given by a bank. The state program was welcomed by Georgian banks, who expressed their readiness to finance competitive projects initiated by large and medium-sized businesses. However, economists of the country are skeptical about the program. Thus, the founder of the NGO "Marketing", Mamuka Pagava, said in an interview to VK that a program like that had already been developed in Georgia once and had failed. Pagava believes that this time the program will fail as well.The expert believes that the project will fail due to the fact that businesses will have no personal liability for loans. "Capitalism has been developing for 500 years based on personal responsibility. This principle is the core of market relations. All financial crises in the world, including the last one, which began in 2008, were the result of government intervention in market relations and the willingness to burden taxpayers with the risks of others," he said.

The state program "Produce in Georgia" presented on Monday by Prime Minister Irakli Garibashvili has been approved by the government. The Minister of Agriculture, Shalva Pipia, said that this program will cover a number of areas which contribute to the development of local production. The project will be implemented jointly by the Ministry of Agriculture and the Ministry of Finance. 
One of the key aspects of the state program is the participation of the state in giving loans to businesses. The program promises $2 million to entrepreneurs who want to start new businesses.

The state will pay at least 10% of the interest rate on a loan given by a bank. 

The state program was welcomed by Georgian banks, who expressed their readiness to finance competitive projects initiated by large and medium-sized businesses. However, economists of the country are skeptical about the program. Thus, the founder of the NGO "Marketing", Mamuka Pagava, said in an interview to VK that a program like that had already been developed in Georgia once and had failed. Pagava believes that this time the program will fail as well.

The expert believes that the project will fail due to the fact that businesses will have no personal liability for loans. "Capitalism has been developing for 500 years based on personal responsibility. This principle is the core of market relations. All financial crises in the world, including the last one, which began in 2008, were the result of government intervention in market relations and the willingness to burden taxpayers with the risks of others," he said.