The government of Georgia presented the program for the social and economic development of the country by 2015. 2015 doesn’t correlate with the electoral cycle, which means that Mikhail Saakashvili’s team has no plans to resign in 2013, when the second term of the current president will end. If Saakashvili decides to leave, some experts think that his team will fight for continuation of the course which was formed in 2003, and it will propose a new leader. Thus, the program can be considered as a plan for the country’s development in “the post-presidential epoch,” as Georgia will be transformed from a presidential to presidential-parliamentary republic in 2013.
Maintaining macroeconomic stability is a priority for the government. This entails a minimal level of fiscal deficit, firmness of the national currency, a low level of inflation, strengthening the banking sector, reducing sovereign debt and a compact state administration.
It seems very easy: implement these several objectives and the situation in Greece, with its disastrous circumstances for the whole world, won’t be repeated in your country. However, this is difficult to do in the context of social pressure, unemployment and poverty of a significant part of population. Nevertheless, “Misha’s team” is ready to fight for a “cheap and low-cost” state. Considering the coming parliamentary and presidential elections and the populist promises of the opposition, such readiness inspires respect.
The other objective defined in the program is reducing the trade balance deficit. In all the years of independence, Georgian imports have surpassed exports by 3 to 4 times. Absolute measures have been changing, volumes of exports and imports have been growing or decreasing, but their correlation has always been the same. The objective reason for increasing the deficit is the absence of gas and oil in Georgia. However, there are many countries in the world which import energy resources, but their exports surpass their imports.
Of course, there are a lot of goods which Georgia cannot produce. It has no industrial base for it, as the economy of the USSR was built on clear division of labor. Georgia was a “tangerine-apple-grape republic,” thus, a fruit adjunct of the industrial superpower. The authorities couldn’t solve the problem. But they tried to outwit it! Georgia took first place in the region in export of cars, even though it doesn’t produce them. The situation concerns the re-export of cars. All customs procedures and registration take very little time in the country. Customers prefer to deal with Georgian customs; and residents of the neighboring countries and Central Asia purchase cars in Georgia.
Another effort to outwit economic reality is support of tourism. This sphere is an absolute priority in present-day Georgia, and all ministers are involved in it. Tourism is an export too: export of services on your own territory. Money inflows reduce the trade deficit, which is important.
When mentioning investment climate and business environment, the authorities mean a merciless fight against corruption and reduction of bureaucratic procedures. In Georgia one can participate in a public sale or a tender via the internet, without dealing with officials. A decision is made by a special computer program.
However, there is a dark side to the meal: the government intends to make the labor market even more liberalized. Liberalization means giving rights to employers and denying them to employees. An employee is not secure in Georgia. An employer can fire him at any time for any reason. In reality, the investment flow is huge in the country, as investors prefer to work in a country where labor unions have no weight.
Singapore and its “social twigs” is a model for the Georgian team of “young reformers.” At least, the world financial crisis and collapse of the eurozone convince Georgian liberal fundamentalists that they are right. Pro-government TV-channels broadcast developments in Greece every day, suggesting to citizens that it is a result of social experiments.
The program includes the project of the Eurasian Corridor, which makes the country a geo-economic crossroads. The concept of establishing a Eurasian crossroads in Georgia presupposes producing re-export goods for third countries. In this case Georgia will be a platform for running businesses in other major countries of the region.
Of course, the program presupposes further reduction of taxes and simplification of all procedures. Establishing free industrial zones for attraction of capital is intended.
One of main lines of the program is development of infrastructure. This entails construction of first-class highways; maintenance of an “open sky” policy, even though it is harmful for national air companies; modernization of ports and railways, and construction of medium and small hydroelectric power stations. Water is the main treasure of Georgia. The government has decided to use it to export electricity, first of all to Turkey.
Agriculture is the only sphere in which the authorities have decided to deviate from the program of “Singaporization” and start direct state investment into the agricultural complex. If Georgian agriculture doesn’t get on its feet even with the help of a fiscal crutch, millions of tourists will have to be fed by imports, and all benefits from tourism will be spent on it.
In the education system pan-national exams are considered to be one of great achievements of Saakashvili. Even the opposition doesn’t argue with it, as now talented young people from villages get an opportunity to study in the best universities of Tbilisi. Moreover, students from low-income families are supported by the state.
The government program confirms and deepens one of the main tendencies in Georgia, which was formed during Saakashvili’s presidential terms: decentralization of Tbilisi as the main and the only developed city. In 2012 the parliament will move to Kutaisi, the second biggest city in Georgia. The government will work there as well. The Constitutional Court is situated in Batumi, which is prestigious.
All these plans are interesting because they confirm the naivety of people who think that Saakashvili’s era will end in 2013.
Georgy Kalatozishvili, Tbilisi. Exclusively to VK.
