The book by the economist Nikita Mendkevich “The Cost of Reform, or Why Georgia Didn’t Succeed” is in a sense a response to the work “Why Georgia Succeeded” by the economist Larisa Burakova, who studied the experience of Georgian market reforms as well.
Leonid Reshetnikov, Head of the Russian Institute of Strategic Studies
Georgia concerns us most of all in the Caucasus region, as our relations with it are difficult. Scientific contacts and research contacts are almost lost. After the book by Mrs. Larisa Burakova “Why Georgia Succeeded”, we wanted to analyze the situation in Georgia at a deeper and more serious level from friendly positions in order to show the developments taking place in this country. We wanted to help Russia to make conclusions, as our country is facing a serious of problem, which Georgia is solving now.
Nikita Mendkevich
I aimed at studying the reforms of recent years, which were provided in Georgia, their processing and consequences. Being an economist, I focused on the economic aspect of the reforms, including the influence of foreign investments, credits, grants which were given to the republic in significant volumes, I also considered internal factors influencing economic processes in the country. As the authorities rejected management of financial flows, the culture of ineffective spending of these resources was formed. For example, a huge percentage of them was invested not in real production, but in intermediary trade. Because of that, we have seen a huge growth in imports of foreign goods to Georgia and a decrease of Georgian production. I mean agricultural products too. Moreover, rejection of anti-monopoly management for a certain period should be noted – there was no such service at all, the functions were later given to the Interior Ministry, but now no real work in provided in this direction. In some regions price collusions and monopolies were formed; they also negatively influence politics, including corruption.
Moreover, I paid attention to a series of aspects connected with social and other reforms. First of all, this is the policy in the sphere of crime. I tried to gather the whole existing statistical material on this theme and detect whether enormous successes were achieved – as the authorities say – or not. I must say my conclusions are rough, because unfortunately the criminal statistics of Georgia, both official and unofficial (social polls) are in very bad condition. They are not reliable. I tried to define latency of crime, but a lot of work should be done in this sphere. I also considered social aspects of reforms, their influence on the population’s incomes, on changing the social policy and its influence on certain spheres, including healthcare. Unfortunately, plenty of sad consequences are present here, including the unsuccessful reform of the healthcare system in late 2000s which led to the growth of diseases and deaths. I analyze relying on statistics.
Georgia cannot be considered from the point of view of the successes and failures of a liberal or other experiment. The problem of Georgia is that reforms, whatever they are, were planned poorly; the authorities treated it inconsistently, irresponsibly - it concerns many politicians. Therefore, the reforms appeared to be unbalanced in many spheres and gave an opposite effect. A combination of incompatible measures took place. This resulted in destructive consequences. The main conclusion made in the book is that one cannot carelessly deal with reforms. Any, even the most classic, idea of liberalism, socialism, and even Jamahiriya provides vicious effects, which are difficult to change if the idea is implemented in the wrong way.
Tamara Guzenkova, Head of the Center of the Study of the Problems of the Near Abroad under the RISS
We can speak about the phenomenon of Georgia in the former-Soviet space. Georgia holds a unique position in the political and geopolitical spheres. That is why one more source of information, a detailed analysis of what happens in Georgia, is very important for Russian experts. I welcome the initiative of our author, but I think he was afraid of accusations of prejudice, bias, dependence of views on the Georgian situation that he tried to discuss this problem absolutely loyally, neutrally, calmly, independently, using open sources. I find it touching that he cited Larisa Burakova a lot as an author of an alternative monograph. His task was to rely on statistics and economic data. In the post-modernist epoch books often appear to be an advertisement of an advertisement. I think the Georgian phenomenon is very contradictory, and the book indicates this. The phenomenon is covered with a thick layer of myths which are difficult to dispel. I think this book could be a first step toward a serious discussion of the development of post-Soviet states, for example, Georgia.
