Dual Administration Threat Eclipses Economic Renaissance Prospects
11 October, 2012
Dual Administration Threat Eclipses Economic Renaissance Prospects

The threat that the dual authority may prevail in Georgia if the President of the country goes into opposition, eclipses prospects of Georgian economy that is looking forward to the renaissance as a result of the power shift. 

“Business should be free of political crackdown,” this was the key and most expected message sent by Bidzina Ivanishvili, a candidate for the post of Prime Minister of Georgia and leader of Georgian Dream political coalition [that won the parliamentary elections on October

1, 2012], to business community on October 5.

Ivanishvili having around USD 6 billion at his disposal is acknowledged as a successful businessman worldwide and both foreign and Georgian businessmen hope he will handle with the full plate of problems of Georgian private sector such as rampant oligopolies and monopolies, lack of competition, expensive credits, violation of property rights and the state crackdown on business couched in fine terms as of “friendship” and “cooperation” between the state and the private sector.

Ivanishvili believes the only relationship between the state and private sector must be in frames of law and as soon as the state would ask for “friendship” business must cry for help like “I’m raped!”

“I personally guarantee the business that not a single official [of new government] will ever dare to interfere in private business and private ownership,” Ivanishvili stated after the meeting. “This should lay ground to economic development in the country and combating the big injustice called unemployment.”

He recommended the business presumably involved in cartel agreements to give up this malpractice as far as the new government plans to restore effective anti-trust service to discharge the market of monopolists once and for all.

“We will restore the court of arbitrage revoked by the previous authority and will create the system where the prosecutor’s office and the court will be in the service of people and business,” Ivanishvili elaborated.

The new candidate of Prime Minister’s office also stressed that the government-manipulated banking sector must be de-politicized and focused on cheap credits fixing at around 5-7% of yield [unlike the currently active yields starting from at least 12% and going as high as 40%]. No entrepreneurship can be developed through credits demanding 15% of yield, Ivanishvili accentuated.

He also promised to improve the labor code, think of making the profit tax void and expressed hopes to restore the trade and cultural relationship with Russia perhaps by the end-year.

“I am expecting the renaissance,” Lasha Papashvili, founder and shareholder of Bank Republic [a part of Societe Generalle Group] currently involved in real estate, agriculture, winemaking and tourist businesses, said on October 5 when Ivanishvili met business community.

Levan Vasadze, a Georgian millionaire with major assets in Russia and founder of Bagrationi 1882 winery in Georgia, thinks “Ivanishvili as nobody else is well aware of this sphere [business] and he really is able to develop business [in Georgia].”

Georgian economic experts share the optimism of Georgian businessmen and expect the new government to make Georgian business climate healthier and attractive.

“I agree with Papashvili that there may be a renaissance in Georgian business but only really smart and skilful entrepreneurs are able to compete at the market. I believe many businessmen who ranked among top businessmen of the country thanks to governmental lobby may be out of the renaissance prospect. This prospect unfolds to only really dexterous entrepreneurs who were discriminated by the previous authorities but now can reveal their skills as business climate becomes fairer  and healthier that enables smart businessmen to compete  the ones who enjoyed artificial preferences starting even Shevardnadze regime,” Ditrikh Muller, a founder of Georgian Investment Group, said in the interview to Georgian Journal.

Demur Giorkhelidze, an economic analyst, believes Georgian business may really flourish only by focusing on social responsibilities neglected so far.

“Big business should understand that they must shift their standpoints if they want to partake in the economic renaissance. The thing is the big business was the one enjoying the benediction of previous government so far and bore not the least of social responsibility. Now they should realize that there are only two ways: either they undertake social responsibility and share reasonable profits with people, or they may still enjoy big profits and be a subject of national contempt,” Giorkhelidze explained to GJ.

The only blemish on the landscape of optimistic forecasts is inadequate behavior of Mikheil Saakashvili, President of Georgia and leader of the ex-ruling political party of National Movement. Saakashvili declared that he goes in the opposition since Georgian Dream won the parliamentary elections. His office term expires in October of 2013 and during this period Saakashvili has sufficient power to baffle the new government’s activity and create a kind of dual authority in the country leading to stagnation and economic crisis.

“The dual authority brought Ukraine to the deadlock couple of years ago making it most vulnerable to the economic crisis and it may affect Georgia in the face of the second tide of economic crisis upsurge. Dual authority is the worst thing that can happen in the country as all investment projects are suspended until the situation clears. No reasonable investor [local or foreigner] undertakes any venture in the country where the president is at odds with the government. Investors need guarantees for smooth business operation and it cannot be achieved when the president declares himself to be an opposition like Saakashvili did,” Muller worries.

There are plenty of changes made by the ex-government to the law affecting investment climate that the new government needs to retrieve and Saakashvili has full power to stopple the legislative activity of Georgian parliament: the parliament-approved bill becomes a law only after the Presidential signature that Saakashvili can easily withhold for three times and protract procedures. Moreover, His Excellency is empowered to dismiss parliament in six months, issue presidential regulations with the power of law and cause a lot of mess in the country in fact. The only way-out is to send Saakashvili on retirement, Muller believes.

“If Saakashvili is a real patriot he must step down now when the second tide of economic crisis hovers in the air to escape dual authority and economic stagnation in Georgia. I believe investments will influx in Georgia immediately and the country makes a real economic breakthrough in this case. Otherwise we may face stagnation not a renaissance,” Muller said.

Giorkhelidze believes Saakashvili will be pretty negotiable.

“He is already well aware of power of Georgian people now [who got back to its national responsibility since the elections day] and understands that everyone who goes against the national will is doomed to failure,” he said.

Print
Other Stories
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
14.07.2019
15.07.2019
USD
1
USD
2.8513
2.8513
EUR
1
EUR
3.2094
3.2094
GBP
1
GBP
3.5727
3.5727
RUB
100
RUB
4.5215
4.5215
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8513
EUR
1
EUR
3.2094
GBP
1
GBP
3.5727
RUB
100
RUB
4.5215
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31