Georgian Economy Aspires to Rule of Law
19 September, 2013
Georgian Economy Aspires to Rule of Law
Recent decision of Georgian PM Bidzina Ivanishvili to quit the post and politics shortly after the upcoming October presidential election makes some Georgian analysts hopeful that at last the law and not a man will control Georgian economy. They downplay fears in sections of the public that Ivanishvili’s political retirement will make a negative impact on Georgian economy and social welfare.
The open letter of Georgian PM released early in September, which informed the public that Ivanishvili would retire soon,
raised fears that negative processes will develop in Georgian business and economy following the slump in the investors’ trust, which significantly depends on the personality of Ivanishvili, a respectable billionaire and renowned figure in the international business world. As a matter of fact, Ivanishvili came to politics as a founder of the political coalition Georgian Dream in the fall of 2011 with the aim to totally reshuffle the ruling power and then quit the political arena. With his, relatively clean business biography (at any rate, his competitors failed to provide serious discrediting information) and charitable activity, he was the key figure shaping out the much coveted power shift during the parliamentary elections last October. Voters, particularly business community who was annoyed by the crackdown of the ex-power, assessed the Ivanishvili’s coming as a guarantee of economic stability and protection of entrepreneurs’ rights. He pledged to make business free of state pressure and he did it. However, the economy dropped in the first quarter of 2013 and cases of violation of property rights infesting the Prosecutors’ Office still remain unsettled. The macro-economic data somewhat improved by preliminary statistics by the second quarter thanks to the rise in export and investments leading the authorities to anticipate the steady re-start in the economic growth. Certain pessimism is however lurking in the public realms given the PM’s forthcoming political retirement and ensuing ambiguity around his original pledge of economic growth and restoration of justice.
Ivanishvili himself assures his step-down will not affect the economy as the economic team he leaves behind is very competent and effective and his economic course will be maintained. Moreover, he promises to be more useful for business and boost investments once he quits the politics.
Lia Eliava, an economic analyst, approves MP’s move and expects no significant slowdown in Georgian economy, provided that the political stability is kept on. She believes the incumbent economic team is prudent and is likely to lead economy along an evolutionary, not a revolutionary way as the ex-power used to do, which means that economy will grow slowly but steadily.
“Economy hates revolutionary changes that led our economy to a deadlock. Money needs legislative guarantees and stable investment environment and not just trust in persons; this is a reason of investments inflow and not Ivanishvili’s factor,” she explained to Georgian Journal. Besides, it is an internationally acknowledged etiquette that a billionaire should not rule the country lest he faces the clash of interest between the state and his business interests. Ivanishvili is well aware of this unwritten covenant. Soso Archvadze, economic analyst, thinks the epoch of one person-regulated economy must come to an end in Georgia and the law should take its due place.
“The more Saakashvili accentuates that during his time the economy has been growing at a higher speed, the more it bespeaks of the existence of a personal factor; he used to hold the reins of economy in his hands and acted at his discretion. This is a mental heritage of the Soviet past: putting one person in charge of the country unlike western world where the laws rule the countries. The law should take its due place in Georgia at last,” Archvadze said.

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GEL Exchange
USD
1
USD
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EUR
1
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3.0693
GBP
1
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RUB
100
RUB
3.9538