BUSINESS
Equivalent to buried treasure – resources that are underused in Georgia
07 September, 2018
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%. According to the Georgian economic expert , Irakli Makalatia, he thinks that the forecast is quite realistic, but rather conservative .

Makalatia suggests that, in order to have achieve higher economic growth the state should use all available resources at its disposal.

“We have the assets that are not used. I talk about assets which belong to the state but whose present economic
value equals zero. These are utilized neither by the state nor by the private sector, and they are effectively equivalent to buried treasure.

These assets are:

Agricultural plot of lands, 70% of which (according to the population census of 2014) are state property. In order to achieve higher economic growth, it is essential that the state sell these assets and transfer them to the private sector.
geotv.ge
The majority of lands belongs to the state. Photo courtesy: allnews.ge

Fossil resources – there are about 960 mines and semi-precious stones in Georgia, which are 100% state property. 61 fixed term licenses have been issued in relation to these assets.. As they are not the owners of the assets the license holders are not interested in modernizing the business by installing high-tech equipment or making improvements. Their main interest is to get as much money as they can in the short term and to get the minerals out , spending as little as they can on overhead costs ,equipment and technology.

State-owned buildings – Georgia has plenty of public buildings. 70-80% of which belong to the state. In order to utilize them effectively, it is essential to privatize.

Forest resource – All forests in Georgia are 100% state owned. Such a situation does not arise anywhere else.

State enterprise – there are 135 state enterprises in Georgia, which are financed from the state budget. In fact Georgia finances them through taxes and are usually run at a loss. According to existing information, 7 of them are virtually bankrupt.
geotv.ge
Georgia is rich with water resources. Enguri dam on the picture. Photo courtesy: amerikiskhma.com

So in summary, the conclusion is that all the above mentioned assets must be made to work more effectively and at a profit or transferred to private ownership if Georgia wants to achieve a double-digit economic growth in the future” – said Makalatia.

First photo courtesy: aaf.ge

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