State Capitalism Ahead
17 November, 2011
State Capitalism Ahead

No more need in business for “State Inc”?

Recently we witnessed quite a number of occasions when the State agencies were effectively given the right of conducting business. Certainly, such “businesses” are motivated by financial gains. A question immediately props up: how fair could be the game rules used by these businesses in relation with their competitors, when their backs are oiled by the bulwark State agencies? This question is asked every time the news about creation of business institutions under this

or that State agency becomes known. The latest such news is about entitling the State- owned Samtrest to found private wine companies.

Grape and Wine Department of the Ministry of Agriculture takes care of state control in the sphere of viticulture and viniculture. A short while ago, the head of the state scolded the Samtrest Director for his poor performance and ordered the Minister of Agriculture to find “more competent” person to replace the Director. At the same time, the administration of the department was enhanced to both control wine companies and even entered the wine market as their competitor.

This news caused an immediate response from wine companies. They fear that this controversial move will provoke conflict of interests in the market. They refer to the international experience and absence of such precedence when similar governmental departments create their own wine companies. But the Minister of Agriculture has “strong-as-an-iron” argument. Namely, he alleges that the new state companies would enter unexplored markets where Georgian companies are not present (?!).

The Georgian Parliament also adopted the changes enabling the Chamber of Control to establish a legal entity of public law called the Institute of Public Audit. The Institute would offer commercial audit service to governmental organizations, municipalities and any interested person. On top of it, it would be able to use services of other audit firms. In other words, the Control Chamber is given an unprecedented power to control businesses officially.

Niko Tevdorashvili (Head of TMG Marketing Company): “Their decision about Samtrest is too hasty. They have not even calculated costs of constructing their own factory, as well as elaborating development strategy and marketing. I wonder where the Samtrest is going to get money to establish its own private wine company. I believe the role of Samtrest must be only that of regulatory to support wine popularization on world markets. By delivering the message of our country’s uniqueness to clients it could facilitate tourism, including wine tourism. But in case, when Samtrest acts as both regulatory body and wine producer, it would be destined to become a biased agency to take advantage of its superior market position in relation to competitors. If the state cannot get rid of the idea of creating private companies then let it create an LTD and openly admit that Samtrest is no longer alive in the country. Creation of public law persons by the state agencies will be discriminative for non-state producers. Accordingly, the Government will try to impose barriers for the alien producers to suffer and thereby help its progeny flourish without a hurdle. This is well tested method.”

Levan Kalandadze (economic expert): Naturally, it will cause awkwardness and create preferential environment for state-driven companies to the expense detriment of non-State players. These days, the country is suffering from ever so growing tax pressure. Hence, organizations will go to all lengths to avoid misunderstandings between them and the state agencies, be it the Control Chamber, Revenue Office or others. It’s a part of the State policy which moves in opposite direction to decentralization.

Print
Other Stories
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
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
19.04.2019
20.04.2019
USD
1
USD
2.6939
2.6939
EUR
1
EUR
3.0323
3.0323
GBP
1
GBP
3.5053
3.5053
RUB
100
RUB
4.2087
4.2087
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
2.6939
EUR
1
EUR
3.0323
GBP
1
GBP
3.5053
RUB
100
RUB
4.2087
April 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