Georgian anti-trust body still under question mark
28 October, 2010
Georgian anti-trust body still under question mark

The anti-trust agency that was restored in spring of this year in the frames of EU recommendations, still lays at leisure, pending for legislation. The incomplete anti-trust reform delays the EU consent to allow Georgia join the Free Trade Agreement.
Restoration of effective anti-trust body is among four key obligatory tasks, which the EU set to Georgia if it really wants to conclude a Free Trade Agreement (FTA) with the EU. The remaining three demands include statistics reform, proper labor

code and food safety control; all set in line with the EU standards and legislations. Georgia has already implemented statistics reform and somewhat streamlined labor code but both fall far from perfection.


The allegedly reformed statistics body that became into public law entity and is supposed to implement impartial researches includes seven members of Board and three of them are representatives of the ministry of economy, ministry of finances and the central bank - all these three structures are assumed been biased toward statistic data and the sector pundits say that there is an apparent interest clash in the reformed statistics service.


Food control legislation is not complete since key paragraphs of the law obliging business to adopt due standards of food production are suspended. The law was scheduled to become fully operational in 2010, but was delayed ultimately and will be enforced by phases starting 2010 to 2017. 
The anti-trust body [been revoked in 2005 in quest of liberal reforms] was restored in May of 2010 officially, but the legislation based on which the body is authorized to implement its function still is not worked out. Government promised to work out legislation in June-July and put the anti-trust body in full operation by fall, but the timetables expired and the anti-trust agency still remains on paper pending for legislation.


The EU seems reluctant to tick any of them as implemented obligations. A non-governmental watchdog Association of Young Financiers and Businessmen (AYFB), hailed Georgian government on October 18, 2010 that it eludes implementation obligations undertaken in frames of negotiations of the FTA agreement in 2008 and demanded to restore the effective anti-trust body immediately.
Merab Janiashvili, Head of AYFB, doubts that government lobbies interests of monopolist companies enjoying carte blanche in the country for years since the anti-trust was revoked. 
“Free trade with the EU is very important to Georgia. It will boost export and cut down expenses to importers that will cut down prices in the country ultimately. The inactivity of government makes me inclined to think that it shuns creating an effective anti-trust legislation to lobby trusts in the country,” Janiashvili said.
Giorgi Khuroshvili, Parliamentary Secretary of government, assures that the action plan on restoration of the anti-trust service is negotiated with the EU at the moment, but he cannot name exact timetables when the service may enter into effect.
“We are discussing the key principles based on which the [anti-trust] service must function and as soon as we achieve a consensus the due legislative initiative will enter the parliament,” he said.
The problem is that government would like to deprive the restored anti-trust service of execution power and grant it with only market monitoring right. It can research the market and send reports on suspicious market players to court for execution. Janiashvili claims this kind of service does not differ from Non-Governmental Organization (NGO) in fact and that the EU disapproved this kind of cosmetic reform past fall.


“The EU demands restoration of effective anti-trust service with execution power. If it has only monitoring function how it differs from NBG actually?” He asked Georgian Journal. “I also can implement market monitoring and send papers to court.”
Janiashvili fears that Georgian government has a controversial economic policy that cannot lead to positive results: it declares being oriented on the EU and duplicates the Singapore and Hong Kong economic models in fact.
“We apparently go toward Singapore. The democracy is limp there and market is very liberal and free of anti-trust and regulatory bodies. They have developed financial sector but do not develop other sectors of the economy. But these two samples are not countries, they are city-states in fact and their sample does not fit to Georgia that is a state and needs to develop all sectors of the economy,” he elaborated.
Paata Sheshelidze, President of New Economic School, argues that the EU approves the Georgian anti-trust reform. He does not believe in efficiency of  regulatory bodies generally and thinks that anti-trust for example rather affects consumers’ interests than protects them.
“It deprives consumers of choice and offers companies to consumer while it is up to consumer to decide where to go for product and service,” He told Georgian Journal. However since the FTA is very important to Georgia Sheshelidze acknowledges that anti-trust must be restored and has no pretension toward the already restored anti-trust agency.


“First of all the anti-trust body is restored and it is much better than it was before. It is a lie that the EU dislikes governmental approach. I have not seen any official documentation proving this fact. I think we have to wait and let government settle the issue, they know it better how to act,” he said.

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