Georgia facing serious economic crisis
Thursday, October 23Experts think that Georgia is on the edge of a serious economic crisis and if substantial steps are not taken timeously the country’s economy could collapse.
Several factors have created this situation. First of course comes the Russian aggression, next is the world economic crisis, but the most important maybe is the series of miscalculations made by the Georgian Government’s economic teams.
In recent years many mistakes have been made. There have been cases of private property abuse, the antimonopoly law has not worked well, there is no effective arbitration court and the role of the national bank and its functions have been seriously diminished. Analysts think that urgent measures should be taken as soon as possible.
Former Minister of Economy Professor Lado Papava is always making serious recommendations which are, unfortunately, being neglected and ignored by the country’s administration. Papava says that today Georgia needs experienced senior civil servants and antimonopoly legislation should be activated. He believes that the national bank’s importance should be increased, it should recover its former functions and it should be free from any kind of political pressure. He says that a new labour code should also be adopted, and that it is absolutely necessary to draw up a realistic budget and carry out budgetary expenditures efficiently. The tax code should also be adjusted so that Georgia becomes more attractive to investors.
The EU and US have demanded that Georgia takes a number of economic measures before they will grant it a free trade regime. Papava’s recommendations are consistent with these EU and US demands.