One hundred agricultural enterprises: unclear prospects

President Saakashvili has several times repeated his promise to build 100 processing enterprises in rural areas to stimulate the development of the agricultural sector. He initially said that by the end of 2009 these enterprises would have started functioning at full capacity. However the August war has delayed the implementation of the President’s ideas.

The Ministry of Agriculture optimistically declares that the project will be successfully implemented, but maybe a little later than planned. Analysts however are sceptical and predict the failure of this initiative. The Ministry is promising to build 300 processing enterprises in different regions of Georgia, instead of the 100 promised by the President. Minister Bakur Kvezereli now gives the end of 2010 as the date this promise will be fulfilled. At present only 12 enterprises have been allocated land and had their foundations sunk.

“Our priority in implementing this programme is to create jobs for as many people as possible,” says Kvezereli. However his optimism is not shared by independent analysts. Economist Shalva Melkadze thinks that opening 100 new agricultural enterprises is just as much of a joke as the promised opening of 100 new hospitals. “When the local market is not protected, consumers have no rights, the borders are not under control and low quality and cheap production is entering Georgia, there is no sense in building even 10 processing plants, let alone 100,” Melkadze maintains.

Melkadze thinks that even if Georgian enterprises started producing goods they would not be able to compete with imported production which is low quality and therefore cheap, so even if enterprises are built and opened and start producing goods they will be closed down quite quickly.