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Common fund proposed between authorities and business sector

By Gvantsa Gabekhadze
Friday, February 18
Certain parts of the business community support the creation of a common fund of the authorities and private sector- a statement concerning the issue was made by the Vice President of Small Business Association, Kakha Kokhreidze, on February 17.

“We have talked on the issue many times before, as the finance sector expresses less readiness to invest in the private sector without the authorities' involvement. It is important that projects are carefully selected and that encouragement is given to small and middle-sized businesses, “Kokhreidze said.

Economic analyst, Gia Khukhashvili is skeptical concerning the fund idea, and mentioned that the issue reveals many question marks and looks like a corruptive deal, “each side in the country should do its job. Such kind of collaboration is not bad, however it is better when the authorities create an environment, where the business sector would be stronger and more dynamic. The Government should free the economy from political risks and business will look after its own matters.” The analyst also supposes that the majority of the business sector do not trust the current ruling force and thus they will not participate in the project, “there is no trust and those business representatives, who are at a distance from the Government, will not take part in the project. Only those, who are in a close relationship with the authorities, will support it.”

Fellow economic analyst, Levan Kalandadze also commented on the issue, “Those projects need common support from the authorities and business sides. Separately, neither the authorities nor the business sector is able to finance very expensive projects. The most important thing is what kind of fund it would be, information released regarding the issue is not enough for making conclusions. There is a need for planning and financing important projects in the county and Georgia’s bank sector is unable to do this. As the analyst underlined, the authorities must not turn the fund into the mechanism of making its own business, “the fund should subordinate to privatization after a certain period, it should sell its shares and from year to year the authority’s participation should be reduced, thus it would become a public fund.”

The initiative regarding the fund has come from the authorities, as Prime Minister, Nika Gilauri stated the Fund will finance an oil refinery, the construction of which is currently being discussed with Azerbaijan.

"In his annual report, the President underlined that the state having close cooperation and coordination with private business will try to implement several investment projects. I mean the construction of the oil refinery. We are conducting consultations for the implementation of the project with Azerbaijani colleagues. Moreover, the creation of logistics centers is planned for the development of agriculture,” Gilauri said.

At the same time, he noted that presently the private sector cannot take part independently in big projects.