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Two perspectives on Georgia's economy

By Messenger Staff
Friday, May 18
Determining the health of Georgia's economy depends on who you support - the government, or one of the opposition parties. The government is satisfied with its economic achievements, regularly boasting about increasing foreign investment, new construction, rehabilitation of infrastructure, and so on. Opposition parties, meanwhile, complain about economic deadlock, stagnating development, and misplaced priorities.

Since the Rose Revolution, the administration mostly avoids discussing the theoretical aspects of economic development; it says it "acts instead of talks". It does not care for popular opinion and, even eight years later, conducts itself in a revolutionary, reformatory manner. Many decisions are made in haste, based on the inspiration of one person and the careful consideration of few others. The President decides to build a new town and the Ministries must support this in their own way. The President decides to rebuild an entire district or move the Parliament to a new city and the whole country is subordinated to the decision.

Independent analysts have characterized Georgia's economic policies as inconsistent and scattered. No plan is given much analysis before it is implemented; and afterwards, there is no acknowledgement of any mistakes or shortcomings. Everything is presented as a success and an achievement. This approach hinders any real analysis of economic policy and its outcomes.

The current administration's economic approach can be classified in one of three categories, as assessed by Georgian commentators: the first, a successful process of development without a democratic environment; the second, a substantial deregulation of the economy and reliance on market in most matters; third, a very fast and energetic privatization of state assets to attract investment. The government claims to be on the path of success, but claims and reality are two different things. In reality, the Georgian people are still largely poor, even as investment rises, tourist dollars roll in, and the country receives international praise for its reforms.

A vivid example of this approach is the tourism sector. Last year, nearly three million foreigners crossed Georgia's borders - so the administration touted this as three million tourists. However, when you look at the number carefully, you find that many are merely in transit between Azerbaijan, Turkey, and Armenia. These people are not tourists, and they spend little of their money on Georgian soil. A large number of foreign visitors are Georgian emigres, who are visiting their family, not touring. Then there is the contingent of ex-pats, diplomats, business travelers, English teachers, and other not-quite tourists. So the real picture of Georgia's "booming" tourist business is quite different from the government line.

If there is to be genuine democracy in Georgia, the government must be willing to look at the economic situation critically, and apply more realistic solutions to the country's many challenges.