Tbilisi, the capital city of Georgia, was visited by the Free Market Road Show last May 13th. The event was co-organized with the New Economic School (NES), a very effective local think tank.
The event focused on Georgia’s economic reality after the reforms and the “Rose Revolution”.
Gia Jandieri, co-founder of NES, spearheaded the event talking about Georgia then and now. According to Jandieri, “after the collapse of the USSR Georgia’s economy dropped more than 80%.” The 90s were a decade of instability in the country but the first decade of the 21st century was witness of a process of reforms and change that are still an example to the world. “The average salary grew almost seven times during the reforms while dependence from foreign lows decreased to non existance,” stressed Jandieri. Corroborating once more the so-called “Laffer Curve”, Georgia lowered and even eliminated taxes but state revenue grew. Moreover, Jandieri pointed out that “Georgia is better than the EU regarding free trade.”
However, there are still problems. Many consider that the 2012 elections signal a turn back in the process and the start of a counterreformation. Jandieri told that some ministers “ are openly saying that they are fighting employers and investors.” The monetary front is not in a better shape. The national currency -the Georgian Lari- has devaluated 40% to the dollar in the past twelve months.
Jandieri believes that the damage capability of the current government is, at least, somewhat restricted by the Georgian “Economic Liberty Act” aimed at constitutionally enshrining the key economic policies Georgia has successfully pursued since the Rose Revolution – based on the principles of prudent, small and responsible governance.
According to Jandieri, the first two measures the Georgian government should introduce are a very simple and low fiscal system and the “depoliticization” of the monetary system.
“We have to make Georgia a place of individual freedom: a hub of liberty that spreads this message to its neighbors,” concluded the Georgian libertarian.
Afterwards came the turn of Simon Appleby – a foreign entrepreneur who has long been living in Georgia. Mr. Appleby highlighted the huge powers the tax collecting agency has: “The revenue service of Georgia can still take all your money from your bank account.”
On top of this point, Pierre Garello –a usual speaker at the Free Market Road Show– emphasized that “Freedom can be quickly lost” and “Georgia should learn from the mistakes of the European Union.”
The event was closed by Paata Sheshelidze – founder and president of the New Economic School. Mr. Sheshelidze provided the audience with two great news. Firstly, that the social perception of entrepreneurs in Georgia is very high. “People see them as hard-working, creative and forward looking,” claimed Sheshelidze. And he also announced that his institute has just published “The law”, by Frederic Bastiat, in the Georgian language.