Opposition Protests

Last months were very active for opposition in Georgia. There were organized 3 big manifestations on the main street in Tbilisi. The were protesting against overuse of power and violence of human rights, also implementation of cash-machines for street traders. The government answered only with blaming the opposition with epithets like Moscow agents, criminals and enemies of the nation.
After a while majority at the parliament counter-attacked the opposition. They started impeachment process against one of the opposition leaders accusing him in violation of laws (Mps by Georgian laws are not allowed to control directly any business enterprise.). The opposition answered with aggressive promises - there will be no peace if you do this.
What is always missing in the oppostition claims - economic policy issues (if not counting the Conservatives (!) complaints for introducing of more just social benefits to elderly. They unfortunately don't mention at all very many mistakes in economic policy of the government.

Good News

Good news from the government!
Georgan government decided to invite for consulting work famous Estonian reformer Mart Laar. He is supposed to work with Georgian government at least 1 year. Now the government is working on details.
Last January Mart Laar visited Georgia and was very successful = having very many workshops, meetings and lectures. After meeting with the President and the Prime Minister it was decided to invite him for longer consultancy.
As the NESG leaders were main initiators of Mr. Laar's first visit they are very happy seeing success of their effort.

Flat Tax in Georgia - First Results

Year of 2005 was one of the significant in Georgians life – the government introduced 12% fat tax instead of progressive 12-20%. This and some other steps forward were to change the taxation dramatically in this country – reduction of number of taxes from 21 to 8, social insurance tax rate reduction from 31% to 20% (it is paid only by the employer) and VAT from 20% to 18% (the second half of 2005) - was expected as huge relief to taxpayers. Even though tax administrative rules remained as stupid as it was before (it is anti-constitutional in very many cases) the new code (or new rates) already proved its ability to change radically the situation.
Here are some figures to compare 2004 and 2005 years. Sometimes appear other concerns that it was not as good idea to decrease these all rates because before they were high but less people were paying them.
It’s a funny that the current prime-minister Mr. Nogaideli was calling every person idiot if he/she said that reduction of taxes would give more results both for private and state sectors. Let’s hope he regrets about his stupidity now.
This may show how it really worked – tax liberalization in Georgia even there are some concerns about realness of the figures. Before, the government was very active in falsifying the statistic information. But business legalization process is easily seen through this table.

And the Governmental Counter-attack

During the meetings with Ruth Richardson, Mart Laar, Marc Miles and Tom Palmer every public official they met (prime-minister and other Ministers of Georgia) was showing his/her great support to liberalization ideas. They promised many things from tariff elimination, to privatization of pensions and further improvements to the business environment. But still there are some concerns coming from the society.
At first they are connected to very weak contact of the government to the people – in this kind of situation any even excellent program can fail and discredit itself. Especially there are very strong feelings of disappointment from three particular projections of the government: health care, pensions and education. All three are long run policy programs and need strong consent of the general public and political parties. Unfortunately we see the opposite – the government very effectively hides its plans from the society and makes everything to fail. Main concerns Georgian libertarians have here is that this government can easily discredit all the ideas of liberalization and of course the left-wing opposition is ready to fight.
After the president understood these political-circle problems he renewed his PR campaign. Few days ago he visited one of the villages in Kakheti (East Georgian province) brought to the peasants fertilizers and a tractor. After granting the fertilizers to villagers he announced about his generosity of presenting the tractor to the village.
The opposition immediately found some problems in his this action asking his secretary: to whom this tractor belongs now? There are no Kolhoz or Sovhoz in the village and even no executive body. Some reformers in the government hoped somebody in the village would take care (privatize himself) the tractor soon but if not in a week there would be no tractor or even parts.
A month before – during natural gas shortage from Russia – the president, the mayor of Tbilisi and the head of financial police announced about their promise to punish anybody who would sell kerosene for higher than market – speculative prices to the population. Unfortunately we couldn’t see any politician protesting against this stupidity – but no wonder, they, even so called right opposition, didn’t respond to 200% increase of central budget spending during last two years.
“Evil” voices are coming the government started again speaking about re-privatization (or nationalization) of some (they say 30) factories suspected as wrongly privatized. The same story again…
So, as one Bolshevik was saying: one step forward, two steps back!

Libertarian Attack

Libertarian Attack
Last 6 months have been very successful for libertarians in Georgia. They (the people of New Economic School - Georgia the think-tank) hosted very distinguished friends of liberty and famous reformers. Here you can see the calendar of events happened through this time period:
September 2005: Hardy Bouillon, philosopher, Germany
October 2005: Robert Nef, Switzerland, Liberal Institut, Zurich,
October 2005: Hon. Ruth Richardson, New Zealand, former Minister of Finance
January 2006: Mart Laar, Estonia, former prime-minister
February 2006: Marc Miles, USA, Author, Economic Freedom Index research, Heritage Foundation
March 2006: Tom Palmer, Senior Fellow, Cato Institute
March 2006: Richard Ebeling, Sheldon Richman and others, USA, Foundation for Economic Education
During the same period of time NESG organized several local seminars and international events in Georgia and Armenia. The main theme of the events was liberalization of the transition societies.

FEE Lecturing in South Caucasus

The leaders and lectures of Foundation for Economic Education (www.fee.org) are visiting this week (March 17-24 2006) South Caucasus . They will provide with public lectures in Georgia and Armenia and 4 day long seminar in village Shindisi, Georgia.
Main themes of lectures will be free market solutions of economic problems and advantages of free society. 30 students from Georgia and 7-7 students from Armenia and Azerbaijan are invited to the seminar in Shindisi. The lecturers are famous Dr. Ebeling (the president of FEE) and Dr.Richman (the editor of the Freeman).

Tom Palmer to visit South Caucasus

Tom Palmer, Senior Fellow, Director of Cato University at Cato Institute (www.cato.org) one of the famous American libertarian think-tank is visiting South Caucasus March 13-15, 2006. He was invited by Mr. Kaha Bendukidze and hosted by New Economic School Georgia. During his visit it is planned to organize sevaral public lectures and seminars. Mr. Palmer's and the organizers wish is to promote libertarian ideas in the region, explain young people of these countries how to implement free trade and limited govenrnment policies.
Mr. Palmer's plan includes visit all three South Caucasus countries evaluating the situation for organizing a regional Cato meeting in Tbilisi in Autumn this year.

In Tbilisi he meets with Mr.Bendukidze, some international institutions and think-tanks.