Thursday, May 25, 2006

EU and Free Movement of People

If you are a citizen of Georgia and decided to travel to EU - you are in great trouble: you need a visa! Ordinary way - you can say. But not for Georgians (I assume for many others too). And where is the principle of free movement – you can ask: it is for elite - EU citizens but not for Georgians.
If you have a business in Belgium for instance - you are lost - you can never have visa - because you are obliged to go to Moscow for it and you need a visa for Russia as well. And it is even worse - so forget about Belgium and business.
If you still want to apply for visa for Austria - it's not better. You have to go to Kiev - great deal. Return ticket for USD 250, hotel for USD 200 for 3 nights and a visa fee for EUR 35=USD 45 = USD 500. And there is no guarantee - you can return back to Georgia without visa and without any explanation.
The most important is that you have to go yourself to apply - you cannot send application and supporting documents by express mail or even diplomatic mail - the Ministry of Foreign Affairs cannot guarantee anything!
Free movement, democracy, freedom, openness, peace etc. Who believes?

Wednesday, May 24, 2006

Parade of Power

Many concerns are appearing seeing how "strong" Georgian Army is! But we need even stronger - they say. All the politicians are silent to show how patriotic they are.
So there are many questions very important to have answers from these politicians, like:
Why we need the army at all, whom we are going to fights with?
Can we really plan any war to win?
Can anybody win any war in Caucasus?
Is army the solution of any internal conflict?
Whom we are going to shoot
?

Very simple and radical decision could be stopping any development and increasing of military spending. Then it can be reduced and minimized.
But now my proposal is to:
move away all the parades from the city center and hold it out of the capital, somewhere desert place. If somebody desires to look at it necessarily I am ready to pay for his/her ticket to go to that place.

Peace to new generations!

PR vs Free Market Reforms

Have you already guess which one is winning?
Now the Georgian government is on its way to decide which is more important to continue reforms or press on the voters again with PR machine. The latter was frequently used very effectively showing the the face of the enemy of nation.
Approaching the local elections but also seeing very clearly the coming general elections not very many people believe the government that was not really successful in reorganizing public sector or giving more freedom to the private can change the situation in the second part of its term. And the opposition is also ready to criticise everything from the left or right sides (especially from the left). Government has real deficit of choice to be sure it can help. So we see there is very few chances. It's politics. Nothing to do!
Greatest chances are lost.

Friday, May 12, 2006

Labor Market, Unions and the New Labor Code

It seems Georgian government is very close to adopt a new Labor Code. The imitated debates didn't change anything in the approach that was announced by the officials. Only thing what can be seen very easily is emergence of some groups who call themselves Labor Unions. Labor Unions are still very funny in Georgia, along with very many socialist ideas unions are very unpopular in ex-communist countries and you need very strong efforts to return the population to them. This is really unbelievable. But there are of course very many people who work in this direction of convincing people to believe. Many of them are coming from the EU commissions and Labor organizations. They can't believe we really don't need unions. Or maybe they want to see we are as stupid as they are - this is a strong condition to be their friend. Unfortunately our government is not as strong in its ideas as is needed for refusing to this. And the opposition in this field is even worse. Nobody thinks about what kind of : - damage can bring to the labor market Labor Code - disadvantages creates the Labor Code to investors and management - danger can arise from the interventionism like labor regulations - discouragement creates uncertainty at the labor market for education - irresponsible motivations and activities appear from regulations of labor, etc. To listen to the government it is other private persons' duty to be responsible for pregnancy of a woman - they have to pay for her special vacations. Some others believe that a man who has 4 children cannot be fired - it is not just. Like in very many situations everybody try to forget that the main source of all of our wealth and opportunities is entrepreneur - businessman, who creates everything and there is no other money from nowhere and nobody. Government money is also very same money coming from entrepreneur, foreign money is also money of entrepreneur. So if we want employment, if we want services and goods, if we want to live - let's not make obstacles to entrepreneurs, let's give them freedom of choice.

'Fresh' Ideas - How To Punish Rich Consumers

After very long and very serious debates Georgian Government decided how to deal with electricity consumers. Hew idea is not simply socialist but a most socialist way of electricity distribution and pricing.
Yesterday, so called 'Regulator of the Energy Supply' (RES) issued its decree about new prices on electricity. By it consumers who use less than 100 kWt (per month) energy will pay 13.48 tetris, from 101 to 300 kWt - 16 tetris, and up than 300 kWt 17.69 tetris (1 US cent = 1.8 tetris).
So that means if you are rich and consume more you pay more. This blog is not a good place to explain why this is very bad for suppliers and especially for the producers of the electric energy. But it is very easy to see that the decision of the government (and of course not of the RES) is very stupid socialist idea.
Main problem is not really management or business difficulties. It is the wrong idea to regulate the price from the central bureau. Thus the new revolutionary government failed to go through this examination with such a sinful idea to govern economic activities from the center.
So the main principle of governance is still central planning Bolshevistic. They are sure that if central planning is permanently failing it is a fault of planners but not of the idea of central planning itself.
If somebody still believes in this kind of business - selling more for higher prices - they can look at the very famous world brand firms' manners of trade. One of the most known Coca Cola company (the same with Pepsi Cola or all the other successful businesses in the world). Price for 0.25 liter bottle of cola is somewhere GEL0.35; 1.5 liter - GEL1.5 and for the 2 liter - GEL1.8. So if you buy 8 bottles of 0.25 l cola you pay GEL2.8 but if you buy 2l - 1 lari less.Trust me readers, this law of economics works in every situation, revolutionary or non-revolutionary, socialist or capitalist environment. To understand this easier ask any seller on the street - they know!

Thursday, May 04, 2006

Wine News - Georgia

Wine war - Russia against Georgia.
If you want to find all kinds of stupidities in one case - take wine war issue of Russia (n Federation - is not it funny?) against Georgia. Who is wrong? Of course Russian politicians who, instead of population adicted to Georgian (or "Georgian") wines for long time, decided to limit import of Georgian wines to the Russian market.
In reality the government cares only about peasants who are producing grapes for the wines - their share in elections is not less then 10 % of all the electorate. This will be great failure before local elections.
As for wines - most of them are falsified. This is a answer to unqualified demand and everybody new about. Unfortunately the new generation of wine producers are not as strong as to fight for the markets and the main export is merely alcohol added color water with some aroma. This is the old story and so popular business that entrepreneurs from Bulgaria, Russia and even Spain found their way to make money in Russia (and Ukraine, Belarus, Lithuania etc) falsifying Georgian brend name wines.
'But what if RF joins the WTO?' There was a question asked the minister of agriculture of Georgia a year ago. 'It would be obliged to reduce tariffs for all imported wines and so Georgia would lose the Russian market in any case?' 'Unbelievable', was the answer. 'Russians love Georgian wine'.
Now you can consider how they love it. To believe in this was not so easy but let's see what part of Moscow youngster prefers to drive Russian cars, or what part of them use Russian TV or players. So wake up!
We need a hard work, low price and high quality. Without this even friends are not able to support you.

"New" Old Initiatives of the Revolutionary Government

Our government does not give us time to think about all the new initiatives coming every hour. One of them, for instance, is buying 500 tractors for villages - no surprise but sorrow. There appearing several questions for this but let's limit our time vaste with the next "invention":
Price of electricity is increasing - 'at last' - can say suppliers - 'they understood we need a help'. In reality after 2002 the price already increased - 12,8 tetri in 2002 was 6 US cents but now it is 7 cents. Now it will be 8 cents. But let's leave this rethoric - it is not a main problem. The main problem is that it is not again market price! (Some "Austrians" would say it is not a price at all.)
Here is another big problem of magic circle:
- consumers - demanding from the government lower prices
- government - saying it is not its duty to approve prices
- regulator - checking price content and defending consumers
- supplier - trying to get more
And who believes the regulator is for consumers and against suppliers? Or is the regulator out of political control? Is free price really dangerous for consumers?
Command prices are good both for government and suppliers. The regulator is the only chance for suppliers to increase prices instead optimisation and improving effectiveness or quality. This is the only chance.
The second genius idea is to punish people for consuming more electricity - use more - pay more.
That is why democracy fails everywhere. Need more "power" but if more "power" is paid more next elections decide who is more "powerful".
Finish with it! Get free prices!

Heritage/Atlas meetings in Colorado Springs

Just after the visit to the US.
Very interesting conferences, speakers and speeches, participants and conversations. Especially very good was the seminar with three Caucasus libertarians in Washington Dc, just before the conferences, organized by Mr. Tom Palmer from Cato Institute.
Greatest interest was directed to Mr Illarionov former adviser to President Putin. He tried to warn the world societies about wrong changes in Russia and required attention to this. After his speech at the Resource Bank meeting some participants from former soviet union decided to write and then sign a special statement about the situation. Signature probably will happen in Vienna at European Resource Bank meeting.
Support Illarionov to support yourself!