Gia Jandieri News

Charting the Course to $7 Gas - J. Kevin Meaders - Mises Daily

2011-04-26T01:07:00.000+04:00

Charting the Course to $7 Gas - J. Kevin Meaders - Mises Daily

US must not implement VAT

2009-07-18T12:39:00.004+04:00

From the letter to Daniel Mitchell, Senior Fellow, Cato Institute

I think this is a big mistake to implement VAT in the US. Americans have no understanding how much it will cost to them, especially loosing of their freedom.

VAT was invented and was cheered by politicians and bureaucracy everywhere for two reasons:

- it is much easier to administer the VAT because taxpayers are obliged to assist an inspector - without this they can't have back their money.

- due to its character technically it is much easier and less costly to administer VAT by the central fiscal authority. Then it promises to redistribute these amounts to the local authorities justly, according to the federal/central government law!

Of course VAT has a very high danger of centralization of power. I assume this is the main reason why it was invented in France but not in Germany or any other federation or decentralized state. This is why the US is not a good place to implement VAT.

It is also wrong philosophically obliging a taxpayer to help government to administer/collect taxes. VAT cannot survive without this very system that a taxpayer must prove that the fiscal documents he/she is holding in hands are legal even if they are issued by suppliers.

And, you must help tax authorities to tax others – like you're obliging others to pay taxes. Unbelievable! Is not it against American Constitution rules?

The US is still believed as a main defender of liberty. Increase of the government expenditures of last years already confused many people in the world and encouraged many governments to follow. Now the US is the only country without VAT only hope for everybody that once upon a time their governments would eliminate VAT following the US example. Now, if VAT is implemented in the US - the world will lose all the chances for limited government and economic freedom.

Story of Gela

2008-08-15T20:41:00.006+04:00

My close friend from childhood - Gela, was a poet. He was an excellent person never had any aggressive ideas to any person, he was in love when became teenager and famous in our school with his soft character.
Gela never supported communist ideas, moreover, hated them.
In 1980, two years after we finished the high school, he was conscripted by soviet army. That period the Evil Empire was fighting in Afghanistan and propaganda was very strong of course, You can imagine what was happening in the army.
Gela came back after two years and we hardly recognized him. Yes, he changed little physically but mostly mentally – was like a mad robot. He was proving to everybody the war was important and necessary, that soviet union was a great country and the world capitalism will be defeated soon, etc.
This is how soviet/Russian propaganda works.
This was one of the first strikes in my life.

Some thoughts again.

2008-08-15T20:37:00.001+04:00

I was again writing to my friend some thoughts.
I assume everybody agree that war is about politics – it is a creation politicians. Therefore somebody who tries to understand how it happened the war in Georgia they he/she needs to understand what kind of alternatives could have both sides of the conflict – Russians and Georgians (BTW: no matter who were leaders of both sides). We can talk much about on if we don’t like or like the current leaders of both countries but I assume they had very few alternatives in their hands.
1. NATO summit in April – it stated that MAP could be given to Georgia in December of 2008 if it continues working on some problems. Unofficially Georgia was told that it needed to deal first of all with the conflicts and then it could be easier. Georgian delegation at the Parliamentary Assembly of Council of Europe tried to ask Chancellor of Germany about this – what could it mean but she denied to answer (nobody knows why – maybe she was correct but this was not understood like this by Georgian side.)
2. Politicians have certain function and role but mainly to do something for people and also KEEP the place in politics. This means when you’re close to such a moment of life of your country like Georgia was after NATO summit you need to do something or leave politics. The similar situation (maybe slightly less difficult) could be happening with the other side of the conflict of course - Russia.
3. If summarize the above mentioned any expert of politics could expect something could happen – no matter who would start this. I assume, I am not as good to know political theory so well but think many governments had good experts to understand this situation easier.
4. All arguments like it was not their task or business to be involved in this crisis I count as unacceptable because a. now many of them are involved after the blood; b. any attempts to hide behind of the humanism and I hate politics never brings peace unfortunately. This world is very much dependent on politics and Georgian people cannot start experimenting on itself of libertarian paradise –if we eliminate our state nobody will follow, unfortunately.
So now I would assume those who observed this situation, understood but did not do everything to prevent they are not less responsible in this war than Georgian or Russian leadership and putting whole burden on them is a shame.

Could We Avoid This Tragedy?

2008-08-13T22:36:00.007+04:00

Could We Avoid This Tragedy?
Dear friends,
Everybody here are asking themselves if we could avoid the tragedy.
Here are some thoughts. To have more precise answer I need to divide it into two parts:
1. Time before April Summit of NATO in Bucharest
2. Time after April, 2008

Time before April Summit of NATO in Bucharest

Probably we could avoid such a big tragedy. Despite of the fact that all the conflicts in Georgia were designed and organized by KGB we had some chances to avoid it. This way could be very long and absolutely free of politics. It is about free trade and exchange we needed to have with our citizens in conflict regions. For instance: we needed not only to try to open the railway from our side to Abkhazia but also ask Russia to open from their side. Instead we blocked conflict region people and broken already established relationship of Georgians and Ossetians.
Unfortunately all other versions of solution were political and they would be wrong not only because they were political but because Russians (when I say Russians – I always mean politicians) don’t care about political decisions or agreements (this was once more proven today again).

Time after April, 2008

It is very doubtful if we could avoid the scenario.

Oil – of course it is about domination of Russia in energy supply of Europe. Georgia for its headache is the only alternative route for Caspian oil and gas (the other ways are though Russia) – who is not aware of this please look at the map of the region
Taking power over Georgia means automatically cutting Azerbaijan and whole Central Asia from other then Russian controlled access to the world. (I assume everybody is aware of Iran – Russia alliance.)
Kosovo – Russia wanted to play the same game in Georgia as in Serbia. No matter if this is absolutely different case.
Having in mind NATO’s failure in April Russians as it was expected by many in Georgia understood this as a step back of NATO and signal for actions for Russia. Having in mind long history of relationship with Russia we had these predictions and warned as many people as we could. That time we could believe in a new conflict but not as big as it really happened unfortunately.
Could Georgia announce neutrality? Some Georgian politicians supported this idea. Discussions on this idea can be somewhat actual in future as some assume Georgia’s membership in NATO is less likely. Is it really possible? If you were in Georgia I would simply offer to look around. So many tense you can find in the region, and so many interests. Think – can we open the railway via Abkhazia? Beware of a quick answer – understand who is interested and who is against. I think here I need to stop counting of the problems. If you look in the realities of the region deeper only NATO membership of Georgia can establish a new situation which could stop everybody thinking about changing the status quo.
Some people tend to address responsibility of the tragedy towards the government of Georgia. I clearly and openly declared several times that I never voted for Saakashvili and his government (although I didn’t vote for others). I have good opinion of many reforms done by them but not so good about political system and protection of citizens freedoms. Government policy of allowing any person of the world to come and start working in Georgia without restriction shows openness and willingness of Georgians to live in freedom.
The provocation was planned very well. Everything shows this. This or any other government would be catch by this political trap. Look in this situation. You are the country leader - means politicians. This already implies you need to do something but keep your positions. If you want to keep your position in the situation like in Georgia, especially when you were told that conflicts are the obstacle to be in NATO (or have more security, have more investments, be a part of western society, etc) – you need to do something and before the next summit of NATO in December. You know that Russia has absolute opposite goal. You try to offer something to conflict regional leaders – Russians keep out them from negotiations. Georgians stay calm – they shoot. Georgians try to talk – they shoot and rob Georgian villages. Georgians ask for cease fire – they used this time for bringing more troops and continued shooting. Are there many politicians in the world who would be so brave to take back troops? I doubt.
Somebody was asking who started shooting – I think this is not clever question. Shooting Russians started earlier, for instance in 1921, when occupied independent Georgia, in 1924, when killed 30,000 Georgian rebels,1956 and 1989 when killed peaceful protesters in Tbilisi, in 1992 when supported criminals of separatist Abkhazia and their allies, during all the following years, everyday, almost every hour. There were many proofs of this, but somebody needed to see real blood now to be sure we were correct.
Thinking about politics and its rules I think it is not for me. It is not for me - but another thing is to find the alternative. Best of worse. I remember the German Chancellor who was very harsh to us for our conflicts in Abkhazia and so called South Ossetia. That time I told to my friend Germans - this is we who blame German and other governments for doing nothing to participate in the process of peace and re-integration of those regions into Georgia. This is again about politics - we can't expect from politicians more than a show how they spend money for nothing - just a show.

Therefore it is for me very doubtful there were any other chances.
Here I stop and maybe try to add something later.

Abkhazia independent?

2008-08-12T20:37:00.003+04:00

Russian president said at the press-conference today if Abkhazia and South Ossetia decide to be out of Georgia they should leave it – but you can ask: who can vote for that only the current population without refugees living everywhere else than in Abkhazia?
The mistake is that those who live there they are only 1/3 of the population lived there. But this is known. What is possibly unknown to many is that Abkhaz (those who called themselves so) population was only 1/6 of whole population of Abkhazia. So why not to give everybody chances to vote? But this is not what Abkhaz want. They even do not accept if voting supports simply independence – they need to keep there apartheid they had before the conflict and after (now they are 2/9 of the population or even less).
Their demand is to legalize apartheid by constitution whether they are the part of Georgia, independent or a part of Russia – this means no matter whi lives in Ankhazia – rulers must be Abkhaz. What Russia needs? To support the apartheid leader and control – this they already have currently.
But being part of Russia is too challenging – you may gain but can also fail – they also know well Russians. You may understand the problem of Abkhaz and may sympathize them also like me – they are really in a trouble. In more real sense most of Abkhaz don’t care about their ethnic, cultural and educational problems – because most of them are more Russians than Abkhaz. They don’t speak their language and almost forgot their tradition.

Please look in the letters of my friends:
http://www.t-i.org.uk/russiamoretogain.php
http://online.wsj.com/article/SB121850039382131705.html

Guess who

2008-08-12T20:34:00.003+04:00

A story of a spare wheel
Dear friends, if you decide once to go for the very important negotiations which can prevent a war – please don’t forget to check a spare wheel in your car because it is really important part of the negotiations. Why?
There is such an experience: Georgian Minister went to Tskhinvali (administrative center of so called South Ossetia) to meet there their leader and a mediator Mr. Popov from Russia sent especially to organize this negotiations. The Minister arrived at the place waited more than two hours calmly and then started asking others where they were. Ossetian said he would not talk to him without Popov.But Popov reported a wheel of the car he was travelling to the place had damaged and he could not continue his way because had no what? A spare wheel of course.
Unfortunately the negotiations failed and that night war started. Who believes in this story of a wheel? Not You? Guess who.

Still very dangerous

2008-08-12T12:58:00.003+04:00

The situation remains still very dangerous in Georgia. Last night was no problem if not counting Russian attack to Kodori. Now they control Kodori.
The also control the road from West Georgia to Tbilisi.
Last hours Russian jets bombed again Gori - municipality, university, hospital, they bombed villages near Gori. Few minutes ago they also bombed places near to Tbilisi. Now it was announced about another bombing of Baku-Ceihan pipeline. There is at least one victim (in Gori) - a Dutch journalist. This everything happens on the eyes of several international high officials like Terry Davis, Secretary General of the Council of Europe.
We still work at our office... Tbilisi is not the same as it was two-three days ago but there is traffic on the street, shops are mostly working even banks decided to close because of lack of security of cash movement.

What we gain

2008-08-10T18:52:00.003+04:00

We are both safe and having no problems with our families so far (Paata and Gia).
As for the declaration of "martial law" - it is for two weeks and we hope it will end in this period or even before. Many things are very much dependent on the international society... We expect that this time the world society will not give Russia chances to re-occupy Georgia what they dream very much about (everything shows only this).
Now everything is also dependent if all the true will reach the western societies to understand at last how dangerous is playing games with such an untrustworthy "partner" as Russia. Russia is a terrorist state and no hopes that it will change soon. I am sure you understand that if not Russian stupid support to separatism nobody would die in here this or previous times. If not Russian open promises to Kokoiti - he or any other leader would sit at the table for negotiations.
We can blame Saakashvili's government for mistakes but if anybody looked carefully into the real opportunities he/she would find out that:
- any government could have only this kind of political choice: Russia or the West - there would be some different details of politics but no different direction, because Russians are not changing and because we, having long experience with them, don't trust them
- region of 40 thousands didn't need 80 tanks- no Ossetian ethnic person has had any problems in Georgia before and after the conflict - this was a stupid Georgian president who invented it - guess who instructed him on this
- if Georgia is wrong in something so called South Ossetia is also the same - if we have wrong politicians I would insist that S.Ossetians have much worse
- this conflict is not about Ossetians and Georgians - somebody is playing with both - it is of course about two superpowers - Russia and the US. But I assume many people understand on which side we are and why. We have the best experience living with Russia - we recommend everybody not have the same.
- when thinking about Georgians and remember our sins I hope everybody can also remember how much we already contributed to the world peace and freedom
- when thinking about our wrong and sometimes stupid actions I hope everybody can remember that we never exchanged highest values into materialistic ones
- rejecting Georgia in NATO directly resulted in these consequences, Russians understood it as a signal to continue aggression.
- now everybody are sure that Russia cannot be a peacekeeper here - we were obliged to prove this - nobody wanted to listen to us before - the war is a price of this discovery-
- and all probably are aware about our chances to fight Russian troops (this shows we never wanted a war)
ARMED FORCES COMPARED
GEORGIA
Total personnel: 26,900
Main battle tanks (T-72): 82
Armoured personnel carriers: 139
Combat aircraft (Su-25): Seven
Heavy artillery pieces (including Grad rocket launchers): 95
RUSSIA
Total personnel: 641,000
Main battle tanks (various): 6,717
Armoured personnel carriers: 6,388
Combat aircraft (various): 1,206
Heavy artillery pieces (various): 7,550
Source: Jane's Sentinel Country Risk Assessments

freedom is worth to fight (to Johnny Munkhammar)

2008-08-10T00:52:00.005+04:00

Hi Johnny.
This is an aggression act from Russia. They supported separatism in Georgia during soviet times and after, were feeding separatist regimes (giving for instance this so called South Ossetian government at least $800m a year - the population was 40 thousands!) Now they wanted to organize even bigger provocation and our government understood this and tryied to prevent them - asked several times to continue negotiations. Ossetian government - which is a part of KGB - denied all the attempts of Georgian government for negotiations.
After this our side had no other chances then to fight - because if not them Russian troops would take rule in whole region there and maybe even out of it.Russians wanted to have this war - actually it never stopped after soviet times - they tried several times to punish us for dissolution of their greatest empire. Now after we announced about our plans to join NATO (it is now better visible why) - they became mad. This whole provocation was planned just for this reason - they wanted to show NATO members how bad we are... I assume most of them understood this up-side-down. at least Americans, British and Eastern Europeans.
This is very shortly. Other things are: they bombed today an apartment building in Gori - they bombed several cities and villages, killed 37 peaceful people; 10 Russian aircrafts are destroyed and several tanks of them. Could you imagine that this 40 thousands of population region has 87 tanks? From where?
Don't ask where is more information, nowhere - "somebody" blocked all the web-sites - guess who. I am ready to provide with more.So, it is war - we know who is our enemy. But we encourage everybody in the world - freedom is worth to fight.
Best,
Gia (August 9, 2008)
P.S. Paata is in West Georgia can't come to Tbilisi so far. I evacuated my children from city to a village.

To my friends - what it is going on here? A war!

2008-08-10T00:49:00.003+04:00

Here is some info about the situation. (August 8, 2008)
First of all it is an aggression of Russia towards Georgia. As libertarian I can't accept any violence no matter who is the initiator. But the situation about Georgia is not usual to say there is a chance to survive without defense efforts, unfortunately.
Yes, we probably made several mistakes past times and my position is not changing - free trade is the best solution for this kind of conflicts if... If you have civilized neighbors, not like Russia. After today's statement of Russian party of Yabloko - supposed to be opposition, which stated that only solution is to send more Russian military troops to Georgia, I tend to suspect there is no chance to find any reason in Russia nearest time.
There is high tense in here but absolutely no panic so far. From the window of my office the picture is similar as it was a week or two ago. But the news coming are discouraging - Russians increase their support to their marionettes, sending more troops (official and inofficial), military equipment and tanks, bombing Georgian territory by military aircrafts, etc.
But, please don't worry, we are still absolutely calm, simply thinking we are not as weak, and the international society is not as same, as in 1921, when bolsheviks occupied Georgia.This is very shortly...

Victory of Democracy over Free Market

2008-01-16T18:07:00.001+03:00

Presidential Elections in Georgia 2008
03 January 2008
Presidential Elections in Georgia: What Can We Expect?
First of all, happy New Year!
What can we expect? Nothing more than returning back to left-wing policies and stagnation.
It was very easy to predict that after introducing right-wing reforms - fast privatization, reducing taxes and tariffs and tax rates, introducing flat income tax, elimination of social tax (wages tax), elimination of several hundreds of licenses, deregulation of sectors of economy and many others – political opposition would attack the government for this activities.
Nobody can say all the reforms went correctly – there could be better methods, better mechanisms, more publicity and transparency. It was truly very uneasy to follow the all steps of the reforms, to understand free market policies… There could be much more radical solutions and even higher speed of changes.
People haven’t got realistic fruits from the reforms – this is the most challenging issue. The government failed to explain the real reason of the reforms, increasing freedoms and responsibilities of persons and decreasing the power of the government. Now this main idea is lost in riots and debates. The most important for debating sides is to show how much ready they are to introduce back totalitarian central planning, welfare programs, and all kinds of protectionism.
The only result we can have from these excellent ideas is slowing down the reforms and temps of economic growth that will inevitably bring Georgia back to economic stagnation.
But don’t worry and calm down. At least democracy won, and most of the political sides will be satisfied. And the parliament will continue to discuss how to please voters, bargain for the resources, and keep the status quo. Most important is to be always correct and satisfy the requests of the gullible and the envious.
Main political battle of last months of 2007 seemed to be the status of human rights in Georgia. In reality most important fight has been between the two – democracy and free market.
We regret to say that democracy wins.
Victory of Democracy Over Free Market!
http://www.nesg.net/page.php?id=33

Imprisoned

2007-09-06T22:26:00.000+04:00

Imprisoned...
But calm, down. I am not in a jail. I am imprisoned in my own country.
To travel to Europe for instance, is almost impossible. Only exception is the UK but all others built barriers to Georgians, no matter who they are, for what reason they try to travel European countries, to receive visas is as complicated as to travel to the moon.
Let's take a case with Belgium - very nice country. If you're Georgian forget about invitations, officials or inofficials, forget about your friends or business partners. Or you have a choice to fly to Moscow and try to apply there. Of course you don't or can't do this. Or if you have any business, conference, speech, etc, in Austria - go to Kiev - this is truly much better - you don't need visa for Ukraine and there are even direct flights to Kiev, almost everyday. So you can go and apply there. Yes, it can be costly but who cares about additional 600 dollars - you can see Vienna then , good deal, indeed.
But, please don't think these are evil capitalistic nations who imposed so strong barriers for Georgians. Romania, which is of the same age of democracy, market, civilization, culture. But now they are the members of the union... oh, sorry the European (not Soviet) Union . What is the first benefit from the EU? Strong bureaucracy, of course. Now they are returnng to the old and not forgotten things, or to say shortly: you want to go to Romania? You need two letters of invitation: inofficial, from the organizers of the conference, or business partners, and what is most important, official - from the Imigration service of Romania. If you are lucky you can have both of them in 2 weeks, then you need to apply in the consulate in Georgia (God Bless, not in Moscow!), and after a week you can know if you are really lucky.
Yes, it is true many Georgians try to escape from Georgia - it is understandable, good jobs are not appearing and you need to survive. But this is not good argument for the embassies and coonsulates. Frenchs are afraid for instance that if they give you more days to stay in France than it is written in your invitation the French economy will collapse at once; this is also true, if you are given 5 days, you of course want to escape 6th day. The same is with Germans. You fly to the US and have 13 hours in the airport of Munich - why not to sleep on the sofas (ironic) there; but don't bother us with your silly requests of transit visas, say thanks, you can stay in the airport...

But what is our fault, please tell us...
At least there must be a just trial...

Georgia vs Russia - the game continues

2007-08-16T04:00:00.001+04:00

After Soviet Union collapse (we suppose it was even before) our relationship with Russia collapsed simultaneusly:

1991 Russians stopped supplying Georgia with gasoline for several years
1991 Russians provoked civil war in Georgia supplying both sides with military equipment and guns
1992 Russians provoked Georgian government to start military expedition in Abkhazia and then helped with money, troops, military equipment and guns separatists in Georgia,
1993 Russians betrayed Georgians and occupied its territory
1993 Russians stopped supplying Georgia with natural gas for 4 years
1993 Russians stopped supplying Georgia with electricity for 3 years
1994 Russians provoked and organized another civil war in Georgia and forced Georgian government to join stupid CIS
1995-2007 Russians organized hundreds of provocations, acts of sabotage, attacks and bombing of the Georgian territory, abandoned Georgian wines, fruits, flowers, mineral water from Russian market, exploded pipelines and high-voltage wires for electricity, blocked Georgian airplanes, buses, postal services, tracks, deported Georgians from Russia only for their ethnic belonging (litso kavkazskoi natsionalnosti - person of Caucasian ethnicity),..
Much harm, nothing to say but we still believe, they love us, especially Russian media and press, and Mr. Jirinovski - our best friend.
But we were told everything is not true but false, or nightmare, or even fiction.

And what a stupid nation is Georgian. It is very easy to obey and have less problems, no separatism, no provokations, no political press, no bombing and no more visa requirement for Russia and in exchange subsidised natural gas and electricity. And Russians would like Georgian Tsinandali and Borjomi again.
But they need freedom, what a stupid people! They even think that if Georgians dissapear at all anybody will cry for them, ha, ha - everybody are Russians' friends, or consumers. They, Russians will show everybody GDE RAKI ZIMUUT!

Georgia is 35th Economically Free Country

2007-01-18T02:55:00.000+03:00

Paradox, surprise, unbelievable... Many Georgians will say. The index doesn't correspond to realities, especially with the speed of economic development.

But let's look closely. If we blame the information - it must be not as wrong as it seems. We can also blame the methodology - but it is the same for other nations too. So if a component is wrongly understood, it must be wrong for other nations too.

We hope in future the authors can find more sources for information to touch the reality, feelings of real people.

But now Georgia is 35th in the world and 20th in Europe, economically free nation.

Let's have a look: http://www.heritage.org/index/country.cfm?id=Georgia and

http://www.heritage.org/index/

Why Georgians Tend to Become Criminals in the EU and Work Hard in the US?

2007-01-16T23:06:00.000+03:00

Georgia lost up to 30% of its population after the collapse of the Soviet Empire (even the WB tends to hide this fact). Many of them left to find jobs somewhere. Most of the population of ex-SU had some kind of marketable skills and knowledge and the collapse of the economy left them without any job for long time and hence, without any chances for developing those skills and knowledge. They needed to have some money to live on and they decided to leave. Some of the Georgian citizens left for their own original countries, for instance Jews and Greeks (even Georgians always tolarated all ethnic or religious groups or persons). BTW, so called Georgian Jews still live their lives with Georgian traditions, speak and sing Georgian…
Now, about main question of this post. After some observations on the lives of Georgians in many countries, comparing with stile of life of Georgians in the SU, there appeared a question:
Why Georgians tend to become criminals in the EU and work hard in the US?
This question is not directed to Georgians. Yes, there are many criminals of Georgian originality in Russia, Ukraine, Germany, Spain, Greece, and especially in Austria (which decided to make huge obstacles to Georgians who want to travel there after that).
What can be real reason for this situation in Austria – I have been thinking for months. Then, after comparing this to the realities of the Georgians in the US, I think I found an appropriate answer.
It started after Soviet collapse. Many people, skillful workers and engineers and scientists among them, remained without jobs and chances for developing their skills and knowledge, or staying competitive on the market. Now, many of them decided to find jobs abroad: some of them went to Russia, some to Germany, Austria, Greece, Spain, Italy, France, UK, US, etc. Most of them work very hard – earning enough money live on it and send remittances to their relatives. Some of Georgians live criminal life – they are “successful” in this too.
But question is to understand why Georgians in the US work very hard (10-12 hours a day) and become criminals in Austria (or other EU country). To answer this question let’s look inside of these countries:
- Austria (and most countries of the EU) – state redistributes the wealth, it provides generous assistance to people, sometimes financing their life for long periods maybe not for wealthy life but enough for life. When Georgians (Aeries, Russians, etc) come there first information they get is that the government is “helpful” and “generous”. It can keep you from dying. It can provide you with food, room, clothes, some furniture, etc. So why to work, why try to find job – it’s so hard! Instead you only need to apply for assistance and allowance. After long period of doing nothing, walking around, you can mention how careless can be some workers at supermarkets and shops, how many things can be taken without problems, how easy is to earn money just to use this carelessness, etc. Then more heavy criminal ideas start to appear and after a while local police will be in a trouble – what to do with Georgians?
- The US – most of Georgian of course tend to settle in NY (mostly in Brooklyn). They find the city very attractive for some reasons: 1) climate is similar to Georgia 2) there are many Russian speakers in Brooklyn (it is still useful for Geogians) 3) diversity of the ethnic groups and individuals is what Georgians always were accepting 4) jobs – they appear every day, so if you want to work you do. 5) even if you are illegal emigrant local police, if don’t commit a crime, never touches you (simply it’s not their duty) 6) if you commit a crime – you’re lost 7) NOBODY offers you any assistance – instead – go and make money.
And Georgians work – very hard. It is a crush of another soviet myth that Georgians are simply lazy people. They are not (simply) lazy – they are rational and when there is a choice of having benefits without work or working hard they chose no work. In the US it is not possible but the EU governments, so generous and gullible, offer them do not work - steal instead and then we will imprison you (Georgians are ALL the same – criminals!).
But we are happy we could somehow answer the main question. It is simple: don’t give Georgians (or any ex-soviets) assistance, give them chances (open to them labor markets) to work!
The epilogue:
A Georgian in NY told me once: you can’t believe but here if you want to have a trouble you don’t need to be imprisoned for a crime, or bitten by local bandits, or even caught by the emigration service. The worst trouble you can have is if you have failed to pay in time for your credit card debts. If you do this more than twice you are really finished - go back to Georgia. We can only hope these people will come back with their greatest experience and make Georgia prosperous.

Old Song with IMF Refrain

2006-08-21T11:51:00.000+04:00

Capital requirements for foreign exchange bureaus (FEB) – is not a strange? This small business entities work mostly only on small amounts from $5 to $50 operations. So their liabilities seldom take more than 5 minutes and $200.
So what for the Central Bank of Georgia (NBG) and the IMF are recommending to introduce capital requirements for FEBs?
These requirements are to support other genius inventions of NBG – requirement of fit and proper, minimum space, special machine to recognize false notes etc.
Georgian Government was ready to eliminate all the requirements but NBG insisted and IMF supported.

As Georgians say – I don’t know to laugh or to cry?!

Paying Taxes is Irrational! (a fable)

2006-06-10T16:26:00.001+04:00

Fable about Spoilt Apple
One (or once upon a time) day a man came to the market to buy apples. Apple was expensive, 2 dinnars per pound. But there were also oranges for half of that price. So he decided to buy oranges. Sellers of the apple were sad.
Second day he came to the market and found out that apple became more expensive – 5 dinars. So he turned away and bought again oranges for 1 dinar. The sellers of the apple were sadder.
Third day surprised him very much – the sellers of the apples couldn’t sell their apple and the apples were already spoilt, but the price was again 5 dinars, so he of course bought oranges again for 1 dinar.
Forth day the man came and was astonished when seeing that all the market was full of cheap apple for ½ dinar, but there was the same problem with them – all apples were spoilt. The sellers of the apples were angry – he didn’t buy our apples for 2 dinars and for 5 too, but now we have very cheap apples – half of oranges price, why he is not buying our apples instead the twice as expensive oranges?
The man answered:
I don’t want to buy spoilt apple not for 5 dinars and not for ½ dinnar too.

The main idea:
You cannot convince taxpayers that paying taxes is rational if your government is ineffective.

EU and Free Movement of People

2006-05-25T00:19:00.000+04:00

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?

Parade of Power

2006-05-24T23:33:00.001+04:00

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

2006-05-24T23:18:00.000+04:00

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.

Labor Market, Unions and the New Labor Code

2006-05-12T18:58:00.000+04:00

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

2006-05-12T18:25:00.000+04:00

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!

Wine News - Georgia

2006-05-04T03:37:00.000+04:00

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

2006-05-04T02:51:00.001+04:00

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

2006-05-04T02:32:00.000+04:00

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!

De-privatization - What Can It Bring to Georgia

2006-04-08T01:07:00.000+04:00

Recent development in Georgia (as well as in other revolutionary country Ukraine) hardly brought us any calm thoughts. Government is pushing the idea of illegal procedures and corrupt decisions and trying to return back the history, nationalizing (or re-privatizing) the property already privatized 3, 5 or even 10 years ago.

Even not bringing theoretic arguments here we can merely ask our government leadership:

- what do you think - what kind of actions are expected from next government - do you think they will be not able to find mistakes and illegal moments in your current privatization-deprivatisation activities?

- how do you think is this process of de-privatization encouraging or discouraging possible investors to bring money to Georgia?

Opposition Protests

2006-03-31T18:33:00.000+04:00

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

2006-03-27T02:29:00.000+04:00

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

2006-03-20T09:47:00.001+03:00

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

2006-03-20T00:37:00.000+03:00

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

2006-03-20T00:00:00.000+03:00

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

2006-03-19T22:35:00.000+03:00

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

2006-03-19T22:07:00.000+03:00

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.

Marc Miles in Tbilisi

2006-02-12T10:05:00.000+03:00

Marc Miles – the main author of famous research of Economic Freedom Index at Heritage Foundation (www.heritage.org – conservative think-tank in Washington DC, USA) visits Georgia the next week from Feb 15 to Feb 19, 2006. His mission is to explain the ideas and the importance of Economic Freedom and the methodology how the group of authors evaluate EF for different countries and especially for Georgia.
The last results of the research of EFI were published on January 4th, 2006 and emphasized great step forward for Georgian economy – that now has 68th place instead of 100th out of 160 countries in 2005.
After the publication the Georgian public opinion had divided in two – who agreed with this progress in the EFI and who look very skeptically on this.

Full description of the EFI research of 2006 you can find here.

New Seminar in Gurjaani

2006-02-12T09:48:00.000+03:00

New Economic School - Georgia holds the next seminar in Gurjaani, Georgia from February 23 to February 26, 2006. Gurjaani is a small town in the east part of Georgia.
The seminar name is Liberty and Property and is designed for discussing the role of the property for a individual and a society.
Participants of the seminar will be chosen through applications. Most of them will be young politicians and students interested in Free Market issues.
All, who want to participate please contact Mr. Paata Sheshelidze through
e-mail: paatasheshelidze@gmail.com or
cell phone: 893305468