Alliance for Georgia criticises President’s proposal

The Alliance for Georgia, leaded by Georgia’s former UN Ambassador Irakli Alasania, has said that the Act of Economic Freedom proposed by President Mikheil Saakashvili to the Georgian Parliament is an attempt to detract attention from the negative content of the Tagliavini Commission report. Members of the Alliance, David Onoprishvili, Vakhtang Khmaladze and David Saganelidze held a special press conference on Thursday at which they said that the initiatives voiced by the President might bring “heavy consequences” for the country’s economy.

President Mikheil Saakashvili’s proposed new package of economic reforms includes amendments to the Georgian Constitution which would achieve a “further liberation of the Georgian economy.” Voiced by the President at the Georgian Parliament on Tuesday, it involves “minimising” Government interference in the country’s economy and putting each proposal to increase or impose taxes to a referendum. The package has been hailed by ruling party lawmakers and Government members as a “new word in terms of economic development.”

The Alliance for Georgia has called for an analysis of the “real content” of the proposal. “Measures should be taken in order to prevent the Government destroying the country’s economy, which is already in a very bad condition,” David Saganelidze said at the press conference. The Alliance members say there are 4 aspects, of the proposal, economic, social, judicial and political, which should be taken into account. “The new initiative creates some social threats. The restriction on increasing taxes, at the first glance, seem an attractive proposal for great numbers of people, however if we consider the current social policy of our Government, restrictions on taxing employers will destroy the possibility of transferring money to social projects,” David Onoprishvili said. “With these changes the chance of taxpayers and investors participating in improving the social security of the population is eliminated,” he added.

According to the Alliance the “wrong” economic policy pursued by the Georgian Government in the recent years has led to an increase in unemployment. “The social situation has worsened; about a million Georgians live below the poverty line, for the first time in the last 15 years GDP has decreased, the export-import ratio is catastrophic, the foreign debt is more than GEL 5 billion. The situation has become worse due to the fact that since the August war foreign investments have been almost entirely suspended,” Onoprishvili told journalists. He said that the “bad situation” of business in the country had been caused not by bad legislation but “the methods of tax administration used by the tax and customs services and their violent methods of filling the budget, the violation of private property rights and the non-existence of a free court system.”

Vakhtang Khmaladze from the Republican Party, which is part of the Alliance for Georgia, said that the initiatives in the Act of Economic Freedom demonstrated the inconsistency of the Georgian Government, which “causes serious problems in establishing democracy in the country.” “Adopting laws, especially in the tax sphere, is the primary function of the legislative body elected by the people. Giving this function to the people indicates once more that Mihkeil Saakashvili has not realised the importance of Parliament and all his steps will further discredit of the legislative body, which is already discredited enough,” Khmaladze stated “It is regrettable that the current Parliament does not oppose restrictions of its functions, but on the contrary welcomes the decay of the highest legislative body,” he added.

Khmaladze assessed the President’s proposal as a PR stunt. “There is no need to create the illusion that Georgia will become the flagman of the world’s liberal economy for political salvation when the country has had almost no positive indicators in terms of economic development over recent years,” the Republican Party member said.

Analysts do not agree with the “apocalyptic” predictions of opposition politicians; however some say the new economic package will bring no results. Gia Khukhashvili has said that the package cannot be called “economic”. “It is unthinkable to put economic regulation issues in the Constitution or put raising taxes to a referendum,” Khukhashvili told The Messenger. “To say that the Act of Economic Freedom will destroy Georgia’s economy is a bold statement, however the general assessment of the package is negative,” he said.