Some scepticism over 2010 budget

The draft budget for 2010 envisages issuing loans to entrepreneurs. Analysts think that this is wrong practice and contradicts the principles of economic liberalisation, which state that Governments should not interfere in the private sector but leave room for free and fair competition.

Analysts think that if the Government starts to finance selected private enterprises from budget funds this should create unfair competition. They fear this could be done to reward those businesses and businessmen loyal to the administration. Those who are critical or neutral will have no chance of getting any State assistance and therefore eventually collapse, and this is corrupt practice.

Former MP and Minister of Economy Lado Papava thinks that granting loans from the budget to legal entities is a big mistake, because banks which issue loans are financial organisations whereas the Government is a political body. The Government will be obliged to create a special credit issuing body in order to pursue this policy.

Economic analyst Davit Narmania says that no developed country gives money from the budget to the private sector as this is a practice exercised only in Socialist and Communist countries, being contrary to free economic principles. The Association of Young Financiers and Businessmen thinks that this kind of practice is a return to the Soviet past.

There is yet another issue which needs to be addressed. The Georgian Government is preparing to take on extra loans of more than GEL 1 billion, and it should therefore be asked, if the country has to accept loans to function how is it in a position to give them?