Opinion divided over current economic performance

The increase in business sector turnover in January indicates that the economy will grow in the first quarter of 2010, Prime Minister Nika Gilauri said at the Government sitting on February 19. However such optimism is not shared by the opposition or many analysts.

“Commercial turnover in January was 10% higher than in January last year and equal to that of January 2008. I hope that this positive trend will continue, giving us positive figures by the end of the first quarter,” Minister Gilauri stated. But Georgian opposition representatives have told The Messenger that such statements can be considered PR and nothing more, as improvements in the economy should first of all be reflected in the Georgian people’s economic conditions.

"Such kinds of statements are frequently made by the present authorities and are part of their continual PR programme. In general, when there is growth in the economy this is reflected in citizens’ incomes, social circumstances and so on. At the present moment I cannot name many countries which are in such a catastrophic situation as Georgia is. Our Government frequently states that the global economic crisis has damaged the Georgian economy less than those of other, even very developed countries, which is true, but this can be explained by only one factor, that Georgia has no economy at all,” Nestan Kirtadze from the Labour Party told us.

Manana Nachkebia from the New Rights also told us that as she has previously stated no economic growth is expected in the near future as the present Government terrorises business. "It is very regrettable that the economic indicators do not actually give us any reason to be optimistic. One of the main ones, which shows the real picture, is that the Georgian banks are in a very poor state and this has been confirmed by the Government. All the banks finished last year with a loss. Instead of encouraging business, which could improve the economic condition, the Georgian Government is terrorising it. Two weeks ago nearly 50 small business owners visited our office and stated that the Tax Service is terrorising them with different sorts of fines, trying to extract substantial sums from them,” Nachkebia stated, adding that initially the Tax Service worked properly but at present its main aim is to take as much money from businesses as possible. She advised the Prime Minister to meet the small business owners and learn the real situation from them instead of making optimistic statements.

Georgian economic analysts have made similar points to The Messenger. "I am not against the Government being optimistic about the economy but the real situation is different; it is possible that the turnover of some companies has increased, but this doesn’t mean that the economy itself or incomes have increased. The economy is approaching a critical point, as it is not being developed. How difficult the economic situation really is in Georgia will be clearly shown in the coming months. Foreign subsidies will reduce as the countries which are assisting us are still in crisis themselves. The only way out of this situation is systemic change in the economic sector,” Gia Khukhashvili suggested.

Nodar Khaduri agreed that the recent increase in turnover of companies does not mean the economy is growing. "The most important thing is the knock-on effect this increase in turnover has. As for foreign investment creating an economic advance, we cannot depend on the political situation in the country or the Caucasus region. We should also take into consideration that there is still an economic crisis in the world and developed countries are not willing to invest in other countries' economies,” the analyst noted.