Debate over Economic Policy

On November 25, a hot debate took place in the Georgian parliament concerning the economic development of the country and future prospects. The debates were held on the demand of the Christian Democrat faction and dealt with the 10 point economic development plans recently promoted by the government. The background of this event is as follows. As usual the ruling power is satisfied with its achievements and is making even broader promises, whereas the opposition vision is radically different from that of the government and it offers alternative plans of developing the economy in the country. The ruling authorities meanwhile however accuse the opposition of not acknowledging the achievements of the government and ignoring new suggestions proposed by it.

PM Nika Gilauri claims that due to the correct economic policy implemented in the country there is no threat of recession. Accordingly, this situation made it possible to propose a new 10 point plan which is targeted at elimination of unemployment in the country. Gilauri tried to follow President Saakashvili’s steps and stated that on macro economic parameters Georgia is one of the healthiest countries in the world. The government says that a shower of investment and a wave of tourists will be expected according to this plan. It also envisages an increase of GDP per capita up to USD 3,100, from today’s USD 2,700. The government also predicts that this figure will come to USD 5-6,000 by 2014. Gilauri recalled that in 2003 GDP per capita was USD 900 and it has increased for the last eight years more than three times.

Despite the figures and optimism the opposition challenges this. According to the Christian-Democrats the doubling of GDP per capita needs at least 18% economic growth. Of course opposition figures share the opinion of economic experts which also think the government is exaggerating. As an alternative, the Christian-Democrats have suggest to parliament a different approach based on four major principles: support of small and medium size business, lowering of taxation tariffs, restricting monopolies through increasing competition, and deeper involvement of state in employment policy. An MP from the National Democrats Guram Chakhvadze labeled the government's 10 point plan as an adventure rather than something based on serious research. Another opposition MP, Tamaz Diasamidze, mentioned that the 10 point plan consists only of promises. The ruling party however does not accept those remarks moreover it claims that the opposition does not want to see the progress in the country.

As the debate continues, it is clear that the opposition wishes to distinguish itself on economic policy from the government as elections draw closer. The debate is only likely to get fiercer in the coming months.