Economy
Untaxed subsistence minimum resembles financial pyramid
06 March, 2014
The untaxed subsistence minimum of salary will be returned to around 600 000 employees in Georgia starting April 1st. The Ministry of Finance of Georgia concluded a memorandum on partnership on February 24 with ten commercial banks to insure a flawless return of the taxation preference for the targeted group. However, the taxation preference itself is far from flawless, economic analysts say. They do not deny that the preference is somewhat progressive as alleviates less well-off citizens, but it looks very much like a financial pyramid.
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Better communication on Khudoni required
06 March, 2014
While the launch of the 700 megawatt capacity Hydro Power Plant (HPP) Khudoni in the Georgian highland of Svaneti stumbles over environment and resettlement problems, economic analysts recommend Georgian authorities to set up a Special Commission with the Investment Council. Four analysts appealed to the government on 4 March.
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WHAT IS THE ALTERNATIVE TO KHUDONI HPP?
06 March, 2014
After many discussions and noise for the past 35 years, Khudoni HPP has become the reason for the differences in points of view. Nobody argues that the energy independence and security of the country is of the utmost importance, but not at the expense of the people’s and the country’s interests.
Ex-Minister of Defense, Davit Tevzadze, assessed the Khudoni HPP construction as a provocative factor to break up the country.
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Stronger standards, smaller bureaucracy
27 February, 2014
Construction standards and supervision are expected to get stronger according to a new draft construction code. Developers approve th56e heightened standards, but ask for less red tape. The draft of the much expected construction code for Georgia is completed at last, and construction standards long neglected should get stronger. The project has been under public discussion since the end of January, and is expected to enter Parliament during the spring session.
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Georgian wine gains in Russia
27 February, 2014
The Georgian wine’s return to the Russian market has exceeded all expectations:within six months it has reached fourth position among the top ten wine importers in the country. In spite of the pessimism of the former sanitary head of the Russian Federation, Genadi Onishchenko, that Georgian wine would not be able to take more than 1% of Russia’s wine market – though it had dominated before the embargo - Georgian wine nowcovers 2.42%, Russian media reported lately.
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Georgian currency puzzle
27 February, 2014
The frequent fluctuation of the Laristill puzzles business and consumers as prices rise. Sector pundits ascribe the unstable Lari to the high dependence of Georgia on imports, and advise Georgian government to encourage development of national industry properly. On the other hand, they blame the National Bank of Georgia for an inadequate monetary policy, and suggest more open currency trade as a solution.
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Economic Strategy 2020 – no breakthrough?
27 February, 2014
The much expected draft paper for social and economic development in Georgia until 2020 was released on 12 February. The paper is the fruit of collaboration between the cabinet of ministers, business associations, and the central bank, as well as independent economic analysts – and it aims to raise the competitive power and welfare of the country as its ultimate goal. The draft is up for public review on the official web-pages of the economic and finance ministries, prior to approval of the public sector and its legal confirmation.
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Maritime freighters beware monopoly
20 February, 2014
International maritime shipping companies are increasingly wary of an emerging monopoly on terminal business in Poti. Eight terminals owned and run by international maritime shipping companies there fear they will be shut down soon if the Revenue Service (RS) of Georgia, part of the Ministry of Finances (MOF), does not put all market players under equal conditions.
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Curbing banks’ appetites
20 February, 2014
Four Georgian analysts have appealed to Georgia’s authorities and its central bank to prohibit non-profile business activity to commercial banks. When banks become dangerous competitors with their own clients, it compromises market competition, and has a heavy impact on the national economy. Three economic analysts - Levan Kalandadze, Irakli Lekvinadze, Giorgi Abashishvili - and a legal analyst - Levan Alapaishvili - sent a joint letter to the Prime Minister, Speaker of the Georgian parliament, and Governor of National Bank of Georgia on 13 February, in which they called for prohibiting non-profile business activity to banks, as well as restricting financial, but not banking, business. Initiators of the idea believe that there is an obvious trend when banks enter all sectors of the economy, both financial and non-financial, and take monopolistic positions due to their access to financial resources, enabling them to oust weaker competitors from the market.
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