Economy
Tbilisi escaped budgetary crisis
20 March, 2014
After three unsuccessful attempts, the Tbilisi’s budget for 2014 has been approved on 7 March. Thus, the capital avoided an eminent budgetary and political crisis that might have ended up in the introduction of central governance in Tbilisi within less than three months before the upcoming local elections scheduled this June.
The budget was approved at GEL 785 million with a prognosis of around GEL 700 million income and GEL 600 million expenses. The budget is socially-oriented, like the state budget.
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Health care reforms to impact private sector
13 March, 2014
The foreseen exclusion of private insurance companies from the state health care insurance may lead insurance companies to bankruptcy while the state will be confronted with the task to renationalize a big part of hospitals in Georgia, both privatized earlier and newly constructed. The Institute for Development of Freedom of Information made this conclusion based on the sample financial research of the biggest Georgian insurance company Aldagi BCI.  
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Georgian privatization law lacks transparency
13 March, 2014
The law on privatization related procedures is still far from being perfect which makes the process non-transparent and the results less available for publishing. This is the message sent by non-governmental watchdog Green Alternative in its most recent report “Aggressive Privatization Policy or ‘the Georgian Way of Privatization-2,” aired on 28 February.
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Financial Monitoring Service may change hands
13 March, 2014
The supervisory body of the Financial Monitoring Service may change hands. Davit Onoprishvili, Head of the Finance and Budget Committee of the Parliament, initiated a bill on the removal of the financial monitoring service handling anti-money laundering issues currently operating under to the central bank and subordinating it to Ministry of Finance of Georgia. Some economic analysts disapprove of the initiative as it weakens the central bank. Others believe that the financial monitoring service implies control levers on secret information and that it would be better for it to be an independent body.
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Preferences for highlands
13 March, 2014
A project on taxation preferences and subsidizing communal bills in the Georgian highlands is underway. The project aims to alleviate the aggravating problem of migration from the highlands to the lowlands which is devastating the frontier villages of Georgia along its border at the Caucasian Mountains. Vasadze appeals to the Georgian government to set up a special agency or ministry handling the problems in the highland regions.
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Georgian economy and Ukraine-Russia standoff
13 March, 2014
The tensions in Crimea and possibility of further deterioration in Ukraine-Russia relations, both countries being significant trade partners to Georgia, raise questions about severity of ensuing adverse effects on Georgian economy. Some analysts fear the impact will be impressive as both Ukraine and Russia represent two largest export markets for Georgia, especially in case of agricultural products. Moreover, Russia is the major source for money transfers to Georgia which may diminish if Russia’s economy dwindles. Some expect a limited impact owing to diversified trade channels.
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Economy takes over in the US-Georgia relationship
06 March, 2014
The recent visit of Georgian PM Irakli Gharibashvili to the US is a breakthrough that marks the launch of a new economy-oriented policy of the US to Georgia – this is the estimation trumpeted by an overwhelming majority of Georgian economic analysts. They predict a higher than expected inflow of investments in Georgia as a result of the positive signals sent by the White House. Also, the Georgian business climate is believed to improve at faster speed once prompted by the US and the EU alike, as both are interested in the stability and economic welfare of the country more than ever.
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Penalty exemption discourages law-obedience
06 March, 2014
All investors who own or manage assets after the privatization along with the state are exempted from penalties for unfulfilled investment obligations. However, this will never exempt investors from penalties if they still lag behind their investment timetables from 2014 on. Sector analysts disapprove of this amnesty and believe it discriminates law-obedient investors and discourages law-obedience in business. If some investors think the blame for their unfulfilled obligations lays with the state, the only justified way to find out the truth will be in court.
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logistic industry crusades against monopoly
06 March, 2014
The freight shipping and logistics business established in the port of Poti call upon the Georgian Prime Minister and Chairperson of the Parliament to pay attention to the emerging monopoly in the sector which obviously enjoys state support. On 3 March, 41 companies representing the logistics and freight shipping sector in Georgia, including some giant international maritime freight lines, sent an open letter to the Prime Minister of Georgia and Head of Parliament to take the market competition under their personal control. They complain that earlier they have already sent out similar letters to Ministries of Economy and Finance, as well as to the Parliamentary Committees of Finance and Budget and Sector Economy, and Business Ombudsman raising alarm about the emerging monopoly in the Georgian logistics industry but to no avail – their voice remain unheard.
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