Deputy Minister of Economic Development (Ministry of Economic Development)

Georgia’s position had improved significantly during the last two years in different international ratings. For example, Georgia was on the second place as the best reformer after Serbia and Montenegro. And this achievement is the result of reforms implemented by new government. But it’s obvious that population can not feel this improvement yet.

Georgia's main goal is to create country with liberal economy, very attractive and very open to operate business.

As we know the resolution of these problems rely on the sustainable economic statement. Georgian product’s 90% was exported in Russia and how will be this problem resolved after the embargo from Russian side? What will be the priorities of the next year for the Ministry of Economy and how will Georgia become more and more attractive country for investors?

“I really hope that this attitude and this course of the government which started 2 years ago continues this way with the same spirit and I will have a country with liberal economy, very attractive and very open to business,’’ Deputy Minister of Economic Development said.

Q. Georgia has developed in these last three years. Many reforms have implemented by the government of this country. From your point of view, what is the most important reform being held in Georgia?

A. As far as my area of responsibilities concerns economic reforms, main objective of our government was to improve business environment in Georgia, because we think that if business has enough opportunity to develop, the economy will also develop. We want to create a state where both opportunities and prospects are given to private business and state regulates only necessary things, so we want to have a country where the economy and business are liberal and open to the international market. Our aim is to transfer Georgia into one of the most attractive places in the world, where people would want to come, live and do business. These were the reasons why we decided to implement many reforms.

Q. Could you be more focused on reforms?

A. The first reform was Tax Code in 2005, which aimed at liberalizing the tax collection process. The second was the reform to liberalize Licensing and Permits, that made it possible to reduce the number of necessary licenses and permits by 84%, it means that only 16% of them is necessary for doing a business. Another very important reform is almost finished now; it’s a reform of liberalization of import duties so we turn Georgia into the country of one of the most Liberal regimes for trade. Our goal is to completely abolish import duties. We are abolishing import duties on machinery, technology, raw materials which means that it is good incentive for private business to invest in Georgia. We are also working to simplify export and import procedures, as it takes too long to get every document. There is other reform such as liberalization of banking services that is also quite recent, our labor code is adopted and enforced already. It is one of the most liberal labor codes in the world which gives opportunity to businesses to improve their value in our country.

Q. How is the situation in Georgia, to compare with other reformer countries of the former Soviet Union?

A. I can tell you that Georgia’s position had improved significantly during the last two years in different international ratings, for example, Georgia was on the second place as the best reformer after Serbia and Montenegro. World Bank identified several areas such as licensing and permits, business and hiring, then tested different countries based on predetermined criteria how they performed and implemented reforms. Georgia took the second place which means that we were very actively engaged in the implementation of reforms. This year it is planned again to conduct researches and we hope that we are able to be the first in this regard. We have also quite a good result in heritage foundation index of economy freedom, which is published annually. Georgia states that it is one of the countries where free economy is welcome and this is quite a good result for a post-Soviet country. This represents a very big incentive for investments which has found its reflection on the pipeline project. The forecast shows that the investments will be more diversified in the future.

Q. NATO membership represents one of the main priorities for Georgia, and what is the role that your area plays for achieving this goal?

A. Well, as you know NATO namely deals with security and defense, which is directly related to controlling the economy very strictly. The officials are required to ensure transparency in their documents, report the economic data and be engaged in corruption free procedures. Consequently, it is very important to do these things accurately, but by the way this is also very important for NATO too, therefore, this relation is bilateral. One of the top priorities for our country is to fight against corruption. Objectives of all the economic reforms are to liberalize and simplify processed, because it will result in the reduced level of corruption. We want to create the environment where the corruption is less. When you simplify procedures, for example the import duty, you reduce the risk of corruption. All the reforms are directed to improve administration and tax collection.

Q. How important was the role of the US in economic growth during last three years?

A. As you know the US is a very important partner for us in all the senses: politically and economically as well. We have a Millennium Challenge Georgia Fund (MCG) which has already started functioning, so Georgia is one of the countries which had been granted this opportunity. We have identified key priorities, which is the infrastructure development. We want to use this money for improving business environment here. Some part of the funding is intended for the energy sector as well. We have been working closely with US authorities since the beginning in order to ensure that the way we spent money is the most efficient.

Q. The government has improved many fields, for example the banking sector and the economic growth is evident, however the population don’t feel the improvement of situation, the unemployment rate has not changed, what do you think, what has to be done so the people would feel the improvement?

A. I think we are in the transitions period now. Legislation is developing very dynamically, but it needs more time to let us noticeably feel the improvement of situation. This is a process, and for the people it takes time to adapt to the new environment, what are the real chances by the reforms conducted by the government. I think that people should know what new opportunities they have. I must touch on the salary problem, I can provide an example, about two years ago working at the public sector was not attractive for making a career, but nowadays the situation is drastically changed. The government’s goal is to optimize the structures and it offers increased salaries create grounds for reducing the corruption. It is very important to use human resources very accurately and it must not occur only in high echelons.

Q. Could tell us about Russia’s embargo on Georgian goods? How it affects the Georgian economy?

A. Well, I think that the priority is to diversify our export; in this case you are asking about wine and mineral water banned from the Russian side. I think that more sustainable solution is to diversify markets in general, though we try to regain Russian market again. I think our goal is that we have a situation where 90% of our mineral water and wine export doesn’t go to only one country. So what the government is doing in this case that we are spending more time, resources and effort on promotion of our products. Which includes the involvement of tourism sphere also; this year we are planning to conduct several investment forums here. We are more especially dedicated to paying more attention to Georgian wine.

Q. Could tell us about your neighbor countries? How do you see future with them?

A. Our neighbor countries are very important trade and economic partners. Especially Armenia, Azerbaijan and Ukraine, we are planning to intensify our economic relations. And as the project like pipeline and others are linked to our neighbors, many business events are held every year, where we participate together. Our government tries to conduct such events very often to establish relations with them. So these countries are important for us, and we have very open relations with them. Except for Russia, we have visa free regime with all of them.

Q. Imagine that today is 2015 year, how do you see Georgia?

A. Well, I really hope that this attitude and this course of the government which started 2 years ago continues this way with the same spirit and I will have a country with liberal economy, very attractive and very open to operate business. So I think that our country is able to give investments another interesting thing like quietness, natural diversity and so on. We work to transform Georgia into country where it is pleasant to work and live. As a result it will be more international country.

Q. As I see the people working for government are very young and well educated. Could you tell us about your background?

A. Well, I spent much time abroad, and I deepened my knowledge in Germany in Heidelberg, where I got masters degree in political science, economics in English, and then I did my PHD in Belgium, Brussels. So this is my general background. I think that if we want to build a new country it is better that the young and open-minded people were enrolled in this process, I recently traveled to the Baltic and I saw that there is the same situation regarding a young person that shows how progressive it is.

Q. In what are you proud during these three years? And what causes your satisfaction?

A. Well, I can say that I actively participated in drafting documents, such as import duty and others. This draft law will be heard in September in parliament and if it is passed I think it allows Georgia to become more and more liberal country. It will be very good achievement. But I think we should not stop because we have other things to improve.