Georgia, after regainig its independence, became a place of many experiments. The nation made certain state-craft steps to obtain legitimacy and capacity to run social institutions. Including the process of restoration of private property.
Most political systems still encourage politicians to promise people to solve the problems at hand with the same tools which created them in the first place: by more spending and more intervention. This, in turn, results in eliminating personal incentives and responsibilities.
Georgia became an independent nation in 1991 after 190 years of, first, annexation by Russia and then forceful incorporation in the Soviet Union. After the Soviet Union collapsed, Georgia experienced the most dramatic peacetime economic decline in human history – a 75% drop in GDP. The country needed to restart its economy, and quickly.
The Economic Freedom of the World study gives all nations a very useful tool to see in which areas their countries’ economies have weak spots, why investors are not attracted to what they offer and why individuals avoid hard work.
The experience of dealing with Russia over the past 200 years has taught us that the only thing Russia respects is power; and we will only have power if we stay close to our friends. However, soon thereafter any such pragmatism was once again forgotten and we now continue living with our illusions as if nothing has happened.
This story of bilateral cooperation between Turkey and Georgia gives an interesting example of how good will and understanding each others needs, despite of several historic and political differences in past, can create a high level of cooperation from which both sides can benefit politically and economically.
After a recent TV address of Georgian Prime Minister Irakli Garibashvili, it became known that the state’s efforts in 2014 and the coming years will be focused on the implementation of an import replacement policy. According to the prime minister: “it is a shame when imports account for 80% of the net export structure.”
New Economic School – Georgia has the pleasure to invite you to Summer University. This years’ edition devoted to the topic of Public Choice: The Necessity of Limiting of Government Power will be held in Bakuriani, Georgia, on August 8-14, 2015.
Georgia’s economic story after the collapse of the Soviet Union (SU) is important to be considered and analyzed in Georgia and in any developing and transition economy nations. There are several reasons why Georgia’s experience is interesting and valuable. First of all, it shows almost all the wrong sides of central planning and a centralized, bureaucratized and command economic system.