IS THERE ECONOMY IN REGIONS?

EKA LOMIDZE

Soviet economy has left “significant inheritance” to some regions of Georgia. Its existence was prolonged due to government hesitation. The regional authorities and the new government will again discuss the future of old, unprofitable enterprises.

Rustavi mayor Merab Tkeshelashvili thinks that the government should express its standpoint with regards to old giants. There are several ways: possible change of the old enterprises’ profile. For instance, metallurgical enterprises were turned to engineering plants in many countries. There can also be capital re-equipment and introduction of modern technologies, which will promote competitiveness of ready-made products in the market.
Merab Tkeshelashvili, Rustavi Mayor:
Such city as Rustavi is a different topic for conversation. There is Rustavi economic growth programme aimed at the development of almost all branches. The state should be involved in it, too. It should consider Rustavi problem as a separate issue, develop long-term Rustavi development programme, form commissions with the membership of specialists from relevant ministries. They should consider implemented work and make necessary corrections every six months, i.e. significant works should be performed. Besides, the state should consider tax benefits and revise its relations with investors. It is difficult to find a suitable investor in such a country as Georgia. The investors that come here are not the ones that are necessary for the city and country.
As for the second business, the state should be aimed at exactly this very direction. There should, certainly, be heavy industry, but development of this branch solely will not help to obviate employment problem. Therefore, development of small business is necessary. It requires special attention of the government. The abolishment or reduction of fixed taxes should make it possible for people to launch and make small business. The state issued grants for the growth of small business, but they were not sufficient. Thus, the Rustavi budget 2004 envisages for stimulating measures ranging approximately from 100 to 200 thousand GEL. A commission was formed to consider plans of small business growth. The winner will receive interest-free loan from the city administration. In reality, local market oriented business projects will be satisfied. For instance, sewing workshop. We have industries that require clothes for their employees, and they purchase clothes in the workshops. The sewing workshop will not be large in scale employing at last five people. The enterprise will work in reality, and the amounts will be refunded after the expiry of the term. Budget receipts will grow. The issues have already been discussed with the Sakrebulo. Consultations are provided by the Small Business Growth Agency Centre.
As for transfers, they can be justified in the transition period, though they are not essential for the city. Yet, our transfers are quite small as compared with transfers envisaged for other cities and regions. Therefore, the need for transfers is, unfortunately, stipulated by a number of reasons: cities and regions can not provide for themselves in the transition period, correct planning is not performed.
Life, social development and society’s demands are far greater than the funds spent for society by the state. Therefore, in some cases the state used to undertake responsibilities that it failed to implement. That is why we have so great debts. Nowadays, most solvable problems should be solved immediately. The government failed to fulfil obligation for financing healthcare programme, which was a primary task. This entailed heavy consequences, which resulted in the decline of healthcare establishments. Collaborators are not paid salaries and funds envisaged by the programme go back to budget in the form of indebtedness. It is a chain reaction. The same situation is in many other spheres. We should begin new life. I was also a Parliament member and I know the way laws are passed. Unfortunately, the laws are far form real life. They are often incompatible with reality and we can not control their implementation. Association of City Mayors met Ms. Nino Burjanadze. We discussed this very issue. This mechanism of passing laws is unacceptable. Laws concerning local authorities should be controlled by local self-governments. The law can be changed even by one phrase.
We also have ideas about the new budget law. Let us see what concessions will be made by the new government. I also wonder about the way the new project will take effect. We are going to submit the project to the president in the nearest future. This will be an experiment.
I hope, present relations and the wish of the new government to solve problems will help to improve the situation in the country.