FROM THE EDITOR

Dr. Emzar Djgerenaia

The year 2003 is the year of goat. As a rule, it is accompanied by cataclysms and deep crisis. Perhaps, not only goat is guilty of events going on in world economy as stormy days of modern world economy have begun even earlier.

To experts’ mind, the US stock market dwindled already in the beginning of the year. Dollar depreciated catastrophically falling from 1.00 to 0.92 against Euro for the first time. According to widespread information, a whole number of central banks in Asian countries have not only stopped buying US exchequer bonds and investing in this sphere, but have even started dumping them. Leak of several trillions of Asian money can have a bad result for America eventually. Added to this is transformation in the economic team of the White House.
Lorence Lid, President’s council on economic issues war replaced by monetarist Steven Friedman, finance ministry Paul O’Nile was replaced by John Snow. O’Nile was criticised by lobbyist of American entrepreneurs for hard currency. Naturally enough, new railway minister will not be criticised for financing election of George Bush and for his old sins, but rather for monetary policy. Glenn Hubbard – head of administration’s councillor group – will be replaced the way it was with Gregory Menk. Hard monetary policy is likely to move to the background.
That is why investors are leaving. Price of petrol reached 30-34 dollars per barrel and gold was 360 dollars per ounce. To experts’ mind, this trend will last till gold price reaches 420 dollars per ounce, i.e. the year 1996 level.
Dow Jones and Nasdaq stock markets are falling dangerously. In 2002 shares decreased by 20%. This trend will last this year. With profit performances being satisfactory, shares of leading firms fall because profit is not derived from circulation (increase of trade volume), but rather from financial operations. Unemployment rate in the US increased and purchasing ability of markets fell. Dramatic approach to the consumption and production of goods might lead to a deep crisis that is likely to last till 2003.
The greatest problem is situation in Iraq where war is about to break out at any day. This causes tension in the world market. Iraq holds the second place by his oil reserves. This is the strategic target that economic stability of 2003 will be sacrificed for.
To experts’ mind, war will not be lasting and thus all changes in economy will regain its course.
Georgian business suffered another blow due to the strengthening of Euro. Georgian business that was oriented on European goods and American currency faced serious difficulties – businessmen had to pay a higher price for goods than usual. At the same time, Georgian businessmen will have to raise prices in order to pay damages, which due to population’s low purchasing ability will lead to reduction in turnover and concealment of profits from tax department. Thus businessmen will have to go over to illegal sector. If lari maintains its stability, export will get expensive and confront difficulties while import will increase due to the construction of oil pipeline, which will cause deterioration of payments deficit. In these conditions implementation of budget of tax will be open to doubt. Another cause of hopelessness is situation in tax incomes with the World Bank changing its policy in our country and local taxes (from state property privatisation, credit repayment and state dividends) being thrown into doubt. The goat year does not bode well for either the world or Georgian economy.
There is one way out – to forget economy of 2003 and start thinking of politics where nothing interesting is going on: there will be “entrance exams” in the Parliament followed by a list of successful candidates. The main thing now is who will pass the exams as subjects are quite difficult ranging from hand-to-hand fight, political prostitution and demagogue to introduction to corruption, lobbyism-celanism and basics of treachery. Leading TV channels have already broadcast statements of coaches. They are experienced figures of the second, third Parliament session who will bring up future star boys by their own experience. Hurry up, places are limited!
I wonder how much does passing of exam cost? One might ask – what the hell do you need this for? But I do! Because if this goes on, no workplaces will soon be left in Georgia except in the Parliament! What on earth should one do – die from want of money and idleness? At least, this way one can find weapon – who knows what will happen in this absurd country with its economy sunk into oblivion.