{"id":1492,"date":"2005-10-11T14:29:35","date_gmt":"2005-10-11T10:29:35","guid":{"rendered":"http:\/\/geoeconomics.ge\/en\/?p=1492"},"modified":"2013-03-11T14:30:02","modified_gmt":"2013-03-11T10:30:02","slug":"the-results-of-2005-world-economic-freedom-study-georgia-holds-the-66th-place","status":"publish","type":"post","link":"http:\/\/geoeconomics.ge\/en\/?p=1492","title":{"rendered":"The Results of 2005 World Economic Freedom Study: Georgia Holds the 66th Place"},"content":{"rendered":"

FATI MAMIASHVILI <\/strong><\/p>\n

On September 8, a presentation of the report of the world economic freedom study arranged by \u201cNew Economic School \u2013 Sakartvelo\u201d, \u201cFraser Institute\u201d, \u201cFridrich Nauman Foundation\u201d, and \u201cTBC Bank\u201d took place. <\/p>\n

Based on the data of the year 2003, Hong-Kong holds the first place in the report according to the study\u2019s results (8,7 points), Singapore holds the second place (8,5 points), New Zealand, Switzerland, and the US hold the third place (8,2 points). They are followed by Australia, Estonia, Luxemburg, and United Arabian Emirates. According to the study, the large countries are ranked in the following way: Germany \u2013 the 19th place, Japan \u2013 30th place, France \u2013 the 38th place, Italy \u2013 the 54th place, Mexico \u2013 the 69th place, India \u2013 the 66th place, China \u2013 the 86th place, Brazil \u2013 the 88th place, Russia \u2013 the 115th place.
\n During the period since 1985, Africa, South America, and the countries of the former communist bloc have the worst indicators. Botswana is the best among the African countries, Chile and Costa Rica are the best in South America, while Congo and Zimbabwe are the worst in Africa, and Venezuela \u2013 in South America. Cuba and Northern Korea have the worst indicators. As to Georgia, according to 2003\u2019s data, it holds the 66th place together with India and Paraguay; it means that the indicators of economic freedom are still low in Georgia.It\u2019s the ninth year since the study of economic freedom has been carried out in many countries of the world headed by famous economists, the Nobel Prize laureates \u2013 Milton Freedman, Harry Becker, Douglas Norti, James Gvarti, etc. The results of the studies are published annually in Fraser Institute\u2019s report. The data on the situation in Georgia for 2003 was for the first time introduced in Fraser Institute\u2019s report this year. It is noteworthy that Georgian partners of Fraser Institute \u2013 the society for spreading economic knowledge \u2013 \u201cNew Economic School \u2013 Sakartvelo\u201d, which is a member of the international network for studying economic freedom since May 9, 2004, and the Southern Caucasus republics became members of this network in 2005. At the same time on May 18 of the last year \u201cthe network for studying economic freedom in the Caucasus\u201d was established by \u201cNew Economic School \u2013 Sakartvelo\u201d and Fridrich Newman Foundation; conferences and meetings were held in Tbilisi, Baku, Erevan. According to the appraisal of foreign experts, \u201cthe network for studying economic freedom in the Caucasus\u201d is a union of like-minded persons, which will be able to collect and analyze corresponding information, propagandize the ideas of economic freedom, inform the governments and public at large, and work out special recommendations for perfection of the situation.
\n What does the study of economic freedom mean? \u2013 According to the official information of \u201cNew Economic School \u2013 Sakartvelo\u201d, comparative analysis of economic freedom and democracy made by Columbian University\u2019s politologist \u2013 Eric Gatske, which was reflected in the results of the study of the world economic freedom, confirms that economic freedom is 50 times more effective in prevention of violence between nations than democracy, at the same time, according to statistics, the influence of democracy is rather insignificant. The countries with low level of economic freedom (2 points according to 10 point system) are 14 times more often involved in conflicts than the countries with high level of economic freedom ( 8 points and more). This kind of correlation does not change even when the study implies such factors as membership in the EU, possession of nuclear weapons, regional peculiarities, etc. After studying of economic freedom the so called economic freedom index is established, which determines difference between the countries.
\n The studies have established that an average indicator of economic freedom has increased from 5,2 to 6,4 in comparison with 1985 (Fraser Institute of economic freedom determines the indicator of economic freedom according to 10 point system).
\n Now, as to Georgia. This year the data on economic freedom in Georgia was for the first time published in Fraser Institute\u2019s report. According to this report, Georgia holds the 66th place.
\n We asked one of the study\u2019s authors \u2013 Paata Sheshelidze to comment on how this result is appraised by foreign partners.
\n Paata Sheshelidze \u2013 the president of \u201cNew Economic School \u2013 Sakartvelo\u201d: \u201cForeign investors, of course, critically appraise the index of economic freedom in Georgia. This means that Georgia is very weak in many components. The indicator of its economic freedom is low even compared to some post-soviet countries. But holding the 66th place in 2003 is, of course, interesting, since this position was mainly stipulated by two components: the study was based on statistical data. In 2003 the share of the Georgian government in the GDP was small, that is the government\u2019s expenditures were very low in comparison with the GDP. According to this component, we hold the 4th place in the world. But this index did not reflect the real situation, since in reality the quality of expenditures\u2019 redistribution was high \u2013 the collected taxes were directed not to the budget but into the pockets of concrete persons. The same thing can be said about other several components, that is why the 66th place in 2003, as I have already said, is based on formal data\u201d.
\n According to official data, from the viewpoint of economic freedom, in the first fourth of the countries the GDP per head makes up 25,062 USD, while in the last fourth \u2013 only 2,409 USD; the average economic growth in the first fourth of the countries makes up 2,5%, and in the last one \u2013 0,6%; in the first fourth the poorest part of population has average income of 6.451 USD, and in the last one \u2013 only 1.185 USD; unemployment in the first fourth makes up 5.2%, in the last one \u2013 13%; average lifetime in the first fourth is 77.7 years, and in the last one \u2013 52.5 years; only 0.1% of children in the first fourth have to work, and in the last one \u2013 22.6%; political rights in the first fourth have 5 points according to 7 points system, and in the last one \u2013 only 1.7 points.
\n The study of economic freedom undergoes annual changes. Presently, the parameters of its appraisal contain the following factors: taxes and government spending, government\u2019s interference with economic activities, inviolability of property and legislative system; monetary and credit system; availability of foreign trade; regulation of production, credit, and labor markets.
\n Paata Sheshelidze: \u201cThe most interesting conclusion of this year\u2019s study is that economic freedom of the country is in the first place in the appraising, then \u2013 political rights, security, etc. The main criterion determining progress of a country is the quality of economic freedom. That is why we have to give our citizens an opportunity to work, get rich, become more attractive personally more proud. I think that Georgia has to make a choice quickly in order not to lose time. Every month, year \u2013 is a lost life of each concrete person. No one, including politicians, should not have a pretension that they will be able to put in order others\u2019 lives.
\n Our study confirms that a country that has chosen economic freedom is strong, protected, people in it are more happy, there is a longer lifetime in it, and what is most important \u2013 the indicator of new-born children\u2019s health is higher\u201d.
\n Economic freedom in the country is appraised taking into account the facts how a person and its property are protected against violence in it; how each of them is independent in personal choice, commerce, and business activities; to what extent the barter is voluntary; to what extent the domestic market is open and foreign trade is available; to what extent business environment is competitive; to what extent the supremacy of law is provided; to what extent the proprietary rights are inviolable; how distinctly the rights and obligations of the authorities are determined, how capable and solid the political institutions are.
\n According to the results of economic freedom\u2019s study, economic freedom is oppressed everywhere where taxes and government spending are high, and there is interference of the state with personal and economic activities of a person; it is known that personal choice, voluntary barter, and market coordination become limited under political dictate. It is also known that the more the economic freedom is, the higher the living standard inside the country is.
\n What must change in Georgian reality so that our indicators of economic freedom would be higher?
\n Paata Sheshelidze:
\n \u201cFirst of all we need more freedom for economic agents, and less restrictive rights for the authorities. In my opinion, changing of the monetary policy is the most important task, Lari should be ensured by gold and not by air as it is the case today. The financial policy should be limited: accumulation of debts, taking of loans must not be allowed, taxes should be reduced considerably, regional authorities should be given the right to reduce their share in total taxes, and hence attract businessmen to their regions; tax competitiveness should exist and each region must be given a chance of introduction low taxes.
\n Any economic regulation must be eradicated.
\n Just imagine, a corresponding certificate is needed in order to make something, but one does not need any document in order to steal or kill a man! Correspondingly, when a person makes some product, we must give him an opportunity to do it. From this point of view, the government\u2019s obligations should be reduced too \u2013 so many taxes, controlling and regulatory bodies are absolutely unnecessary, and it is better to use the money spent on them for purposes, for example for development of infrastructure. Besides, Georgia should open the door for everyone in international trade. In general, custom duties are not necessary, however, at the same time it is very important to open more frontier points, which will give the population living near the border an opportunity to work and trade with contiguous countries.
\n Political decentralization is very important. One person must not manage everything and all matters must not be decided in one place! Responsibility should be shared, and more people should have an opportunity to think. In the sphere of international security Georgia should give up any militaristic ambitions. All problems can be solved if economic growth will be our aim\u201d.
\n How will the index of economic freedom in Georgia improve in the studies of the next 2006 year where the situation in Georgia in 2004 will be reflected? \u2013 In the year 2004 the share of the Georgian government increased considerably in the volume of GDP. That is why, according to the preliminary forecast, a sharp deterioration is expected in this component, in 2004 many regulatory and controlling bodies were functioning in the country, and correspondingly a big difference in this component between the indicators of 2003 and 2004 is not expected. <\/p>\n","protected":false},"excerpt":{"rendered":"

FATI MAMIASHVILI On September 8, a presentation of the report of the world economic freedom study arranged by \u201cNew Economic<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[32],"tags":[],"yoast_head":"\nThe Results of 2005 World Economic Freedom Study: Georgia Holds the 66th Place - Geoeconomics<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/geoeconomics.ge\/en\/?p=1492\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"The Results of 2005 World Economic Freedom Study: Georgia Holds the 66th Place - Geoeconomics\" \/>\n<meta name=\"twitter:description\" content=\"FATI MAMIASHVILI On September 8, a presentation of the report of the world economic freedom study arranged by \u201cNew Economic\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"7 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#website\",\"url\":\"http:\/\/geoeconomics.ge\/en\/\",\"name\":\"Geoeconomics\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"http:\/\/geoeconomics.ge\/en\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/?p=1492#webpage\",\"url\":\"http:\/\/geoeconomics.ge\/en\/?p=1492\",\"name\":\"The Results of 2005 World Economic Freedom Study: Georgia Holds the 66th Place - Geoeconomics\",\"isPartOf\":{\"@id\":\"http:\/\/geoeconomics.ge\/en\/#website\"},\"datePublished\":\"2005-10-11T10:29:35+00:00\",\"dateModified\":\"2013-03-11T10:30:02+00:00\",\"author\":{\"@id\":\"http:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\/\/geoeconomics.ge\/en\/?p=1492\"]}]},{\"@type\":\"Person\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\",\"name\":\"Admin\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"http:\/\/2.gravatar.com\/avatar\/bf2d8703d729f003d8905b57fcab5078?s=96&d=mm&r=g\",\"caption\":\"Admin\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/1492"}],"collection":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1492"}],"version-history":[{"count":1,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/1492\/revisions"}],"predecessor-version":[{"id":1493,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/1492\/revisions\/1493"}],"wp:attachment":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1492"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}