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Georgian Economic Policy with Populism Elements

Social and economic environment in the country is always preconditioned by the state policy.

This year Georgia’s economy started livening up and growing: foreign trade, economy, number of registered companies, number of employees (according to the statistics). Immunity of Georgian economics has strengthened for overcoming global and local problems.

It should be noted that the Government has showed political will to care for social and economic problems: social programs are implemented, poverty eradication measures are carried out, financing component grows for overcoming social problems through establishing foreign experience, amidst growth in debts and obligations.

Today, key challenge consists in economic policy. Experience suggests that economic turnover and growth forecasts are not sufficient. In this situation state management standards are not based on achieved results, fulfilled programs, reduced debts and obligations, while results of certain program are positively appraised, due to certain criteria (for example, loans Larization program).

Shaping global development and strategic vision by the Authorities raises more questions and generates public discontent and this is reflected in distrust to the current system, low economic activity, apathy and embarrassment.

It should be noted that amidst current «political inheritance”:

  • We have heavy social and economic environment, where separate components of global and local problems dominate;
  • Confidence has declined because of results of the carried out policy, economic activity, efficiency of political developments and public involvement have also decreased;
  • Political environment has shaped economy, where its certain components function by inertia, while other fields remain in uncertain condition;
  • Re-branding of old policy and superficial political changes could not make essential influence on economic development and public welfare. Political system could not shape economic policy commensurate with public demands.

It should be noted that poverty in this country has political roots and only politics is able to defeat it. Regretfully, economic policy has not become a key challenge that would unite Georgia’s political forces around one orbit.

Today, public rage can be still curbed, however, the wave of rage cannot be controlled endlessly, because all resources for problem resolution have expired (political and administrative resources).

It should be noted that Georgia’s economic policy serve rather unclear  than populism goals. This policy does not follow specific goals and are not of reformatory character.

Consequently, the country has never had such necessity of changes as today, because state debts grow, global challenges sharpen, economic policy is inefficient, social inequality grows, productive and strategic resources of the government is ignored (academic resource).

Conclusion

Thus, the current realities such as political class, current rules of game,  political system and analysis of operation suggest the country needs a new political class.

If we want to receive social and economic welfare in the country, this can be achieved by not growth in obligations, but economic policy, economic activity, new political and geostrategic resources. This can be achieved by shaping a new political force.

We should consider re-branding of old policy as the political Frankenstein, which will be represented by the same social and economic  result. When shaping a new political system, genetic resources of old policy may be used in certain processes, as an ingredient. However, an entirely new system should be shaped.

Only  new political class can:

  • make education and science a state priority
  • fundamentally transform public management environment and generate new political activism;
  • carry out efficient policy, make efficient economic policy and achieve economic growth;
  • create job places; resolve social problems and remove social inequality; unite society and grow political reliability;
  • Increase exports and reduce ratio of imported resources; Georgia should not remain among importer countries;
  • Instead of outsourcing, management processes should be carried out by Georgian specialists (strategic planing, research, analysis, evaluation, development of and implementation of programs).
  • Cut external and internal debts through economic growth;
  • Shape strong state system as soon as possible and carry out global policy.

Naturally, changes should be brought by an accelerator and academic resources should act as this accelerator, as a new political force with new economic visions, leadership activities and organizational resources.

In whole, Georgia’s future policy should be based on academic principles.

Rati Abuladze Professor, Doctor of Economics