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MP from the Ruling Party against the Recommendations of the IMF

An interview with Georgian MP, businessman Gogi Topadze

During a recent visit, the delegation of the International Monetary Fund recommended the Government of Georgia to cut budget spending and raise taxes. Do you share that view?

The International Monetary Fund has brought nothing  good to any country. After the IMF came to Georgia in 1996, the economy fell into the abyss, industry and agriculture have declined. A condition raised by the  IMF, namely  to  cut budget spending – can cause social discontent, moreover, when  business today requires to reduce taxes.

That is the IMF’s  recommendations  are wrong and  IMF experts do not adequately assess the situation in the country?

The International Monetary Fund has  never brought  any benefit to the country. When a country has problems, appears the IMF and gives loans on terms that hinder economic growth. Therefore, I will  not in any way support the initiative of the IMF. Today Georgian businesses needs support and tax increases on the contrary, will hit businesses and will further worsen the economic situation in the country.

Minister of Economy said that the IMF is a partner of Georgia, it turns out that you don’t  agree with this?

I respect the Minister of Economics, he is a professional in his field, but due to fluctuations of the national currency, he found himself in a difficult situation and he has to make compromises. In reality, neither tax increases nor budget cuts will benefit the country’s economy. Ultimately, economists and financiers will have to take the decision, but I, as a businessman, I am totally against.

The International Monetary Fund considers the measures taken by the National Bank correct. What is your opinionabout this?

The National Bank made a big mistake that was late with currency interventions. Representatives of the economic bloc of the government recognized a  high demand  in the market.

On the example of other countries, I can say that they carried on the foreign exchange market billions of dollars and failed to stop the devaluation. Our National Bank woke up very late and sold too small amounts.

Many experts also note that it caused  panic in the currency market.

What is the current mood of business? Whether  the scheduled  investment projects will be delayed?

Business will face  difficulties, if taxes go up.

There will be no growth of 5%, as it was initially forecasted. Most likely it is about 2%, as an international crisis is evident. Business would do everything to enable promising objects, and to participate in the economic recovery. But in any case, no one will  agree to  increase taxes.

With regard to privatization the government is talking about – how interesting for investors will be the objects put up  for sale?

It all depends on the price at which they will be  sold. The objects themselves are interesting, some of them probably will be sold.