There is an argument that we have a very simple tax code, it is easy to start business…this could be even dangerous”Kakha Chargeishvili declared. He says that two most important factors for economic growth are employment and increase of income.
World Bank often suggests that we should implement structural reforms. However, what they mean by this is not very clear. What do you think, which kind of structural reforms should parliament implement first of all?
The most important reform that has to be implemented is a monetary policy reform which will deal with capital surplus. The cost of capital is altered to national capital cost and also capital availability and influences on different economic fields. It is necessary that National Bank starts large scale reforms and conducts a new policy.
Does Georgia need its own Stock Exchange?
Georgia definitely needs a stock exchange. This is a continuance of what I was talking about before.
National Bank should create a mechanism in which commercial banks will help creating new capital. It is necessary that banks will mobilize different sort of capitals and create investment companies. We also have a very high intellectual capital which could promote economic development.
How would you estimate Georgian banking system?
I have heard that banks are not very happy about introducing equity and bond capital in the country, however it should be opposite of that.
We have a paradoxical situation in Georgia. Commercial banks earn money with the services which are free in most countries for customers and they don’t earn money with the ways as normal banks do in developed countries.
Banks should promote fast and effective growth of liquidity in the country and create a system in which entities have an access to financial capital. However, there is no sign of it in the country.
Is it generally a bank problem or economic and systematic faults?
Everything what I am talking about is connected with each other and it’s impossible to blame something for this and something for that. The most important topic is that our financial system should be open for all countries and banks. This will open the way for western stock exchanges and banks to be introduced in Georgia. It does not mean they will steal clients from TBC or Georgian bank. It will only promote competitive environment.