Economy
Posted: 1 month ago

Giorgi Abashishvili: Bureaucracy Remains Major Challenge

Reduction in bureaucracy expenses is one of the key challenges. Over the past 5 years the number of employees in public sector is growing, whilst the figure is declining in the private sector, Giorgi Abashishvili, head of Ilia State University Business School research center noted.

According to the Iliauni report, in 2014 to 2018 the number of employees in the public sector rose by 41 000 persons, but the number of employees in private sector declined by 41 000 in the same period, Abashishvili said.
 
This fact proves that bureaucracy remains the key challenge and additional research works are required to identify reasons of this tendency, Abashishvili said.
 
“It is misappropriate to talk that workforce has proportionally moved from the private sector to public sector, but the fact is that over the past 5 years, especially, over the past 3 years, the number of employees was declining in private sector, not because of lower bureaucracy.Therefore, the reason should be analyzed.
 
The 2020 development strategy talks about inclusive development of economy, as a key principle, but the fact is that this development cannot be achieved in the situation, when the number of employees grow in public sector and declines in private sector”, Giorgi Abashishvili pointed out.
 
It is noteworthy that the majority of employees in the private sector is registered in agriculture field and according to the statistics, they are considered as employed if they own a land plot or cattle, he said.
 
“The main part of citizens employed in the private sector are registered in agriculture field, whilst this sector’s ratio in Georgia’s GDP is only 7%. We should take into account that our citizens are considered as employed if they own a land plot or cattle and use products for sales or for their own needs”, Abashishvili said.
 
This tendency is preconditioned by the fact that the private sector cannot compete with even low-paid public sector, he said.
 
“According to the current statistics, employment in the private sector is of symbolic character. Competition in the public and private sectors are normal, but the fact is tat in the private sector, specially in terms of small and medium business development, there are a few opportunities. Consequently, this is the reason of inequality that is very high in Georgia”, Abashishvili said.