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Journal number 1 ∘ Solomon Pavliashvili Zurab Garakanidze Nata Garakanidze
EARLY WARNING OF THE ECONOMIC SEPARATISM IN GEORGIA

Expended Summary

According to the data in scientific literature, there are about 25 active separatist movements in Europe. In this term the demand for part of the rebel regions is the secession, while other part claims fiscal rights - economic independence.

Collective economic interests in the condition of federal arrangement of state are primarily revealed in the fiscal interests of individual regions - administrative-territorial or ethnic-autonomous subjects of the federation. There are two types of fiscal separatism – “Poor” and “Rich”.

Historical experience demonstrates that two major factors have a significant influence on provoking “Poor’s” separatism: support the region by a stronger foreign state and a dictate of the center over the region. Such separatism is more radical, because the poor usually act more radically rather than rich people for at least one simple reason: they do not have anything to lose.

In terms of “Rich’s Separatism” it should be emphasized the regions that are more developed in comparison with the rest of the country, i.e.; they are rich and are trying not to share their fiscal revenues to the center. Such regions are, for example, Basque and Catalonia in Spain, Flanders in Belgium. Such separatism is also active in northern Italy, which is richer than the south part. All these regions are a rich part of the country and in this case, we can say that the richest regions do not want to sustain poor regions.

The role of the fiscal sphere is special in Federative States, as in the federal financial system, as in no other area, the antagonistic attitudes of the federal center and its subjects, as well as among the subjects of the federation itself are clearly expressed.

Federal regionalism slows down the separatist moods, but the separatist aspirations emerge anyway in terms of non-distribution of revenues, i.e in the conditions of a passive economic policy. So separatism is generated by a starvation or great wealth.

To ensure that the federal center constantly monitors timely transfers of its own revenues from the budgeted regions and in this manner to prevent fiscal secession attempts, it is created the e-Treasure - electronic program in the Treasury.

However, in order for the monitoring to be comprehensive, it is necessary to specify the second group of indicators (variables) in the program in addition to the standards defined by the "Budget Code" – so called catalytic indicators. Such indicators will be specific for each region, as the regions are distinguished by their peculiarities. For example, Abkhazia had more energy connections out of the country - with neighboring Russia than with the rest of Georgia, Tskhinvali region and Russia, or Nagorno-Karabakh and Armenia had more land transport communications. Before 2004, Adjara was distinguished from Turley with its development in all fields, including theological communications (theological education, medical, cultural and ecological tourism, power transmission lines and transport communications, and etc.).

Therefore, we believe that in addition to the "basic" norms of the revenues defined by the Budget Code, in the electronic program of separatist trends early detection, there should be indicators of economic policy (redistribution of the incomes). For example, the ratio of the road network (frequency) between the center and the region to the road connecting to the neighboring country or the frequency of power transmission lines in comparison with the cables connecting to the center or the quantitative ratio of the state-owned enterprises owned by the center to the local state enterprises, etc. In the article, as a conclusion, we prove that:

- Aspiration of some separatist regions for separatism is due to the poor performance of the region's fiscal standards. An example of the mentioned is the Autonomous Adjara in the beginning of this century;

- Separatist aspirations of the regions are enhanced by the minerals found there, say, the availability of hydrocarbons, or the prospective of receiving the revenues as a result of transit of transport routes through their territory. For instance, the separatism of Scotland, Flanders, South Sudan and Kurdistan in these regions is coincided with extracting hydrocarbons, while the aspiration of South Brazil, Abkhazia, South Ossetia (Georgia) for secession is coincided with the construction of centrifugal / transboundary communications in their territory;

- Legal and flexible fiscal mechanisms for distribution of revenues and expenditures between the federal center and regions weaken separatism. Examples are Scotland and Northern Ireland in the United Kingdom.

The inter-agency economic mechanism of the different branches of Government interaction of early warning is proposed in this article. The federal center will use model of economic mechanism of the separatism early detection and will carry out a concrete preventive measures – meetings of the executive branch agencies and the heads of the regions, where the legislative changes and economic sanctions, other new initiatives will be discussed.