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Journal number 1 ∘ Rozeta Asatiani

Expanded Summary

First of all, the wrong economic policy is the main reason of a failure of Georgia. Therefore, the change of the main directions’ (main stream) of economic policy on the basis of increase of the uniform requirement strengthening of social orientation is necessary. It is the only way for revival of the last market.

The state is a guarantor of adequacy of existing economic policy in relation to economic development of the country and features, how successfully it develops. Does such policy exist in reality if actually it is policy of closing of eyes and escaping from it?

Today an inequality index in distribution of the income in Georgia - Gene's coefficient is high (0, 40-0, 41) and social stratification does not overcome any criticism.

Offhand carried-out privatization in Georgia did not bring anything good to the country. If we shortly estimate the left years, the answer is unambiguous: the state adjusted "the soft glove" of the privatization, for which accelerated conduction the focus was not done on corporate governance, the assets of the state were given to the private sector without any regulatory processes. Unfortunately, this policy is being continued even today. Privatization became less transparent process and a roundabout way became a corruption source.

How is it possible to privatize so inscrupulous objects that are strategic for the country (communication, railroad, water, electropower supply and so on)? And that on foreigners! We will loose gradually economic independence without which the political independence is fiction?

After all, the strategic importance of the privatization is the creation of specific environment, but how will be created competitive environment in this way when private entrepreneurs, who occupy a strong position in the market, defeat simply the new rivals in the competitive battle?

Their situation in the market, according to the consumption of goods and wide large-scale character of production, will always be monopole.So, for what do natural, state monopoles exist?In conditions of right management,  the state would be able to cash withdraw that sum in several years, which would receive from the privatization.

In the modern world, in the epoque of globalization general question is- do you want to become stabil and developed country? - So, carry out economic reforms with the conditions and program that we offer you.

But, as the practice showed, “recipes” developed by foreign economists are not always effective. It was not equaled unapproved use of the view that the economic policy successful in one country would be successful in other countries. That is why, the same model of economic reforms became unacceptable for many countries.

If we estimate in general the transition period of the market economy in our country, we can conclude the following: formation of civil society in Georgia left on the level of propaganda. We construct the market economy in such way how we constructed socialism (even developed).

There is no one country in the world where the market economy (and not the elements of the market relation) that is socially oriented economic system formated without taking into consideration general postulates of Keynesian economyc theory. Keynes’ theory is dedicated to crisis analysis of economy and explains the reasons of unemployment, therefore, poverty, gives the ways to escape from socially unbearable situation. In the West there is no developed country that did not start its modernization, effective economic growth without “Keynesian revolution”.

Keynesian multiplier effect, which starting point is the rise of the solvent demands of the population and, hence, the expansion of market and, therefore, business activity, became the basis of destruction of tough wild capitalist relations and formation of new market relations.  This last, in return, may be considered as the starting point of formation of the civil society. This advanced practice has been considered today in economic policy of the countries developed, but which were in a difficult situation in the thirties of the leaving century. Non-consideration of this “world miracle” was followed in Georgia by the exclusion of indigenous population of the country from the ownership and business activity, a sharp rise of unemployment and poverty, coverage of the state budget deficit by thrown out sums from the National Bank, and then by the sale of the most part of the country’s national wealth to foreigners. In turn, all this was followed by an aggravation of a criminogenic situation, by prisoners, including, filling of prisons with the minor condemned people, an aggravation of a demographic situation and, what is the most important, violation of the rights and dignity of the person. In brief, the wrong economic policy has led to a difficult situation of the most part of the population of Georgia.Today advanced developed countries keep a prepotent position in a question of definition of a new world order whereas small, in particular transit countries are perceived as municipality of global system. The indicated tendency has already accepted natural character what process of an institutionalization of world economy influences strongly.

XXI century offers the world new model of economic development. This model is based on innovative economy, where the leading role is impelemented by the intellectual capital, internet network and, in general, by informative and telecommunication technologies. That is why, nowadays the emphasis is made on competitive advantage of the country, on resource saving and less waste technologies, quality, know-how, on creation of new types of the products, new standards and etc. Georgia also has to follow this way.