Is this man the godsend of Libertarians and free-market lovers everywhere? Could Georgia be the model for future economies? Or will it end up plunging into war with Russia?
None of my readers know it, but one of my pet subjects is Caucasian politics. I read about it regularly, and discuss it with some very nice Georgian people. I have picked up the odd bit of Russian and Georgian. Raghorakhar Bijou. [loose phonetics].
Here are some choice quotes for people that I know will like this guy, namely Frank.
He says that Georgia should be ready to sell “verything that can be sold, except its conscience”.
Next year “if not sooner” he will cut the rate of income tax from 20% to 12%, payroll taxes from 33% to 20%, value-added tax from 20% to 18%, and abolish 12 kinds of tax altogether. He wants to let leading foreign banks and insurers open branches freely. He wants to abolish laws on legal tender, so that investors can use whatever currency they want. He hates foreign aid it “destroys your ability to do things for yourself,” he says though he concedes that political realities will oblige him to accept it for at least the next three years or so.
As to where investors should put their money, “I don’t know and I don’t care,” he says, and continues: “I have shut down the department of industrial policy. I am shutting down the national investment agency. I don’t want the national innovation agency.” Oh yes, and he plans to shut down the country’s anti-monopoly agency too. “If somebody thinks his rights are being infringed he can go to the courts, not to the ministry.” He plans, as his crowning achievement, to abolish his own ministry in 2007. “In a normal country, you don’t need a ministry of the economy,” he says. “And in three years we can make the backbone of a normal country.”
The lesson he drew from the Russian experience, he says, is to change the method of privatisation, not the principle of it. He promises public sales to the highest bidder, and cash only: “no conditions, no promises, no beauty contests”.
Big improvements in business conditions are needed in order to offset big political risks and to keep investors coming. “Other governments make budgets,” he says. “We are making a nation.”