Issue 5, 2012. October-November


DAVIT ONOPRISHVILI: CREATING A "HEALTHY AND COMPETITIVE" BUSINESS ENVIRONMENT sat down with Columbia University-educated economist Davit Onoprishvili, PM candidate Bidzina Ivanishvili's nominee to chair the Committee for Finances and Budgetary Issues, to talk about the Georgian Dream's plans to overhaul the country's anti-monopoly laws, reconfigure the labor code, and reset relations with the business community.

One week after sweeping to power in parliament, billionaire Bidzina Ivanishvili, the nominee for prime minister, promised Georgian business leaders and foreign investors that his coalition will put an end to monopolies, cartels, and price fixing in the country.

Davit Onoprishvili, one of the architects for Ivanishvili's economic platform, told the new coalition government is ready to overhaul the country"s anti-monopoly laws.

It is a subject Onoprishvili knows well. He helped write the country's pre-2005 law on monopolies when he was a member of parliament during the government of former President Eduard Shevardnadze.

"What the National Movement did … they decided this regulation could be harmful for developing businesses and business itself can regulate the market and there is no necessity to have some [oversight] from the state," he said.

"And after this, after two or three years, we really got a bad picture. In many areas of the economy, there rose monopolistic structures, it was not a pure monopoly -- it was a much more complicated, sophisticated cartels."

The coalition believes the fuel industry, pharmaceuticals, and telecommunications are key areas for restructuring once a new law is passed.

But Onoprishvili stressed that businesses do not have to fear a repeat of the mass arrests and government-sponsored show trials that marked the first years of the Saakashvili government.

"In our case, we are not going to punish anybody because of their political views or some other interest which is legal. Just if somebody violated laws and has a problem … they have to pay taxes or (whatever) fines regulated by laws, they should pay. That is it," he said.

In addition to the anti-monopoly law, Onoprishvili said the coalition is planning to review the labor code and other United National Movement initiatives, such as the Partnership Fund which was established last year to help attract greenfield investment.

The labor code should be reformed to meet International Labor Organization (ILO) standards, noted Onoprishvili – a move that should help expedite negotiations with the United States and the European Union over trade agreements.

The Partnership Fund, a major government initiative to leverage state assets and budgetary funds to help finance greenfield investments, is a project that deserves close "review," Onoprishvili said.

"[W]e have the impression this is to make a hidden privatization of those shares of those companies that are now [in state control]," he said.

"Plus we should see what the benefit is from that, what the benefit is to the state from this. We will make a careful review, and then we will make the decision to leave it or not."

The coalition itself is planning to create two funds – a billion dollar agriculture fund and a SME development fund.

Approving the budget, reassessing tax fines, pension reform, and the creation of a pension fund are also on the agenda – a lot of work for a coalition that has to pass a budget before the end of the year, and has just under a year to implement its platform before the next election.

Onoprishvili underscored that regardless of the sector, the coalition's goal with all the reforms is to improve the business climate – and improve relations between businesses and the government.

Now, he said, business associations and the government needs to find a bridge to foster more communication.

"We will be for such an open relationship and we have to create a good business environment and attract investment," he said.

"The prime minister himself is a business person and he knows better than anybody how it is better to create a business environment and be beneficial to the business itself and the state and also to solve at the same time substantial social issues."