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GEORGIA: SAAKASHVILI WANTS TBILISI TO BECOME "GOVERNMENT-LITE"
10/06/09

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President Mikheil Saakashvili on October 6 called on parliament to adopt legislation that would require a referendum to enact tax increases, would strictly limit budget deficits and would ban new regulatory agencies.

Addressing parliament, Saakashvili claimed that the Economic Freedom Act would make the South Caucasus state "a real flagship of world liberal economic ideology." Saakashvili termed the tax increase referendum -- also applicable for any new taxes -- the central focus of his program. Keeping taxes "low and simple" has worked to stimulate investment and provide jobs, he claimed.

"[T]ightening the government’s belt" is another part of this government-lite approach. Budget deficits would be set at 3 percent of Gross Domestic Product; budgetary expenditures could account for no more than 30 percent of GDP. Debt would be capped at 60 percent of GDP.

The package also prohibits the government from holding shares in private banks and from controlling prices.

Apart from the regulatory agency ban, a constitutional freeze would also be placed on new licenses and permits, apart from those pertaining to communications, financial services and energy. Regulatory agencies may also exist in these sectors.

The proposed legislative changes should encounter little resistance in parliament; Saakashvili’s United National Movement for a Victorious Georgia party dominates the legislature.

The Georgian leader used a reference to a national cultural icon, the revered 19th century novelist Ilia Chavchavadze, to sway any doubters who believe that liberalism is "a non-Georgian word." Chavchavadze, a nobleman who led Georgia’s 19th century national movement and was later canonized, was "the first Georgian libertarian," Saakashvili claimed, the Civil.ge news service reported.
"By choosing liberalism, we are choosing Ilia’s way," Saakashvili said.

Posted October 6, 2009 © Eurasianet
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