More precisely, how Georgia's economy should work, so that people's savings in banks grow along with demographic growth.

So, first of all, we should understand that the independence of this country, its superiority is the achievement of the Georgian people, and accordingly, the resources of this country - lands, forests, lakes, minerals, natural waters and others - belong to the citizens of this country. Accordingly, it should be distributed to the citizens of Georgia equally, following to the principle of justice.

Let's call it digital privatization (not voucherization). This involves a free auction and I will briefly explain its content:

All citizens will be awarded an equal number of points numerically. Let's say 1000 points. For example, the state will auction 20 hectares of mowing land. At the auction, citizens, both rich and poor, will trade equally with equal points. They will also use the points of family members. A seven-person family will have 7000 points, and a five-person family will have 5000. Accordingly, one participant will be better than the other by 5001 points, the first one will have 1999 points left, which he will use in another auction. He will get the 20 hectares of land, and he will have already spent 5001 points. And the owner of 5000 points will participate in the auction to privatize other properties for free. Finally, the points will be spent and the assets in the hands of the state, except for defense and other strategic objects, will become the property of the citizens of Georgia.

The question of whether Georgia's resources are shared by all of its citizens?

The answer is yes!

How?

Answer: railways, ports, hydroelectric plants, buildings, minerals, etc. These assets will also be owned by citizens at a free auction using equal points for everyone.

So, the value is not assigned to a particular property, but people themselves decide how many points to spend at the auction, that is, how many points to exchange to get ownership of a particular property. Let's not forget that all citizens will have an equal amount of privatization money or points.

For example, 70% of French forests are owned by French citizens. By law, each citizen can have a forest with a maximum area of ​​10 hectares. A total of 3.5 million French people own and manage their own forests. Why? Because every year, forest soil cover (humus) is removed from the forest and handed over to fertilizer factories. Those factories then supply the world markets. The higher the quality of the forest, the more expensive the raw materials obtained from it. That's why everyone takes care of the forest there. 18% of the remaining French forests are owned by municipalities and 12% by the state.

Let's not forget that 39% of Georgia's territory is covered by forests and is fossilized capital.

The Port of Rotterdam has thousands of berths and all are private. Port-related communications, electric and fiber cables, canals and others are the property of the city municipality, and the city municipality itself maintains these communications with municipal revenues.

In Europe, with high incomes from ports, forests, water, railways, people pay high taxes, and this is what makes the country strong.

Now the most important thing. All this received property, needs investments. Business cannot develop by itself! The point is that the investor is not some foreign monster who will take away our „Georgianness“. But we, the citizens of Georgia, are the investors.

There are four types of investment:

1. Bank credit;

2. Trade credit;

3. Shares;

4. Bonds.

Suppose a Georgian enterprise needs to find an investment of 100,000 dollars. The entrepreneur does not go anywhere for this. It will only issue 1,000 shares with a par value of $100 and list them on the stock exchange. This is how other enterprises will place them. Those who have financially attractive shares on the stock exchange will be bought first by the citizens of Georgia. And these citizens also become partners of this enterprise, who will receive dividends (profit share) from the profits of the enterprise every year, in the amount of the value of the shares they have purchased. Someone will have bought a share of 100 dollars, someone else will have bought a share of 1000 dollars, etc.

Let's say that an entrepreneur does not want to have partners in his capital. It can issue bonds, say 1,000 of $100. will announce the discount (interest rate) on the bond. So, a bond is the same loan that an entrepreneur gets in the stock market, not in a bank. For example, an investor (citizen) can decide - to buy a 7% discount bond with his 200 dollars, or to invest these 200 dollars in a 4% deposit. If he buys the bond, after one year the company will pay him back $214 ((200+(200*7%)).

With the money received from the sale of securities, the entrepreneur will invest in his own business. Buying and selling of stocks and bonds and its accounting is done on the stock exchange, which should be independent. Its standards, procedures should be monitored by the Securities Regulatory Commission. It is already a state body, but independent in its decisions. This is determined by the constitution. In general, the economy is measured by stock market indices, which, unfortunately, we do not have until now.

A separate issue is the organization of special commodity exchanges, through which national products should be exported, and much more properly and easily. If we want the work of Georgian winemakers to be appreciated in the markets, we should have an international wine exchange in the country.

Ultimately we get a free market economy, which means developed stock markets and high standard private property.

In the 90s, the World Bank estimated the total assets of the Republic of Georgia at 3,000,000,000,000 US dollars. Compare this figure with the population of Georgia and you will understand, on average, how much assets one citizen will own.

856 lakes, 49 types of soil, 2,400 mineral healing springs, 2,718,000 ha of forests, 594 deposits of inert resources and paving stones, peat on 300 hectares, 130 million tons of bentonite, 33 barite deposits, 80 billion tons of manganese. This is a small list and you probably understand that it is the market economy that should make the Georgian people spin like bees.

Now we don't have a market economy. Our economy is socialist by mother, capitalist by father and Georgian by surname. We should know that the less the state interferes in the economy, the stronger the economy of such a country and the state itself. The modern state has two main functions - security and infrastructure. The share of the state's participation in the Japanese economy is 5% and you know what kind of country it is!

The economy is not managed by tenders, grants and remittances. The economy is developed by investments. Investments come with technologies. Investment decisions are made in markets, not in cubicles.

The Baltic countries have done the same as described above. That's why they are in the European Union and NATO, because they need a partner country there, not a host country. How the country and people should protect themselves from foreign economic expansion is a separate topic. There are also corresponding mechanisms.

The investors of the construction of the Hydroelectric power station should be citizens of Georgia, and the dividends from the profits should be received by the citizens of Georgia. A brief explanation of this issue is impossible.

The rest is a matter of will.

 

Zurab Maghradze

Doctor of Business Administration