Free Market Road Show 2013 | Gia Jandieri


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AEC, KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2013 na tému Šetriť alebo
nešetriť: Zachránia Európu len úsporné opatrenia?, ktorá sa konala dňa 7.
júna 2013 v Bratislave. Ďalšie súvisiace informácie nájdete na

AEC, in cooperation with the Conservative Institute and INESS, and in
association with international partners organized the Free Market Road
Show 2013 in Bratislava on June 7, 2013. More information at

Published in: Economy & Finance, Business
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Free Market Road Show 2013 | Gia Jandieri

  1. 1. Collectivist Parasitization againstResponsibilitiesGia JandieriNew Economic School – GeorgiaFree Market Road ShowBratislavaJune 7, 2013
  2. 2. Bastiat’s Wisdom• State is the fiction by which everybody tries tolive at the expense of others.• This is now applied to the nations and looksalmost the same– Now many nations try to use other nationsresources and capacities for their benefits,
  3. 3. How it works for individuals• It is the nature of a human to try to reach resultswith easiest way• And if somebody offers free resource why not totake it• Because there is another nature of a human notto offer anything for free unless forced to do so• Another natural behavior of a human is to lookfor such easy ways and• if seeing others aren’t careful with usingresources – just taking them• And seeing somebody used this free chance andnothing very bad happened – they decide tofollow and not to lose the chance
  4. 4. Is there a limitation for this?• It is obvious there is a limit of economic,financial, at last human capacities• Even in a family with many children energy andhealth of parents are permanently decreasing• A business will be punished by competitors ifemploying some working and some not workingemployees• Economy cannot survive if one big part is justconsuming the achievements of another, at leastfor competition reasons
  5. 5. Personal responsibility• Individuals prefer other people to be responsible• Even though in most of the cases theyunderstand if they did something wrong way thisis their not others’ fault• But this is correct if not propaganda telling themit’s still others’ fault• And they don’t believe but accept: CollectivistParasitism (subsidies, assistance)• If they are told someone is responsible insteadthey like this
  6. 6. How it works – an example• An Individual always tries to be out of specialresponsibilities• He accepts those responsibilities from wherehe expects some gains• And if he is told to accept some extra rules heexpects some compensation:– Maybe privileges– Maybe sharing responsibilities
  7. 7. What about the nation• A nation is a collectively responsible – or it’snobody’s fault - union• Nations like individuals – accept if offered - freeresources, free ride at the expense of others• This can be– financial resources or– gains from• international trade,• monetary and• fiscal policies
  8. 8. Like individuals• Governments try to avoid responsibilities butsimultaneously propagating of about takingfull responsibilities• Involving whole population in supporting thepolicies of– protectionism of different type,– accepting debts,– policies allowing people living at the expense ofothers– Policies shifting the responsibilities away fromindividuals
  9. 9. Harmonization and Centralization• The Benefits–Better policies are adopted easier–Easier to cooperate n some fields–Some Compliance costs are lower
  10. 10. Harmonization and Centralization• The Costs–National Governments are losing theirresponsibilities–De-motivating of–Consumers are losing their choices–Lack of competition brings higher prices andlower qualities–Black markets are widening
  11. 11. International Donors• In one hand:– They give access to resources in important times– They also try to put national governments in somediscipline frames• But in the other hand– They de-motivate national governments to look forbetter policies, accounting to the public– They give a relief to national governments to shifttheir responsibilities– They give chances to live at the expense of futuregenerations
  12. 12. Georgia and IMF• IMF started working with Georgia in 1990s• It made several attempts to support Georgia’seconomy with loans and strengthening ofmonetary reserves and policies.• It also “supported” Georgia with advices andconsultancy, in fact mostly looking like orders– “Tax Code of Taxastan”
  13. 13. 2008• May. IMF Office was closed down. Local policywas best for growth and there was no needfor external injections.• War in August.• Immediately offer of $750m
  14. 14. Budgetary payments for Foreign Public Debt(Ministry of Finance of Georgia)
  15. 15. Growth of GDP(World Bank, 2005 International $)
  16. 16. Budgetary Revenues (MOF Georgia)
  17. 17. What is Now• IMF is looking for new opportunities, stated that:– Georgia needs Russian market– Georgia’s new policy to invest in agrarian sector is asolutionWhat are the ideas behind?World Bank works with the new government onPensions… what for? To make our system as bad asothers?
  18. 18. DCFTA with EU• Georgia asked for FTA• EU commission offered deep andcomprehensive• Full EU regulatory frame (aquis) to beimplemented• BUT:–This can slow down the growth by 3-5 %–Government will then ask forcompensation…
  19. 19. Georgia is a Champion• Free movement of goods• Freedom of movement for workers• Free movement of capital• Freedom of establishment andFreedom to provide servicesIn all these sectors Georgia is a leader.
  20. 20. Economic Liberty Act• Prohibition of increase of tax rates orimplementation of new taxes• No more than 30% of governmentexpenditures• No more than 60% of public debt• No more than 3% of public budget deficit
  21. 21. General System of Preferences withthe US and Labor Unions• Georgia being a member of the WTO from2000• Has had GSP with the US from 2004• Georgia is one of the freest trade nations –total customs tax collections is under 0.2 % ofGDP• But Unions didn’t like our free laborenvironment and asked USTR to stop GGSP
  22. 22. Trade Policy of Georgia
  23. 23. After Criticisms and Local Hesitation• Georgia has new government :– which already trying to destroy all theachievements of reforms– looking for assistance and loans
  24. 24. Conclusion• Stop propaganda of parasitism• Decentralization of responsibilities• DON’T GREEK US!
  25. 25. Many Thanks!••