GBW: Fitch Ratings, an international rating agency, has advanced Georgia’s credit rating and improved Georgia’s GDP growth rate forecast to 6 percent for 2010. Do you consider this forecast to be realistic?

-Fitch Ratings is a quite experienced and influential agency and it would not publish ungrounded projections. I believe the agency has employed an analysis of reports of such international organizations as the International Monetary Fund (IMF) and the World Bank (WB), besides its own supervision on the Georgian economy. I am sure Georgia’s GDP growth rate may really equal 6 percent amid the current intensified economic processes. All of us are witnessing the Georgian economy is rising and intensifying. I can promulgate this without any ratings too.

GBW: The Wall Street Journal has called the economic reforms in Georgia as exemplar to even Great Britain. What would be your appraisal to this statement?

-In due time in inaugurating these reforms, we also took certain precedents from various countries. We should not think Georgia is a small country with 4 million residents and we should not make an example of larger countries. For instance, I am really happy that former Finance Minister Lekso Aleksishvili has become an official adviser to the Kyrgyz Government and the project has been financed by the U.S. Agency for International Development (USAID). At the same time, neither the government nor the business sector denies that a lot need to be done. According to my forecast, the Georgian government will focus on fiscal finance reforms. The government plans to further improve the tax code and develop the legislation, which will be easier to interpret and neither tax inspectors nor businessmen will be able to provide double interpretation for this or that entries, as it has generated many disputes and disagreements the last time. I believe serious consideration should be made to the monetary and credit policy and I have information that the government has already launched the process. Moreover, commercial banks should moderate and minimize credit interest rates. Today, the banking sector are able to take this step and the president of the National Bank of Georgia (NBG) has made multiple statements about this opportunity. The continuation of judicial reformation is the third and most important issue. I would name registry reformation as the most important. The reforms the justice ministry has implemented in the registry system is an example for the world over. I mean the procedures for starting business, timely reception of registry extracts,  the simplified system for applying for  passports. The removal of record offices and other similar barriers has promoted Georgia to rank eleventh in the index of economic freedom. The Georgian government is able to really boast about these reforms. We have got the opportunity to keep permanent communications with the government and this is a good precondition to deal with many problems.

GBW: Georgia has fallen several positions in the index of economic freedom, as the index authors note the state sector interference in the business sector activities has increased. Do you agree with this consideration?

–I would agree with the consideration that some ratings will describe advancements of Georgia, while other ratings will the country's downturn. The development and adoption of a normal legislative basis would be the most serious and genuine assistance to the Georgian business sector. It will do the job itself. The main thing is the business sector also must be disciplined, pay taxes, so as the infrastructural reforms be carried out, highways be constructed and so on. All this should be implemented to draw supplementary investments. I fully agree that state interference must be minimized in the business sector. Many banks and companies have gone bankrupt amid the global economic crisis all over the world, while there is a very few failed businesses in Georgia. Georgian commercial banks have not bankrupted in the very gravest period and the Georgian-Russian hostilities. We should precisely determine what the state interference means. If the state offices are scrupulous and strict and carry out monetary and credit and fiscal policies, this does not mean the government is intervening in the business sector activities. I do not want to live in a country, where either businessmen avoid paying taxes or state officials close down businesses without any sound basis or reason.

GBW: Tax code reforms have been suspended to a certain degree. What is the reason, maybe disagreements in positions?

– According to my sources, the Georgian government has intensified the tax code revision. I can assure you Georgian businessmen should expect a great surprise in June. I can openly say a new tax code is being developed. Even if 20 percent of the declared changes have been incorporated and adopted in the tax code, very many problems will be removed in the business sector. I mean double interpretation of the legislation will be minimized. All of us will perceive the code in one way. All of us will have the same approach and the same figures, while this is still a problem at this stage. Another problem is the current tax code basically envisages the state sector interests rather than the business sector’s. The issue should be balanced, otherwise the business sector will never be successful.

GBW: The Georgian government says it makes comparisons to the 2008 indicators, not to the 2009 indicators. Do you agree the business activities in Georgia has intensified to such a degree?

–The business sector has genuinely intensified activities and this is proved by a number of indicators. For instance, the number of phone calls to the Business Association of Georgia (BAG) has increased. Moreover, the number of visitors to hotels has risen and notary bureaus have also livened up. I believe the quite ambitious statement of Prime Minister Nikoloz Gilauri has been substantiated. I believe the fact the government makes comparisons with the year, which has recorded abnormally high rate of economic growth, and not with the year, which has marked the lowest index of GDP, is an encouraging step and approach.

GBW: Your representative has become a member of the Georgian Finance Ministry Board of Appeals. What has been the effect of this move?

– The BAG has one official representative and our special group will assist him in performing the required task. We have received no information that the Finance Ministry board of appeals has made any biased a decisions. If such a fact takes place, we are ready to react. The effect is that any businessmen, who submits an appeal to the board, can rely on the support of BAG. We are ready to protect any business. At the same time, businesses must provide strong argumentation ungrounded taxes have been imposed on them. It is worth noting hat the last period a majority of appeals have been satisfied to the benefit of the business sector and this is a new trend. The same trend has emerged in the court system. The last years’ statistics says a majority of actions are satisfied to the benefit of the business sector and this is a very encouraging tendency.

GBW: The Georgian banking sector remains passive to enlarging corporate loans. What is your consideration to make breakthrough in this respect?

–The National Bank of Georgia has taken significant steps in this respect. NBG plans to offer many legislative initiatives. In most cases, loan interest rates are very high. I believe the problem with “expensive money” will be removed after the business sector offers more valuable business proposals to the state and the bank sectors. Commercial banks are stage by stage leaving the crisis period. For instance, I serve a 13 percent interest rate loan for one of my companies, but this is an exception and such loans should be issued massively. We appreciate and have good memories of the pre-war period. It seems something was good before the war, but no one noted this that time. Citizens were able to acquire any goods by installment payment schemes thanks to good relations between the business and bank sectors. This period will return again, but not by waving a magic wand. This will happen in the course of time.

GBW: The Georgian Government expects investment inflows to record approximately one billion USD in 2010. Do you consider this forecast to be realistic?

– I would welcome even a half billion of USD is invested in 2010. The ultimate statistics will be unveiled at the end of 2010. I personally prefer to have pessimistic moods at this stage and be pleased by the result, which will give the ground for more optimism in the future. The fact is that starting from Fresh company ending with RAKEEN considerable funds are being reinvested in the ongoing projects. The Hayat and Kempinsky projects may be also resumed. The question is of 250 million USD in case of only project. Therefore, investments of 1 billion USD may be a very pessimistic figure and investment inflows may record far significant figures in 2010.