Due attention not being paid to small and medium-sized businesses

Data from the first quarter of 2009 show that only 14 percent of Georgia’s output is produced by small and medium-sized businesses. This proves that Georgia’s administration is not paying due attention to this very important segment of the Georgian economy and it is deteriorating. “The Georgian Government is not interested in small and medium-sized businesses,” thinks economic analyst Demur Giorkhelidze.

It is universally acknowledged that the development of small and medium-sized businesses is a backbone of statehood, as this creates jobs, increases the external compatibility of production, enhances the welfare of the state and strengthens it. In all well-to-do countries small and medium-sized businesses enjoy different tax benefits, which as a result encourage the development of that country’s economy. In Georgia there are no special state institutions or tax advantages which can encourage the development of small and medium-sized enterprises, which are taxed in the same way as large companies.

Former member of the ruling party and now leader of the Women’s Party Guguli Maghradze is accusing officials of corruption. She is saying that under the cheap credit scheme the maximum a company could receive was GEL 100,000, but some companies have received more than GEL 2 million. Today in Georgia 83 percent of production is accounted for by big businesses. 8 percent originates from medium-sized businesses and the rest from small businesses, although 21 percent of all employees work in small businesses. In the new programme initiated by the Government for rescuing the country from the crisis and stimulating the economy there is almost nothing said about supporting such businesses.