Becoming European: Georgia's strategy for joining the EU

Problems of Post-Communism

Volumn 53, Issue 1, 2006, Pages 26-32

  Papava, Vladimer ^a,b,c   Tokmazishvili, Michael ^d,e  

^a JOHNS HOPKINS UNIVERSITY   (United States)

^b Georgian Foundation for Strategic and International Studies   (Georgia)

^c Georgian Parliament ^*  (Georgia)

^d Case Transcaucasus Foundation

^e Council of the National Bank of Georgia ^*  (Georgia)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33644671947     PISSN: 10758216     EISSN: None     Source Type: Journal    
DOI: 10.2753/PPC1075-8216530103     Document Type: Review

References (16)

1. Vladimir Sergeevich Avtonomov, "Politicheskaia ekonomiia perekhodnogo periody" (Political Economy in Transition Periods), Mirovaia ekonomika i mezhdunarodnye otnosheniia (Global Economics and International Relations), no. 9 (1996): 11.
2. Stanley Fischer and Jacob Frankel, "Macroeconomic Issues of Soviet Reform." American Economic Review 82, no. 2 (1992): 37-42;
3. Jeffrey D. Sachs, "Privatization in Russia: Some Lessons from Eastern Europe." American Economic Review 82, no. 2 (1992): 43-48.
4. Vladimer Papava, "The Basic Causes of 'Dragging Out' the Transition Period," in Central Asia and South Caucasus Affairs: 2003, ed. Boris Rumer and Lau Sim Yee (Tokyo: Sasakawa Peace Foundation, 2003). pp. 324-34.
5. Database, Georgian State Statistical Department (www.statistics.ge).
6. Teimaraz Beridze and Vladimer Papava, "The Main Macroeconomic Tendencies of Georgia in 1995-2002," in Rumer and Lee, ed., Central Asia and South Caucasus Affairs, pp. 307-23.
7. Roman Gotsiridze and Otar Kandelaki, "Georgia: Halfway Reforms as a Factor of the Economic Crisis," Central Asia and the Caucasus 6, no. 12 (2001): 179-88. The regime change was named the "Rose Revolution" because of the flowers the protesters carried as symbols of their peaceful intentions.
8. This does not include the rural population, which represents half of the total population. Under Georgian law, farmers who own up to 0.8 hectares of land are not counted as unemployed. The average annual income of these farmers is €150-500 and at least two out of three farmers are unem-ployed; farmers are among the poorest members of Georgian society.
9. World Bank. World Development Indicators, 2002, 2003 (www.worldbank.org/ website/external/datastatistics/).
10. The overthrow of the communist regime and the collapse of the controlled economy (against the background of the world market) stripped bare the economy of the post-communist countries. With some exceptions (in particular, enterprises that produce hydroelectric power, oil and natural gas extraction, and the primary processing of raw materials), the goods produced in these countries were unable to compete with world standards either because of their low quality or high cost. There is no market for such goods and, in principle, will never be. An economy of this type is dead - a "necro-economy" (from the Greek word nekros [dead]). See Vladimer Papava. "Necroeconomics: The Theory of Post-Communist Transformation of an Economy," International Journal of Social Economics 29, nos. 9-10 (2002): 796-805. The fact that the "front-runner" countries have been recognized by the European Union as nearly ready for admission attests, in principle, to the fact that a necro-economy does not exist in these countries. As for the laggard countries, the necro-economy is the main cause for the delay in their transition to the market economies that can create the economic basis necessary for post-communist capitalism.
11. Mamuka Tsereteli, "The Political Economy of the Ajarian Crisis." Central Asia-Caucasus Analyst (April 21, 2004) (www.cacianalyst.org/view_article.php?articleid=2297/).
12. It bears noting that the process of transition to a market economy and the construction of institutions of statehood were considerably simpler in the former German Democratic Republic (GDR) than in the former republics of the Soviet Union because the reforms in the GDR were preceded by union with the Federal Republic of Germany. See K. Barfus, "Istoriia ekonomiki Germanii posle Vtoroi mirovoivoiny" (History of the German Economy After World War II), in Menedzhment i rynok: germanskaia model (Management and Markets: The German Model), ed. U. Rora and S. Goldova (Moscow: BEK, 1995), pp. 58-66;
13. Hans-Ulrich Derlien. "The Triple Revolution: Administrative Transformation in the Former GDR. " in The State Afler Communism. Administrative Transition in Central and Eastern Europe, ed. Barbara Nunberg, Luca Barbone, and Hans-Ulrich Derlien (Washington, DC: World Bank, 1999), pp. 195-236.
14. Nevertheless, this factor cannot be deemed decisive in delaying the transition to a market economy in Georgia and other "outsider" countries. One need only look to Croatia, Slovenia, and the Baltic countries for counter-examples. They too were outsider countries after acquiring independence and lacked their own institutions of statehood. The example of their economic transformation refutes the thesis about the fundamental impossibility of a rapid transition to a market economy simultaneous with the process of creating new state institutions. See also Leszak Balcerowicz, Socialism, Capitalism, Transformation (Budapest: Central European University Press, 1995), p. 146;
15. Vladimer Papava, "The Georgian Economy: From 'Shock Therapy' to 'Social Promotion'," Communist Economies and Economic Transformation 8 (1996): 156;
16. Branko Milanovic, Income, Inequality, and Poverty During the Transition from a Planned to a Market Economy (Washington. DC: World Bank, 1998), p. 3.