ISET Shared Georgian Experience of Economic Transformation with the Ukrainian Delegation
Monday, 16 March, 2015

On March 12, ISET hosted the Ukrainian delegation within the scope of the project “Ukraine out of Crises through Dialogue” implemented by the Caucasian House. The main purpose of the meeting was to share the experience of Georgian economic transformation throughout the last decade. It was the second meeting in the framework of this project. ISET hosted the first delegation in November 2014.

Eric Livny, the president of ISET, presented major Georgian economic reforms that are relevant to Ukraine nowadays. Apart from the military conflict, challenges Ukraine faces today can be somehow compared to those Georgia has overcome in 2003.

Before the “Rose Revolution,” Georgia was characterized by a poor institutional framework, lack of rule of law, low efficiency of regulatory bodies, widespread corruption, and other problems that were leading to low rates of economic activity and very significant size of the shadow economy. Georgian political and economic transformation, particularly its market liberalization experience is quite interesting for Ukraine. There are some useful lessons learned that could be adapted and applied in Ukraine. The presentation focused on the Georgian experience of liberalization and simplification of the Tax Code, liberalization of foreign trade, and business deregulation.

Special attention was drawn to the factors that have driven all reforms mentioned above to success, that the liberalization process was sharp and comprehensive and was applied to almost every sphere in a very limited time in order to gain momentum. Apart from the tangible results, Mr. Livny presented major drawbacks of the reform and talked about the consistent problems of the country – high unemployment and poverty level.

The presentation was followed by an extensive discussion session. The individuals attending the meeting were interested in peculiarities of the reform process, Georgian experts’ views on ongoing reforms in Ukraine, and recommendations.