The Fight for Georgia

格鲁吉亚和俄罗斯之间的战争不可避免地是一场短暂而片面的事件。俄罗斯军队在空中轰炸的支持下，上个月越过边界涌入有争议的南奥塞梯领土，回应莫斯科所称的格鲁吉亚军队的入侵。俄国人击溃了这个人口460万的小邻国的军队，然后在双方达成停火协议之前推进格鲁吉亚本土。这场战争勾起了人们对冷战期间苏联入侵匈牙利和捷克斯洛伐克的回忆，扰乱了世界市场，也引发了人们对莫斯科和西方之间重新出现紧张关系时代的担忧。

Georgia responded the only way it could. President Mikheil Saakashvili took to the airwaves and appealed to the world community for help while his prime minister, Vladimer (Lado) Gurgenidze, sought to marshal financial support. Gurgenidze spent the first day of the Russian offensive working the telephones to call investors and rating agencies in a bid to shore up Georgia’s debut $500 million sovereign Eurobond, whose issue he oversaw in April. The bond sank as low as 82 cents on the dollar, but rebounded to 90 cents within a week. As Russian forces rumbled south, cutting the road and blowing up the rail lines between Tbilisi and the Black Sea, Gurgenidze lobbied for a postwar aid package with donors ranging from the U.S. Department of the Treasury to the Asian Development Bank, which Georgia had just joined last year. And as the conflict moved swiftly to its conclusion, the prime minister’s office issued daily bulletins showing that the wartime Georgian lari had appreciated by 0.2 percent against the dollar and that tax revenues were flowing normally — all in an effort to assure the world that Georgia’s economy, which expanded at a blistering 12.7 percent pace in 2007, could quickly resume its growth trajectory.

“Now more than ever we need a set of coherent, radically liberal and extremely investor- and business-friendly policies,” the 37-year-old prime minister tells Institutional Investor.

古尔根尼泽的疯狂行为得到了回报。他确保西方对格鲁吉亚的道义支持得到硬现金的支持，以修复估计高达10亿美元的战争损失，相当于格鲁吉亚国内生产总值的10%。截至上月末，世界银行已承诺3亿至3.5亿美元用于重建，国际货币基金组织（imf）已向第比利斯派遣了一个应急小组，以制定自己的援助计划，布什政府已承诺随时准备“支持格鲁吉亚，使经济和金融稳定得以继续”财政部负责国际事务的助理部长克莱·洛厄里告诉《华尔街日报》。尽管评级机构将格鲁吉亚的主权债券评级下调了一个等级——标准普尔将其评级下调至B级，惠誉将其评级下调至B+级，但洛厄里赞扬了古尔根尼泽为通知投资者和安抚市场所做的努力。Lowery说：“他们保持了自己的投资者基础，以不断了解国内的情况。”。“我不认为很多国家会想到这一点。”

考虑到距首都仅一小时车程的混乱局势，格鲁吉亚经济继续相对平稳地运转。司机们像往常一样在第比利斯的街道上狂奔，商店里挤满了人，银行报告说存款没有挤兑。据估计，来自冲突的13万难民被安置在空置的学校和其他公共建筑中，没有受到惊吓。乔治·索罗斯的开放社会研究所报道格鲁吉亚事件的记者乔治·隆萨泽（Giorgi Lomsadze）上个月底观察到：“现在这里简直是超现实的。”。“街道的一边，人们在普通的咖啡馆里闲逛。另一边是一个难民营，你意识到战争正在进行。”

格鲁吉亚被莫斯科击败，随之而来的不安的和平给这个曾经是世界上最具活力的经济体之一蒙上了一层阴影，去年外国直接投资占GDP的比重达到17%。这也对萨卡什维利的判断力和耐用性提出了新的问题。萨卡什维利是一位才华横溢但反复无常的领导人，他派遣格鲁吉亚军队进入南奥塞梯的决定为俄罗斯的进攻提供了一个简单的借口。如果格鲁吉亚要迅速从冲突中恢复过来，就需要一些冷静的实用主义来配合萨卡什维利狂热的民族主义。这意味着该国可能比以往任何时候都更加依赖古尔根尼泽，总统去年11月从外部政界招募了古尔根尼泽，以帮助平息国内政治动荡，为经济改革努力注入新的活力。

Gurgenidze在苏联后领导者之间具有独特的传记。他的上一份工作是佐治亚州银行的首席执行官，该国占主导地位，长期私有化的金融机构。在此之前，他从亚特兰大的埃默里大学获得了一个MBA，并在伦敦担任投资银行家七年。他从一个不寻常的来源，前美国参议员巴里Goldwater汲取了政治启示，其中一个1964年的总统竞选海报是他谦虚的第比利斯办公室的墙壁诬陷。

Goldwater’s laissez-faire, small-government philosophy helped pave the way for Ronald Reagan’s and Margaret Thatcher’s triumphs in the 1980s. “This reflects my political views,” Gurgenidze said several weeks before the Russian conflict. “What we are trying to do here has been described as compassionate libertarianism.”

Gurgenidze推动了今年春天推动了20个新的经济法，使得预算赤字禁止赤字，要求单位数通胀目标，消除股息的税收，并成为一堆私有化。这些措施旨在将格鲁吉亚转变为“新加坡，巴林和爱沙尼亚的某种混合”，因为他把它放置了黑海地区和中亚的贸易和金融枢纽。

然而，如果没有基本的政治稳定，古尔根尼泽的野心将化为乌有。尽管在最近的冲突中，政界人士都聚集在国旗周围，但许多观察家认为，萨卡什维利在激怒莫斯科方面的鲁莽行为可能会让反对派在未来几周和几个月内抬头。

自Saakashvili诉诸武术和群众殴打以来，它少于一年以来普尔街抗议。这些强制性行为和不透明的政府簿记在他的总统中，玷污了2033年底推动了他推翻了前任Eduard Shevardnadze的民主形象。“我们认为法治和民主是实现任何目标的最佳方式，但是政府中的人们看到这一点不同，“萨卡什维利盟友五年前，萨卡什维利盟友·萨利亚利亚·谁现在主持了反对派共和党。

Gurgenidze promises his government will rebound quickly from the Russian conflict and carry on with free-market reforms to stimulate investment and growth.

The prime minister is just the most senior of an under-40 brain trust with U.S. degrees and multinational résumés that Saakashvili has hired since sweeping to power on the back of the Rose Revolution, so named for the flowers many demonstrators handed to riot police. Finance Minister Nika Gilauri, 33, has a master’s degree in management from Temple University in Philadelphia and was a consultant to Spanish utility Iberdrola. David Amaglobeli, the 32-year-old acting president of the National Bank of Georgia, did graduate work in economics at Oregon State University. Minister of Economic Development Ekaterina Sharashidze, 34, boasts graduate degrees from both Harvard University and the Massachusetts Institute of Technology and was formerly employed by Goldman, Sachs & Co. Saakashvili himself, who is 40, attended Columbia Law School and worked briefly as a corporate lawyer in New York.

This hyper-Westernized clique launched one of Eastern Europe’s boldest experiments in modernization by shock therapy, with impressive results. The revolutionaries fired 40,000 public employees, clearing out entire ministries and most of Georgia’s police force. They dropped the number of different types of taxes collected in Georgia from 22 to seven, and slashed the corporate tax rate from 47 percent to 20 percent. Higher compliance with the lighter regime led to a fivefold increase in budget receipts, and pensions rose to $50 a month from a derisory $7. “We have proven that supply-side economics really works,” Gurgenidze boasts.

Saakashvili’s team also slashed red tape and bureaucracy. It now takes 45 days to open a bank in Tbilisi, says Nicholas Enukidze, a childhood friend of Gurgenidze’s who is chairman at Bank of Georgia. By contrast, it takes six months in Ukraine, where BoG bought the midsize Universal Bank of Development and Partnership for $81 million last year. Georgia ranked 79th out of 179 countries in the latest corruption perceptions index published by Berlin-based watchdog Transparency International. Ukraine finished 118th and Russia, 143rd. “We can definitely say that the government has defeated visible, daily corruption,” attests Badri Japaridze, deputy chairman of Bank of Georgia’s top rival, TBC Bank.

Saakashvili的政府也恢复了ShevardNadze留下了混乱的基本服务。收集垃圾;热量和功率可靠。“我记得2000年心脏病发作，没有人可以让我楼下，直到电梯开始在早上开始工作，”格鲁吉亚战略和国际研究总裁亚历山大·克隆德利（Tbilisi）是一个独立的智库的独立智库。“今年，即使俄罗斯军队距离第比利斯25公里，所有市政服务仍然营业。”

The Georgian economy responded to better governance with a bracing expansion, last year’s spurt following 9.4 percent growth in 2006. Tbilisi, an ancient capital nestled in the Caucasus Mountains, with vaulted stone churches dotting its high ground, still has a dilapidated feel away from its central boulevards. Paved streets run off randomly into gravel and dirt, and stray dogs wander at will. Beyond the capital, half of Georgia’s population still lives on the land, eking out 11 percent of GDP on tiny plots worked with manual implements.

但是Budding Enterprise的迹象无处不在第比利斯。Tumbledown地中海风格的房屋越来越可能有一个梅赛德斯或BMW停放前面。搭配刚刚开放的街道的小商店更大的街道：面包店，锁匠，家具维修，孕妇装，互联网咖啡馆。在过去的四年中，银行信贷已扩大60％至65％，中央银行管理员Amaglobeli报告，由小型企业和零售贷款诞生刺激。

格鲁吉亚是地下entrep著称reneurship in Soviet times. Now they are registering 5,000 new businesses a month, says Kakha Bendukidze, the deputy prime minister who left a successful business career in Russia to become Saakashvili’s first economics czar. “Georgian culture is family-based and very egocentric. Every person thinks he’s a king,” he observes. “That makes a very good environment for small business, though not an easy one for big organizations.”

The country’s leap forward has won Saakashvili’s team respect tempered with some personal reservations among the, until recently, narrow circle of Westerners watching Georgia. “Misha and the people around him are arrogant,” says a European diplomat in Tbilisi, referring to Saakashvili by the widely used diminutive of his first name. “They think they are God’s gift. But I wonder if anybody else could have pushed through all these reforms.”

Yet from the outset Saakashvili’s blend of self-assurance and zeal has bred habits more authoritarian than libertarian. He kicked off his presidency in 2004 by arresting scores of officials and businessmen linked to Shevardnadze until they coughed up cash via so-called plea bargain agreements. He then channeled tens of millions of dollars from these oligarchs’ fines to opaque “special funds” controlled personally by the Defense and Interior ministers. The funds were eventually closed after hectoring from the IMF and Western embassies. By November 2007, Saakashvili had made enough enemies to nearly undo him. Tens of thousands of demonstrators filled Parliament Square in Tbilisi for five days with demands ranging from early elections to increased pensions. The president decried them as agents of Russia, then finally declared a state of emergency and sent the police to disperse them using tear gas and rubber bullets. Hundreds of protesters were injured in the ensuing melee, and the TV station that had egged them on was shut down.

但萨卡什维利也注意到了选举的要求，他呼吁在1月份进行总统仓促投票，4月份进行议会投票，他抛弃了现任总理祖拉布·诺盖德利，转而支持古尔根尼泽。

Before Gurgenidze took office last November 22, his public life had been limited to hosting the local version of The Apprentice on Georgian TV. He had left his native Tbilisi in the early 1990s for Middlebury College in Vermont, and Emory, then spent half a dozen years with ABN Amro in London and Moscow, rising to global head of investment banking for the technology sector before coming home to run Bank of Georgia in 2004. In three years he doubled the bank’s market share, to 35 percent, and listed its shares in London, increasing its capitalization 38-fold. Foreign institutions now own 87 percent of BofG, led by New York–based Firebird Management, with 10.7 percent. ( It was Enukidze, who had become chairman of BofG, who persuaded Gurgenidze to come home and run it in 2004.) “This is a job, not a career,” Gurgenidze says of being Georgia’s second-highest official. “I’ll probably end up running money somewhere.”

Yet the libertarian banker helped give the Rose Revolution a second wind, with considerable assistance from a divided opposition, which for its presidential candidate chose Levan Gachechiladze, an error-prone winery owner with next to no economic program. The government’s United National Movement party went on to triumph in the parliamentary balloting, gaining 120 of 150 seats.

“Gurgenidze practically saved the government by playing the role of the new man,” says Kakha Gogolashvili, director of European studies at the GFSIS. But that was before the war.

首相的20个新法律,都是传递en March and May, enshrined fiscal probity into Georgian statute. The central bank actually hiked its discount rate from 7 to 12 percent this spring in a campaign to keep price rises in single digits. “Very few countries had the [nerve] to increase rates by 5 percent in the face of the credit crunch,” Gurgenidze notes approvingly. The aggressive policy wrestled inflation down to 9.8 percent year-over-year as of August, compared with about 15 percent in Russia and 30 percent in Ukraine.

Gurgenidze pushed through enabling legislation for a new round of privatizations, including, most controversially, the entire state health care system. In its place the government would subsidize insurance payments according to need, he says. The premier also tried to lay the legal foundations for his personal dream of turning Georgia into a major offshore financial center.

To this end Georgia’s dividends tax is being scaled down to zero from its current 10 percent, and foreign-registered financial companies will pay no taxes at all so long as they do not have Georgian clients. But a financial haven must first of all be a haven. And even if Russian troops complete their withdrawal to South Ossetia and Georgia’s other breakaway province, Abkhazia, and stay there, Georgia’s economic ambitions have sustained a severe blow that was partially self-inflicted.

Gurgenidze, not surprisingly, stoutly defends Georgia’s wartime conduct and predicts a quick resurgence of tigerish economic performance. “Georgia just returned fire after heavy shelling of civilians by the separatists and after reports that a large column of Russian troops was entering Georgian soil,” he told II in a telephone interview late last month.

格鲁吉亚以外的观察家则不那么友善，他们称萨卡什维利鲁莽煽动敌对行动，尽管他们谴责俄罗斯入侵格鲁吉亚。1987年至1991年美国驻莫斯科大使、现任哥伦比亚大学哈里曼俄罗斯、欧亚和东欧研究所教授的杰克·马特洛克（Jack Matlock）说：“萨卡什维利试图通过军事手段解决问题，而不是建设格鲁吉亚的经济，使之成为一个美好的生活场所，这是完全不负责任的。”。古尔根尼泽安慰自己，八月事件把格鲁吉亚从后苏联历史的脚注变成了全球头版头条新闻，同情地把它描绘成一个被一个叛逆的克里姆林宫欺负的勇敢的民主国家。他说：“这场悲剧的一个可能的建设性结果是，国际社会已经更加注重解决格鲁吉亚的问题。”。

上一代塞浦路斯也被民族violence between Greeks and Turks, and until last year a Berlin-style wall still divided its capital of Nicosia, ignored by the legions of bankers and attorneys calmly tending to their clients’ offshore fortunes. Benign neglect of intractable ancient conflicts is, for many countries, an essential part of moving pragmatically toward a prosperous future. Georgia still has a shot at becoming one of those countries, thanks to all the forward momentum built up since 2004. But it has to hope that President Saakashvili has learned the Cypriot lesson, and not learned it too late.

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前线资本主义者

Since he was appointed prime minister by President Mikheil Saakashvili last November, Vladimer (Lado) Gurgenidze has reinvigorated an economic reform program that aims to make Georgia a bastion of capitalism in the Caucasus. The U.S.-educated Gurgenidze, a former investment banker, pushed through Parliament a package of measures outlawing deficit spending, cutting taxes and paving the way for large-scale privatizations. The sudden conflict with Russia, which invaded the disputed Georgian provinces of South Ossetia and Abkhazia last month and then recognized them as independent states, cast a dark cloud over Gurgenidze’s ambition, as well as over the future of Saakashvili’s presidency. But the Prime Minister reaffirmed his vision in a telephone interview, saying, “now more than ever we need a set of coherent, radically liberal and extremely investor- and business-friendly policies.” Earlier this summer, before the conflict, the prime minister laid out his economic vision in an interview with Institutional Investor Contributing Editor Craig Mellow at his office in Tbilisi.

Institutional Investor:What does Georgia want to be in 20 years? President Saakashvili has mentioned the next Singapore or Dubai. What’s your view?

Gurgenidze：格鲁吉亚是无可否认的欧洲部分 - 在历史上，在政治上，历史上，我们渴望成为欧洲家庭的有意义的成员。在我们的经济方面，我会说我们希望成为新加坡，巴林和爱沙尼亚的某种混合。这意味着尽可能多的经济自由，并在区域金融和贸易流动中发挥不成比例的巨大作用。

We aspire to be a financial center. If you look at the map, there is nothing of the sort, or not much, between Dubai and Cyprus. We can trade on the ease of doing business here and on our low, transparent tax regime to become a regional center for fund administrators and trust services.

What needs to happen now?

Back in March, despite the election season and everything else, we pushed through a package of 20 new laws and significant changes to existing laws. That was a very major first step toward turning Georgia into the sort of jurisdiction I just described.

我们有写入预算法案,它病了egal to have a deficit. On the monetary side, we have made it illegal for the central bank to have an inflation target in the double digits, and we have a clause that calls for a vote of no confidence in the central bank governor if the bank overshoots the inflation target by more than 2 percentage points for four consecutive quarters. I’m not aware of any other laws worldwide that are as hawkish.

Taxes were already very low and flat here, but as good libertarians, which many of us are, we will now reduce the personal income tax over the next five years from 25 percent to 15. There is no separate social tax or anything else. We will also reduce the dividend tax to zero from the current 10 percent. Starting January 1 next year, we have abolished all taxation on financial instruments. If you register a foreign financial company here, you can be completely free of any tax, including profit tax.

The tax burden now is the lowest in the country’s history. Yet in the past five years, the budget revenues have grown fivefold.

Is the international economic crisis affecting Georgia?

很少。格鲁吉亚经济的韧性让每个人都感到惊讶。尽管俄罗斯的贸易禁运，商品价格周期和信贷紧缩，但我们在过去几年中一直在增长10％或更多。

原因是经济自由 - 政府试图尽可能快地摆脱私营部门的方式。我们正在私有化医疗保健部门，所有医院都将私有化。这就是我们走了多远。

Will that be accompanied by an insurance program?

我们有一个计划，但即使是以市场为基础。我们只向贫困线以下的人提供优惠券，他们可以自由地接受任何保险公司。

对于自2004年以来取得的所有进步，动态和自由，我们仍有大约一百万人[从460万人口]低于贫困水平。而且百万必须知道改革不是一个肮脏的词，他们没有被遗忘。这就是为什么我们增加了养老金，我们正在承保这一非常大规模的健康保险计划。我们已削减基础设施支出，因此我们不会将政府支出增加为GDP的百分比。

What are you going to do for the rest of your life?

That’s a very good question. I’ll probably end up running money somewhere somehow. This is a job, it’s not a career.