Georgian President against bill on free economic zones

The Georgian President is against adopting the bill on free economic zones. Eduard Shevardnadze voiced his position in a traditional Monday radio interview today and pointed out that he was not against the liberalization of tax policies, but opposed the creation of free economic zones, as "Georgia is in a legal and economic vacuum". In the opinion of the President, free zones "will trigger the creation of an uncontrollable economic segment and an oasis for money laundering". Additionally, while there is no territorial integrity in Georgia, free zones will enhance separatist trends in some regions, the Georgian President stressed.

It is worth mentioning that the campaign against the creation of free economic zones in Georgia is based on the unwillingness of current Georgian authorities to create a free economic zone in Batumi (Ajaria). Shevardnadze once again reproached Ajaria for not transferring resources to the central budget and mentioned that the autonomous area retained 50 percent of all customs duties, 40 percent of the VAT and 40 percent of excise revenues. Ajaria owes about 24 million laris (about $12m) to the government, while the center has not paid 140 million laris (about $70m) in transfers to the region.

The bill on free economic zones was to be discussed by the Georgian parliament last week, but it was not due to the absence of a quorum. The opposition is currently collecting signatures for summoning an extraordinary parliament session and discussing the bill, which has been lobbied by the Restoration parliament party for the past six years. The party was created by Ajar leader Aslan Abashidze. The International Monetary Fund (IMF) is against adopting the bill on free economic zones.