Georgian economy minister dismissed – without explanation

Georgian Prime Minister Mamuka Bakhtadze relieved the Georgian Minister of Economy and Sustainable Development, Giorgi Kobulia, of his duties late last night.

Kobulia held the post for less than a year, having been appointed back in July 2018.

The head of the administration of the government, Kakhi Kakhishvili, told reporters late on 18 April about the decision, but did not provide any reasons. Information about the imminent dismissal of the economy minister proceeded the official announcement the entire day.

A few days earlier, the leader of the ruling Georgian Dream party Bidzina Ivanishvili stated that he was dissatisfied with the activities of several members of the government, without mentioning their names.

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Two reforms are associated with the name of Giorgi Kobulia, which have caused discontent among the public and heated debates among politicians.

The first is the pension reform, which provides for the mandatory transition of citizens under 40 years of age to an accumulative pension system, which entails a monthly contribution from one’s salary to the fund.

The second is the restriction of issuing bank loans, which is why many citizens have lost the opportunity to take loans, and many companies whose business have been associated with selling credit or in installments have serious problems.

Some of his famous quotes are:

“Income is increasing, we are living better and better every year and every month.”

“People shouldn’t get blacklisted just because they took out a loan to buy a refrigerator or a TV.”

“If too much foreign direct investment is accumulated, at some point, foreigners will start being paid dividends and this will have a bad effect on our economy.”

“Lari fluctuations give us the opportunity to create a safety cushion for the economy (commenting on the next devaluation in the national currency).”

The Georgian media also pointed out his long vacations in Moscow (before being appointed to government). Kobulia was earlier a senior partner in the Moscow branch of the international consulting company McKinsey. The first time he went on vacation, which was on the fifth day after his appointment, he missed a visit to Georgia by German Chancellor Angela Merkel.

Some weeks ago his luxurious house in Tskhneti near Tbilisi was robbed. However, Kobulia declined to comment on the matter, stating that he would not comment on his “personal life”.

Assessment

Both the opposition and members of the ruling party have linked the minister’s resignation to his statements.

“Kobulia’s main mistake was that he should have known where he was going … Under the conditions of this government, when both the economy and politics are managed by one person, not ministers, he was doomed to failure. In addition, he made a lot of frivolous statements,” a deputy from the opposition United National Movement Roman Gotsiridze told Rustavi-2 TV.

Gotsiridze says that the decision regarding Kobulia’s resignation was in fact made by Bidzina Ivanishvili, not the prime minister.

Roman Kakulia, the Chairman of the Parliamentary Economic Policy Committee, noted that Kobulia, who had held the post of minister after many years of working abroad, was not fully aware of the realities of Georgia.

“He had to make such statements, the meaning of which I understood, but society could have interpreted them differently. Such things require caution, especially in the economy.”

Kakulia noted that Kobulia is “a fairly educated person with solid knowledge of the economy”.

Natela Turnava, the deputy minister, has been appointed minister of economy in his stead.