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PROMISES VS. RESULTS
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Kakheti, the region most famous for Georgian wine, has seen grape
production decrease by as much as
two-thirds
from the Soviet era.
Given the overall importance of wine for Georgia and the region’s
agricultural potential, the Saakashvili government has begun
implementing policies to revive this sector. What are the chances for
success? Check out four of the government’s biggest promises and
their results.
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PROMISE:
“We have adopted a very important tax code with the lowest tax
rates on the entire territory of the former Soviet Union within the
Black Sea basin. Now, our business should learn how to profit by this
code. The businessman should learn how to work, because nobody will do
it instead of them.”
- President Mikheil Saakashvili
State of the Nation Address
December, 29 2004
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RESULT:
“[T]he [increase of] excise taxes is flawed. . . putting the
burden on the beer and wine industries, sectors that are just in the
nascent stages of development, forces them to restructure their current
business plans. This will seriously hinder development in these
sectors.”
- Giorgi Isokadze
Executive Director of the Federation of Georgian Businessmen
American Chamber of Commerce Magazine
January 2005
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PROMISE:
Recognizing the potential for tourism in Georgia, including agricultural
and wine tourism in Kakheti, the authorities in Tbilisi have promised to
boost their efforts in promoting interest and development in this
sphere.
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RESULT:
Outlets for Georgian tourism are already being developed in places like
Ukraine and a conference on rural tourism, under the sponsorship of the
European Union, has been scheduled in Yalta in September that will
include displays from the Georgian wine industry and tourism companies
to help promote travel to Georgia.
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PROMISE:
2005 - Each year, hundreds of thousands of counterfeit bottles of
Georgian wine hit world markets, costing Georgian wine companies and the
government considerable sums in lost revenue. To curb the practice, the
government has promised to pass anti-falsification laws and introduce
regulating committees.
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RESULT:
2005 - In January, the government introduced the Wine Quality and System
Formation Fund, a group meant to oversee ways to revamp quality control
for Georgian wine. A wine testing laboratory, run under the auspices of
the Agriculture Ministry and the first of its kind in Eastern Europe,
was opened in late 2004. Local officials in Kakheti, however, report
that a local so-called “control unit” promised by the
Agriculture Ministry to combat falsification of Kakheti wines has not
yet been established in the region.
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PROMISE:
2005 - Georgia is slated to receive as much as $1 billion from the
United States’Millennium Challenge Fund this year. The government
intends to use a certain amount of the fund as equity capital for
investments in agriculture and tourism in the country’s rural
regions.
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RESULT:
2005 - Projects proposed for Kakheti, should it receive a portion of the
Millennium Challenge Fund money, include railway reconstruction, road
construction, and the opening of a brick factory and oil recycling
factory. None of the perspective funds will be directed towards the
development of Kakheti’s main source of income – wine.
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