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State Deceived Small Entrepreneurs

July 16, 2007

The law enacted for Adjara Region is not enjoyed by any enterprises in the area

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Although the Georgian Parliament introduced amendments to the Law on Privatization of State Property, it is not followed in Adjara. Those amendments stated that “enterprise, located in the Autonomous Republic of Adjara, with total price of 100 thousand lari, will be privatized by its employees. Those enterprises have either domestic profile or work in public nutrition.” Representatives of the Ministry of Finances and Economics of Adjara stated that enterprises mentioned in the draft law do not exist in the autonomous republic. Consequently, the Ministry refused nearly 35 small entrepreneurs to purchase their entities and sold them on the auctions. Small entrepreneurs brought suit against the Adjara Ministry of Financiers and Economics at the court.

The amendments to the law on “Privatization of State Property” were enacted in January 2007. It was prepared particularly for Adjara Region. The reason for the initiative was delayed privatization during Aslan Abashidze’s regime. Small entrepreneurs could not purchase their entities.

After the revolution in Adjara, national movement, “Chveni Adjara” (Our Adjara) with MP Tamaz Diasamidze as a leader, started the struggle to restore the rights of small entrepreneurs in Adjara. They introduced the draft law to the Parliament according to which small enterprises with the total price of 100 000 lari should have been sold to employees. The parliament enacted the draft law.

As soon as the draft law was put in force, 25 entrepreneurs applied to the Ministry of Finances and Economics; however the latter did not satisfy their appeals. Mindia Nakashidze, the Deputy Minister, stated that Georgian Legislation does not recognize the term “Small Enterprise” expect some cases which do not have their profiles estimated yet. The Ministry cannot sell those entities under the new law. “Tjose enterprises were not established by state. Nor the Adjara Autonomous Republic has any shares in it. Consequently, the Georgian Law on “Privatization of State Property”, Article 12 Section VI does not envisage similar purchases. Those entities are registered on Batumi City Hall and concerned people had leased them from the state for some time… Usual privatization process will continue.”

MP Tamaz Diasamidze states that the situation regarding small entrepreneurs is confusing and blames the Adjara Autonomous Government for disobeying the law. “Local Ministry made volunteer decision. They have blocked laws in the region. Consequently we have some serious doubts regarding the situation. Some officials seem to be interested in those enterprises. Many people will become victims of this situation”…

Small entrepreneurs had to apply to law enforcers. Batumi City Court has already started the discussion of the case. The suitors demand to put the amendments to the law on “Privatization of State Property” into force.

Small entrepreneur, Zurab Tsitskhvaia, applied to the Human Rights Center’s Batumi office for help. He said that the Adjara Ministry of Finances and Economics does not obey the law for certain reasons. “Unfortunately, the officials from the Ministry understand the law in different way. Initially Aslan Abashidze restricted the rights of small entrepreneurs and did not let us purchase the entities. With the support of Tamaz Diasamidz it took three years to restore our rights. Finally the President signed the draft law. However, the law was enacted to deceive us. We have petitioned to the Georgian President several times and informed him that the Adjara Autonomous Government was not following the law. In reply to our petitions, Vakhtang Tsetskhladze, the head of the Department for Discussion and Analyze of Georgian President’s Correspondence, wrote to us that “Our petition was sent to the Administration of the Adjara Autonomous Republic for further reaction.” Thus our letter must be discussed by those officials against whom we have appealed. I will not let anyone in the entity I have worked for 35 years (art-advertising workshop) for. I have lived honest life and now the government makes me commit a crime or a suicide.” 

Small entrepreneur, Nodar Devidze blames the government for having mercantile interest in their entities. “After revolution, intensive privatization of enterprises started in Adjara. Maximum price of one sq. meter in the enterprise was 240 USD. After the law was enacted they artificially raised the price to 1 500 USD. Two years ago I could purchase my enterprise for 10 000 USD but now I have to pay more than 60 000 USD for forty sq. meters. We did not buy the entity two years ago on the auction because we expected the government to make some discounts for us. In fact everything has worsened. How can we hope anything when they ignore the law signed by the president?!”

Davit Shanidze, lawyer for entrepreneurs, said that his clients have raised two questions in their suits. “We demand the court to order the Adjara Ministry of Finances and Economics to sell out the enterprises on the auction that is envisaged under the law enacted by the Georgian Parliament.”

Bakur Bolkvadze, lawyer for the Human Rights Center’s Batumi office said that similar situation has some particular reasons. No enterprise has been purchased according to the law since it was enacted. “Representatives of the Ministry of Economics stated that if entities where suitors are employed are not state properties or Autonomous Republic does not have shares in it, we should ask why the Adjara Ministry of Finances and Economics are selling them out on the auction. Law-makers do not define anything about shares while disposition the norms. It generally discusses the regulation of privatization of small enterprises on the territory of Adjara Autonomous Republic. This article was introduced to the law out of the interests of entrepreneurs and if the law should not be followed, why have they enacted it?!”

  Emzar Diasamidze, Batumi

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