I want to welcome you all and congratulate you on Georgia's Independence Day. I want to tell you that we have established a wonderful tradition. We are holding our second charity dinner. Today over 250,000 lari was raised, which will go to the more than 70 cafeterias operating throughout Georgia where our underprivileged citizens are able to eat high-quality food on a daily basis. I go to these cafeterias often. We closely monitor them to ensure that the quality is high. This is one of the most painful things for me because the people who go there are so virtuous, so educated, so intelligent and have done so much for their homeland. But it is simply a pleasure to go there and talk to these people. This is an outstandingly educated and meritorious part of our society, whom life has thrust into their current situation. Our task, for all of us, is to rise up out of this situation as quickly and completely as possible.
The country is changing, all of you can see this, look around and you will all see and acknowledge that the country is changing at a fast pace. I would prefer that it change at a much faster pace and we all want it to change faster. But you can feel this energy in the air. Today we all had the opportunity to walk along Tbilisi's streets. Today several new hotels opened in Tbilisi alone. The city was full of energy. Big changes are under way not only in Georgia's capital, but also in Batumi, which we visited a few days ago, and several regions of Georgia. Of course this is really only a prelude to bigger changes. The real changes in our society must begin only now. Our task is for all of us to be part of these changes.
The best thing in Georgia, the best indicator for me over the last few months, is not only that Georgians are returning to their homeland but also those Georgians who found money abroad are investing in droves, and I can count for you on my fingers how many millions were invested. According to my calculations, Georgians living outside Georgia have invested some 200-250m in Georgia's economy. This is at a time when capital is fleeing Russia, when capital is more or less leaving Western Europe. This is at a time when throughout the course of the last few years, everyone who was someone in Georgia tried to flee the country.
You know and I know that this money is now being invested in Georgia. With these investments, for example, the construction of an enormous Hyatt complex near the Aragvi Hotel will begin. This is investment in the country by Georgians living abroad. These investments are being made in many large and small facilities, for example a chain of cinemas in Samegrelo [region]. I recently met a small group of Georgians who had returned from abroad and built the most beautiful cinema in all of Georgia in Zugdidi and will do the same in Senaki and Poti and they want to do the same in another four or five places in Georgia. Even if it's a small chain of cinemas, remember that one year ago there were no cinemas outside of Tbilisi at all and that this was not a profitable business. When we went to Zugdidi and went to the cinema with some children I discovered, as I have said before, that these children were at a cinema for the first time. They were behaving unusually. In our childhood we behaved differently. These children behave differently and then I thought about it and realized that they have never been and that this was their first time in this environment.
Our main achievements of the past years, and this is quite apparent from public opinion polls. Of course, the public's opinion is always changing and of course I also know that a certain part of society is always inclined to say that the good things happening are happening of their own accord - roads are being laid on their own, schools are being built on their own, hospitals are being repaired on their own, the army is being built on its own, order has been established on its own and everything that is bad comes from the government. However, most of the public, the absolute majority, understands very well what changes are under way in our country. But the main thing that makes me happy in this respect is that one year ago the absolute majority of the public said that the main problem in our country was electricity. Now less than three per cent say so.
Ninety-eight per cent, I repeat, 98 per cent of Georgians say that over the last two years they have not given a bribe and haven't heard of any cases of a relative paying a bribe. I would like to ask you Georgian businessmen here if you have paid a bribe. Perhaps you won't raise your hand now, but I will gladly stay afterwards and speak to you. But the European Bank for Reconstruction and Development conducted a survey of companies working in Georgia and Georgia ended up in the top three least corrupt countries on the whole European continent. It finished ahead of the Scandinavian countries, Germany, England, France, to say nothing of Eastern Europe, though aside from us, Estonia also emerged on this list. The author of the Estonian economic miracle is today an adviser to the Georgian president. He managed together with his team to create the most successful economy in the whole world, not only in Eastern Europe. This was in a country that was just as ruined as Georgia was 10-15 years ago. These are our main achievements.
And one more thing. The majority of crime in Georgia since February, when I declared zero tolerance for crime, up to and including May, petty and serious crime in Georgia, has in reality, organized crime has, according to all statistics, been cut in half, despite the fact that every evening they show horrific things on television, which is natural, we are a democratic country, and this, though not in such a dose, of course, but we're a small country and when not much is happening they show these things. Moreover, public opinion says that crime has been reduced by half. And do you know what kind of crimes this refers to? They may not be publicized, but these are crimes like cattle rustling in villages, attacks on people harvesting and attacks in stairwells, which have decreased in Tbilisi. I am very happy that things are moving in this direction. This tendency must continue.
On one hand we want a very ardent and fundamental battle against crime and zero tolerance, including, I state once again, towards petty crime. And this works. It is a fact that it works. On the other hand, there should also by zero tolerance of all manner of infractions, illegal behaviour and human rights violations [by police], because this is also of fundamental importance. Simultaneously we need a society that feels safe and is not under pressure from another person.
It is very important for us that all these kinds of attitudes and violations, all policemen involved in crime, are pursued to the end uprooted and taken to court. Of course, we are proud of our police but of course there are and will be such people, unfortunately, just as there are in America, England and France.
At the same time, we must understand that business must be totally decriminalized. I don't like the fact, and neither does the Tax Police, that the Tax Police has so much contact with businesses and enterprise. This only shows that something is still not working in the tax system. We increased tax collection rates and this is thanks to you. We have much higher revenues despite lower taxes. But at the same time, it is not permissible for the Tax Police to be constantly dealing with businesses because this means that the relationship between business and the government is within the criminal justice system.
Therefore our task is to create a tax system so effective that such surgical interference is no longer necessary. There have been cases where 20m or 25m lari have been found to be hidden in one shop. This means that the Tax Inspectorate failed to work properly and this is not right. The fact that such excesses take place somewhere is a weakness of the state. We must all fight this together, as partners working with each other and overcome it together.
A moment ago I mentioned the courts. Our main challenge, given that we are trying to rid business of corruption and extortion, that there now is electricity throughout Georgia and this means that a business can be opened anywhere, when we are building roads, when there is greater safety - I'm not just talking about corruption, there is no more robbery, banditry and organized crime in Georgia and this is a great accomplishment of ours, although all organized criminals in Georgia have fled to a certain small neighbouring country - is to create a court system that will enable us to settle business disputes in a way that a business is no longer beholden to a government official. The arbitration system that we had was foolish. We do not intend to deceive ourselves. The same people filed cases in arbitration, the same people ruled on these cases and the same people ruled against the government. We are not fools or so inexperienced as to stand for that. We want an arbitration system in Georgia that is truly unbiased and independent.
Therefore I again have an idea, and I am working together with the European Union on this, to invite foreign judges to attend court proceedings. Let's say we put 50-100 Western European judges together with the same number of Georgian judges and over the course of two or three years let them rule together on existing disputes between you and the government. This will require several months of preparation, but it will give us an opportunity to create standards for dispute resolution, and our legislation already complies with European standards, that will then remain in the Georgian justice system and then we will no longer need foreigners and will be able to resolve these disputes ourselves. I want all of us to prepare for this together. I want there to be dialogue on this topic. I want us to talk about this and work together. Of course your life is not easy, I am well aware of that.
Our country is under great pressure but today you saw how happy the people are, how much cheer is in the streets. Today I walked along Tbilisi's streets and did not see one face that was not smiling. But turn on some Russian television station and they will tell you what happened today in Georgia. Mass confrontations, mass dispersals, the whole of Georgia took the streets to overthrow the authorities. There were excesses, buildings collapsed. People were killed. Those who were not killed were arrested and in general this country has reached its end. A neighbour of mine from a Central Asian country that is a large investor in Georgia told me: I watch Russian television, I have no other choice. When I watch such reports I know that everything is still all right in Georgia.
This pressure really exists. We don't want to stick our heads in the ground. This pressure exists today. But it is no coincidence that I have brought Mart Laar here today. Estonia, a country a fourth the size of Georgia, experienced three to four times as much pressure than Georgia. They closed off everything. Ninety-five per cent of their market was cut off within a few weeks. Today Estonia, sorry, not today, but rather for the last twelve years, has been the fastest growing European Union country, with the most competitive products, which compete with those of South Korea, Singapore, Hong Kong, the United States, Finland and Sweden. How did they manage this? By not being afraid. Because when one market was cut off they went to another. When agricultural products were cut off - and this was a largely agrarian country- they started processing agricultural products. This process has already begun in this country. Last summer they stopped importing our apples, but several apple juice producing enterprises have already opened. They cut off mandarins last December and this year three or four big citrus processing facilities are being installed in Adjara that will process 80 per cent of our citrus fruits.
This is exactly what we must do about wine. They have cut off our wine market. First of all, I think this is more of an opportunity than a tragedy. This is a chance to make every bottle of our wine better than Australian, Chilean and other wines because this is a totally unique wine. I have seen and you have probably seen and heard how much Europeans value our wine. But in response we are building in Kakheti a grape concentrate factory which will process, according to our calculations, 40 per cent of grapes. This year we will take on a much wider spectrum of markets, the Ukrainian market, Eastern European markets. We must thank those who imposed this embargo for such an advertisement for our wine, because we never could have received such an advertisement otherwise. The whole world found out that Georgia has wine and that it is of high quality. Of course, no one bought the claim that it is full of pesticides.
Today all of the British and American press [is writing about it], there are billboards throughout Eastern Europe. Of course we have to do all of this through partnership between the government and business. The state budget, which includes the taxes you have paid, is being used to organize advertising campaigns and wine festivals and take court action against the falsification of Georgian wine in Spain, Bulgaria or in any other country. And we will find the means to hire marketing companies, which we have already done. We will find a way so that in two or three years, and this is wholly realistic, we can sell much more than we have been selling up to now. And then our return to the Russian market will be inevitable because there will be no point in closing out of the market.
What does our independence mean to us? It is the main prerequisite for everything. There will be no point in cutting off gas to Georgia if there is alternative gas [supply], and starting this year Georgia already has alternative gas [supply]. We have worked hard on this. Therefore there is no point in cutting off gas to Georgia and this will be completely absurd as of this autumn. When one is dependent on a single market, that market is certain to close, but if and when one has a possibility to sell half of it on another market, then there is no point whatsoever in cutting off that market.
Diversification, seeking diverse contacts - this is the main key to finding a way out of the present situation. We should not allow our development be hampered for a single minute, my friends, because regardless of how much they speak about Georgia being ruined and falling apart, everybody today saw the Georgian army and everybody saw their level of readiness, even though we did not display 90 per cent of our hardware. We only demonstrated what would not damage the asphalt because asphalt is already precious to us and 90 per cent of it would damage the asphalt.
We have not displayed all our soldiers because garrisons need to be guarded and because sensitive locations in Georgia need to be fortified, but you have seen what the Senaki [military] base is like - I have spent four days at the Senaki base. I marched together with them, I ate with them, played football with them every evening and simply watched the illuminated headquarters together with them in the evenings. You should see it for yourselves.
Firstly, the unit is like - I have not seen many like it in films - any of the finest Western-type units. Behind the lit windows are sitting officers and sergeants, all working with computers, working with maps, moving stuff from downstairs to upstairs. It was a real pleasure to just simply watch this. You could not see a single soldier wandering around aimlessly as used to be the case in the Soviet Army in which I served for two years despite myself. Most importantly, these are people whose psychology is different - that was obvious when we interacted with them.
The same is true for all areas of our government apparatus. This year we are bringing more that 300 schools in Georgia close to European standards. Of these several dozen are being built and more than 300 are being renovated. Modern heating systems will be installed in all schools; all of them will have new doors and windows; old desks in all these schools are being replaced with new ones, all of these schools will be equipped with computers.
Computerization and the provision of Internet access is under way in the whole of Georgia, and this process should continue. We built a hospital in Kutaisi last year which is the most modern hospital throughout Transcaucasia. This year we are building two modern hospitals in Zugdidi and Gori which will be finished in late July or August and are starting the construction of the Republican Hospital in Tbilisi.
We have brought a Georgian doctor of the highest calibre from New York - another indication - who has brought with him a whole team of Georgian doctors from the West. Nika Qipshidze, the son and grandson of famous doctors who enjoyed a super-successful career in New York, as anyone who knows him will attest, has abandoned everything. His team too is giving up everything, including salaries 10 or 15 times higher than here, to come to Georgia to build a new Republican Hospital, and virtually a new medicine. It will be the most modern hospital in the former Soviet Union and the money that you pay in taxes is also invested in this, my dear people.
Regardless of how much they speak, cast a spell on us or be anxious, we should not lose our cool because this is our future. This is our future - hospitals and access to them, schools and universal access to education, infrastructure and through this infrastructure, provision of employment and opening up new prospects.
We are opening technical training centres this year and I need your assistance in this as we need a large number of construction personnel - plasterers, painters, foremen, you know better and you can list more than me - many construction companies are here. We know that we do not have them. You do this under your aegis, we will give you money and you do it under your aegis, train them, have them work under your foremen, we will pay them salaries, but you should hire them eventually as I am confident there is a demand for all these people.
Recently we passed through Batumi. A perfectly nice new hotel has been built and thirty more new ones like it are being constructed. We are short of sufficiently trained personnel to ensure the good quality of tourism. We need to train such personnel, we need to train waiters, we need to provide high-technology training. I was very pleased to see a high-technology facility of our armed forces, and a complete novice, a graduate of the Georgian Technical University there, who had been sent for good training abroad beforehand.
You should see how great these young people are, but it is not only in the army that we need them but first and foremost we need them in business. First of all we need them in industry. We should be aware that tomorrow and beyond, the entire region will develop at a very high pace. Our economic growth was more than 11 per cent during the first three months of this year. This is a very high growth rate.
However, we should anticipate that Azerbaijan will have very high growth rates, we should understand that tomorrow Azerbaijan will need lots of engineers, lots of high-technology specialists and it is the Georgians who should go there.
There is similar development in Central Asia and the Black Sea region. Why should we concede this privilege to someone when Georgia is a mine of such intellect and such talent? We should do this together. We should be aware today that, for instance, 70 per cent of pork is imported and we do not have as much beef as we need. I am speaking about agriculture, I am not speaking about construction materials which Georgia has in abundance, but there is just a need to prepare and process them well. The overwhelming majority of this is imported. We should put an end to this once and for all. We should use all of this, add our intellectual potential and take up new markets.
Georgians indeed have an opportunity to do this and we should do this together. This certainly requires continuous dialogue. Much useful work is done. For instance, the demolition of old, so-called Khrushchevka [residential buildings built in the 1960s] buildings has started in Tbilisi and construction companies have commenced building new houses in their place, not just in the centre. Such developments are under way in Varketili, Moscow Avenue, Metromsheni, Vazha-Pshavela and Nustubidze.
I want to get together with construction companies and discuss setting up a special regime that would encourage you to take make these construction projects a priority, to ensure that first of all it is these people who are resettled and provided with flats because they represent the least protected segment of our society.
Let us work out a special regime and do that together. Some zones in Georgia - I have just been to Ajaria - are developing very fast. Samegrelo is developing surprisingly fast. I personally am amazed at how quickly they got the hang of development in Zugdidi, Senaki and other districts of Samegrelo. However, there are zones in Georgia where development is not so fast due for natural reasons. Let us get together and discuss how to create proper conditions for development there too because if Batumi develops while Ozurgeti doesn't and if Zugdidi develops and Lagodekhi doesn't, we, our country will not move forward. If some get rich and others become completely impoverished, our country will not move forward. We should create a fair model but the fair model cannot be achieved through directives. The fair model is to be set up through our interaction, maximum freedom, maximum openness, maximum flexibility of the state and maximum encouragement of everyday dialogue with business.
I want all of us to understand that we indeed are going through radical reforms now - we have recently passed the most liberal labour code in Eastern Europe. In France they destroyed everything, a total of 30 million people took to the streets, and the labour code failed. Yesterday the Georgian parliament taught a lesson to the French political elite by passing the most liberal labour code that one can imagine. This means that you have a green light to do legal business and no-one will dare blackmail you. You cannot be approached by the labour inspectorate, which incidentally does not exist any more, and be asked why something is not registered. You have a complete green light - you can hire as many people [as you want] and indeed you should hire many and so make use of the people's talent and labour. At the same time, you should be free from external blackmail and excessive regulations.
We have set customs tariffs that will allow each of you to import equipment from more developed countries without paying customs duties, and I want to do the same for a whole range of construction materials which cannot be produced in Georgia. I believe that it is possible [to produce] most of them here, but we may spread this out to cover what cannot be produced and what is unprofitable.
We should by all means pass a new investment law. I want the law to say that if an investment exceeds a certain amount, say 5m no district administrator or inspector - at the moment they don't touch you as I have frightened them all -cannot even in theory come close to business in the future regardless of what kind of government is in power. Since there is more investment an investment centre has opened in Freedom Square and anyone can go and speak to them. All permits should be issued within a week. This is our advantage. In Moscow it takes two years to get a construction permit, in Kiev it takes three years. In Georgia it should require one week or a refusal should be issued in exceptional cases if there is a good reason. Once you get such a permit, no-one should be able to ever poke their nose in and touch you. Likewise, property is inalienable and no-one should ever be able to lay their hands on it. This is the main premise of our development.
What advantage do we have over other countries? It is predictability, order, the rule of law and the safety of each individual. We do not have oil and gas but these values are so strong and so few countries have succeeded in creating them that, in this regard, Georgia has given a historic chance to each of you and the whole of our society.
Finally I would like to tell you that I want you all to hurry up. I want no capital to be set aside or stored away in mattresses and banks, because now is the time to invest money in Georgia, the time to invest money. We collected three to four times more from privatization than we expected because it was done in an honest way. Some were displeased that it was done honestly but most were happy. Those who were displeased had expected that being close to the authorities would help them get hold of something and so they grumbled. However, the majority understood that if one pays more and one is granted better conditions, one will win for sure.
Now the energy sector privatization and the construction of new hydro-electric plants and energy facilities are ahead of us. I am sure a lot [of money] will be collected through that too, because everything is being done in an honest and transparent way.
Money is arriving. Investors from Eastern Europe, Western Europe and Turkey are queuing up in Georgia. Two airports are being built on Turkish money. Name one Eastern European country which has built two airports in the first two years of its development. Even Estonia did not manage that. At least we outperformed this good man in one respect.
We will no longer suffer from a deficit of capital but I want you too to be aware of this. The sooner we invest money the greater the return on less money will be. This is a common principle of life. The later we try to get on a train once it has left - I like comparisons to trains - the harder it is to catch with it somewhere near Igoeti or Batumi. It is better to be seated comfortably from the outset and be sure that the train is moving in the right direction. I think each one of you here are well aware of this. The main thing for you is to communicate this to our society in due time, create prospects for them in due time, and in due time communicate to them that each person in Georgia lives better and more justice, including social, is achieved by each family in Georgia due to the fact that each of you is successful.
This is hard, this is not easy but this is possible. There will always be less than we want. There will always be displeased people, people who want more, but this too is a sign of progress. This too is the sign that prospects have emerged. When we all lived poorly, when everything was bad, even small things made people happy. Now that society is making progress everyone wants to get rich quickly, everyone wants to have prospects sooner, everyone wants that their kin do not have to, say, go to these soup kitchens every day, and there will come a day when this will be so.
But there still is a long way to go. Until then, on the very beautiful day of our independence, I once again want us to be aware that patience, optimism and very hard work is required of us. First of all, we, the government, need to work three, four times harder, and I want you involved in this important progress, this important work, this great joint attempt to create and prop up - to spite our enemies - a very strong country, a very strong country, and I cannot compare it to any other country.
We should all be together in this and then we will be able to do anything, I believe. We will overcome anything, we will withstand all neurotic resistance and pressure. Let them remain anxious, let them, who pressure us now, be anxious while we do our work. I congratulate you once again and thank you for being here.
This translation is published with permission from BBC Monitoring, Reading, UK
Communications Office
of the President of Georgia