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Georgia Enterprise Privatization
Another key element of economic reform, privatization of
state enterprises, was stifled under Gamsakhurdia. He feared that
the "economic mafia," which already owned a significant share of
the nation's wealth, would use that wealth to accumulate state
assets. Rapid growth had already occurred in the private retail
sector, however, once cooperative enterprises began expanding in
1988. In 1990-91 privately run "commercial shops" began
proliferating, often in place of state stores. Typically, these
shops offered consumer goods brought from Turkey and resold at
very high prices. The Law on Privatization of State Enterprises
was adopted in August 1991 to outline general principles, and the
Committee on Privatization was established in 1992. Under
Shevardnadze, privatization began cautiously in August 1992 when
the State Council adopted the State Program on the Privatization
of State Enterprises. The law copied Russia's approach to
privatization by providing for several methods, including
"popular privatization," consisting of a combination of vouchers
distributed to the public and auctions of state enterprises. The
country's political crises delayed meaningful measures, however.
By 1993 few Georgian industries had been privatized, although
large numbers of small enterprises were scheduled for
privatization in 1993 and 1994.
Data as of March 1994
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