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Bendukidze – State Minister with Big Mandate to Reform
Giorgi Sepashvili, Civi.ge, Tbilisi / 16 Dec.'04 / 14:51

The Economist described Bendukidze as
“a different sort of oligarch.”

Kakha Bendukidze, who once was described by the New York Times as “a large man with a big agenda,” has been transferred from position of Economy Minister to the position of State Minister in order to oversee all economic reforms.

Some commentators say this change of positions, which became possible as a result of a recent reshuffle in the Georgian government, is a demotion for Bendukidze, but many analysts believe a man with a big agenda would have hardly accepted this new appointment were this the case.

Bendukidze himself says that in his new capacity as a State Minister he will be able to oversee the structural reforms of all governmental structures.

“I will be in charge of not only economic reforms but I will also recommend and oversee structural reforms in other sectors, for example in the Energy Ministry and the Agriculture Ministry. Of course this does not mean that I will be responsible, for example, for the electricity supply; I will recommend structural reforms which I think are necessary to carry out in different governmental bodies,” Kakha Bendukidze said, while speaking on the Tbilisi-based 202 television’s talk show on December 15.

He also said that an outside view is better to see what kind of reforms should be made, rather then “seeing these problems from inside the office of the ministry which you are going to reform.”

The Georgian leadership recruited the Russian-based tycoon Kakha Bendukidze, 48, a native Georgian, as Economy Minister in June. He was President and Chief Executive Officer of Russia’s largest private heavy engineering corporation, United Heavy Machinery. Bendukidze graduated from the University of Tbilisi in 1977 before earning a Ph.D. in biology.  He first became involved in the private business sector in Russia in 1990.

“In the capacity of Economic Minister Mr. Bendukidze was very much engaged in routine bureaucratic procedures and this is so far away and unusual for a person like him. Now I think he will be freer in his attempts to carry out drastic reforms, which he has had on his agenda from the very first day of his arrival,” MP Maia Nadiradze of the ruling National Movement party says.

Leader of the opposition Republican Party Davit Berdzenishvili agrees with this assumption.

“Kakha Bendukidze should be a chief strategist for the Georgian economy.  I believe there are two options for him: if he remains in Georgia it means that he is fully engaged in developing a concept for economic development in Georgia. If he is not entrusted with this mandate then there is no place for him here,” says Berdzenishvili.

Prime Minister Zurab Zhvania was also prompted to assure society of Bendukidze's continuing role in the government, through an announcement, on December 14, about the cabinet reshuffle, wherein he stated that Bendukidze would be entrusted with even more authority to carry out reforms.

“It [the State Minster for Economic Reforms] will not be a symbolic position. He will enjoy the President’s and Prime Minister’s mandate to carry out more rapid reforms in all sectors of the economy,” Zurab Zhvania said.

When liberal economist Bendukidze arrived in Georgia in June, upon being nominated as the Economy Minister, the first thing he announced was that “everything can be sold, except conscience.” This was a blow for the prevailing Georgian stereotype that no state-run enterprise, labeled as “strategic” should be sold. This notion of selling "strategic" enterprises was a difficult idea to voice for many Georgian politicians in the past, as this stance was generally viewed poorly by their constituents.

Bendukidze was free of this kind of political burden. He launched a special web-page www.privatization.ge listing 372 enterprises which were put-up for privatization. The list offers a huge range of enterprises, including a manganese factory and a proctology clinic. So far only a few of these listed enterprises have been sold, among them a couple of hotels in the Adjara Autonomous Republic and Tbilisi and the Tbilisi Aircraft Factory – TbilAviaMsheni.

But Bendukidze promises that as a result of these radical, ultra-liberal reforms the “economic growth in Georgia will reach 12% annually by 2007.” 

For many, Bendukidze is notorious for his temper. Recently, at a governmental session which was broadcasted by the Georgian television stations, Bendukidze called Energy Minister Nika Gilauri “stupid” for, as he put it, not knowing how to invest money in the energy sector.

But despite his controversial personality, the Georgian leadership deems it worthy to keep “a large man” in the government, as the country faces a big agenda ahead.


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