Laissez-faire bear baiting

Over at our front page, Cindy Cerquitella reports from Tbilisi where, when the government isn’t getting reckless with Russia, it’s passing remarkably far-reaching market reforms. Check it out:

TBILISI, GEORGIA–Back in August I could barely tear myself away from my inbox: every few minutes I’d get an update from friends here telling me of new horrors, and fresh attacks by the Russian army. Things were pretty grim that week; I even received a dramatic email from a friend here in the capital saying goodbye; that Russian tanks were heading his way.

Thankfully, only three months later, nearly all that fear and urgency is gone. The city is crowded, vibrant, and bustling, thanks to a roaring economy. Georgia’s economy has grown at an annual rate of 10% over the past two years — even through the Russo-Georgian war — and even now, amid the global downturn, it continues to grow at a respectable 3.5%. The country has enacted a flat tax of 15% on corporate profits, and committed to lowering the personal income tax rate to 15% as well over the next five years. Prime minister Lado Gurgenidze’s administration has also signed legislation which will, over the next three years, abolish taxes on dividends, interest earned, and capital gains. In fact, with no export taxes or barriers, and an import tax of only 0.2%, Georgia may boast the most actively pro-market government in the world.

Tbilisi is beautiful, with rolling green hills, ancient castles, and intricate architecture. Though Russian bombs fell around its outskirts and on its airport over the summer, there was already little evidence of the attacks when I arrived in October. Though small, the airport was modern, well organized and security was at a minimum both coming and going. (Though for some strange reason, most flights arrive and depart at ungodly hours like 3:00 am).