In response to “Georgian Dream” party’s decision to suspend EU integration, within two weeks of creating Freebusiness.ge on December 15, about 2400 large, medium and small businesses with total turnover of billions of GEL, have joined the Free Business Platform – freebusiness.ge.
The members of the Free Business Platform demand:
1. Appointment of new, free and fair elections and
2. Release of detained protest participants before New Year, so they can spend New Year with their families.
Maisi.News spoke with the founder of the Free Business Platform, Giorgi Chugoshvili:
1. Giorgi, what risks do you see in the current situation?
We have a political crisis in the country, which, if not resolved, will inevitably transform into economic and then social problems. When we talk about economic problems, we mean that first it will affect small businesses, then medium businesses, and probably finally large businesses as well – there could be significant problems from a business perspective.
Additionally, we must consider existing and potential sanctions and the severing of partnerships that we’ve seen with the Western world recently, and the suspended integration process. This could cause a major domino effect in the economy, which will manifest, of course, in currency depreciation. Currency depreciation will directly result in price increases and inflation due to the simple reason that Georgia is highly dependent on imported goods. We have quite large imports and small amount of exports.
Consequently, this situation will inevitably reflect in the social component, economy’s exchange rate and inflation. If this continues, it could develop into these two economic and social problems and then we’ll get very difficult outcomes. Business – particularly, part of it – is significantly worried about this. There was the first precedent in BMG, probably about two weeks ago, when businesspeople gathered together and stated their position that these threats are facing the country, and then there was a discussion about what the next step could be.
The next step was formalizing position of business companies. As we said, the source of all this is political, but it could develop into economic and social problems – and this needs de-escalation.
2. What are the two demands of Free Business based on – new elections and release of detainees?
Now everything is very acute and we have a very tense situation in the country. Therefore, business’s interest is de-escalation and the companies that are joining our statement and those businesspeople who initially discussed this and were concerned – see elections as the best way for de-escalation, because there is a political conflict and in democracy, political conflicts are resolved through democratic instruments, which is – elections.
The second thing, also very important, is the young people who were protesting the current political situation in the country. We saw that during their detention, after detention and during court proceedings, it was very clearly visible that their fundamental rights were violated. Violence is not acceptable in general, especially violence against detained people, moreover when a person in court proceedings has video evidence that they did nothing wrong. Unfortunately, we have a harmful practice where two police officers can give mutually exclusive testimony to the court and the court gives this, let’s say, priority in decision making, rather than the video material that shows completely the opposite. These people, these young people should not be imprisoned. Society is saying this, international society is saying this, and this is beyond debate.
Therefore, business united around these two main demands: first, that for de-escalation purposes there should be new elections that are fair, transparent, and second, that these people should meet New Year in their homes – and finally there is this very important thing for me in the statement, that regardless of political views or political taste, any business or businessman who thinks that these two steps need to be taken for the country to de-escalate and to avoid those economic and social factors we discussed, can join this statement.
This is a business statement. This is not some political statement. Of course, there are businesses that say that demanding elections is not a political interference, and that’s why they’re joining the statement. At the same time, you can’t solve a political problem with social demands, right? I also find it a bit strange that many companies that actively make donations to political parties are the ones saying today that this demand is political. It’s a bit of an odd situation, as if business should be completely distanced from politics, which is not the case, has never been anywhere and cannot be. Because when company founders make donations to parties, they are of course already acting on politics, and this is a normal thing. This happens in many countries, it happens in Georgia and that’s how it should be.
But suddenly demanding elections for de-escalation has become such a political matter that some companies chose to distance themselves from. However, I don’t think that a political crisis can be resolved with economic demands. It somehow needs to be resolved by incorporating political demands. We see that for twenty-six days, I think, people are standing, protesting and demanding also, this, this step, which is the only rational step in this situation.
3. How do you directly see this platform’s purpose and what does your mentioned so-called “dollar voting” – or in Georgian, “lari’s voice” mean?
Why did we create this platform? We created this platform because I think that business needs to undergo transformation. In the nineties, after the Soviet Union, business emerged in quite a non-business-like form. It didn’t appear as real business should be. There were people in the country who accumulated initial capital at the expense of country’s assets – at the expense of the population, so to say – and then they have multiplied and enriched their capital.
Then there was a second stage, which is generating wealth in a very close coordination with the government, let’s say, which is also not a good business practice. Good business practice is what we see today among young Georgian businesspeople. This is professionalism, creating good products, creating good services, customer orientation and building organizations around values. If an organization is void of values and its only goal is wealth generation and profit generation – it’s no longer a twenty-first century business. The entire developed, Western world has agreed on this.
Young generation consumers often boycott companies that don’t have values, when they fail in values. Simply there are other problems there. Young people may protest elsewhere, for example, not caring about the environment, lack of ethics in operations, and so on. There, for various reasons, they may reject companies because of unethical operations, or unsustainable development practices.
We have a somewhat different situation here. Here now the main value that is under attack and under risk is our country’s future, and I think and so do many others – over 2400 companies joined our statement in approximately ten days’ process – those people and I also think that a company should have values and should declare these values.
It’s very important that we know the position of those companies regarding the country’s fate whose consumers we are, because there is this very good term called “Dollar voting”. Dollar voting means voting with money. When we buy a company’s product, service, we pay them money. From this money, thirty to forty percent goes to the budget, the rest goes to salaries, profits, development and so on. We, by buying their products, give them a “vote” to continue producing the products and services they make, but also to continue operating with good practices and values. Be it their influence on politics, be it their social responsibility or their values.
Therefore, when we buy a product, we’re not just buying a product, we’re giving this organization an opportunity to grow, strengthen and more actively do what they were doing, both in terms of product, as well as in terms of side processes, social responsibility and political influence. That’s why it’s important for me to know the value chain and structure of that management and founder from whom I’m buying products and giving them a vote to strengthen and grow. And I think this is not just important for me, but for many others.
So we created exactly the platform where these positions will be stored forever. Yes, some companies will make posts, respond to something, some will stay silent, some will express opposing positions and so on. We wanted that for the country during this very important process and at the end of this process there would remain an archive that we can return to one year later, two years later, during the next crisis, which might be an echo of this crisis, and we’ll see who supported which position – who warned us, who fought for specific steps and who stayed silent or opposed. Coming to agreement on some position is one thing, staying silent is another.
4. We often hear from various media about business harassment. You talked about business mutual support. What does this mean?
I think silence is the least acceptable position. And why? Any company operates within society. It benefits from public goods, it benefits from the budget, directly or indirectly, because roads are built, there is lighting, there is security and so on. These are public goods. If these goods didn’t exist, it couldn’t operate and couldn’t generate that wealth. Therefore, this position is unacceptable, that when times are good, business takes benefit from social goods and multiplies its wealth, but during crisis, when the country is struggling – waits for the storm to pass. I don’t consider this a correct position.
Therefore, employees and consumers and society should know companies’ positions and value structure: what they believe in, which direction they’re going, what positions they’re taking. It’s very important that the country moves in a direction where business isn’t afraid to state critical positions. Business creates wealth, business fills the budget. Then this annual budget, which is already over twenty-two billion lari (GEL), should serve the country. Business, when it fills the budget and then doesn’t like how it’s being managed, shouldn’t be afraid to say this, because it doesn’t feel protected, despite possibly working absolutely correctly, transparently and honestly.
But I’m very happy that over 2400 companies have united and they feel more protected, because this is based on the Three Musketeers principle – one for all and all for one. If any company faces problems because they stated the right position – this is already a problem for all of us, and we are obligated to stand by them with all resources we have. That’s why I think that small and medium business, which is really the backbone of the economy, should believe in its power.
Of course, big business is also very important, but business should be liberated, business should believe in its own powers and business should know that it pays a lot of money to the budget and when something isn’t right, it should have the ability to state this boldly.
5. At this time, around 2,400 businesses are joining the Free Business Platform – Freebusiness.ge – what does this mean in terms of Georgia’s economy?
In Georgia, according to official Geostat data, we have two hundred thousand active legal entities. But this is a very inflated number. In reality, those who have turnover, who are established businesses – and established doesn’t necessarily mean large – who operate normally, about 79 000 legal entities annually submit reports to the Audit Service. So this is the real economy, because all somewhat self-respecting companies maintain orderly accounting. They necessarily send annual reports to the Audit Service. Last year’s October was the deadline for submitting reports, which 79 000 companies have submitted.
Accordingly, we’re talking about having 79 000 active businesses in Georgia. But these companies then divide into small, medium, large and very large companies. Also separately are public interest entities, which are banks, pharmacies, large supermarket chains and so on. Public interest entities – we have about 120 companies. Very large companies we have about 135. Large companies we have about 600, medium – 4500 and the remaining 74 000 approximately are already small businesses.
This is the situation and now, when companies are already joining us, we’re moving to the next level of analysis. Until now mainly, to somehow handle this number of companies, because with 2400 companies we went through the verification process in ten days, to make sure that statements are being made by persons who are authorized to speak on behalf of the company, be it founder, director or others.
Of course we’re getting more companies, but not that number, because in the first days six-seven hundred companies were joining per day, and verifying them was quite laborious.
Now we’re moving to the second level analysis, to understand what share this is of our economy quantitatively. It might sound small, but this is the first precedent when business spoke up so loudly. Most importantly, this is a joint statement of small, medium and large businesses. There we see very large companies with hundreds of millions in turnover, we see large, medium and very small companies too. Among them by initial assessment, the turnover of those companies which are now being calculated – the turnover of companies that joined the Free Business Platform statement is over ten billion lari. This isn’t half the economy, let’s say, of course, but this is quite a large number and quite a large force.
Of course this process will continue. More will join us and we have hope that we’ll reach about ten percent of companies, which will be about eight thousand companies.
6. What does Western partners’ support mean for Georgia’s economy?
First, I want to say thank you {to Western partners}, because during these 33-34 years since we gained independence, we went through a very difficult period and there was constant support from our Western friends.
They truly haven’t deserved that attitude and those statements that were made towards them by the government. Also, what I want to say is that we look at them as an example of how business should be, how strong small and medium business should be and how it should be so that this agreement, which we’re working on, that business should be socially responsible and business should return part of its wealth back to the society, not only in the form of taxes, but in the form of social responsibility and with its values in the right vector.
I really want to see Georgia one day fully integrated into the EU economy, because this is a huge opportunity. When we talk about large business in Georgia, this is medium business by European standards or even less – there are enormous opportunities in terms of innovation, enormous opportunities in terms of production and various industries. Most importantly, everyone knows historically and today too, that this is this reliable economic partner on which you can build long-term strategic partnership, and not that northern vector.
Therefore I am very grateful, personally, for all this period, today’s, this support and all support expressed during these 33-34 years and hope that we’ll manage to be worthy partners.
7. What values unite the members of Free Business Platform?
In 2400 companies there will be all kinds of companies – there will be large, there will be small, there will be such that let’s say personally me or even with each other, on some values they agree, on some values they might not agree, some things they view similarly, some differently. But this Free Business Platform is only a platform of people united by values. There is no economic interest there, no lobbying interest there.
Simply, these company founders (there may be exceptions), but the absolute majority has several things that I think are common for everyone. First is that I think all founders are brave. Second I think that {these companies} care more about the country, they put country’s interests ahead of their personal interests. Third: I think that despite having large companies too, they think more about the country together with consumers, rather than their potential behind-the-scenes relationship with the government. These several things we can say about these companies, and I think that in this regard some kind of unique unity was created. These are brave people, these are freedom-loving people, these are people oriented towards European values and development of this type of business, and they want to do real business. They don’t want to do corrupted business.
I have many young businesspeople around me who don’t know how to work in a corrupted system. If Russian influences strengthen here, business will automatically become different. It will be corrupted. It will be oriented on arranging things with institutions and not on building right business, right values and consumer-oriented business.
We already have a whole generation of entrepreneurs, business people who neither know how to work in corrupt, un-European environment nor know how to work in corruption, don’t know how to arrange things with government, most probably have never donated money to anyone for benefits, and so on. Therefore such people are many – I personally know how many, very many, who are like this and that’s why they joined this platform, because they want to do right business, they want to do honest business and they want to be protected, because they do right and honest business, and the system shouldn’t harm them because they are right.
This is the main problem, which I think 99% of these businesses would agree on: that they want to operate in a fair environment. From the principle of separation of powers, this means that even if executive government wants your business to go badly, your business to stop or restrict your freedom, for this there is court which should balance this branch of government. That’s why I think several things unite these people: their courage, their love of freedom, their love of justice, their European orientation and desire that new generation business practices become dominant and gradually move away from business practices inherited from Soviet Union.
8. What would you tell those companies who haven’t yet made a decision whether or not to join the Free Business Platform?
To those businesses that haven’t yet joined our platform, I would tell them several things. First, I would tell them to join because there are such companies here that I would want to stand beside these people. If I had to choose and hadn’t made a decision yet – I would want to stand beside them – I would stand proudly {beside them}. And conversely – I couldn’t sit proudly at yesterday’s meeting with the prime minister.
Second is that we are many and we’ll put our best efforts to protect each individual business, if problems are created against them, we’ll stand beside them with all resources we have.
Third, I would say that it is not our goal to damage anyone’s business. Our goal is not that somehow either some company becomes victim of bullying or we damage their sales or somehow situation gets mixed up in company – because employees will ask questions: “Why aren’t you joining this statement?” and so on. These things might happen, we can’t give guarantees to anyone about this in the process, but this is not our goal. Our goal is more long-term, that business becomes healthier, business distances itself and detaches from some coordinated shadow arrangement practices with government.
Our goal is that business should be accountable, first of all to society and not just to government. Our goal is that business should believe that it pays much money to budget and it has the right to raise voice, and shouldn’t be afraid of this. If these companies who aren’t joining, ask themselves: that I’m not joining because maybe later I’ll have problems, despite working honestly – exactly that answer is the reason why they should join, because if they believe in their hearts that they might have problems because they raised their voice – that’s exactly the problem we’re fighting against. That’s why they should join. The more we are, the sooner business’s bright side will become reality rather than a dream.
“Lari’s voice” – or dollar voting – this term is very important. Consumers and employees should realize their power, just like companies. Company doesn’t exist as something brought from air. This is union of people, don’t people individually have values? Do these values disappear? Everything starts with a mission, what mission we have, what we’re doing, what we’re uniting around. Then specific decisions follow, products and team growth. In teams too, they look for such people who have same values as company’s mission – the 21st century business cannot be just about the money. We should go beyond this and should have very clearly defined value system.
9. Finally, what are three key words that reflect your wish for Georgian business, why you want Euro-Atlantic integration?
Justice, diversity and development.
I wish our country great success and I want to see such {country}, where if any one person stands and protests something, it’s a problem for everyone and everyone listens. If one company has a problem, is being unfairly oppressed and asks for help – ten thousands of companies would stand beside them, it would be a fair state. I want Georgia to be a country, where fundamental rights of every person and every organization are inviolable.”
Editorial note: In the 2024 parliamentary elections, observer organizations revealed serious violations at many polling stations, where the total number of voters is 417 000 people – which is approximately one-fifth of the voters who participated. Serious and systemic violations are also confirmed by OSCE/ODIHR in its final conclusion published on December 20.
At the peaceful civil protest, in which hundreds of thousands of citizens participate, after “Georgian Dream” party’s decision to suspend integration with the European Union, more than 460 people have been detained, of whom at least 300 have been subject to violence and in some cases – there are traces of torture.
