Country light business behavior

Страна легкого бизнес-поведения

Oh, guys, as I just rolled these international rankings. And especially the reaction to the sacred points of our “iksperdov”. Ukraine has risen by 64-th position in Doing Business. Oh, what a joy! Poroshenko shouts – my merit. “Green” – not ours. Immediately jumped out evrointegranty: and Georgia on 7-th place, she was all done! You seriously think so? Then you’ve never been in Georgia and certainly did not conduct business there. And why all the silence that Luxembourg holds 72? Although they have a GDP per capita of $114 234, and we have $3095?

Let’s start with “doing” and Georgia will finish. Although it is very desirable — on the contrary. But entertaining and funny will leave on snack. So what is Doing Business? This annual ranking of ease of doing business world Bank, which is based on ratings submitted by lawyers, auditors, accountants etc. from the point of view of the influence of the normative-legal acts on the activity of the average company.

This is not a rating of investment attractiveness. This is not a ranking of the potential capacity of the economy. There are not assessed public debts, interest rates, solvency of the population, and very roughly — the level of corruption. Solely in terms of direct impact on the business. But there is also indirect. Therefore, the results are amazing.

The lungs have one? Neophytes European way of development. Georgia — 7 position, Lithuania — 11th. Estonia on the 18th place, Latvia on the 19th. Kazakhstan occupies the 25th place, Russia — 28, Turkey — 33, Azerbaijan 34 , 40 in Poland, Armenia — 47, Moldova — 48, Belarus — 49, Bulgaria — 61, Slovakia — 45, Romania — 55, Hungary 52.

Don’t know how objective their assessments of Russia and Belarus. Maybe there’s really not so difficult to do business as it seems. But why “graze back”, Luxembourg, Malta, San Marino, which lost among the African and Latin American countries? And they have-then what’s the problem? No banditry, no corruption, perfect roads, financial crises are a party.
It turns out that six criteria by which is the consolidated score Doing Business, accounted for only very specific times.

1) building Permits. Well, with this we have, frankly, a complete ass. Is difficult to obtain, and be certain that hindsight will not be canceled — even more difficult.

2) Access to the grid. Greatly underestimate this factor. And it is very important. What could be a business if there is no electricity? And to connect Ukraine to electricity is a science of survival. They should not only “zabashlyat” officially, but to find a common language with the managers of the energy company, shell owners energolinija and so on. And the cost of our electricity is already higher than in Eastern Europe. No wonder Igor Kolomoisky began to purchase electricity in Russia. Image is nothing, profit is everything. And with our energoresursami for which a low bow to Europe, cheap no.

3) Registration of property and land. You can register. To be sure that no one will overwrite the registry your assets themselves cannot. Raiding was, is and will be. Is our everything!

4) Obtaining loans and the base of borrowers. Well, as for me, no problems with it. Problems with loan defaults — we have a share of non-performing toxic loans (NPL) in the portfolio of banks 51,68% of the total. Therefore, most of the foreign banks that so well here, “grazing” in the mid-2000s, has already ran off. And the other shrunk to the level of formal representation.

5) Protection of minority shareholders. Know comments. We laugh together. Can even the court to go and experience all the delights of BDSM domestic judicial system.

6) international trade: time for import clearance, certification requirements, etc. With this all as would be standard bureaucratic, but it is so corrupt that to get into the business side without well-established “channels” – a recipe for commercial failure. And how much customs is not reformed, hipsters it is not set up (such as Maxim Nefedov), foreign consultants shall not be hired, the situation has not changed.

Now two questions arise? And that, in Georgia better? And Luxembourg worse? And why in Luxembourg, which occupies the 72nd place in the ranking, last year went down $20,318 billion in foreign direct investment, and in Ukraine – $2.5 billion? Despite the fact that the Luxembourg area comparable, rather than with Ukraine and with Georgia, where last year invested as much as $1.86 billion of foreign direct investment, despite the 7-th place in Doing Business. As said Taras Bulba: “Well, son, you have helped your poles?”.

And it is very important to look at the expense of what Georgia has such a high score, and in Luxembourg — low. Items in the “access grid”, paying taxes (offshore is offshore), international trade, investor protection, etc Luxembourgers them all wonderfully.
The problem are the “registering property” and “obtaining credits”. Wanting to get into the tiny financial harbour in the centre of Europe so much that the new is not accepted. To register a business in Luxembourg is very difficult. It is necessary to take someone from the local. And the entire adult population of a total of 602 thousand people have already “sold out”. Same problem with the banking system. The point is not to get credit, but to just open an account: willing to place money so much that they simply refuse.

Where poor investor to go? Can come to us. To invest in bonds or even in banks. Or invest in Georgia. There all easy and wonderful, as we see by the score, and power you will connect, and the business register, and the estate sold, and the building permit will issue. And export of Bay leaf, wine and “Borjomi”(don’t know what else from Georgia to export?) and did not have any problems. Take me as you take.

So don’t want infection! Do not invest in Georgia rating. And even in “poliuretanovuju” Ukraine. Strive by hook or by crook to get to Monaco. Goes, ease in business, as in behavior is not always good. Matter and other factors, which in their General mass create a sense of convenience and comfort. And I understand these people.

Because all the advertising slogans of the Caucasian Las Vegas, on luxury brand boutiques and restaurants, high Georgian cuisine in Batumi nice break on the first thing you face when booking the hotel, even the coolest, on the waterfront, stars in four: this is a proposal to pay cash, not card. And not just in cash upon arrival a prepayment in Kiev “Gog who will come from Givi”, of course, without any checks and receipts.

Corruption, of course, no no. But if a ski area blocked the road due to the threat of collapse, the only way to unlock it is to ask the owner of the hotel contract with the “owner” of local emergency services to clean or skip.

And it’s all so reminiscent of the Ukraine in the early 90s that just wonder: where are the eyes of the world Bank, which assigns a squiggle and is Doing Business? They do not even bother that the volume of investments in Georgia in 2018 decreased by 34.9% (!) compared to the 2017 year. As said Deputy Minister of economy and sustainable development Catherine Nikabadze: reduction of volume of foreign investments not related to any fundamental risk or deterioration in the investment environment. And what is it about? With the improvement of the investment environment?!

And to understand what it is actually, I suggest reading the wonderful fragments of opus one real investor, though small, I found in LJ. You will understand everything.
“Don’t like “pouring water”, so will explain their decision to sell the property and to leave from Batumi following:

1. Since the 2011, when I bought 4 apartments in Batumi, property prices slowly but consistently decreased. If the earlier apartments in the conventional towers “Orbi” on the waterfront cost of $2000 per meter, now 1000-1200.

2. Due to uncontrolled development and lack of government control beautiful Batumi has become one solid building, partly abandoned. Unfinished sticking out everywhere, and the area around them like the aftermath of an atomic explosion over the mountains of debris.

3. Most construction and existing buildings do not meet construction standards and building codes. The house is not only losing a “trademark” look after a couple of years after delivery, but occasionally they fall from balconies, crumbling plaster and torn, the elevators.

In 2012 I started to rent an apartment in Batumi through Airbnb and competitors were few – twenty apartments in the entire city. Today on Airbnb several thousand apartments for $25-30 per day, and costs for public services has increased since 2011, three times (think Laundry, cleaning, replacement of bulbs faucets-houseware, cosmetic repairs).

We are discussing a situation in which you are living in Batumi and themselves sit and serve their apartments. But not everyone can afford to go to live in Georgia. In previous years the Commission was in the city about 20% of the profits. After the competition for the delivery of increased and prices fell, taking 40% of the profits. I mean, what kind of freak would wash clothes, repair the damage, meet and see off tourists for 2.5 bucks? It does not happen.

Who will rent out your apartment in Batumi? Good question. In about 100 firms that specialize in the delivery of housing, but only a few can be trusted. I assure you, 9 out of 10 firms – the usual irresponsible blockheads, and some even crooks. Many have caught on that their apartments were taken in the management of obscure girls from Ukraine for a ridiculous 10% of the profits. And then rented apartments for prostitutes and their clients.

In past years, 80% of all buyers were Ukrainians, Belarusians and Russians. In 2018 our people among the buying has already become about 30% and the remaining 70% are Turkey, Iraq, Iran and the Emirates. From the once famous health resorts of the USSR Batumi has turned into a solid construction, and the Arab Bazaar. The Turks are buying up housing to come and play in the casino, plus the best Georgians. The Arabs for the same reason.

The Georgian leadership for many years, gave everyone the chance to do in Batumi whatever they please. Buy apartments and houses, take, earn. Even taxes are not required to pay, at least, of punitive sanctions was not. Moreover, infinitely liberal visa laws – live year-round in Georgia, no visa is not necessary. Nepoymi who come in large numbers. Now the Georgians depends on all who are willing at least to pay something and that’s a fact…”.Egor Smirnov