On 24 July 2014, in his interview with the British newspaper, The Guardian, the Minister of Economy and Sustainable Development of Georgia, Giorgi Kvirikashvili, stated: “We have the lowest taxes in the region, simplified border procedures, a corruption-free environment and very good public services. None of the countries in our region can offer such conditions to the West.” (www.ipn.ge) FactCheck

took interest in this statement and verified its accuracy.

A comparison of the business conditions in the different countries of our region requires a complex economic analysis. However, in order to simplify the task we can use the international ratings which monitor the investment and economic conditions of the countries. These ratings look into the factors that influence the commercial activities inside the country. One of the most popular of such ratings is Doing Business which is carried out by two organisations of the World Bank Group: the World Bank (WB) and the International Finance Corporation (IFC). This research has been carried out in all of the World Bank Group member states since 2004. Doing Business

includes the following components:

1. Starting a business
2. Dealing with construction permits
3. Getting electricity
4. Registering property
5. Getting credit
6. Protecting investors
7. Paying taxes
8. Trading across borders
9. Enforcing contracts
10. Resolving insolvency

According to Doing Business 2014 (research of 2013), Georgia holds the 8^th position in the ease of doing business rating. In 2013 (research of 2012) Georgia held the 9^th position in the rating whilst in 2012 it ranked 16^th.

It would also be of interest to examine the different components of the aforementioned research and compare them based upon the region.

Chart 1:

Component/Country	Georgia	Azerbaijan	Armenia	Turkey	Ukraine	Romania	Bulgaria	Russia
Doing Business 2014 Ranking	8	70	37	69	112	73	58	92
Starting a Business	8	10	6	93	47	60	65	88
Dealing with Construction Permits	2	180	79	148	41	136	118	178
Getting Electricity	54	181	109	49	172	174	135	117
Registering Property	1	13	5	50	97	70	62	17
Getting Credit	3	55	42	86	13	13	28	109
Protecting Investors	16	22	22	34	128	52	52	115
Paying Taxes	29	77	103	71	164	134	81	56
Trading Across Borders	43	168	117	86	148	76	79	157
Enforcing Contracts	33	28	112	38	45	53	79	10
Resolving Insolvency	88	86	76	130	162	99	92	55

Source: Doing Business 2014. World Bank

Chart 1 makes clear that Georgia is a leader in the majority of components. However, it should also be noted that the main focus of the research is to determine the number and difficulty of the bureaucratic procedures and it does not take into account other important factors such as: the qualification of the labour force or the infrastructure development level. However, Georgia does have the best results in the fields of taxes and public services, as stated by the Minister.

According to the statement of Mr Kvirikashvili, Georgia has the lowest taxes in the region. The Doing Business

research addresses the issue in its component of tax administration. The amount of taxes and their share in the untaxed earnings of the companies are calculated separately for each country. The results for the aforementioned list of countries look like this:

Chart 2:

Country	Georgia	Azerbaijan	Armenia	Turkey	Ukraine	Romania	Bulgaria	Russia
Number of Payments	5	18	10	11	28	39	13	7
Share of Taxes in the Total Profit of the Company %	16.4	40	38.8	40.2	54,9	42.9	27.7	50.7

Source: Doing Business 2014. World Bank

Chart 2 shows that Georgia does have the lowest taxes as compared to the other countries of the region. The number of payments is also fewer, indicating fewer bureaucratic problems.

Giorgi Kvirikashvili also talked about the low levels of corruption. According to the research of Transparency International, Georgia holds the 55^th position in the 2013 world ranking of corruption and only Turkey has lower corruption levels in the region (53^rd position). Russia and Azerbaijan ranked 127^th, Armenia – 94^th, Romania – 69^th and Bulgaria was 77^th.

Hence, this part of the statement of the Minister is also mostly true.

Conclusion As a result of its study FactCheck

found that Georgia does indeed have the lowest taxes and fewest bureaucratic barriers in the region. It is also a leader with the lowest levels of corruption. However, it should be pointed out that when it comes to the decision of whether or not to invest in a country, not only low taxes and bureaucratic procedures are taken into account by the investors. The most important factors in this sense include: qualification of the labour force of the country, the extent and the potential of the economy and the necessary infrastructure for international transits (level of development of sea ports, railroads and motorways). Geopolitical and domestic stability are also taken into account. These factors greatly influence the decisions of the investors in most of the cases. Even though Georgia can offer a good environment for investment, it lacks the level of infrastructure and extent of the economy enjoyed by Turkey, Romania and Bulgaria.

Based upon the aforementioned factors, FactCheck concludes that Giorgi Kvirikashvili’s statement: “We have the lowest taxes in the region, simplified border procedures, a corruption-free environment and very good public services. None of the countries in our region can offer such conditions to the West,” is MOSTLY TRUE.