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Capital Markets

Georgia’s success story may have sting in its tale

The country has come a long way in transforming a reputation as an opaque, corrupt state into a model open economy with aspirations to be a regional hub in trade and finance. But can its achievements survive the political upheaval threatened by elections?

Ten miles from Tbilisi, the Georgian capital, sits the smallish city of Rustavi. It doesn’t look as if it could or should be home to one of mankind’s more daring socioeconomic experiments, but it is. On the edge of this nondescript settlement, once home to generations of Soviet-era steel workers, sits a series of parking lots, each filled to bursting with second-hand cars.

Every conceivable make of automobile is here: Mercedes-Benz and BMW, Toyota Land Cruisers and boxy little Kias, souped-up Range Rovers and bulked-out Minis. All have arrived from Germany, either overland on trailers or on container ships via the Bosporus and the Black Sea. They sit here, row upon row, mile upon mile, their mirrors and windows glaring in the piercing April sun.

With the right papers you can buy a car here, in cold cash, in five minutes. It takes another 15 minutes to walk to Rustavi’s nearby Public Service Hall (PSH), where you receive your number plates, and a further 10 minutes to secure a full set of transit documents, noting the point where the car entered Georgia, and the point where it will leave.

No service tax (and no bribe) is paid at any point: just a tariff based on the size of the engine, payable to a smiling clerk sat at one of the PSH’s kiosks, which also process everything from passports to hunting licences to permits to start a company.

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