On September 18, a group of truck drivers gathered for a second day of protests against the Georgian Finance Minister Ivane Machavariani’s decision to ban import of wheat by road.
By the Minister’s order issued on August 22, wheat can be transported to Georgia only by sea, or by train. This rule was to come into force on September 15, but its enactment was postponed till October 1, amid truck drivers’ protests.
The protesters claimed that the government first tried to run them out of business by increasing prices on services and creating other administrative barriers, but having failed, decided to impose a blanket ban.
“It is no democracy. There is no free competition here,” one of the protesters said, adding that the government justifies their decision by saying that the trucks create delays at the border crossing points, which inconvenience tourists, and also that they import low quality wheat. “If we are importing low-quality wheat, why do they allow us in Georgia with low-quality wheat?” the protester asked.
The protesters also said that about 3000 persons are engaged in this business, mostly as small, private drivers and truck owners, the majority of them claim to have taken the bank loans to organize wheat shipments from Russia. “We give the Finance Minister time until tomorrow evening [to revoke the decision]; otherwise, we will continue rallies across the country,” they said.
According to Geostat, in January-August, 2018, wheat accounted for 1.2% of the country’s imports (USD 71.5 million).
Rationale behind the ban contested
The Georgian Finance Minister made a decision to restrict wheat shipment via road in August, citing the queues at border crossing points as the reason. “A lot of people recommended their relatives and friends not to leave for Georgia. So, we could not tolerate it and therefore made a decision to restrict import of wheat by trucks,” he told the reporters at the time.
Vaso Urushadze, Executive Director of HUB Georgia, a platform working on transport-related issues, told Civil.ge that the Finance Minister’s “unilateral” order was “illegal,” and that it also contradicts to the Georgian legislation.
Urushadze backed his opinion by the Georgian Law on Competition, which says the state authorities may not “make decisions that result in the monopolistic position of undertakings, there by substantially restricting free pricing and competition, except as provided for by the legislation of Georgia.”
Urushadze said certain companies, who mainly imported wheat by sea or by train before 2013, had monopolized the business, but other, small entrepreneurs started importing wheat by road.
“This of course has created problems to the large monopolist companies,” Urushadze said. He believes there was a “deal” between the Government, certain “informal decision-makers” and private companies: “We have a classical example of how the Government is trying to create a monopoly artificially, rudely interfering into the private sector and restricting competition.”
HUB Georgia’s Executive Director further underscored that the restrictions would not only affect the importer companies, but ordinary citizens as well, because the basic products like bread, “significantly depend on the value of the [commodity] products they are produced of.”
While the Competition Agency is authorized to address such claims, Urushadze said it has not been effective, and plans to file an appeal at the court against Minister Machavariani’s decision.