Kakha Bendukidze, Georgian economist and that country's former economy minister, died in a hotel room in London on Nov. 13 of heart failure, aged 58. He had been recovering after undergoing heart surgery in Switzerland.
Praised
for improving Georgia’s position in the World Bank’s Doing Business rating up
to 11th place from 137th in 2004-2007, Bendukidze had served as a counselor to the
Ukrainian government since May.
“At
53 percent of GDP in public expenditures projected by the IMF in 2014, Ukraine’s
public expenditures are far too high. That leaves only one alternative to
close the gap: extensive budget cutting,” Bendukidze wrote in an article
for the Kyiv Post which was the last bit of writing the economist saw
published. “The best comparable countries are the Baltic
states that have public expenditures of 34-38 percent of GDP.”
“Big
cuts should be directed to the old Nomenklatura. Many of their privileges are
hidden in the uniquely high public pension expenditures of no less than 18
percent of GDP. Special pensions alone amount to 4 percent of GDP,” emphasized
Bendukidze in a joint piece prepared along with Daron Acemoglu of the Massachusetts
Institute of Technology, Anders Aslund of Peterson Institute and others.
Bendukidze’s
reforms in Georgia were about attracting investments into the country
through the sale of state-owned property in an extensive privatization program. As minister, he cut a number of taxes in the 4.5-million strong nation from 22 to 6, which
made life for small and medium businesses, a traditionally underdeveloped
segment of the economy in post-Soviet countries, much easier.
Holding
degrees in biology from Georgia’s Tbilisi University and Moscow State
University in Russia, Bendukidze launched a biochemical factory in 1988 that
allowed him to earn enough money to acquire 17 percent of Uralmash, a major
Russian machinery builder, for an extremely low price of $500,000.
Later,
he started United Machinery Plants, a holding that produced energy
equipment, on the basis of Uralmash capacities. Bendukidze merged UMP with
Power Machines, another Russian machinery producer, in 2003 and eventually sold
his 42 percent stake in UMP for $50-70 million, according to Vedomosti, a
Moscow-based business daily.
After
serving as Georgia’s economy minister in 2004-2008 under the presidency of
Mikheil Saakashvili, he chaired the Free University in Tbilisi.
“Once
I was flying in a plane with a sincere young woman from Georgia who was
criticizing the regime of Saakashvili, but was coming back on her summer
holidays from the Georgetown University,” Sergiy Fursa, an expert on bonds
with Dragon Capital investment house in Kyiv, wrote on
Facebook. “She lived in a world build by Kakha (Bendukidze) and Mikho
(Saakashvili)… but didn’t like the regime. She just didn’t remember what was
there ten years before and didn’t understand why she had a chance to study in
the States.”
“Two
week-ends ago we had a dinner together (with Bendukidze) and argued a lot. Just on
Monday (Nov. 10) we were exchanging emails about the meeting. And now he’s not
here. Sad. Something has broken. RIP, Kakha,” posted Dmytro Shymkiv, deputy chief of staff of the Presidential
Administration of Ukraine.
Kyiv Post associate business editor Ivan Verstyuk can
be reached at [email protected].
