LESSONS FROM GEORGIA
Tbilisi, Georgia. Despite having been invaded two months ago by a country 30 times its size, the Republic of Georgia appears to be dealing with that crisis far better than the United States and other major governments are dealing with the international financial crisis, and thus the question is, "Why"?
The answer quite simply is that the Georgia leaders are not so arrogant to think they know better than markets, and hence they are relying on the market to solve most of their problems.
The prime minister, Lado Gurgenidze, was both educated and spent considerable time in England and clearly was influenced by Margaret Thatcher. I asked him if he was concerned that the pressures to grow the size of government because of the invasion would undermine Georgia's reforms (note: history shows governments almost always grow in relative size versus the private economy in the time of crisis, such as wars or financial instability, even if governments create the crisis).
The prime minister replied that the Georgians have not retreated from their reforms, including shrinking the size of government, and they fully understand any retrenchment would be very damaging.