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Economic reformer fired from Georgian government

Published 02/09/2009, 05:44 AM
Updated 02/09/2009, 05:48 AM

TBILISI, Feb 9 (Reuters) - Georgia's new prime minister, Nika Gilauri, has sacked a reformer who played a central role in opening up the economy to investors.

Industrialist Kakha Bendukidze left his business interests in Russia to join the Georgian government five years ago as minister in charge of economic reform. He was moved a year ago to government chief of staff but remained an influential figure in shaping economic policy.

"I can confirm that the prime minister made a decision on the removal of Kakha Bendukidze," Avto Pavlenishvili, spokesman for the Georgian prime minister, said on Monday.

"The prime minister ... thinks there is someone other than Bendukidze who is more appropriate for the post of head of the government administration," he said, without saying who would replace Bendukidze.

He said the prime minister may offer Bendukidze a job as an advisor.

Georgian President Mikheil Saakashvili persuaded Bendukidze to leave Russia and join the government soon after the 2004 "Rose Revolution," a peaceful uprising which ousted an administration that had overseen years of economic stagnation.

Bendukidze implemented ultra-liberal economic reforms which included auctioning off state property and introducing one of the world's lowest rates of income tax.

Those reforms won praise from the International Monetary Fund and attracted a wave of foreign investment which helped the economy notch up 12 percent growth in 2007.

Last year's war between Russia and Georgia -- coupled with the effects of the global slowdown and mounting Western criticism of Saakashvili's democracy record -- have undermined investment.

Official figures for gross domestic product in 2008 are not yet available, but the government expects growth to have slumped last year to 1.5 percent.

Before returning from Russia to his native Tbilisi in 2004, Bendukidze was chief executive of OMZ , one of Russia's biggest engineering firms.

The 51-year-old has been one of the few economic heavyweights with business experience inside a Georgian government where many of the ministers are in their thirties.

The Georgian president named 33-year-old Gilauri as prime minister last month, the fifth person to hold the job in Saakashvili's five years in office. (Reporting by Margarita Antidze; Writing by Christian Lowe; Editing by Ruth Pitchford)

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