Making profitability the primary goal of state-owned enterprises is the wrong approach, says Gia Jandieri, economist and vice president of the New Economic School – Georgia. Speaking on the TV program Business Course, he argued that state-owned companies should operate only in sectors where the private sector cannot fulfill the necessary functions.
“If a company can generate profit, it should be private. One reason to establish a state-owned enterprise may be that the private sector is unwilling to operate in a particular area because it is unprofitable,” Jandieri said. He added that state-owned companies should have clearly defined social or strategic objectives, allowing citizens to assess whether they are fulfilling their intended purpose.
Jandieri also questioned the state’s ability to manage businesses effectively and argued that clear accountability mechanisms are essential. If a state-owned company serves a social purpose, such as subsidizing Tbilisi’s public transport system, the government should specify its objectives and demonstrate whether they are being achieved.
The comments follow the government’s approval of the 2026–2027 State-Owned Enterprise Reform Action Plan, which aims to introduce corporate governance standards in at least 10 state-owned corporations by 2027. The plan also provides stronger financial oversight, including supervision of state-owned corporations with annual turnover exceeding GEL 10 million.
