Why are they Still in Business?


The failure of the idea of communism and the demise of socialism 30 years ago on the territory of the former Soviet Union has mostly been succeeded by the appearance of the wildest possible capitalism on the selfsame territory, including in Georgia. Almost every possible brand in the world has emerged here since then, from Coca-Cola and McDonald’s to famous French perfume firms and wine stores. Tbilisi is literally overflowing with foreign vestment shops and kitchen utensil joints. Chic trade malls have become a regular sight here and restaurants look as rich as in any famous city of the world.

These are all the unfailing features of a country which is flowing with milk and honey and where a high standard of living is a norm. Is this true or not in case of this particular country? Those who are fixtures in those stores and restaurants will say yes, but they are in a flagrant minority, and those who make the unfortunate majority will definitely say no. Let us go to those new-born malls and stores and count how many clients they enjoy round-the-clock. They are often more empty than not, only seeing the occasional straggler sauntering in to enjoy the air-conditioning in the summer heat or, in winter, to warm up. The reason for that emptiness is that the prices in those unnatural-for-a-poor-country places are through the roof. Who buys food or merchandise there? How can a nation with only 3.5 million people, the majority of whom cannot even pay their monthly utility bills, create a clientele for stores and restaurants with prices like that?

So, how come they are still in business? I think this is the question of the century, and that question needs not only to be asked but answered, too. The survival of a business in an environment which is devoid of market features is almost impossible. If you don’t sell your product, how can you continue operating? There is something uncannily fishy in businesses which are not making money and are still out there in the marketplace. Who is helping them? Are businesses like this subsidized? Why? What is the bottom-line? What special goals are they pursuing? I can understand why people want to keep television and radio stations running without any remuneration – these are wonderful toys in the hands of those who make money elsewhere and consider radio and television as a medium which is worth investing money in, catering to their own, deeply private interests, but why do people keep merchandise stores which are not frequented at all, or are visited only sporadically? Perhaps this is a feature of the economy of a developing country where people are charitable enough to let the business environment mature so much that in a couple of hundred years they might yield something lucrative, letting tomorrow’s generation enjoy today’s investment in their noble predecessors.

I apologize for my sarcasm, but I am sincerely interested in why it makes sense to run a store which is visited by no or few customers. Truth has become a very expensive commodity in our times but the human aspiration to its essence is so overwhelming that we cannot but stay curious. Would anybody venture to give me that piece of the truth?

Nugzar B. Ruhadze

10 August 2017 18:33