THE PLACE OF ECONOMIC FREEDOM IN THE ECONOMIC POLICY OF THE COUNTRY

Abstract

A market economy is based on economic freedom, which is revealed in freedom of choice. Choice is the main precondition for competition, and competition is the main driving force of economic development. Economic freedom contributes to the development of the economy of country and the well-being of the population the country depends on it. The International Heritage Foundation has been conducting annual surveys since 1995 on the fulfillment of these conditions in 180 countries around the world, including Georgia. The index of economic freedom in Georgia changes every year. A country is considered economically free if it does not restrict individual choice, voluntary exchange, freedom of competition. A necessary condition is the protection of private property. In an economically free society, every person has the full right, at his own discretion and in the conditions of free choice, to achieve his own goals, the state does not interfere in its activities and choices. It should be noted that economic freedom does not mean economic independence. At the present stage of society's development, the economic activities of any economic entity are so intertwined, so dynamic and in-depth, that the notion of economic independence sounds more an anachronistic than a 21st-century achievement.This applies to relations between countries, as well as relations between individuals and legal entities. Economic freedom means, above all, freedom of choice. Index of Economic Freedom (Economic Freedom of the World) is a measure of economic freedom compiled by the Heritage Foundation, a leading center for American policy research and ,,The Wall Street Journal“ . This index has been established since 1995.The world rating of "economic freedom" has a great importance in terms of further attracting investment in the country. The Index of Economic Freedom is based on ten criteria. These are: freedom of business, freedom of trade, fiscal freedom, government costs, monetary freedom, freedom of investment, financial freedom, property rights, freedom from corruption, freedom of labor. The information on the results of survey of the Heritage Foundation "Economic Freedom Index" 2020 is posted on the official website of the Ministry of Economy and Sustainable Development of Georgia, according to the survey 2020 of the "Heritage Foundation" Index of Economic Freedom " rating score of Georgia reached a historical maximum - 77.1 points, it was promoted by 4 positions in the world ranking and took the 12th position. Compared to the previous year, Georgia was promoted by 2 positions in the European region - with this result Georgia is in the 6th place among 45 countries in the European region with the status of "mostly free". Total score ofGeorgia exceeds both the regional (69.8 points) and the world average point (61.6 points). In our view, property rights are crucial in this large system of valuation. In terms of private ownership, the benefit or loss is the property of the owner, which gives him an incentive to use the resource efficiently. When a resource is transferred to collective ownership, the responsibilities are dispelled, and the different motives of the owners ultimately make the preservation and reasonable use of that resource less possible. An even worse result is achieved if the asset becomes state-owned, because then the liability for profit and loss is not dispersed but divided among different groups.There are known cases in the Czech Republic, Poland and Hungary, where after the end of socialism, the profitability of privately owned companies increased by an average of 77% in just a few years. There are many such stories in the former socialist countries, although privatization is a permanent process in developed countries as well, and the value of privately owned assets around the world has, in fact, been rising every year since the 1980s.