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An Imf Success Story? Try Georgia


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AN IMF SUCCESS STORY? TRY GEORGIA

As a result of its International Monetary Fund-supported economic reform program, the country of Georgia is a winner, as Gary S. Becker states in "A free-market winner vs. a Soviet-style loser" (Economic Viewpoint, Aug. 3). Nonetheless, Georgia still needs to raise more revenues. Tax receipts amount to less than 10% of gross domestic product. This covers only two-thirds of spending. No wonder the IMF is pressing the government to increase its revenues. But not, as Becker implies, by raising tax rates. Rather, we recommend removing exemptions to widen the tax base, and improving compliance.

In its IMF-supported programs, Georgia has gradually raised revenues from virtually zero five years ago to 10% of GDP today. That is one of the keys to Georgia's remarkable stabilization from hyperinflation in 1994 to less than 10%-per-annum inflation now. Other reforms--including privatization, improvement of corporate governance, building a sound financial system, and an independent and well-functioning system--are creating the basis for greater investment, sustainable growth, and a reduction in the size of the underground economy. Gary Becker is surprisingly off the mark in his analysis of Georgia's economy and the IMF's role in this impressive success story.

John Odling-Smee

Director, European II Dept.

International Monetary Fund

WashingtonReturn to top

ALL'S NOT FAIR IN EXECUTIVE DIVORCE

For many, the most painful and unfair part of divorce is deciding about children and custody ("Divorce, executive style," Cover Story, Aug. 3). The historic bias is unequivocal: Women receive sole or majority custody in almost all cases.

Property division is typically done independently of custody issues. In most cases, a husband and wife split their assets 50-50 and then divide the caretaking and raising of children on an 80-20 basis, often with large monthly child-support payments (that are untaxed to the recipient) to the mother. Does this seem fair to the father or the children involved?

While 1990s America is comfortable with an even split in property, it appears to be resisting a natural, equitable time-share for children with their parents. This seems to have been lost on Alice Hector, who, as noted in your story, was "outraged" that her husband was awarded custody after being a stay-at-home dad. If the $300,000-per-year lawyer-parent were the father and not the mother, this would be hardly worth mentioning. The mother would get half the assets, custody, monthly child support, and alimony--and nobody would think twice.

Until men and women can see that there are issues on both sides that merit collective evaluation, there will remain large gaps in perceived bias by the two sexes, as clearly documented in your polling data.

Mark Kelley

Del Mar, Calif.

Although the social stigma of divorce has lessened, there is, as you show, a new disincentive to corporate divorce--namely, the sizable cost a divorcing executive's company absorbs in resources, time lost, and opportunities missed--not to mention the bad publicity.

Corporate boards, with more at stake than the personal life of one executive, may increasingly distance themselves from embattled and distracted workers. Lacking corporate support, executives contemplating divorce may think twice and try a little harder to make their marriages work.

Michael W. Kalcheim

Chicago

The divorce settlements sought by housewife spouses of corporate executives are startling and insulting--especially to other wives who have balanced day-to-day family responsibilities with dual-career challenges, too. These executive housewives enjoy fine lifestyles supported by their high-achieving husbands--lifestyles that often include household help, caterers, nannies, club memberships, a social whirl plus. More, they enjoy great opportunities and time to pursue independent interests, new endeavors, intellectual and personal growth within marriage.

How unfortunate that these executives chose dependent and self-absorbed women over independent and interesting women of substance.

Lea Gill

Old Greenwich, Conn.Return to top


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