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2009-07-10 13:59
Budget non-cutting
The idea that the crisis has blown over and that the economic recovery has been started is quite popular today, at the suggestion of the Georgian government. Meanwhile, the experts are warning again unjustifiable hopes. However, the economical situation in Georgia is as confusing as the political one.
The government is talking about budget growth; in their turn, the experts are anticipating another wave of crisis. Nevertheless, according to Business-Georgia Internet portal, a few days ago, during the parliament bureau special session the project of amendments to the country budget has been adopted, which implies budget increase.
As to the economic situation in Georgia, the opinions are different. For instance, according to the Commersant radio station of Georgia, President of the National Bank of Georgia (NBG) Georgi Kadagidze has stated that the two worst quarters in the Georgian economy are over. With reference to IMF and WB, he asserts that the world economy is undergoing recession, Georgia being no exclusion. That is why, according to Kadagidze, one has to encourage the business during the period of crisis. "We are expecting the maximum activity at the first stage of the economy boosting plan; the (government) plan also implies certain steps that will enhance the process of economic revival and make the business sector more optimistic", - Kadagidze stated.
An economical expert, Doctor of Science, Economy, David Narmania believes that "It is needless to speak of any signs of the economy revival; the unemployment is growing, the budget receipts and the GDP are reducing; now, what activity are we talking about?"
The World Bank representative Asad Allami has recently warned against another wave of crisis that will in the near future affect the countries with minor economy, having an impact upon "the state expenses, social standing and the growth of unemployment". However, despite the forecasts made by domestic and foreign experts, the government of Georgia assures that this year the budget should increase by 317 million laris, despite of the fact that the tax receipts have decreased drastically since the beginning of the year.
How is the budget growth going to be provided, then? Chairman of the parliamentary budget committee Zurab Melikishvili gave the following answer to this question: "What is meant here is grants and credits, with a view to reduced receipts". By the end of the year, Georgia is going to get a large share of international financial aid. The changes prepared by the government are based upon these expected credits, which the government has recently decided to receive.
However, the credits are not just expected: recently, the World Bank has allocated 85 million dollars. On Tuesday, the European Committee announced additional allocation of 2 million euros to Georgia to provide assistance to those having suffered during the Georgian-South-Ossetian conflict in August 2008.
The IMF mission is paying a two-week visit to Georgia. According to VZGLYAD, during negotiations, the issue of providing budgetary aid to Georgia on the part of IMF will be discussed for the first time. Those sums that had been allocated by IMF earlier were used only for the currency reserves replenishment. Well, time will show what kind of help IMF is going to provide to the Georgian budget.
Nevertheless, some economical experts recommend sequestering the budget instead of enlarging it. The former deputy and expert on economical issues Shota Gvenetadze who is currently representing the oppositional Movement for Fair Georgia says: "This year, the receipts are going to decrease by 1 billion laris. That is why, it is necessary that the budget cutting project should be in place".
According to Business Georgia, the optimism of the ruling political force is not at all shared by the former Minister of Finance, expert on economical issues Lekso Leksishvili. In the first quarter, the total GDP decreased by 5,9 percent which, in his opinion, speaks of the fact that the coming year is going to be rather tough. "The budget loss will surely exceed the expected level. Accordingly, the growth of the budget is based upon very optimistic calculations but, unfortunately, there are no grounds for them at the moment".
So far as no one has been able to invent a reliable method of managing the current economic crisis, the disputes relating to the economic perspectives are quite explainable. Meanwhile, the Georgian newspapers have spread a rumour about President Saakashvili's intention to replace the prime minister. This has been reported by VZGLYAD with reference to the All News Tbilisian newspaper. According to the newspaper, Prime Minister Nika Gilauri will resume his post of Minister of Finance on account of the budget non-performance in May-June.
The post of the head of cabinet will be contested by two representatives of Saakashvili's immediate circle, Mayor of Tbilisi Gigi Ugulava and Minister of Justice Zurab Adeishvili. According to the Georgian periodical, the latter has got more chances. The question is, why replace the prime minister if the budget is not only performed but over-performed? Even considering the fact that these are only rumours, it is obvious that there is no smoke without fire.
Besides, there has been a long-term tendency of the hasty termination of premiership in the Georgian latest history. On the whole, the post of prime minister is not a lucky one in Georgia. Saakashvili's friend and associate, the Rose Revolution ideologist Zurab Zhvania died in February 2005. According to the official version, he died because of the carbon monoxide gas that leaked from am improper space heater. They are still demanding an independent investigation in Georgia, for the official version is considered to be unpersuasive.
Still, the next Prime Minister Zurab Nogaideli (a member of Zhvania's team) managed to hold the post for a record term of two years. He resigned on his own will, having later created an oppositional party called Movement for Fair Georgia. Nogaideli's successor Lado Gurgenidze occupied the post for one year. Grigol Mgaloblishvili lasted for several months and resigned in unclear circumstances. According to the media, the president threw a cell phone at him at the heat of the moment.
The current Prime Minister Nika Gilauri became head of cabinet this February. If the future of a prime minister directly depends upon the citizens' welfare and not only upon the budget performance, then, the staff changes are as inevitable as death or taxes.
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