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Monday, 19 March 2018


You’re on the wrong track, batono Mikho

2009-07-27 22:50

3478.jpegIMF Mission has considered advisability to set aside another loan for Georgia. The statement has not been promulgated yet but independent Georgian experts think new loans are another temptation for the government that is not a good money spender. During the crisis the customs duties were raised and nothing is done to invigorate competition. Politicians and experts debate over the way to go next.


Does Georgia need new IMF loans? The representatives of the financial organization wanted to understand how efficient the money for Georgia is. This is not the first and apparently not the last loan the current country leaders get. After August 2008 the IMF promised to lend USD 725 mln to Georgia.

By that time the country had already received two USD 439 mln tranches to refill foreign currency reserves. Another tranche is supposed to be USD 72 mln. It will be enough to patch up the budget and pay salaries to teachers, doctors, railway employees and other public personnel on time.

"It's no good borrowing all the time, - Kakha Bendukidze, ex Economy Minister warns the officials. "It's easy to spend a lot while achieving a visible result spending little is really hard. Under crisis conditions the budget expenditure must be lowered. The Georgian government has reserves for that", - the expert stated in his interview with Kommersant. So the foreign debt has now amounted to GEL 40 bn 849 mln.

The fund's mission answered the government's request and dedicated two weeks to examination of Georgia's economic situation. Yesterday it wound up offering no decision on the new tranche so far.

Before the visit of the mission the country leaders launched an anti-crisis package. State infusions and guarantees helped to revive construction and banking spheres a bit and refill the budget. But a heap of other problems is still there: unemployment, non-availability of medical care, people's impoverishment, losses in travel business and pitiable state of landowners. Country people have the only joy left - rich peach harvest in Kakhetia. Peaches are sold on local markets and in Azerbaijan.

Now Georgia has problems selling foreign goods. As Business Georgia reports Chinese sellers in Lilo City market complain about sharp fall in sales. Lower incomes account for the 30% decrease in the number of customers. At the same time Turkish manufacturers have fallen victim to the secret protectionism by Georgian authorities. As Zaman newspaper (Turkey) writes it's been a month since shuttle traders stopped crossing the border at Sarpi checkpoint. As local traders explain the consumer goods from near-border Kemalpash town are now resold in Batumi at exaggerated prices thanks to new taxation rules which force the Turkish goods out of competition.

It's the amendments to the Tax Code adopted a few days ago that made the entry of goods via customs checkpoints more complicated. In particular, if a citizen carries out multiple transfers of goods within a 30-day period, this is considered an economic activity subject to taxation. Even parliamentary minority was resentful over the amendments. Economist Andrey Illarionov, ex adviser to the Russian President who is now actively intriguing against Russia couldn't swallow that either: he accused Saakashvili's government of taking a wrong turning on the way to economic development. "Today the carried out liberal reforms are being dismantled. New limitations keep being introduced for business community. The government must recover consciousness, reduce taxes, government expenses and stop controlling businesses", - the economist advises.

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