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The Ministry of Finance to measure the depth of Sakartvelo’s debt pit2011-03-03 21:04
Soon the Georgian people will finally get to know to who and for what the citizens of Sakartvelo and their descendants will have to pay debts in which the country's authorities are up to their eyes. The Prime Minister Nika Gilauri already addressed the Chief of the Ministry of Finance Kakha Baindurashvili with the commission to tell the society on the international donorship of the republic. What can be expected from the report of the Minister of Finance?
"The society must receive detailed information on the means provided to Georgia after the conference of the donor countries in 2008, GHN cites Gilauri. - Part of these means have already been spent on various infrastructural projects, part will be spent in 2012-2013". According to the Georgian Premier, for 4 out of 4,5 billion contracts have already been signed, two of them have already been spent, and the other means will be distributed in the coming years.
Reporting to the country's people is surely a positive moment. However, even now Gilauri says that in the nearest term the external debt of the country will increase up to five billion, "thanks to" the credits of the World Bank and the Asian Development Bank. Therefore, the representatives of the country's authorities intimate that they are not only not going to repay their debts but will continue borrowing from foreign creditors.
The logics of Mikhail Saakashvili and his team is paradoxal. In his recent declaration the president stressed that the republic had a much smaller debt than all of its neighbours. "From this point of view we are in a better situation", noted the Georgian leader, adding that currently the state banking sector is healthy and stable and Georgia is the first country in the world by reforms due to the high indicators of its economic growth.
Such a positive mood of Mikhail Nikolaevich, however, is not shared neither by the influential financial organizations nor by the local economists.
Not long ago a mission of the International Monetary Fund visited Georgia and gave several recommendations to the country government as a result of their visit. The IMF experts said that the hopes to restore the pre-crisis flow of investments to the republic are not justified. "The external environment remains changeable, and the expected restoration of the afflux of foreign investments seems more and more dubious", the fund report stated. At the same time, the IMF reminded to the Georgian government that in the coming years Georgia will have to transfer significant amounts to repay part of its national debt. "In 2012-2014 the Government and the National Bank will face the need to meet some important external commitments (including the IMF one) that will reach their maximum in 2013, when over one billion dollars will have to be paid (eight percent of the GDP)", ran the document.
The Georgian economists are even less optimistic. Thus, the famous expert Merab Dzaniashvili said that the external state debt of Georgia constitutes 46% of the GDP indicator. And reminded that the growth of the debts compared to the gross domestic product is not observed for the first time, and if the trend continues, the country will simply find itself on the brink of bankruptcy.
What do the country's authorities count on in such a difficult situation? Saakashvili and his team keep on proclaiming the investment appeal of Georgia, but investors are not queuing to put their money into the economy of the republic. Experts believe that Sakartvelo will anyway remain part of the post-Soviet space, regardless whether Saakashvili wants it or not. Georgia is integrated into the CIS so well that if any serious investments are made, they will be made from there.