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Saturday, 23 June 2018


No fear of the world crisis in the Georgian economy?

2008-12-26 17:19

1/7/0/1170.jpegThe UN suggests struggle against poverty to be the priority trend of the coming year 2009. Needless to say this direction is imposed by the global financial crisis. The answer to the question when it will reach its peak and subside is being searched for most reputable world experts in vain. Meanwhile Georgia's President knows the timeframe...


"The country will have difficulties for only six months, and by spring 2009 the situation will change for the better, - Saakashvili promised at the meeting with Georgian businessmen that was broadcast by all main TV channels. By the way such meetings organized by the president have become frequent of late. Evidently he expects the effect determined by an old reworded saying: constant dropping wears away a crisis.

The words of the president rely on multiple arguments. Like this for instance: "Georgia's financial system is balanced, and there will be no holes in the budget as the USA have appropriated 250 mln dollars to us", or "Our economy is facing the world crisis all set as the government has made its best to save it"; or "There are signs of economic decline that might grow more serious but not on such a scale as in Russia, Ukraine, Latvia and Hungary".

However verbal rhetoric is not inspiring any more. Local economists are simply full of indignation.

"We only hear slogans that we are "cooler" than others and that we'll be saved while the Baltic States and Europe will go to ruin. And Russia has already fallen apart; - the president's optimism is quoted by the expert on economic issues Giya Khukhashvili in his interview with Internet edition, - But in reality everything is completely different: in comparison with other countries we and our economy are tailing along".

All countries, he continues, will overcome the world crisis as they know what the system situation is, what work must be done, what conditions must be created in order to survive the current situation. "Here there is no idea about it. Saakashvili is trying to convince us that the difficulties will last for six months. I would happily agree to that so that the president's wishes came true. But unfortunately I see no grounds for optimism".

So what are the facts? According to the bids on December 22 lari lost another 30 points and now its exchange rate to dollar is around 1,7. At the same time the demand for national currency in the country is still rather high. All day long the reporters of "Kommerasant" radio station tried to understand the reasons for that but no answer was found in the end.

According to ex president of the National Bank Nodar Javakhishvili, the violent fall of lari confirms that "Georgia is one of the post-Soviet states in the most painful situation. We are a country of beggars importing 80% and exporting 20% of produce. To really fight the inflation we have to manufacture competitive goods. If the tendencies of production stoppage and withdrawal of investors is going on it will be impossible to restrain lari".

It will be remembered that in November the national currency has lost entire 20%. And now the Georgian media forecast that the New Year's tradition is at risk - there will be no piglet on the table. Pork price has increased 20% with the price per kilo being 12-15 lari. And the sellers say it is not the limit. Prices of eggs, cheese, honey and nuts have jumped up too...

The salaries of most citizens remain at the level of already out-of-date cost of living - 400 lari (200 dollars). The highest pension (including all benefits and surpluses if any) is 100 lari at the most.

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