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Monday, 16 July 2018


Sakartvelo: he that Is warm thinks all so

2011-06-17 16:13

Sakartvelo: he that Is warm thinks all so. 18490.jpegThe National Bank of Georgia hurries to share joyous news with everybody. The economy that some time ago was literally at the death's door is rising from the ashes and is demonstrating impressive growth trends. Maybe the tourist season helped the state moneybox so much? Or have investors taken to Sakartvelo planning to "grow money trees" in the area of the rapidly developing Batumi and Kutaisi? I wish they had. It is becoming clear that


the increase in the indicators is due just to the iron political will, abrupt liberalization and paranoid anti-corruption activity. However, ordinary citizens have remained poor as church mice, continuing to keep head above water.

According to the National Bank report, the annual indicator of the real growth of the gross domestic product was 6,4%, and the nominal value of 2010 increased by 15,6% compared to the same value of the previous year. Financiers suggest the sector analysis of the dynamics should be consulted to get impressed by one interesting detail. Those industries of economy which had been given up for loss proved that the situation may change quickly. Commerce, food and processing, transport, finance and construction increased their shares in the GDP significantly. At least, this is stated in the annual report of the main financial institution of Georgia.

Another panacea of economy revival is the soft fiscal and monetary policy, as well as increased import and export. But let us not play hanky-panky, the most important export income item is the resale of foreign cars, and the growth in the values is caused by a jump in the prices of various goods. If this all can be called fruit of the liberal reforms of Mikhail Saakashvili and Kakha Bendukidze, this is all true. But a country can hardly survive long living on foreign goods and stuffing the budget with charity received by Georgia from the International Monetary Fund, World Bank and MSS: it is not going to last long.

Georgia has received significant volumes of cash from other international financial institutions more than once. As soon as the Caucasian republic became independent, the European Bank for Reconstruction and Development and the International Financial Corporation invested 400 million euro and 180 million dollars in the financial, power, transport, agricultural and industrial sectors of the Georgian economy. Therefore, since 1994 Georgia has been listed among the countries whose economy depends much on donors, as well as on their conditions and requirements.

Thus, at the beginning of this year the government announced the great news that the Board of Directors of the Millennium Challenge Corporation made a decision to provide another financial grant to Georgia. The first part of $295 million had already been accepted by Georgia. According to the plans of the benefactors, the authorities had to reduce the level of poverty and stimulate the economic growth in almost all the regions of the country. Believing the National Bank, the Cabinet of Ministers is coping with the second task quite well but in fact the dwellers of the luxurious palaces in glass and aluminum are not going to fight with the poverty of Georgian citizens.  

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