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Thursday, 27 October 2016


Sakartvelo’s iron budget

2011-11-14 19:39

Sakartvelo’s iron budget. 24424.jpeg

Carrying out revolutionary reforms to revive the country's economy Georgian government started to conquer the world with ...scrap metal with Saakashvili planning to earn nearly USD 60 mln selling it. "For dessert" Georgia plans to flood European market with churchkhela. These statements are made against the background of news on a 40% increase of Sakartvelo's foreign trade turnover.


Hearing all that one might ask how come that such a prosperous country has an immense external debt. A person unaware of difficulties in Georgian economy might take statements made by Sakartvelo government for an illusion of a paradise. Model reforms, war on poverty and corruption, interested investors. How can Saakashvili's "kingdom" have problems at all?

Yet, there are many. Not just serious - systemic. Getting serious volumes of foreign financial aid to the young Caucasian democracy, Georgians live in poverty. It is true that "low-level" corruption has been conquered: we see transparent buildings of the Interior ministry departments, state-of-the-art police stations. But what about bribery above? As we know, there is no way of saving on matches. Penalizing dishonest law-enforcement officers, Mikheil Saakashvili and his teammates somehow don't do the same toward each other. Where do all subsidies of the International Monetary Fund and the European Bank of Reconstruction and Development go, Mr. President? Why do people openly speak about the power clan on one side, and plebeians on the other? Annually lots of people leave Georgia failing to make a decent living at home...

Looks like a circus, in a word. The government makes a pompous presentation of a 10-item plan of the country's strategic development describing "macroeconomic stability", "improvement of social policies" etc in nice words. What does a common Georgian gain as a result?

Let's move on. Georgia's external debt to international creditors is almost equal to the country's budget - over four billion dollars. With a correct economic policy and right choice of priorities this money would be enough to improve living conditions for citizens. But the money vanishes in unknown direction. Look at the longest pedestrian bridge in Anaklia that collapsed one day after being commissioned. Remember Chinese cars though purchase contracts were signed with Renault group. The country's enterprises stand idle and most of them are privatized. All is spent on Eurobonds with the help of which Gilauri's government plans to decrease the volume of the first debt tranche. Yet, officials report on dizzying progress from high stands.

By the way, the sell-out mood that the Georgian government was seized with half a year ago, is still there. This week it was reported that the government plans to earn GEL 95,6 mln on selling scrap metal. "Increase in mixed and non-classified incomes is based on changes introduced to the tax code this year with the scrap metal export excise remade into value", - the optimistic forecasters explain.

Big words again. Who needs Georgian scrap metal? Last summer the country's parliament put old cars on auction - damaged Chevrolet Cavalier (1988), Gaz 31029 (1995) also with defects and armored Cadillac Sedan Deville (1998). Don't you think it looks more like microeconomic convulsions than attempts to take the country out of the crisis?

"Maybe churchkhela will be a good solution?

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