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Tuesday, 25 October 2016


Grants are sinking into the earth

08.07.2009  |  16:15

3301.jpegGeorgia might long have turned into a prosperous country, with all the money it receives from the international organizations and the Western countries for free, or at a low interest. However, as the Labour Party of Georgia has stated recently, these funds are squandered by the government. Executive Secretary of the party Paata Jibladze told GeorgiaTimes about the misuse of the agricultural grants.


The Labour party of Georgia is collecting information about the way Saakashvili is spending the grants allocated to the country by the international donor organizations. Next week, the Labourites are going to disclose the scheming around this money; so far, Paata Jibladze has publicly discussed just one popular agricultural project, that is, the project of restoring melioration in the republic.

Within the project context, the irrigation and drainage systems of the country's agricultural land have been restored.

Since 2002, the project in Georgia has been sponsored by the World Bank (WB). At the first stage, the bank extended a credit of 32,5 million dollars. The second stage was launched in 2006, having required over 30 million dollars. All in all, according to Jibladze, the Georgian government has already spent 63 million dollars on the reconstruction of the melioration system. However, all these amenities are not at all suitable for the farmers. Why? Because of the excessively expensive use of the irrigation system.

According to Jibladze, the irrigation of one hectare of land will cost a farmer a fixed amount of 75 laris plus 27 laris per one hour of electric power. During a drought period, it generally takes five hours running to water the whole field. If we multiply these figures we will get a "round" sum of over 200 laris (125 dollars) for a one-time watering of one hectare, which the farmers simply cannot afford.

Thus, the money received from abroad to support the Georgian agriculture has not at all made the life of the villagers easier. They are going to pay twice for the foreign help: first, for the watering and then, the taxes which the state needs to settle with creditors. "The government is oppressing the farmers, imposing excessive taxes upon them, so they have to leave their home in search of a profit. If the government truly wants to develop the economy it must first of all create suitable conditions for farmers and reduce the taxes", - Jibladze believes.

With those means that have been allocated for the improvement of the agricultural system Georgia could become one of the world's leaders in producing bioclean products should it made the agriculture its priority", - he told GeorgiaTimes. However, unfortunately, Georgia took another way of development: the country has been flooded with the low-quality genetically modified products from Turkey and Iran.

As the Labourite believes, all the goods that Georgia could produce on its own should be protected with fees and taxes. As to those goods that the country cannot produce, they should be imported at zero customs rates. And, of course, the money allocated to Georgia by the donor countries and banks should flow "directly to the people, regardless of their nationality" instead of getting stuck in the governmental projects, Jibladze underlined.

As an example of the intricate scheming with the grants, one can remember the latest act of good will from Japan. In March, the government of the land of the rising sun gave Georgia 12 million dollars (1,2 mln yen) as a grant. This money was to be spent by Ministry of Agriculture on harvesters, mowing machines and other machinery. However, despite the fact that the Georgian government received the money "for free", it decided to... sale the acquired agricultural machinery.

Naturally, it was to be sold to the Georgian people at a "reduced" price. Well, money for nothing is, of course, a profitable business. According to Business Georgia, the first batch of machinery will be put on sale on July, 20. It will be Crown Agents, an English company, which is going to benefit from this transaction as well; this company has been authorized by the Georgian government to hold tenders and purchase machinery.

No wonder the issue of spending international grants and credits emerged in the oppositional critics. These days, the International Monetary Fund (IMF) mission is studying the economical situation in the country in order to make a decision as to the next tranche. The Georgian government is going to use it to fulfill its budgetary obligations. Budgetary aid is the Fund's new product. So far, IMF has been assisting the country only in reserves replenishment. However, it would be too early to treat the bankers' generosity as a benefit for Georgia. Firstly, the government gets used to squander money if it is flowing in like pennies from heaven. Secondly, one would inevitably have to return the debts with interest.

Meanwhile, WB has pleased the Georgian government by having approved the extension of a 85-million-dollar credit for the programs aimed at anti-crisis fiscal boosting and providing aid to disadvantaged groups of people.


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