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Tuesday, 24 April 2018


Sakartvelo’s new burden

07.04.2011  |  14:52

Sakartvelo’s new burden. 15579.jpegEvery day, Georgian government promises the people some growth - in investments, salary, export or agricultural production. But the real growth can be seen only in prices, corruption and death rate... as well as in the state debt that has passed the point of four billion dollars. This week, the parliament is to change the law so that the government could increase the debt burden. Expert Soso Tsiskarishvili told GeorgiaTimes correspondent what it will mean for common Georgians.


Current legislation does not allow increasing the debt load on the state. This fact very much restrains the Georgian government which seriously needs money to mend the growing holes in the budget. There is no opportunity to get it, so the government decided to promote amendments to the Law on the state debt in parliament, which could let it realize another emission of Eurobonds to the amount of 500 million dollars.

In an efficient economy, additional product is the natural consequence of production and trade; however, Georgia's national economy can hardly be called "efficient". Soon, perhaps, it won't be called at all due to the efforts of the untalented government in the absence of the very subject. That is why one has to tailor the law to one's needs again to get another portion of the long-awaited currency in the shortest time possible. It is notable that Speaker of Parliament David Bakradze promised that the amendments would be adopted at an accelerated pace. The idea that they may be rejected never entered the mind of the head of the pocket parliament and it is common citizens who will ultimately have to pay for the scheming.

According to the officers from Ministry of Finance, the new emission of the state debt obligations to the amount of half a billion dollars is needed to refinance the previous loan of 2008 that was spent on eliminating the consequences of the August-2008 conflict. GeorgiaTimes correspondent asked economic expert Soso Tsiskarishvili whether this is so and what the prospects of the new loan are.

"You know, Georgia has got its own sad experience of joking with Eurobonds: at the beginning of 2008, it issued bonds to the amount of half a billion dollars for the state treasury without being publicly criticized. And there are still no reports on what the money was spent and what the necessity in their receiving was, - the analytic expressed his opinion on the fate of the previous loan. - Now they assert that the money was spent on eliminating the consequences of the August war but Georgia conducted no military actions in March 2008 when the loan was taken. I mean, they had planned this war beforehand - that is clear, for they knew they would have to restore everything. But I do not think such prospect was defined for that money from the very beginning. Anyway, no one had time to spend this money during this short war. Russians think it was a five-day war but Georgia really made war for one day and a half, or, at least, for two days".

Soso Tsiskarishvili is sure that the current loan will repeat the fate of the previous one. "I think the new European loan will again be extended under conditions of zero transparency but members of the Georgian government will enjoy plenty of happy events - multi-million concerts and other fancies. It is especially sad when we are talking about the necessity of maintaining agriculture and about the 150 million laris that are to be allocated and then we find only nine million laris in the budget. The rest of the money was spent on organizing the events and arranging facilities that have nothing in common with agriculture. And the situation is not going to change until the government regards the people as the main value and until it is obliged to account for its activity before parliament", - the Georgian economist is sure.

At the same time, he expressed an opinion that the efficiency of the current loans will be zero, for now economy will receive no means at all. Instead, the threat of default will grow real. "To borrow money and to settle up debts is a primitive scheme often used by mediocre dealers. When the state retorts to it, it can mean complete financial collapse, - Soso Tsiskarishivli stated. - I believe that Saakashvili's repeated calls on the people to pull in their belt must be primarily addressed to him and his government, for the expenses they incur are, firstly, absolutely nontransparent and, secondly, bring less and less result".


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