State Budget 2013 Meets Pre-election Promises
27 December, 2012
State Budget 2013 Meets Pre-election Promises

The state budget of 2013 cut down administration expenses as much as possible to be socially-oriented and tailored to the pre-election promises of Georgian Dream, political coalition that came to power in Georgia.

New government of Georgia succeeded to approve the main fiscal document of the county for 2013 by December 20, 2012 in line with the budgetary law deadlines and full compliance with the pre-election promises of Georgian Dream political coalition that took the office out of the ex-ruling party of National Movement in this past October.
Economic analysts accentuate that the incumbent government handled with the difficult task to work out the state budget 2013 within the tightest deadlines from October 24 [when the new government was actually approved] to December 20 in order not to violate the budget related legal procedures and, what is very important, to tailor it to the priorities of Georgian Dream instead those of National Movement who drafted the state budget project for 2013 prior Georgian Dream took its office term legally.
Ultimately the income prognosis of the state budget 2013 stands at GEL 8.425 million and the expenditures are capped by GEL 6.920 million. Social-insurance, health-care, education, agriculture, aiding of Involuntarily Displaced People (IDPs), environment and infrastructure development are the priority sectors. Therefore the financing of social and health-care increases by GEL 630 million totally in 2013 compared to 2012. Around GEL 2.473 billion is earmarked to cover all social-and-health-care related costs including pensions. This kind of growth in funding is caused by increased number of people who will get health-insurance from the state as well as increase of pensions. Although the promised increase of pensions as well as social-and-health care packages will be implemented gradually.
“To avoid inflation pressure,” Irakli Lekvinadze, an economic analyst, explains.
Initially the currently active differentiated pension rates fixing GEL 110 for people over 60 and GEL 125 for people over 67 as well as pensions of the first group invalids will be streamlined at GEL 125 since April of 2013; and the subsistence minimum equivalent pensions of GEL 150 will be adopted for all the aged pensioners and first group invalids starting September of the next year. Pension of other invalid categories as well as victims of political repressions and families bereft of breadwinners will also increase since September.
All the citizens of Georgia who are not covered by the state
health-insurance will enjoy the minimal insurance package that provides medicals service in emergency cases. However all of them will enjoy the basic health-insurance package since July that apart of emergency case aid also provides financing for planned surgeries, medical check and diagnostic etc. The socially vulnerable category will receive doubled assistance since July again.
Education and science ministry will be financed by GEL 670 million that envisages increased voucher-based funding to schools mainly that lays ground to increase of salaries to teachers. Financing of the educational grants for students and programs supporting science also enhanced.
Agriculture ministry gets GEL 241 million that means almost 61% of growth [a GEL 92.1 million] compared to GEL 148.9 million allocated in 2012.The lion’s share of the funding comes on procurement of agriculture technique like tractors and motor-blocks, as well as on repair of irrigation systems. This financing also envisages tilling of 30 thousand hectare of lands and irrigation of 7 thousand hectares. 500 thousand small farmers will get the state assistance to fund the upcoming spring cultivation works. In addition an Agriculture Fund with GEL 1 billion of budget will be created to channel financing to the agriculture sector apart of the state budget.
The budget of the Ministry of IDPs and Resettlement increase by 92% from GEL 25 million to GEL 48 million and envisages rehabilitation of residential houses of IDPs.
The Ministry of Regional and Infrastructure Development gets GEL 901 million. GEL 501.7 million and 181.9 million out of the figure will finance road and regional municipal infrastructure rehabilitation works respectively. GEL 80 million is allocated to the Ministry of Culture and Monument Protection – not a single museum, theatre or any other state-based cultural establishment will face drop in the budget next year.
Accents in 2013 will fall on clearing the foreign state debt too: GEL 400 million is allocated to this end in the state budget. Nodar Khaduri, Minister of Finances, accentuated that the year of 2013 is quite burdensome from the point of view of clearing foreign-debt related expenditures and promised that other years after 2013 will be less and less encumbering to this end.
Economic analysts approve the state budget 2013 as find it much more transparent, detailed and targeted on programs. The much criticized paragraph of “other expenses” making around 13% of the state budget in previous years and completely non-transparent became clear his time providing full description of expenses it targets on.
“Taking into account that the budget has been shaping out against the backdrop of political battles and clashes [with National Movement] it is pretty well-elaborated, clear, social-care and agriculture oriented as promised before elections,” Soso Archvadze, an economic analyst, said.
Lekvinadze thinks that the financing of priority sectors was increased skillfully at the expense of cutting administration costs: financing of interior and defense ministries decreased by GEL 15.2 million and GEL 30 million respectively. Ministry of Finances also faced a GEL 18.2 million drop in funding. The Presidential and Governmental Funds with traditional funding as GEL 50-50 million each traditionally and enjoying notorious fame of non-transparency also shrunk. The drop referred to the Presidential fund only that gets GEL 10 million next year. Governmental fund retained GEL 50 million. Khaduri explains this by difficulties in monitoring the presidential fund’s outlays.


Other Stories
Mapping Russian Capital in Georgia’s Economy
Center for Civil Involvement has presented an account of a research project that lasted from May 12 to July 18. According to the
The Cartel-ificent Five - Determining real owners of the “Big Five” is harder than catching a black cat in a dark room
After eight months of research, Georgia’s Competition Agency decided to fine companies operating at the petroleum products market
In Veto Veritas?
In Veto Veritas?
The attempt to separate the National Bank of Georgia from its monitoring service has caused a lot of controversy. In a bizarre twist, international
Summer economic prospects - How much money will three large-scale events bring Tbilisi?
In summer, Tbilisi hosts three massive public events – Tbilisi Open Air musical festival that started on July 3 and ended on July 7; European Youth
Georgia’s Got “Talent”... in Banking Supervision
On June 27, Georgian Parliament approved the bill on separation of a banking supervision function from the National Bank in the first hearing.
A “Georgian Manhattan” in Vere Gorge – Georgian Business Chamber's bold plan for the disaster area
The International Builders’ Association and Georgian Business Chamber have devised a project
Grape prices to rise drastically due to crisis in Russia
The Tbilvino Company, a major wine producer in Georgia, will procure much less grapes from farmers this year in comparison to the last.
Hazelnut price will increase due to extreme weather
This year, hazelnuts will become more expensive. According to the experts, devastation of harvest by hailstorms will affect prices considerably.
Fewer Russian Tourists Plan to Visit Caucasus’ Black Sea Resorts in 2015
The number of Russian tourists at Caucasus’ Black Sea resorts will decrease this year, - The Russian Levada Center claims.
10 Wealthiest Georgian politicians
It is difficult to say whether it’s politicians who enter business or the other way round. Yet it is a fact that a lot of Georgian politicians
Does Georgian meat have a future at the European market?
On September 1 of 2014, Deep and Comprehensive Free Trade Area (DCFTA), the main part of the Georgia-EU Association
“International Bank of Azerbaijan – Georgia” – Eight successful years in Georgia
JSC “International Bank of Azerbaijan – Georgia” emerged in the country in 2007. Today, eight years later, IBA-Georgia stands
Business Confidence Index drops for Georgia
Business confidence in Georgia has dropped by 24.5 points to an all-time low of 3.6 on a scale of [-100; +100] points, though it was
Hard Times for Greengrocery in Georgia
The once-profitable greengrocery business is going through hard times in Georgia. Although several months ago even the Russian
“From Shanghai to Rotterdam Through Georgia Rather than Russia” - TBC Bank President on Anaklia Port and the New Silk Road
Soon the Georgian government will declare the company which, as a result of the tender, will carry out the Anaklia Port project.
Banking Supervision May Change Hands
Georgian Parliament recently suggested transferring the capacity of banking supervision from the National Bank of Georgia
Banks vs. GEL?
Banks vs. GEL?
The sudden strengthening of Georgian national currency after its equally sudden downfall has created a fertile ground for suspicion of banks
What Will Tbilisi’s New Districts Look Like? - A “City of the Future” Near Tbilisi Sea
A massive construction effort is currently taking place in the vicinity of Tbilisi Sea. In this once uninhabited area, now stand commercial structures
Will The Government’s Plant the Future Program Make Georgia Self-Sufficient?
Plant the Future is a new, ambitious program initiated by Ministry of Agriculture of Georgia, which will see 15 million GEL spent on
The largest poker championship in Georgia
For the first time in Georgia, presents MPN Poker Tour. From May 28 to 31, in Tbilisi’s Sports Palace, a four-day-long international poker
“Just like Georgia, the lari has a bright future” - Exclusive interview with IMF resident representative Azim Sadikov
Ever since the lari began depreciating last year, a multitude of factors responsible for this was named, some of them directly contradicting each other.
Georgia aims to become second largest hazelnut exporter
Georgian government has hatched an ambitious plan to become a number two hazelnut exporter on the globe within 5 years.
SOCAR halts its carbamide plant project in Georgia
The State Oil Company of Azerbaijan has suspended the construction of the carbamide plant in the Poti free industrial zone of Georgia.
Large-scale Investment Projects - Solution to Georgia’s Economic Woes?
Georgian government awaits stabilization of the national currency’s exchange rate in 2-3 weeks – right after the Gardabani Thermal Station
Palm Apartments - Modern living inside the Batumi miracle
In June, the Black Sea’s most comfortable and high quality apartment complex will open in Batumi. The elite complex Palm Apartments
GEL Exchange
Other Stories
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
Some of Georgia’s commercial banks are already buying at 2 GEL per $1. Their webpages are publishing information regarding national currency’s exchange rate in real-time mode.
Georgia's central bank governor Giorgi Kadagidze says Ukraine is in the same bind as Georgia was in when Russia banned its neighbor’s exports in 2006
Food and drinks at the territory of “Kazantip Republic” became cheaper. Some bars and food providers reduced their prices by 20% to 50%. For example, khinkali that cost 2 GEL
On the 20th of August, at 9 in the evening, “Kazantip” festival was declared officially open, with both multitudes of foreign guests and local denizens attending.
From now on, Georgian national currency, the Lari, will have its own symbol. Georgia’s National Bank declared a contest to select the symbol in December of 2013.
Georgian auto business is under the threat of collapse. There’s an unusual lack of people at Rustavi Automarket, yet despite the forced reduction of prices recently, many cars
Georgia has signed a so called Association Agreement with the European Union in Brussels.
Gardabani’s greenhouse economy is on its first stage of replacing 30% of imported tomatoes with locally produced ones.