State budget 2011 duplicates defects of its predecessor
18 November, 2010
State budget 2011 duplicates defects of its predecessor

Project of state budget 2011 is still based on the “tight belt” policy and violates fiscal decentralization principles. Non-governmental sector and oppositionist politicians still reprimand the government for lack of transparency and ask the authorities to present more detailed description of expenses in the final version of state budget.


The revised version of the main fiscal document of the country in 2011 was sent to the government on November 15, 2010; after that it went through the secondary hearing on

November 12, 2010. And now the government has to study the questions and recommendations made by the parliament and non-governmental organizations regarding the state budget project; and either build them in the final budget version or ignore them.

 


Usually the government does not take into consideration recommendations related with political decisions [expected to be implemented through the state budget]. To this end it still violates decentralization principle removing GEL 40 million from the regional self-governments’ yet meager budgets  in favor of the state-controlled regional development funds. The latter is supposed to tackle financing problems of self-governances if they face any. Thus de-jure independent regional governments appear well-dependent on the federal money.
“This is unacceptable for the normal fiscal decentralization environment,” Davit Narmania, Executive Director of the Institute of Caucasus Economic and Social Research, told Georgian Journal. “And no matter how ardently we argue now that it is a step backward from fiscal decentralization point of view nobody takes a heed to our opinion when the state budget project is put for parliamentary procedures. It would be better to air this issue earlier so as to enable us to provide with in-depth analyze how removal of this GEL 40 million might affect certain programs. It is not a big sum actually and government could find other resources to finance regional development funds without curtailing self-governances’ budgets in regions.”
As to economic facet of the matter government sometimes takes them into consideration. Authority turned out unprecedentedly benevolent to non-governmental sector and independent analysts this year during discussing the new tax code and summoned them for consultations during the state budget committee hearing as well. Whether or not it pays an attention to their opinion will be clear after the revised and final version of the state budget 2011 project will enter the parliament.
State budget 2011 increases by GEL 100 million compared to this year budget. It reaches GEL 7.088 billion and targets at 4.5 % of economic growth. Financing of education, health-care, infrastructure and  agriculture projects will be key priorities next year, Kakha Baindurashvili, Minister of Finances, said at Finance and Budget Committee sitting at parliament on November 11, 2010.
Financing of education as well as social and health-care increases by GEL 16 million and GEL 5 million respectively. According to Baindurashvili, the education system financing envisages salary growth to teachers, as well as teaching English language and computers that includes provision primary class pupils with PCs.
“English is the key communication language globe over and our children have to acquire due English skills to promote themselves and the country…similar can be said respective to computers, they are essential part of any sector today,” Baindurashvili said.
Guram Chakhvadze, an oppositionist MP, hailed government that pensions do not reflect the increased inflation rate and depreciation of national currency that affects yet meager pensions.  The promised increase of pensions to USD 100 [built in the pre-election campaign program] is still delayed due to crisis, Bandurashvili explained.


Financing of agriculture increases from GEL 14 million to GEL 53 million that is an unprecedented budget for agriculture during the last 15 years of Georgia’s independence, Minister accentuated. 
Infrastructure projects mainly will be focused on road construction and tourism.GEL 222.4 million is earmarked on augmentation of east-west highway, and GEL 129.4 million on motor car way bypassing Batumi and Kobuleti, Ajara region, so as to remove the existing road running all along the beach and vacate place for more hotel infrastructure development.
Economic analysts and non-governmental watch-dogs believe the state budget 2011 duplicates the problems of 2010: it undermines principles of the fiscal decentralization, is too optimistic and lacks transparency. About GEL 100 million worth expenses are not clearly outlined and other parts of financing also lack detailed description.


“Actually the budget of 2011 is more detailed compared to budgets of previous years but it is not sufficient as far as state budget and local budgets move to program and capital financing starting 2012 that is a difficult thing for all expenses must be built in details and charts very precisely. And government had better address to this policy as soon as possible,” Narmania said.
Baindurashvili swears that the state budget 2011 is still based on the “tight belt” policy undertaken by Georgian government in 2009 due to financial crisis and administrative expenses of government and budget-based organizations are cut down as much as possible.
Narmania who  questions the “tight belt” policy of Georgian government in 2010 proposes to provide non-governmental watch-dogs with a special report on “tight belt” policy of 2011 along with the state budget account to  make clear which state-budget-based instance saved money and how much as far as the underway budget format does not provide with such an opportunity.
“We closely monitored the so called “tight belt” policy of 2010 and we doubt that government  pursued it actually. So we propose Ministry of Finances to provide us with a special account of these “tight belt” policy-related expenses as far as the underway state budget does not include full information to this end,” Narmania said. 
Moreover the tax-based revenues of the coming year budget are planned to increases by GEL 770 million. And as far as economic analysts think Georgian economic reality does not lay ground to such optimistic prognosis; they fear that the planned revenues may be raised via stronger administration of penalties rate of which also increased [by new tax code]. However Baindurashvili played down these fears asserting that the revenue figure is based on economic growth of the country alone.

Print
Other Stories
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
18.04.2019
19.04.2019
USD
1
USD
2.6931
2.6939
EUR
1
EUR
3.0456
3.0323
GBP
1
GBP
3.5137
3.5053
RUB
100
RUB
4.2150
4.2087
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
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
GEL Exchange
USD
1
USD
2.6939
EUR
1
EUR
3.0323
GBP
1
GBP
3.5053
RUB
100
RUB
4.2087
April 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30