Tbilisi escaped budgetary crisis
20 March, 2014
Tbilisi escaped budgetary crisis
After three unsuccessful attempts, the Tbilisi’s budget for 2014 has been approved on 7 March. Thus, the capital avoided an eminent budgetary and political crisis that might have ended up in the introduction of central governance in Tbilisi within less than three months before the upcoming local elections scheduled this June.
The budget was approved at GEL 785 million with a prognosis of around GEL 700 million income and GEL 600 million expenses. The budget is socially-oriented, like the state
budget. The largest funding – over GEL 186.6 million – goes to health and social care. GEL156.4 million will ensure construction of new infrastructure and exploitation and reinforcing of dangerous structures. GEL 69.5 million will be used for environmental purposes. GEL 30 million is to encourage housing condominiums. Education sector will get over GEL 84 million while more than GEL 50 million will fund culture, sport and youth program activities. More than GEL 23 million will be distributed to maintain public order and security and only GEL 12.5 million is set aside for boosting economy and creating job opportunities.
If the 2014 budget had not been approved by 11 March, Tbilisi would have had to dismiss its authority and a central interim authority would have been established. This would have put the Georgian capital’s social projects on the hook.
The draft budget entered Tbilisi Sakrebulo [Assembly, an elected legislative body of Tbilisi authority] on 15 November 2013, and failed three times due to the political discrepancy between the minority-supported Mayor’s office and the majority controlled Sakrebulo. Analysts indicated the upcoming local elections as the main reason. Both majority and minority parties struggled to get control over the capital’s budget prior to the local elections.
Irakli Shikhiashvili, a majority Chairman of the Sakrebulo, clearly stipulated that they cannot trust the Tbilisi budget to the minority-staffed government of the Georgian capital during the pre-election period. It is certainly true that the United National Movement or the ex-power representing a minority in the Tbilisi authority is recognized to have been misusing budget money for financing pre-election campaigns when it held the office during 2004-2012.
The minority, in return, accused the ruling party of deliberate blockade of the draft budget to finally dismiss the Tbilisi government and get control over the budget before the elections. In the meantime, a number of social projects including the financing of kindergartens, health insurance and public transport, funding of 600 000 socially vulnerable people, and issuance of vouchers which partly compensate for the communal bills of the Tbilisi population stumbled over the non-existing budget affair in winter.
But the worst outcome Georgian non-governmental watchdogs were wary of was the acute political crisis. According to the Budget Code of Georgia, if the local government fails to approve its budget within three months from the approval of the state budget, the central power dismisses the local authority and undertakes the ruling of the self-governing body until a new mayor is assigned by the central government and until a new assembly is elected. Since the state budget for 2014 was approved on 11 December 2013, the Tbilisi’s budget had to be approved by 11 March. Georgian Prime Minister, Irakli Gharibashvili, himself called upon the capital’s authority to reach a consensus and approve the budget to escape the establishment of central power that counters the international obligations assumed by Georgia within the European Council. Georgia, as a member of the European Council, should observe EU regulation which prohibits its Member States to dismiss an elected governing body six months before scheduled local elections.
According to Mamuka Katsitadze, a member of the Sakrebulo, holding local elections against the backdrop of central power in the capital would be unacceptable and affecting the image of Georgia while it strives for NATO and EU integration. Finally, the Sakrebulo drafted its own budget draft version and, although the Mayor’s office found it far from perfect, the budget was approved. However, according to the amendments, City Hall will handle the budget under strong supervision of the Sakrebulo.
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