“I’m not saying that all is fine but on the other hand, not everything is that bad” - Exclusive Interview with Nodar Khaduri
03 April, 2015
“I’m not saying that all is fine but on the other hand, not everything is that bad” - Exclusive Interview with Nodar Khaduri
The devaluated GEL, increased prices and an unpredictable business environment – this is hardly a full list of problems revealed lately. Has the government made mistakes while planning the country’s economic policy? Was it possible to avoid the shocking devaluation of the national currency? These issues were discussed with Nodar Khaduri, Minister of Finance in “Business-Press” by Palitra TV. Georgian Journal is offering our readers an abridged version of that interview.

“I live in Gldani together with my family, which
consists of 8 members. My parents are elderly people, waiting for the 150 GEL pension every month as well as its increase by 10 GEL in September. We have to explain to people that the problems are temporary and we shouldn’t let anybody manipulate the situation.”


Nodar Khaduri, Minister of Finance of Georgia:

– I understand all the people for whom the current condition is difficult and as Finance Minister, I know the situation in the country better than anybody else. Today, unfortunately, the problems come to the forefront and accomplished deeds are left unnoticed. I’m not saying that all is fine but on the other hand, not everything is that bad. A lot has improved. Even the living standard – the issue that bothers everyone – has increased by eight percent in two years.
I live in Gldani together with my family, which consists of 8 members. My parents are elderly people, waiting for the monthly 150 GEL pension as well as its increase by 10 GEL in September. We have to explain to people that the problems are temporary and we shouldn’t let anybody manipulate the situation.

– Considering the situation in Russia and Ukraine, wasn’t it possible to predict and calculate the influence of their problems on Georgia?

– The influence of Russia and Ukraine on the economy of Georgia, especially on exports, is only 15 percent. Even if these two markets became completely closed to us, the economy would merely grow by four percent instead of five. The Monetary Fund confirmed that the five percent of economic growth was quite realistic.

“I always take economy class, myself. I’m not saying this out of self-pity; I just know what country I am a Finance Minister of.”

– But it has changed and may even become halved now.

– Officially it hasn’t changed yet, but we think that achieving the 5 percent figure will be difficult. In January, this figure was about 0.5 percent, which was a bad indicator. In February, the turnover of enterprises paying the value-added tax (VAT) increased by more than 15 percent. It means that in February the economic growth was at least 4-4.5 percent. There are many indicators showing that the economic situation in the country has improved. Last year, Georgia got 1.3 billion USD in investments. We haven’t seen such investment since the 2008 war.

– Have you tightened the belts yet, as promised?

– The authorities shouldn’t spend much on administration. We’ve already decreased the expenses on fuel and communication. We don’t purchase furniture, cars, etc. unless there is an urgent need. According to protocol, the ministers are supposed to purchase business-class tickets for transatlantic flights. I always take economy class, myself. I’m not saying this out of self-pity; I just know what country I am a Finance Minister of. I use a car that was bought one week prior to my appointment.

– When you were appointed to this post, you said that business in the country was already squeezed out like a lemon. Today businessmen say the same about you. The frequency of revenue inspections has increased.

– By that, I meant that businessmen were taxed heavily as well as forced to participate in certain projects, such as getting assigned to build something somewhere. Today nobody can say that he is forced to do something. As for the revenue checks, they have their regulations. Currently the Finance Ministry is checking 1,300 companies, out of which in only 67 cases are we facing the risk of exceeding the timeframe. No other country in the world has a revenue inspection time limit of three months because it is nearly impossible to check all the documents in such a short time.

– Could there be measures taken to prevent the lari from such a shocking devaluation? Do you think that only external factors are to blame for the current situation?

– Naturally, there was a chain of events and a so-called domino effect at play. As for internal factors as opposed to external ones, let me start with the fact that the people expected far greater economic growth, which we failed to achieve. In general, desires and plans for the future match the future itself, unless there are shocks involved that disrupt it. These shocks can be both external and internal. Fortunately, we do not have internal shocks to speak of - we have small “shockies,” and they include our opponents’ desires to see Georgia in flames. I can say with full responsibility that there is an ongoing attempt to sow nihilism in the country and rob the people of their hope for tomorrow. This is done by our opponents due to them still clinging to their past. This is the main problem of the Georgian economy.

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Exchange Rates
GEL Exchange Rate
Convertor
20.09.2018
21.09.2018
USD
1
USD
2.6179
2.6193
EUR
1
EUR
3.0606
3.0693
GBP
1
GBP
3.4517
3.4651
RUB
100
RUB
3.9087
3.9538
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GEL Exchange
USD
1
USD
2.6193
EUR
1
EUR
3.0693
GBP
1
GBP
3.4651
RUB
100
RUB
3.9538