Defense spending up, social welfare down in new budget

The government wants to amend this year’s state budget to increase defense spending, the Finance Ministry announced this week.

The budget amendments do not completely reverse the government’s election pledge to devote more resources to social services, but it shifts the focus, knocking down the budget for healthcare and social welfare by GEL 40 million.

The Finance Ministry announced the budget amendment—the year’s second—on June 24, saying the state is taking in more revenue than expected.

The rise in revenue, according to a Finance Ministry statement, is thanks to sharper than projected economic growth and cheaper administration costs, among other factors.

Upping defense spending is for “increasing the country’s defense capabilities and getting closer to NATO standards,” the statement read.

“It’s not a secret to anyone that defense is one of the top priorities in our country, so that’s why spending increased on defense,” a Finance Ministry spokesperson told the Messenger.

According to the ministry statement, total spending across all areas, taking into account budget cuts, will increase by GEL 226.5 million to a total of GEL 5.705 billion, leaving the country with a roughly GEL 550 million budget deficit.

The change nearly erases the extra cash given to the Ministry of Health, Labor and Social Affairs when this year’s budget was first amended in March, as campaigning began for last month’s parliamentary elections.

The Defense Ministry’s new budget is now GEL 1.395 billion, or nearly a quarter of total spending, close to its record-high sum of GEL 1.495 billion last year.

More than 40 percent of that will be spent on personnel costs. A top ministry goal, according to its website, is the “improvement of the social conditions of the military staff.”

Wages of military personnel increased anywhere from five- to eight-fold over the last four years, according to the Defense Ministry. About a quarter of its budget is spent on weapons procurement, the ministry says.

The Interior Ministry, which oversees domestic police and some defense operations, won another GEL 40 million, pushing its total budget for the year to GEL 640 million, a hefty chunk above last year’s budget of GEL 467.4 million.

Mzia Mikeladze, a deputy director of outreach and development at the International School of Economics in Tbilisi, who was speaking individually from her institution, said she found it “strange” the government would spend most of the budget windfall on the military after its election campaign statements promising more attention to social welfare.

“This distribution [of the budget] is a bit strange to me, but on the other hand it’s understandable that with the worsening of Georgian-Russian relations and Georgia NATO aspirations that the government decided to finance defense,” Mikeladze said.

While the ruling party’s overwhelming share of the legislature ensures the amendments’ passage, an MP in the tiny parliamentary minority said his party has “many questions” about the new budget.

“It will be interesting [to see] how the government will explain such a dramatic rise in the military budget in combination with the lowering of social and healthcare expenses, which we think should be the priority,” said Christian Democratic MP Levan Vepkhvadze.

Vepkhvadze told the Messenger that the Christian Democrats, which hold six seats in parliament, oppose the bill in its current form—but its options are limited.

“We have consultations in committee; on some points our position is close to that of the majority,” he said. “But if this is a political decision, they hold a majority and we can’t do anything.”