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Former Economic Minister critical

By Messenger staff
Friday, December 5
The Shevardnadze-period Economic Minister and later MP in the Saakashvili administration Lado Papava thinks that the USD 250 million received by the National Bank of Georgia for stabilizing its financial situation after the war was spent very quickly and without significant results. The expenditure could not maintain the GEL rate and it will definitely go down.

Georgia has a huge trade imbalance, import being 4 times more than export, investments have slowed down considerably and the August war together with world economic crisis have created dire problems for the GEL. Papava thinks that the NBG did not work efficiently. NBG could not prevent the Lari rate from falling, although it spent the received amount and an extra USD 50 million. Papava also considers that the unexpected and sudden fall of the GEL on November 7, 2008 was a serious mistake which created panic in the population. Some even started speculations that this was not a sudden fall but a deliberate devaluation for personal gain organized and plotted by a certain group of people.

Today the NBG continues selling USD reserves to maintain the GEL rate artificially, but the experts predict that further devaluation of the Georgian currency is inevitable.