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Vano Merabishvili’s forecast about the financial reality

By Keti Arjevanidze
Wednesday, January 16
Vano Merabishvili, Secretary General of the United National Movement pointed out the main factors of the financial crisis in Georgia in a special briefing on January 15th. “Georgia faces a financial crisis, which is mostly caused by a decrease in budget revenues,” declared Merabishvili.

According to Merabishvili, the economic activity in Georgia has reduced significantly, which is revealed in its export and import decline, as well as the reduced production and trade in the country.

Merabishvili highlighted three major factors of the crisis; the first is the pressure on business. He said daily inspections are underway by tax inspection, the financial police and prosecutor’s office, the ministry of Interior Affairs as well. “Second is the halted construction, which became the reason behind the increased unemployment rate. Third and the main reason is that the new government does not have a clear, united economic action plan,” stated Merabishvili.

UNM Secretary General also emphasized the issue of increased amount of debts among economic institutions. According to him, today economic subjects have serious debts to one another. “In order to disguise the crisis, the government restored the practice of [former president] Eduard Shevardnadze’s government era – preliminary taxation – companies were forced to pay taxes preliminarily and this will lead us to crisis,” said Merabishvili.

Davit Narmania, Minister of Regional Development and Infrastructure denied the accusations of Merabishvili. Narmania said that infrastructure projects are not decreasing; on the contrary their amount is increasing significantly. According to the Minister currently extra 180 million laris will be spent in order to perform planned projects comparing to 2012; Narmania also stated that the projects started in 2012 will be continued.

The minister excluded the accusation about the increased unemployment rate caused by halted constructions. “In terms of construction 2013 year will be very busy and more people will be employed than in previous year, therefore our ministry does not expect increase in unemployment and budget crisis due to the delays in our ministry’s projects,” added Narmania.

Revenue Service addressed Merabishvili to participate in debates with them and provide arguments on his statement.

According to Khatia Moistsraphishvili, spokesperson of Revenue Service without presenting the arguments they consider Merabishvili’s statements as the discredit directed to every employer of Finance Ministry and Revenue Service.

Nodar Khaduri, Minister of Finance also commented on the issue saying that the business environment in the country is better than it was before October 1st Parliamentary Election.

“If some companies are closed or have some problems, it is the fault of management of these companies, so they should think about their management and business development” said Khaduri.

Analysts also estimated the UNM’s financial forecast. Some consider that the estimation by Merabishvili was exaggerated and that the threat and danger of a budget crisis is not expected. Some analysts believe that a crisis in the budget exists but it is temporal.

According to analyst Irakli Lekvinidze, the country does not face budgetary crisis. Although he does not exclude the consumer activism decrease, which according to him is connected with post-election period and “transitional period” in the country. “Economically January is the most passive month of the year, but it is too early to speak about the financial crisis in the country,“ said analyst.

Merabishvili also informed that the UNM has launched fundamental works over the topic and on January 22 media will be provided with the detailed data and figures.