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Budgetary problems revealed

By Gvantsa Gabekhadze
Tuesday, November 12
Minister of Finance, Nodar Khaduri, states that there will be no gaps in 2013's state budget. He stresses that no changes will be required in this direction. However, several ministers and MPs have already recognized the budgetary problems and made comments concerning the reasons and outcomes.

“We planned the budget deficit to be 2.9% this year. The figure was reduced to 2%. The budget will cover all expenses anyway. However, we might have certain losses in the part of the revenue,” Khaduri said on November 11.

“Budget revenues will not be met, it is already clear,” the Parliament’s Finance-Budgetary Committee head Davit Onoprishvili said regarding the issue. He stressed that the government has not explained how the gap might be filled.

“However, the parliament will not advise neither sequester nor foreign loans. I think that the expenses should be reviewed,” Onoprishvili stated.

Onoprishvili reiterated that the increase in budget income is directly linked with the growth of GPB.

“When we have 2.5 % economic growth instead of 6%, this means that business performance and activeness is low,” Onoprishvili said.

Economic Minister Giorgi Kvirikashvili recognizes that there will be a gap in the 2013 state budget. However, he admits that social expenses will be completely covered.

“There are no administrative problems in the budget, but we reviewed lots of projects and announced new tenders,” Kvirikashvili said.

The minister stressed that the problems concerning tenders and projects will be reduced for the following year due to the non-stop actions of the Ministry of Regional Development and Infrastructure and other state bodies.

Minister of Regional Development and Infrastructure Davit Narmania also emphasized that after the new government took office, some companies that were supported by the previous government, were removed from various projects.

“We announced new tenders and modified the situation, as those companies did not fulfill their obligations and had millions of state budget loans,” Narmania said.

Member of the United National Movement (UNM) Zurab Japaridze stated that the UNM “warned the current government concerning the difficulties.” He stated that the state economy is going down and the 2013 state budget was not realistic from the beginning.

Non-parliamentary opposition representative Kakha Kukava states that all the complications concerning the budget will be shifted onto the new Prime Minister Irakli Gharibashvili. He stated that no one dared to speak about financial complications when Bidzina Ivanishvili took the position.

Economic analyst Demur Giorkhelidze believes that the complications concerning the budget were clear from February 2013.

“The draft of the 2013 state budget was based on the UNM's adopted draft and attitudes, only some insignificant changes were brought in. The new government did not carry out legal changes that would encourage the economy, there were no institutional modifications, and there was no real draft laying-out how the economic situation might be improved,” Giorkhelidze said.

The analyst underscored that the budgetary revenues were calculated for a 6% economic increate when there is only 2.5 % growth. Giorkhelidze stated that the new government made business free from the government’s intervention that was a positive step. However, big business refrained from investments due to the unclear political situation.

“The problems in the economy were caused in the frame of the previous government. It is very hard to solve the problems in a year. However, Georgian Dream Coalition failed to carry out effective measure and did not make what could be done in a year,” Giorkhelidze said.