Expectable Budget and Expectable Riot

Nothing useful can be expected from the budget estimates submitted by the government in the parliament, which must be adopted till December 17, and health care and welfare expenditures are decreased in it; There have been no talks about pension growth; Repayment of interest has increased; Expenses of education sphere as well as of state grants allocated for Patriarchate and grants for theological education have went down; Presa.ge met and talked with the expert of social economy – Otar Khupenia.

[Nino Mikiahsvili. 01:44 14.12.2010]

Otar Khupenia: If we say expressively, the budget is generally considered as the number made up by logics, but the third variant of the budget that is being considered at the parliament now can be called the heap of mutually exclusively and illogically arranged figures.

They used to say and write in different projects that the budget increased and they named certain numbers; They also forecast better condition in health care and social defense system in spite of the price sky-rocket, but in fact everything is on the contrary – throughout the past years, the state budget decreased by 93 million GEL.

What does the budget decrease affect on in special?
– Health care programs were cut by 32 million GEL. Social aids- by 12 million GEL. Expenses of social defense of children – by 8 million GEL. The amount of money to be allocated by the Ministry of Labour, Health and Social Affairs of Georgia will be decreased by 5 million GEL; Repayment interest will surely go up on health care service.

The money to be allocated by the Ministry of Education and Science of Georgia will be rolled back by 2 million GEL. Traditional expenses of education have decreased; For example, there is no money in the budget to help people of other nationality living in the regions to learn Georgian language!

Aids for defense system are also reduced that is welcomed – if the significant part of the billions spent on defense system before, was spent on the active segment of the Economics system, our life would be better today. Expenditure of the Ministry of Internal Affairs remains on the same level.

The state budget decreased by 123 million GEL. But according to the prognosis made six months ago, there would be 735 million GEL. The state governor can not make any prognosis in 2011-2012 in fact, because 70-75% of his income depends on the transfer or grant balanced from federal budget. The part of income tax is always collected by any self-governing unit in the world. In our country, it is totally centralized.

We have a bigger, state problem – if we strengthen the local self-government as the institution without solid, legislative financial base, it all may be confined to words only.

How does the increase of budget expenditure by 40% affect on agriculture?
– Turning agriculture into a filed of high priority and increase of expenses by 40 million GEL are made by incompetent people. It is made for PR, but this amount of money is insignificant for solving the local task. For instance, a person needs 400 gram bread but he/she has 50 gram one and you add him/her 3 gram. This is an approximate picture of agricultural growth. In the country where we eat 80% imported food product, increase by 40% means the allocated money for hybrid corn seed and nothing more.

What is the situation like in the Department of Pensions?
- Nothing happens at all; Merely, the government launched a new PR as if in Georgia “a new pension package” will appear soon. I want to tell people: the idea about pension package is not known to the world; This is an attempt for number game – if a pensioner is offered additional aid as gas or power allowance, they will be summed up and after it they can say that the pension is increased then. It’s all, nothing more.

According to the average pension level, in the former Soviet Union, Georgia is superior only to pre revolution Kyrgyzstan; But it is inferior to other remaining countries.

Moreover, apart from 2011 budget estimates, the government has a prognostic point of view about the situation in the country by 2014 that is very grave to read and think of too. They wrote about the pension security that in 2011 932 million GEL will be spent, but in 2014 the sum will amount to 125 million GEL; i.e. it will increase up to 193 million GEL.

If we divide 193 million GEL into the number of the pensioners, the average pension increase will be about 20%, that is 16 GEL. If 16 GEL is added to 80 GEL the pension will make up 90 GEL. i.e. by 2014, the pension won’t even be 100 GEL. If we take into account the fact that during the 5 years, roughly speaking, 30-35% will be wasted due to the inflation. Purchasing power will be less of course.

Is the pecuniary aid of 24-30 GEL for the people under poverty line the same? Is it increasing or reducing?
-During the next 5 years, this aid will be increased by 20 million GEL in all, it means that each person’s aid will increase by 2,7 tetri per day, but by 81 tetri per month. So, these aids will turn into a fiction.

Public health care means make up 84 million GEL today, that are decreased by 55 million GEL under the new budget. This means that the first aid that is free and available for the great part of the population will actually no longer be given up to 2014 and we will have such picture in the health care system– on the one hand, there will be no population provided with insurance policy or first aid health care.

In your opinion, is this budget drawn up by uneducated people? Or on the contrary, was it drawn up by intelligent ones on purpose?
– In any case, for assessing the result it is the same whether the bad result is given owing to unintelligence or evil. I don’t rule out that majority of them knows these facts but owing to various reasons, some close their ears and some close their eyes but it is not essential now. In this case the result is the key aspect.

The grave economic condition will be aggravated by too high level of foreign debt service in 2012-2013. Now the tax of foreign debt service exceeds one billion. i.e. the one seventh of our budget and according to the date observed by me, this number will grow up.

And what kind of results can be achieved?
– It has already been announced that in October, we had double-digit inflation – 10.6, that is declared number. Here the authority acted deceitfully. Economists know how inflation is measured classically even in their third year. But in our country’s condition, when 47 percent of the population is with arms stretched and a beggar says he/she is poor, the principal accent must be made on food aid. Every housewife knows what the wrong was with food product – we mean not 10 % growth but not less than 30-40% increase and unfortunately, it is very vitally significant and essential for the absolute majority of the population.

Pensions and social aids are not increasing, but the prices are boosting. It means that purchasing power falls for the absolute majority of the population. I think, just that is why “Free Democrats” declared quite relevantly that a serious threat is approaching us, that can be called a social crisis.

It can cause the hungry people’s going out in the street, can’t it?
– Yes, it is classically called a rebellion. We have never had the revolution that expressed massive dissatisfaction. The first revolution and the other one too on Rustaveli Avenue were the revolutions. The results did not reach Aghmashenebeli Avenue, not only, for example, to Ortatchala, to say nothing about the outskirts. In fact, it was a fight for chairs and the result is well known for everyone.

If we mean the social rebellion, it is harder to speak about it, because in every country it is a synonym of blood, fratricide and injustice and the result of the above mentioned things is unpredictable though. In such a case, there is practically no chance of coming intelligent people into power. The most probable thing is that hungry people are promised high salary and high pension by someone. Then the promise can not be kept, the question of overthrowing will be put in six months and it will be really overthrown. This process may last for a long time.