Pension Debates Top Political Agenda

Protesters demand a pension system based on length of service.

Planned changes to Georgia’s pension system has triggered major political debates, which resulted in a protest rally on December 2, when more than two thousand pensioners gathered outside the Parliament in Tbilisi.

The reform envisages increasing the minimal pension from the current GEL 28 (USD 15.5) to 38 (USD 21) and a decrease of the maximum pension from the current GEL 5,000 [approximately USD 2,700] to 560 (USD 311) starting next year. The maximum pensions are reserved for former high-ranking officials. Amendments will also introduce a new retirement age – 65 for both men and women. Currently the retirement age for men is 70 and 60 for women.

According to the Georgian Labor, Healthcare and Social Ministry the state budget will save about GEL 1.5 million by decreasing pensions for former high-ranking officials. But an additional GEL 35 million will be needed to cover the increased minimum pension. A draft of the 2006 state budget envisages a total of GEL 584.6 million for pensions and allowances.

Opponents and those protesters who gathered on Friday outside the Parliament are demanding the introduction of a pension system based on length of service. There are up to 950,000 pensioners in Georgia. This number is expected to increase by about 28,000 in 2006.

88-year-old Nikoloz Omiadze (right) says he needs at least GEL 150 per month to survive.

“I have worked for 60 years and they offer me only 38 Lari. This increase by 10 Lari is like giving candy to a child to make him stop crying,” Valeri Chelidze, 79, who participated in the protest rally outside the Parliament, told Civil Georgia.

“I need at least 150 Lari per month to survive,” says 88 year-old Nikoloz Omiadze, another pensioner.

The rally was organized by the opposition parliamentary faction Democratic Front, which unites MPs from the Republican and Conservative parties.

Leader of the Conservative Party MP Koba Davitashvili, who is a former close ally of President Saakashvili, says that introduction of a pension system based on length of service “was among those many promises which enabled this government to come into power.”

“But now they have forgotten about these promises. We have a deceitful government,” he said at a news conference on December 3.

But Minister of Labor, Healthcare and Social Affairs Lado Chipashvili said at the parliamentary committee hearing on December 2 that introduction of a pension system based on length of service will only be possible after the minimal pension equals minimum subsistence level, which is about GEL 140-150 per month.

“I think this will be possible after two years. It is important that we are moving in this direction through a gradual increase of pensions,” Lado Chipashvili said.

These debates about the pension system and a protest rally outside the Parliament triggered some heavyweights from the ruling National Movement party to come into play. MP Giga Bokeria convened a press conference on December 2 and dismissed claims by opponents as “groundless and shameful populism.”

“I want to request that the population as well as media sources do not yield to this populism. I want to tell you that pensions will be increased by 10 Lari for 96% of pensioners. This is possible at the expense of many things, including at the decrease of pensions for former high-ranking officials,” he said.

“We understand that this increase [by GEL 10] is not enough, but the country is gradually approaching the stage when a pensioner will be able to survive with a pension. The [time] has not yet come, but we should also not forget that we are living in a country where the [former] authorities were failing to even distribute 14 Lari pensions. We have managed to cover these pension arrears – as I recall it was more than 300 million Lari – and we have doubled pensions [from GEL 14 to GEL 28] and now we are again increasing it by 10 Lari. This is a fact… This is what the Georgian state can do at this stage. All the rest is demagogy and populism. It is impossible to turn Georgia into Switzerland in two days,” MP Bokeria stated.

Meanwhile, government-sponsored TV adverts have already appeared on the local television stations hailing the authorities’ policy of a gradual increase of pensions.

Tensions accumulated in the process of pension debates turned into a fist-fight at the session of the Tbilisi City Council – Sakrebulo – on December 2. Sakrebulo members, as well as parliamentarians from the ruling and opposition Republican and Conservative parties became engaged in a fist-fight in the City Hall, where the Sakrebulo is located.

MP Koba Davitashvili of the Conservative Party said on December 3 that the opposition plans to continue debates at the parliamentary sessions. In addition, he called on the population to demonstrate on December 6 to express protest.