Legislators Criticize 2002 Budget
Only few days after their appointment, Georgian ministers found themselves immersed in a new row with the legislature over the 2002 budget.
Timely adoption of the budget is one of the requirements set by the International Monetary Fund to renew the program of financial assistance to Georgia. The draft negotiated with IMF experts was submitted to the Parliament on December 27. On the same day the Minister of Finance Zurab Nogaideli was presenting the budget draft on hearings of Parliamentary Committee on Budget and Finance, only to realize that chances for its approval by the legislature without chances are wafer-thin.
It was decided that the Parliament will discuss the budget 2002 on January 10, 2002. The burdensome consultations with the parliamentary factions and committees had to be squeezed in a busy holiday season. And government’s task is not the easy one – the Parliament requests to increase expenditures of the budget by 100 million Lari ($48 million).
The minister of Finance and newly appointed State Minister Avtandil Jorbenadze, who coordinates the economic team, have to face overwhelming opposition, both from their own party – the Citizens Union – and the opposition. According to the final draft, the state budget for 2002 is 1 billion 65 million Laris.
The faction “Industrialists” lobbies for increased domestic budgetary investment. The faction’s leader Gogi Topadze addressed the President on December 14, 2001 stating: “We urge you to adopt the development-oriented budget from the year 2002. On the first stage 5% of all expenditures must directed to investment into the local production. This sum of 50 million Laris must be divided between the provinces of the county based on the feasible business plans”.
Topadze believes that these 50 millions should be distributed by the governmental commission, headed by the President.
Shevardnadze reacted quickly, stating that requested sum is not too significant and therefore Industrialists’ request might be considered favorably. The Finance Minister who initially called the Industrialists’ request a ‘funny proposal’, was forced to backtrack on his words. He agreed to consider the proposal during the consutations with Parliamentary factions on December 28, 2001.
Other parliamentary factions also call for increased expenditures – from increased subsidies to the regions, to improved pay for the teachers.
It is planned that additional funds would be raised through improved collection of the tax revenues.
Vitali Khazaradze, Chairman of the Parliamentary Committee for Taxes and Revenues, demands increase of tax revenues to the budget by 100 million Laris. He says that if the government will not consider this request then the legislators will not approve the budget 2002.
But the Minister of Taxes and Revenues Levan Dzneladze calls the demands for increased revenue collection “unrealistic.” Dzneladze states that no improved revenue collection is feasible since the borders of the country are puncured by loopholes of the regions not controled by the central authority and, as a result, smuggling is flourishing.
However logical the minister’s arguments may sound, they are not likely to find the simpathetic audience in the parliament.
Analysts observe, that the Georgian legislators are struggling hard to restore tarnished public reputation.
The parliament won hearts of many citizens when supporting popular protests and demanding government resignation in November, 2001. But afterwards the parliamentarians endorsed the majority of the old ministers to return to their posts, save the most resented ones from the country’s security establishment.
As a result the national media went ablaze with the titles of “failed revolution” or the “most pointless public protests in world history.”
By being involved in a row over the budget, many argue, the parliament tries to restore public confidence. But the reasons of at least some may be more far-fledged
Already after re-appointment of the majority of the ministers, influential MPs, including former Parliamentary Chairman Zurab Zhvania, and radical reformers led by Mikheil Saakashvili argued that the current government is only a transitional compromise.According to the radical reformer plans the the cabinet of ministers should be re-introduced – a decision that requires serious constitutional changes and will re-distribute the power in Georgian politics.
Thus the rejection of the budget draft for the year 2002 may trigger the governmental crisis to open the way for the power re-shuffle.
But this scenario is likely if only the interested players will consider the time ripe to deliver a decisive strike at shattered Georgian executive – and the President. Thus the budgetary review is likely to serve as a reliable barometer of Georgia’s Spring 2002 politics.
by Giorgi Kalandadze, Civil Georgia