Georgian budget issues

In 2012 the Georgian Law on the Budget will be substituted by the Georgian Budget Code, the Ministry of Finance has stated. Deputy Minister Papuna Petriashvli has explained that the so-called programme budget, which will outline the financing of different programmes and projects for 4 years, will become an essential part of the annual budget. This will facilitate the evaluation of possible outcomes and establish criteria for the assessment of these outcomes.

Until 1998 there was no law on the budget in Georgia and different Ministries bargained over their financing. In 1998 the Georgian Parliament adopted this law and started producing annual budgets under it. In 2003 a new law on the budget was adopted.

Programme budgets are already prepared by the Healthcare, Education and Justice Ministries. In 2010-12 all the Ministries will gradually adopt programme budgets but this is a very complicated and labour consuming task. Economist and former MP Lado Papava says that compiling programme budgets started in 1996 in Georgia but this system was not perfect then as the country had serious budgetary problems. Today however it is possible to plan programmes, Papava says.

Serious changes are also being made in the 2010 state budget compared to 2009. For instance in 2010 it is envisaged to allot to the Ministry of Defence GEL 750 million, almost GEL 150 million less than in 2009 and 50% less than in 2007. This is very concerning when one considers that 1/5 of this country’s territory is occupied by Russia and there is much threat that the aggressor could launch a repeat attack.

Commenting on the situation in the defence sphere opposition economic analyst Gia Khukhashvili has said that the money invested in the defence system had been misappropriated. He thinks that the country’s defence system should be secure but militarization has brought us to catastrophe.