President’s reserve fund cut to half

Georgian president’s reserve fund will be cut from USD 30 million to 15 million for next year.

Finance Minister Nodar Khaduri said Wednesday that two months before the end of the year, the president’s reserve fund is empty.

He said the president spent more than a half of the fund, more than USD 30 million, for his own administration, and USD 300 000 was spent on the United National Movement (UNM) activists.

The president’s reserve fund is one of the two state reserve funds. The other one, managed by the government, will remain at 50 million GEL (USD 30 million) next year, the finance minister said. The fund this year has 35 million GEL left of unused money.

“Most of the expenses went to the development of infrastructure,” he said.

The two reserve funds were originally only meant to be used for handling crises like natural disasters, but after Mikheil Saakashvili came to power the law was changed in 2005 so that they also could be used for “undefined government expenses.”

This, combined with a high level of secrecy around what the funds were spent on, opened the door for using the money for a rock festival, electricity vouchers, a student trainee program, opening of a new theater and other things that were seen as part of the National Movement’s political campaign. In case the reserve funds were spent before the end of the year, new money would be transferred, like happened in the election year 2012.

Under the new government, there is more openness about what the funds are spent on.

Khaduri blamed the apparent low economic growth this year on the ‘failed cohabitation’ between the government and the president.

“In the beginning of the year we expected 6 percent growth, but unfortunately ongoing events, including processes in politics, specifically the so-called cohabitation and permanent interruptions from the president, such factors, part of which were subjective and [part] objective, brought us to the fact that the economy didn’t grow by six percent,” he said.

The minister responded to the recommendation of the International Monetary Fund that in order to eliminate its trade deficit Georgia will have to take on foreign loans. The minister confirmed that Georgia will take loans, but only for infrastructure projects. He did not say how much money Georgia is going to loan. (Democracy & Freedom Watch)