Using budgetary resources for pre-election campaign

FROM THE REDACTION

In the period of parliamentary election preparations, the Georgian government and ruling party continue to use budgetary resources for funding activities directly targeting voters.

These events—with varying frequencies and amounts—are funded from the state and local budgets, including in the Adjara Autonomous Republic.
Certain targeted programs and initiatives described in the government’s ongoing program “United Georgia without Poverty (Plans for 50 days and the nearest future)” fit into this category. Some are clearly meant to bring about short-term electoral effect, despite being packaged as longer-term programs. The 50-day program was presented in January 2008 by Prime Minister Gurgenidze, as the new government took office following presidential elections. And it is meant to be the guiding action-plan for his government. The 50-day program is well reflected in the state budget: in 2008, GEL 85 million is designated for the program. While most of this amount is already allocated, the state is still spending considerable amounts on additional social and infrastructural initiatives that are not related to the program. These are, however, reflected in the state, autonomous republic, and local budgets.
State Pension and Salary Increases
During his presidential campaign, Mikheil Saakashvili vowed to increase pensions. This is now part of the 50-day program. As part of the program’s first step, state pensions will be increased from GEL 55 to GEL 70 starting in April. This increase will benefit 653,000 old-age pensioners. According to the program, the 2009 draft budget will include pensions at USD 100, effective some time in 2009. At the time the announcement was made USD 100 equaled about GEL 160. Currently, given the fluctuation in the exchange rate, 100 USD equals GEL 143. It is difficult to project what the exchange rate will be in one year’s time, though it is not expected that the dollar will regain ground. While defining amounts in U.S. dollars may be appealing to a common ear, the implications might not be quite as attractive. Further, defining domestic expenditures in a foreign currency is quite unusual for Georgian budgetary processes.
This rise in pensions now means that in 2008 GEL 749,757,600 will be spent on pensions only, up GEL 312,794,300 from 436,963,300 in 2007. While the pension increase is to be by all means commended, the clear insufficiency of the pension amount both before the raise or current means that major positive changes of living standards of the elderly should not to be expected.
While the 50-day program calls the two-step increase of pensions a “pension reform,” this is a far cry from any meaningful reform. Despite the rhetoric, the government is not addressing pension reform. The pensions are funded solely through the taxes paid by those employed. The system of private pension funds is practically non-existent. Although no reliable data exists, it is plausible that only employers of foreign companies and others on the high-end of the Georgian workforce are part of private pension schemes. Those currently of the pensionable age are precisely the generation that has lost most of their savings when Soviet Union collapsed, leaving them reliant on the state pensions. While the state no longer officially calculates the subsistence minimum, it is very likely beyond GEL 70 per month. Given the rising inflation, the current pension increase will only approximate an indexation (i.e. correction of nominal amount by the inflation, so that the real figure does not depreciate), rather than a genuine raise. The pensioners, by definition, are impoverished and most would not be able to survive without the family support or the government subsidies for the empoverished.
Given Saakashvili’s other campaign promises, additional salary increases are expected, e.g. for school teachers, who were promised reasonable salaries and pensions to guarantee their decent living.

Fuel Allocations
The 2008 state budget allocates GEL 29,155,000 for the purchase of fuel for rural residents for the spring agricultural works season. Almost 911,000 benefiting rural families have for the most part already received 20 liters of diesel fuel each, adding up to 18,220,000 liters in all.
Local governance bodies are responsible for distributing the fuel vouchers that are then exchanged for fuel at local gas stations. However, cases have been reported when majoritarian candidates from the ruling party were involved in the process. Further there have also been reports of voucher-holders being denied the fuel, and local gas station owners buying the vouchers for GEL 20, rather than giving out the fuel.

Rural Mechanization Program
Before and after the presidential elections both President Saakashvili and Minister of Agriculture Petre Tsiskarishvili have on numerous occasions affirmed the government’s support for rural development. They have asserted that tractors and other agricultural machinery are being made available for rural residents for free.
As part of the 50-day program, rural mechanization centers are established in all regions of Georgia, and, as of end of March, 2008, 350 tractors have been handed to them. The program lays out two vague principles – that the tractor services will be universally accessible and that the Ministry of Agriculture will supply the centers with all the necessary machinery prior to the plowing season.
The government’s claims are misleading: the Ministry program stipulates that tractors may be leased for a long-term period (maximum 25 years) with a five-year grace period (when interest is not paid) and four percent annual interest. The Ministry budget allocates about GEL 29 million for the program.

Business as Usual
The Government of Georgia has been criticized for being in a constant pre-election mode and, since October 2007, the United National Movement actually has been designing election campaigns. During this time, new initiatives with great intentions abound, though the eventual results remain unclear. Here the employment programs come to mind, supposed to retrain Georgian workers to be more employable in Georgia’s developing economy. Experts called those programs a waste and loudly disapproved of the government’s attempt to reduce unemployment through the two short-term and ill-designed programs.
This fifty day program is again implemented during the pre-election period for the parliamentary elections. While its name suggests actions that will immediately, in 50 days, produce tangible results, 50 days have already long passed since its initiation, and it will be at least months before benefits of most initiatives will be felt.