THE ONLY SUCCESSIVE FIELD NATIONAL BANK – NATIONAL ATTRIBUTES

By Mate Melia

The World economy is ruled by financial magnates who are united on the summit called the Banks. Thereof, national banks reign in the world economy.

The example of it is 0,5% refunding rate which was performed by the US Reserve bank Who are leaders of supreme banks in the world and how is the National Bank of Georgia enrolled in the list?
The Y2000 was too difficult for the world economy. This could be true as far as Georgia is concerned. There was no GDP growth last year. Compared to previous year, nominal volume of gross domestic product comprised 6 billion GEL, 30-50% of which are products of hidden economy. International trade decreased and the deficit in payment balance increased. Compared to the previous period, the number of unemployed increased noticeably. According to the T2000 report of the Georgian National Bank, amendments were made in the “law on the Year 2000 State Budget of Georgia” twice which was due to the last year hard situation in state finance management. On July 2000 State Budget was sequestered by 22% and then, once again corrected on December. Finally, state budget parameters were determined by the revenues of 695.1 million GEL and expenditures of 992.6 millions.
Despite the cuts, Budget was not implemented.
255 millions among total 437.8 of tax revenues were derived from business taxation throughout the country and the rest from imports. It once again testifies to the fact that production in the country is in deep crisis and the scale of hidden economy increases on account of the tax burden as a result of which the budget deficit made up 203,9 million GEL. 134.8 millions of total gap were covered by the National Bank. State debt in the Y2000 amounted to 4.2 billion Laries, or 68% of GDP. From the beginning of 2000, domestic debt rose by 154 millions at the expense of credit from the National Bank of Georgia. Current account operations lacked 228.3 million GEL in 2000. Export, mainly, rose at the expense of scrap metal and evacuation of Russian military techniques. Compared to previous years, import rose by 17% whereas legal imports of oil and cigarette reduced 3-4 times.
Despite the above-mentioned hard situation, consumer prices in Georgia for the Y2000 rose by 6,4% and the GDP deflator rose by 6,9%, which is the lowest index during the post-soviet period. To compare, the same indicators in previous years made up 10.9 and 9.5%-s. Since then the government have been pursuing aget-tough monetary policy that, as the executives of National Bank consider, is the result of such mechanisms as economy in transition, imperfect financial market, dollarisation, corruption and budget crisis.
The National Bank of Georgia closed the Y2000 with the decrease of 391.2 million GEL in reserve funds, 19.1 million US Dollars in international reserves, and 40 million Dollars in international assets. It had profited by 67 million Laries and financed the government with 135.5 millions.
According to the National Bank data, M3 indicator made up 618.2 million GEL that exceeds the Y1999 indices by 39.5%; M2 indicator made up 382. 1 million that’s less by 33.5% compared to 1999 record. Deposit basis for commercial banks rose by 104 million Laries, 79 millions of which are that of foreign currencies.
As we see, dollarisation indicator rises yearly, interest rates have decreased. They have approximately decreased by 6% for the 6-12 month loans.
The National Bank of Georgia purchased the resources of more than 44 million GEL last year, which are the 61% of total purchases. 20 auctions the total value of which made up 10.3 million GEL, were held during the year. By the end of the year, total volume of international reserves of the National Bank of Georgia amounted to 109.4 million US Dollars.
It is noteworthy that the number of loans issued by the National Bank of Georgia for the Finance Ministry during 1994-2000 amounted to 773.7 million GEL.
Last year, the National Bank continued its trade operations in the currency market.
The system of banking supervision is improving year by year. Commercial banking gets safer for customers. In the second half of 2000, 9 commercial banks were deprived of licence, 28 were examined and given a rating of the CAMEL banking system.
According to the data of 31st December 2000, net profit of the National Bank under the organic law, made up 65.6 million GEL (54.1 millions in 1999) which, in accordance with the International Accounting Standards, equals to 74,9 millions (42.3 millions in 1999).
Thereof, we may conclude that Irakli Managadze (the President of the National Bank of Georgia) is the real leader and he deserves the name of the first banker in the country. During the past ten years, Georgia could perfectly form only one institute – the National Bank. Despite serious economic renovations, Managadze’s team is able to stand the pressure and to lead the National Bank of Georgia into the list of first banks of the world civilisation, where only the professionals hold place. Everyone may achieve thit success if he works hard. It means that only professionalism can save us.