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Kutaisi Residents May Face Financial Crisis

Written by Nana Mghebrishvili, The FINANCIAL

20/01/2013 20:55 (451 Day 12:46 minutes ago)



The FINANCIAL -- Zura Chakvetadze will lose his income in the event that the Georgian Parliament relocates back to Tbilisi . He is not the only one on whom the new constitutional change currently being discussed may have a negative impact. A huge number of Kutaisi residents started up their own small businesses since the new Parliament brought extra revenue and prestige to the city. Lots of them are now justly concerned as they have loans taken out with the banks.

Imereti is the leader in terms of issuing loans after the capital according to data of National Bank of Georgia . At the same time, crediting in the region has been increasing significantly over the last year. Commercial banks had issued GEL 413,078 thousand by 1 October, 2012. The number is almost double compared to the same period of 2011. Only GEL 240,771 thousand was issued in that period. Such a big increase is directly related to the rise of political activities in the region.

Zura Chakvetadze took out a loan from the bank to renovate his house and buy home appliances. As a result he then rented out his house for GEL 500 a month. This is very good income for a family in the region.

“I have to pay interest rates for three years,” he worries. “But if the Parliament moves back to Tbilisi , I will lose the chance to rent out my house for good money. This will double my problems. First of all I will lose my source of income and what’s more, I will not have the ability to pay off my loan.”

Chakvetadze is no exception in Kutaisi society. Lots of people have rented out their houses for high prices. Meanwhile, some people have opened shops there. They thought that demand for products would grow because many people have moved to Kutaisi and more people would earn money to spend in shops.

Nanuli Kavtaradze is one who opened a market near the Parliament. She borrowed quite a large sum of money from the bank to do this. The market offers quite a good range of products and the owner has arranged its distribution networks well.

“I started working on opening my shop one year ago,” Oniani said. “It required a significant amount of time, energy and money. Now, just when the shop is working quite successfully, Kutaisi faces the danger of becoming a dead town again. If that happens, I have no idea how I will be able to pay back my loan.”

Akaki Bobokhidze, member of the parliamentary minority, also discusses the negative effects of abolishing the Parliament in Kutaisi. “NGOs were going to open branches in Kutaisi. Some embassies, international organizations as well as Georgian businesses would have had offices there. Some conferences would have been held in Kutaisi. For example, Imedi TV had already started the building of a local office in Kutaisi, but the process has now stopped because of the discussions about new change.”

Beka Danelia, a student from Vani, is studying at Akaki Tsereteli State University in Kutaisi. He is in his first year. Danelia was going to pass his entrance exams to Tbilisi State University, but his family decided to move to Kutaisi, not to Tbilisi .

“I thought that more working places would be created in Kutaisi and I would have the possibility to find a good job here, near my family and village. This would have made life easier for us. But now if the Parliament moves to Tbilisi , I will not be able to find a job here in Kutaisi and at the same time, will have less of a chance of getting employed in Tbilisi with a background of being educated at Kutaisi University.”

Some people are employed in the Parliament as well. In this case they will lose their newly-created jobs. Residents of the town have become more self-confident. “I live near the Parliament, which was previously a very bad place. I always felt ashamed about this fact, but now I am proud of my town and my home. Now I proudly invite my friends, and all residents in the area feel the same,” said Bela Kapanadze.

Media organizations and NGOs operating in Kutaisi recently applied to the Parliament in an open letter with the request not to move it to Tbilisi . The letter said: “The price of real estate is already raised in Kutaisi. Demand for different services is increasing as well. New business objectives have appeared. Internal and international tourism is developing. Society is becoming more active. All these factors have created a better investment environment for the town. These trends will be reversed if the Kutaisi Parliament is abolished.”

The arguments for moving the Parliament to Tbilisi are: keeping the Parliament in Kutaisi is more expensive than in Tbilisi ; the distance between the Parliament and the Government will make communication more difficult; the Parliament building is not comfortable; deputies have utility problems. The discussion continues.

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