The FINANCIAL — On 15 November 2016, during his interview with Pirveli TV channel, one of the leaders of the United National Movement, Zurab Chiaberashvili, assessed the condition of the exchange rate of GEL, as well as that of the economy in general.
Mr Chiaberashvili stated: “Mr Khaduri and Mr Kvirikashvili presented the action plan for eradicating the depreciation of GEL to the joint committee session of the Parliament of Georgia in March 2015 and the tightening of belts was announced at that time as well. About year-and-a-half has passed and we are still in the same situation. We have been telling this to them for so many years; however, they still continue increasing the bureaucratic expenditure, taking domestic debts and putting the economy in a tight spot.”
In 2015, the then Prime Minister of Georgia, Irakli Gharibashvili, and his Cabinet did indeed announce the policy of tightening the belts. This policy envisaged the reduction of bureaucratic spending.
Bureaucratic expenditure consists of the acquisitions of goods and services as well as of the money spent on remuneration. The bureaucratic expenditure in the 2015 budget plan was set at about GEL 2,323 million and was implemented almost by 100%. The Government of Georgia did not amend the initial budget plan in this field and implemented it without any changes.
The 2016 budget plan set the bureaucratic spending at GEL 2,480 million, exceeding the budget plan of the previous year by almost GEL 160 million. According to the statistics of the 2016 budget implementation, the payments in the field of bureaucratic expenditure are going according to the plan so far and it is highly likely that by the end of the year the implementation figures will meet the requirements of the initial budget plan.
According to the same document, the growth of the domestic debt in 2016 was set at GEL 200 million. This means that the growth of bureaucratic spending and the domestic obligations were practically equal. In addition, apart from the growth of the domestic debt, the State Audit Service underscores the method of accounting the debts and recommends the government to review its debt accounting policy.
The 2017 state budget plan was first registered on 1 December 2016. Hence, Zurab Chiaberashvili was making his statement basing upon the initial budget project, not the official plan. According to the initial budget project, the administrative spending was planned GEL 90 million more than it was in 2016. By the final project the administrative spending is GEL 57 million more than in 2016. But if we will see as percent of total expenditure, in 2016 administrative spending was 29% of total expenditure and in 2017 it diminishes to 27.8%.
Conclusion
According to the implementation statistics of the 2015 state budget, the administrative spending did not reduce after the statements of the Minister of Finance of Georgia and the Minister of Economy and Sustainable Development of Georgia. The expenditure did not reduce according to the 2016 state budget implementation statistics either. Furthermore, the administrative spending in 2016 increased by almost as much (GEL 160 million) as the domestic debt (GEL 200 million).
In 2017 state budget plan administrative spending is increased by GEL 57 million, but if we will see as percent of total expenditure, in 2016 administrative spending was 29% of total expenditure and in 2017 it diminishes to 27.8%. It means that administrative spending burden (on the budget and on the economy of Georgia) will be lightened.
Based upon this information, FactCheck concludes that Zurab Chiaberashvili’s statement is Mostly TRUE.
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