'Georgia Finance' - The impact of economic development and stability to the social sector
It has been more than two years now that Georgia elected a new president, a new flag, a new anthem and armors. These are not the only changes in the country. Just a few days ago, my husband Mikheil Saakashvili summed up the economic achievements of roughly 30 months since he seized power in Georgia: double digit growth figures, quadrupling state revenues, doubling pensions and allowances including restitution of accumulated arrears, crackdown on corruption and diminishing of the shadow economy, solving of the energy crisis, democratic reforms in higher education, impressive growth in tourism, professional and efficient army, police force and border control, booming construction market (roads, schools, squares, sport complexes, health facilities) ... an enumeration of the major outcomes since the peaceful Rose Revolution.
This month, ‘The Economist' published a few articles on the big economic achievements of Georgia's new and young government: ‘Apart of those [governments] of the Baltic countries, Mr. Saakashvili's may be the most accomplished post-Soviet governments now in office' and ‘there have been big achievements, chief among them an impressive crackdown on corruption ... more tax is being collected, economic growth will reach double figures this year ...'
Georgia on the rise
The trend has been set: a trend of development, growth, optimism, stimulation, hope and energy in a country that is building up at top speed with a government that is keen on keeping its promises and improving life standards. As a result, Georgians more and more believe in a prosperous future and as a result thousands of Georgians are even returning to their motherland from abroad where they have been trying to survive and qualify themselves during the harsh economic Georgian crisis of the nineties and the first years of the new millennium. In general, critics and skeptics find little support within the population as the facts are so much speaking for itself.
Private sector: carrot and stick
To guarantee economic development, the private sector is offered an improved investment climate and a better protection of private property.
Doing business in Georgia became attractive: in particular the energy, infrastructure/construction and tourism sectors are injected with foreign and domestic investment. A good example of a bottom-up approach is the thousands of internally displaced persons (IDPs) who are getting financial compensation in exchange of leaving their dwellings in former hotels and sanatoria at different resorts in Western-Georgia. These objects have been privatized by the government for tourism development. The IDPs can now acquire private property or start small enterprises.
As there is more confidence in the sustainability of Georgia's economic growth, the banking sector and other financial institutions can develop and gradually offer better and safer services, including more attractive credit and loan conditions for the small and medium enterprises.
By setting good examples and show best practices, businesses make people get gradually used to the rules of a market economy which is based on merits and competition.
But next to the carrot there is the stick: financial accountability became one of the key words in both public and private sectors. This year, sale checks and receipts were introduced on the whole territory of Georgia despite of massive protests of those seeing their profits shrink while moving out of the shadow (economy). It was and is necessary to strictly apply the law and punish those who cannot account for their financial or tax management. Another good development is the introduction of international arbitration in Georgia.
Room for health & education
As the state budget is growing steadily thanks to better border and trade control, privatization and more perseverance in tax collection, there are funds for increasing pensions and salaries of public servants including teachers. Renovation and modernization of schools and school equipment is another social achievement of the past few years. The Georgian Ministry of Health and Social Affairs has -in anticipation of minimum subsistence level allowances- introduced temporary financial assistance for hundreds of thousands of the most vulnerable families in Georgia, receiving an additional 20 to 75 EURO per month and taking benefit of an insurance scheme covering urgent medical care including ambulatory service. The capital's city council has also selected more than 50.000 vulnerable families who can count on a medical insurance coverage. It goes without saying that insurance is one of the ways to guarantee social stability and the best basis for development instead of stagnation. It is a very welcoming fact that the middle class more and more opts for (medical) insurance: in this way the core group of vulnerable will diminish step by step and as such get more state assistance per capita.
Economic growth paves the way to territorial integrity
It goes without saying that there are still a lot of challenges ahead for Georgia. Territorial integrity stays priority number one on the national agenda, i.e. gaining back control over the territories of South-Ossetia and the Black Sea bordered Abkhazia.
Many Georgians still are jobless or are involved in unofficial petty trade in the cities. It is the goal of the present government to cut in half the number of jobless and people living under the poverty line within three years from now. With a high rate of unemployment, the government and the private sector mainly cover the increasing demand for work force by domestic labor force. It is hard though to find skilled workers, especially in the construction sector and it is a challenge to avoid bringing in foreign workers to do the job. Therefore, technical colleges for vocational training and special programs for updating knowledge and skills will be set up soon.
As a rule, health care reform is one of the toughest challenges showing results at a long term perspective. As is generally known, the success of reforms -however radical and tough they might seem at first glance- lays in the management of the transitional period in the midst of which we are now. I am deeply involved in the education and health sector reforms: as a specialist of modern languages, a few days a week I am teaching French to MBA students and Georgian diplomats.
I am involved in the Deinstitutionalisation Working Group trying to find and formulate a durable solution to the problem of 5000 children residing in almost 50 institutions that are under the supervision of the Georgian Ministry of Education and Science. Unnecessary to say that these children are lacking parental love, care and attention.
As a Chair of the Country Coordination Mechanism I am responsible for coordinating different grant programs in the national fight against Tuberculosis, HIV/AIDS and malaria.
As the founder and director of the SOCO Foundation I am involved in charity since 1998 assisting the most vulnerable population of Georgia (www.soco.ge).
As I have become mother of our second son just eight months ago, I am very motivated to gradually shift my attention towards the issues around reproductive health and safe motherhood. Other areas of special interest for me are children without parental care, prevention of drug abuse and promotion of sports and healthy life style. One of my hobbies, classical music, made me set up a classical music radio station which will be the first station in its kind to get soon on the Georgian air.
Sandra Elisabeth Roelofs, First Lady of Georgia