On the New PM’s Economic Plans

On September 8, with 98 votes in favor to 0 against, the Georgian Parliament approved a new Cabinet under Prime Minister Giorgi Gakharia.

Gakharia, who has occupied multiple posts in the Georgian government, was nominated to the PM’s post after the former PM, Mamuka Bakhtadze, announced his resignation on September 2. During Bakhtadze’s time in office, Gakharia was the Deputy PM and Interior Minister, as well as the Secretary of the National Security Council. Before that, from November 2016 to November 2017, he served as the Minister of Economy and Sustainable development of Georgia.

The PM has said he does not think new initiatives are necessary at this stage, noting that first, all projects that are underway need to be concluded.

“We also have to do an audit of what we have already done, be it programs or initiatives. We have to bring these to a close and analyze the results. We need less talking and more work and results. We need to have something we can compare and rely on,” he told Parliament prior to his team being approved.

Gakharia says discipline and effective bureaucracy are also necessary to achieve effective economic results.

“This government will be focused on that. Effectiveness will be the most important criterion and, of course, discipline,” he said, adding that without effective bureaucracy, no reform can come to a logical end nor make sense to citizens.

The Prime Minister noted that, conceptually, the solution to the problem of poverty ultimately comes down to employment.

“We’ve seen some positive trends in this regard. The poverty level is down, jobs are up, but this is not satisfactory: we need more. We have to agree on a concept at the formula level, and that concept is simple,” he said.

The Prime Minister said the country needs both political and macroeconomic stability and a transparent and predictable business environment in order to create jobs.

"We need to have such communication with businesses that we can make a forecast in the medium term so as to create more jobs and have a more robust business sector. Of course, we, the state, must talk about social responsibility. Unless we do that, this social responsibility will be a burden on the state and we will have to bear it,” he added.

Gakharia also stressed the need to concentrate on the development of the country’s industrial capacities.

“We need to enhance human capital development, and this should be facilitated by an effective bureaucracy whose work will be a key principle and objective for the new government. Before we can achieve the ultimate reduction of poverty, of course, our social services and the social responsibility of the state must be focused on social protection functions,” he said.

In addition to this, PM Gakharia noted that the economy of the country does allow for a further pension increase but that this is not the main priority.

“We need to make fundamental changes in the system. We need to establish certain rules for retirement provision at the legislative level. We will try to make some changes here too. However, we have international commitments, and if we are to change our position in negotiations with the IMF, we will try to introduce some form of indexation where the increase in pension provision is not a matter of political speculation and is directly linked to economic growth,” he explained.

The new PM also noted that everything related to logistics is critically important and a priority for the country, including the Anaklia Deep Sea Port project, which is of crucial importance to the state. Logistics, he said, is one of the most important components of Georgia's developing economic potential.

“It should be understood by everyone that each Lari the state spends on this project, and it has already spent hundreds of millions, is the contribution of each of our citizens. People should also understand that by doing so, the state, in all its steps, has the right to demand from private partners a fulfillment of their obligations in a timely manner,” Gakharia said.

The Prime Minister underlined that the state will do its best to ensure the project is implemented.

By Thea Morrison

Image source: marneulifm.ge