Georgian gov't announces plan to support construction sector through crisis
The Georgian government has developed an anti-crisis plan aimed towards minimizing the damage to the construction sector caused by the coronavirus pandemic.
But many people are protesting and saying that the plan will be implemented at their expense.
As of May 28, Georgia has reported 738 cases of coronavirus infection. 573 patients have recovered, and 12 have died.
The plan allocates 434,000,000 lari towards supporting the construction sector ($1 = 3.2 lari).
This sum is significantly larger than the money the authorities intend to put towards the tourism and agricultural sectors – 200,000,000 lari and 300,000,000 lari, respectively.
The government intends to put the 434,000,000 GEL towards four main goals:
● 70,000,000 GEL- towards subsidizing interest on mortgage loans
● 14,000,000 GEL – towards government guarantees for a portfolio of mortgage loans
● 150,000,000 GEL – towards constructing houses for refugees
● 200,000,000 GEL – to back construction-related purchases.
The construction sector will spend these funds specifically on construction, and the real estate acquired within the framework of the project will be given to refugee families.
There are a number of conditions for subsidizing interest on mortgage loans, including time, receiving the loan, the size of the loan, and the repayment term.
Prime Minister Giorgi Gakharia says when drawing up an anti-crisis plan for the construction sector, the conditions of the real estate market were taken into account, and the goal was to revive it.
He noted that the government will provide assistance to every citizen in need of better housing conditions for the next 5 years. Gakharia believes that actions of the government will help approximately 1800 families, or around 6000 people, get an apartment 3 years before they otherwise would be able to.
The prime minister says that the decision to provide support to the construction sector was dictated by the fact that before the crisis, construction and development accounted for 9% of the total domestic market, it was the fastest growing sector with approximately 120,000 jobs, and almost as many indirectly-related jobs.
He also emphasized that construction served as a kind of engine for enterprises manufacturing building materials, furniture, trade in equipment, etc.
The public reaction to the government support plan for the construction sector has been mixed.
In particular, many users of social networks are annoyed by the fact that the government is covering interest on loans.
Since the money will be taken from the budget, it means that taxpayer money will be used, they write, pointing to a lot of cases when people took out loans for housing, and then rent them out:
“We are paying for them to conduct their business.”
The first case of coronavirus infection in Georgia was reported on February 26, 2020. A state of emergency was declared from March 21 to May 23 to counter the coronavirus pandemic.
The first phase of the lifting of restrictions began on April 27. Starting June 15, the Georgian authorities plan to resume domestic tourism, and from July 1, borders will open to foreign tourists.