Georgia’s anti-crisis plan – who will be helped how
Georgian Prime Minister Giorgi Gakharia has presented the country’s coronavirus anti-crisis plan.
According to the plan, the state will provide assistance to the unemployed, the socially vulnerable, large families and people with disabilities.
The government has allocated 3.5 billion lari (about $1.1 billion) for the anti-crisis measures.
As of April 24, 431 cases of coronavirus infection were confirmed in Georgia. 5,126 people are in quarantine, and 578 people are under supervision in hospitals. Of those infected with coronavirus, 114 have recovered and five have died.
What is written into the plan, and why is the opposition criticizing it?
What losses has the country suffered since the coronavirus pandemic. Figures
● According to the Prime Minister, against the backdrop of the crisis caused by the coronavirus pandemic, economic growth in Georgia will be minus 4 percent instead of the planned 4.3 percent growth.
● The country’s budget will lose revenues of 1.8 billion lari (approx. 560 million dollars).
● Current budget expenditures will be reduced by 300 million lari (approx. $95 million).
● According to Gakharia, 350,000 people will lose their jobs.
Who will receive help
The unemployed, retired and socially vulnerable
Over the next six months, 200 lari ($62) per month will be received by those who have lost their jobs or were sent on unpaid leave after the state of emergency was announced.
In total, this help will affect 350,000 citizens, said the Prime Minister. This will cost the budget 460 million lari ($144 million).
The self-employed will receive one-time assistance to the amount of 300 GEL (approx. $95) if they can prove that they have lost income due to the declaration of the state of emergency. According to the Prime Minister, this will cost the budget 75 million lari.
In addition, 100 GEL per month for 6 months will be received by officially registered socially vulnerable families as well as people with disabilities.
The countdown for these six months will begin on the day the state of emergency is declared on March 21. Payments will begin in May.
The countdown for these six months will begin on the day the state of emergency is declared on March 21. Payments will begin in May.
Since 2021, the pension of all pensioners will increase by 20 GEL, while pensioners over 70 will see their pensions increase by 25 GEL.
Business Assistance
Employers who do not lay off workers and retain jobs and wages for them will receive tax benefits from the state.
In particular, over the next six months, salaries of up to GEL 750 ($235) will be exempt from income tax, while the same amount will be free from taxation for salaries up to 1500 GEL.
For this purpose, 250 million lari will be allocated from the budget.
According to the government’s plan, an automatic VAT refund mechanism will be launched, and this year the business will receive an additional 600 million lari ($ 187 million).
Commercial banks will also receive from the government 600 million lari, with which they can lend to the business.
An additional 500 million lari will be allocated from the budget for loans for small and medium enterprises. The state will guarantee 90 percent of the loan if the entrepreneur decides to start a new business and take a new loan. And for companies with old loans, the state will help in their restructuring and will finance 30 percent of the loan.
Changes have been made to the Enterprise Georgia program of the Ministry of Economy. According to the anti-crisis plan, within the framework of this program, the term for co-financing loans for entrepreneurs will increase from 24 to 36 months. The interest rate co-financing mechanism will also be changed.
Agriculture
According to the decision of the government, individuals and legal entities this year will be completely exempted from payment for irrigation water, current debts will be written off.
The Ministry of Agriculture will increase the maximum size of micro grants to 30 thousand lari instead of the current 5 thousand lari.
The government will allocate 50 million lari for agricultural loans for the cultivation of annual crops (for example, wheat, potatoes, cucumbers). The Prime Minister predicts that 5,000 people will be able to use the program, the government will fully finance their interest on loans.
Opposition critical
Almost all opposition parties have sharply criticized the government’s anti-crisis plan.
Politicians believe that the assistance that the government offers to the population does not meet the challenges facing the country. This is not enough and the program cannot mitigate the serious consequences of the economic crisis for people, opponents of the government say.
The European Georgia Party believes that a way out of the situation would involve a reduction in taxes, rather than providing one-time assistance.
“We heard a presentation that was vague, belated, superficial and full of harmful and inadequate criteria from Prime Minister Gakharia,” said party leader Giga Bokeria.
Bokeria called the meager amount of assistance that the state offers citizens, and the fact that the government does not reduce taxes, in his words, “unthinkable.”
Badri Japaridze, a spokesman for the Lelo political movement (founded last year by renowned banker Mamuka Khazaradze) said the government has not developed a systematic plan to stimulate the economy to allow unemployed people to return to work. And the financial assistance that people who are left without work will receive is very small.
Japaridze believes that this is more a pre-election plan than a plan to overcome the crisis:
“It is also questionable as to why the schedule is scheduled over six months. The sixth month coincides with the election. The question is why this help cannot be provided within three months?” says Japaridze.
Aleko Elisashvili, leader of the Civil Movement, said that the Georgian government had the opportunity to work with the opposition and develop an anti-crisis plan for national consensus, but the government did not take this opportunity.
“The essence of this plan should be that people locked in houses are physically saved … These ministers and the parliamentary speaker who are satisfied there deserve to be forced to live with their families for 200 lari per month,” Elisashvili says .
Elisashvili believes that the government could do more.
“600 million lari is accumulated in the pension fund. Our budget is 10 billion. 30 percent of the budget can be saved if you reduce current expenses – business trips, bonuses and trips back and forth. This is 3 billion lari. We also have foreign aid – 3 billion lari. If you correctly distribute this amount, you can really support people and give them 1200-1500 GEL (375-470 dollars) per month. There is an opportunity for this,” Elizashvili said.
The first case of coronavirus infection in Georgia was confirmed on February 26, 2020. On March 21, a state of emergency was declared in Georgia, and from March 31, the general quarantine regime.
