Georgia: Government Couldn't Figure Out How to Spend $68 Million, NGO Says
Think the Georgian government is hard up for cash? If anti-corruption watchdog Transparency International is correct, you might want to think again.
In a recent statement, the group claimed that officials failed to spend a whopping 150 million lari (roughly $68 million) budgeted for 2014 expenditures. *
It alleged that the finance ministry had attempted to conceal the scale of the underspending by listing 80 million lari (about $36 million) as a sub-item in the government’s Treasury Single Account (defined by the IMF as “a unified structure of government bank accounts”) to make sure it was not reflected in the country’s annual financial statement.
As a result, the group continued, inaccurate budget-deficit calculations were shown to the public, potential investors and international organizations.
Critics claim that the underspending, the second year in a row, shows that government departments did not keep projects on schedule or even get started with them.
“This is a new paradox that the government has money, but cannot spend it,” drily remarked Roman Gotsiridze, a head of the Central Bank under former President Mikheil Saakashvili, local media reported.
Since regaining independence in 1991, Georgia generally has had the opposite problem, he added.
The finance ministry ardently denies any wrongdoing. It insists that it keeps its books properly — hauling out the World Bank’s senior economist for the South Caucasus, Rashmi Shankar, on March 20 to echo that claim — and that the 80-million lari was just additional revenue, rather than unspent budget-funds.
The ministry has demanded an apology from TI. But the group has stood its ground. Claiming that the ministry also has been busy tweaking its online deficit-data, it argues the ministry’s explanations fall short of the whole story.
The claims are not the first time the ministry has been charged with inattention to money-matters. Last year, a scandal erupted over the amount spent by Finance Minister Nodar Khaduri on official dinners for visiting guests. The ministry responded by posting menus on Facebook.
But, this time around, some see a much broader story. And one that may not necessarily be so quickly resolved.
For the past year, Gotsiridze, who now runs an economic think-tank, has claimed that the government was not using its financial resources, including foreign-aid funds, to build bridges or revamp agencies as intended.
But, if so, fuzzy regulations mean that may not necessarily affect the payment of bonuses.
The government, however, did not have difficulty spending money elsewhere, according to the opposition UNM. It claims the government spent 181,000 lari ($81,235) on new Italian furniture for the prime minister's offices in the central administration building. (The government says it actually was 156,000 lari, or about $70,014, and, according to Finance Minister Khaduri, is needed for the administration "to continue to operate in a normal situation.")
The finance ministry maintains, though, that when it comes to its accounting, everything remains above board. TI’s financial claims, Khaduri told reporters, are “unprofessional.”
*TI Georgia receives funding from the Open Society Georgia Foundation, part of the network of Open Society Foundations. EurasiaNet.org operates under the separate auspices of the Open Society Foundation-New York City.
Giorgi Lomsadze is a journalist based in Tbilisi, and author of Tamada Tales.
Sign up for Eurasianet's free weekly newsletter. Support Eurasianet: Help keep our journalism open to all, and influenced by none.