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Tbilisi Budget

In 2015 Tbilisi municipal budget will finance social and health programs by 203 million GEL, that is 25% of total funds. Namely, 168.5 million GEL will be allocated for social projects and 34.4 million GEL will go to healthcare programs, up 8 million GEL compared to 2014.

Economic analysts assert the 2015 municipal budget is not practically designed to stimulating economic growth, and both national and capital budget are largely designed for social obligations. At the same time, less attention is paid to the infrastructure projects.

In this situation, the natural question is whether a poor country like Georgia and, particularly, its capital, can afford so socially oriented budget.

Levan Kalandadze

Expert of Economy, Head of the Georgian Initiative for Infrastructure Projects

It would be incorrect to make empty evaluations whether the 2015 municipal budget is good or bad because of one simple reason: neither Tbilisi nor other self-governments and cities   have got independent budget, in practice. Local budgets, including Tbilisi municipal budget, basically represent a financial document dependent on central budget transfers. Consequently, the issue of financial and budget independence of Tbilisi Council or other self-governed city or district, unfortunately, is only fiction and in this respect the statue of independent bears only formal importance.

The self-governments reformation does not provide enactment of financial decentralization component as a main instrument of the genuine decentralization. As a result, city self-governments and councils do not have their own revenues. Hence, composition and approval of a local budget bears only formal character. Therefore, local budgets, including Tbilisi 2015 municipal budget is adequate to the the central budget transfers. Naturally, taking into account this and central budget problems, the 2015 Tbilisi municipal budget will be practically fully oriented on implementing municipal social programs through ignoring programs oriented on economic development. Thus, we should not expect the 2015 Tbilisi municipal budget will promote economic growth and finance projects oriented on business sector development.

The main challenge accompanying budget processes, including Tbilisi budget, is to provide efficiency of the budget expenditures. As reported, the January to September plan of revenues in 2014 was performed by 95.2% (deficit marked 24.8 million GEL), while payments part was fulfilled by 82.8% (lack of 95.3 million GEL).

In this respect significant downturn was marked in financing Tbilisi transportation, roads construction, buildings reconstruction, infrastructural and other projects and efficiency of budget expenditures.

Focusing on these issues and problems should become one of the goals of local self-governments in 2015 to ensure efficient employment of the existing resources in the existing conditions.

Irakli Lekvinadze: The 2015 Tbilisi budget accounts for 800 million GEL and it is oriented on financing social programs in line with main priorities of the ruling team in Georgia. Medical and treatment programs, infrastructural arrangement of preschool assets and, in general, infrastructural projects are very important. I believe efforts for creating program budget is very significant and good precedent, as expenditures substantiate efficient fulfillment indicators. The 2014 budget deficit marked 26 million GEL. I believe the 2015 budget will not repeat such precedent, because a new team is responsible for preparing and fulfilling the 2015 Tbilisi budget. In whole, the budget structure responds to the main challenges and needs of the capital city.

 

Tamar Kakabadze