Georgia: 2011 Budget Is Big on Bucks, Small on Public Details

Government transparency has long been a rallying cry for Georgian President Mikheil Saakashvili’s administration, but when it comes to public information about the state budget, that transparency can be hard to find.All but 12 percent of Georgia’s 7.107 billion-lari ($3.98 billion) state budget for 2011, approved on December 17, comes from government revenues; the remaining 877.5 million lari (about $501 million) represents outside financing.  The largest budgetary outlay goes to the Ministry of Labor, Healthcare and Social Protection (1.604 billion or $916 million), the lowest to the Office of the State Minister for Reintegration Issues (1.7 million lari or $971,000). But finding details in the 100-page document released to the public about the government’s biggest projects, however, can often prove a difficult or impossible task. The budget, for instance, contains no information about how much will be spent on the development of a four-season resort in the mountainous region of Svaneti, an ambitious project initiated this year by President Saakashvili, who has described it as a bid to challenge Swiss ski resorts. The only information related to Svaneti in the budget shows that the region’s administrative center, Mestia, along with eight other cities will receive 1.2 million lari or $686,000. No details are provided. Information is similarly lacking about development of Anaklia, the Black Sea village with which the Svaneti resort will be partnered to offer tourists a ski-and-swim option.  Expenses related to tourism, a key government focus, are limited to two lines about the tourism department’s wages, “service costs” and “non-financial assets.”Specifics about other priority projects, though, are available; the Ministry of Education for example, will receive 32 million lari ($18 million) to provide all Georgian first-graders with computers.Finance Minister Kakha Baindurashvili stressed to EurasiaNet.org, however, that members of parliament have access to a much more detailed, 500-page version of the budget, which is made public and placed on parliament’s website after the budget is passed.  The final document, he affirmed, clearly defines every category of expenses, including “other expenses,” a budgetary parachute for emergencies and other unforeseen situations.The 2010 and 2009 budgets available online, however, appear to be only the 100-page “sneak-peek” version. EurasiaNet.org was not able to find more detailed information about government expenditures in these budgets. That lack of information about approved state budgets leaves the public with little choice but to take on trust parliament’s decision to approve government expenses. The catch is, however, that some opposition members of parliament concede that they do not know for what they are voting. “Our criticism is that this budget is a rough estimate and it is not very detailed…we don’t know how much we are spending today and if we need those expenditures, for example for television or cars, etc,” said Budget and Finance Committee Deputy Chairperson Guram Chakhvadze, a member of the opposition National Democratic Party.Although parliament has worked out an elaborate system for classifying budgetary expenses, the government does not use it, Chakhvadze alleged. He noted, however, that some aspects of the budget, namely allotments of foreign aid and grants, are quite clear. The same level of transparency, he argued, is needed for domestic spending.The opposition argues that that lack of classification also obscures the intended purposes of more than 800 million lari ($457 million) designated for “other expenses.”  In the defense ministry’s budget, for example, 2.79 million lari ($1.6 million) in extra expenses are allocated under specific items, like the ministry’s “civilian” offices and the joint chiefs of staff, but no information is provided about how those funds will be used. Some 9.1 million lari ($5.2 million) in undefined “extra expenses” are included in the Ministry of Interior Affairs’ 566-million-lari (over $323.4 million) budget.Davit Onoprishvili, who served as finance minister from 1998 to 2000, maintains that the lack of clarity about those funds means there is little oversight over how the money is spent.“These ‘other expenses’ go to education or health or the [security] ministers, but the problem is that more than half of these ‘other expenses’ are not clarified,” said Onoprishvili, a member of the centrist opposition Our Georgia – Free Democrats Party. “[I]t gives flexibility to the government to spend that money [however] they want.”Chakhvadze, by contrast, noted that it is not possible for the funds to be used however a ministry chooses, but, he added, without detailed information, members of parliament and the public cannot make informed decisions. “[T]hese funds are almost completely non-transparent. We don’t know what the money is being spent on,” he said. Similar concerns have been voiced before about the presidential and government reserve funds, “rainy-day” pots of money; the 2011 budget grants 50 million lari (roughly $28.6 million) to each fund. The budget made available to the public contains no information about their intended uses.  Finance Minister Kakha Baindurashvili acknowledged that “it is normal that people have questions” about the budget, but maintained that ongoing reforms will make information about spending and revenues more accessible and transparent to the general public.The 2012 budget, he said, will be “a program budget,” a budget that includes analysis about what funds are supposed to accomplish and more specifics on how they will be spent, Baindurashvili said. The format is also used in the United Kingdom and the United States. A study of Georgia’s 2009 budget, published this year by the Independent Budget Partnership, a watchdog organization that works with civil societies in developing countries to make government spending more accountable, also called for increased public participation in parliamentary budget hearings and for the Chamber of Control to publish budget audits. The group noted, though, that the government has made significant strides in improving the budget over the past four years.[The Open Society Georgia Foundation also participated in the Independent Budget Partnership country survey. OSGF is funded by the Open Society Institute, which also finances EurasiaNet.org under the auspices of its Central Eurasia Project.]