Georgian PM emphasises “good” economic framework, “free” business, peace for rapid development

Georgian Prime Minister Irakli Kobakhidze on Wednesday discussed the country’s economic development in an interview with Imedi TV, saying the Government had a “very good framework policies for economic development” and “very good management”, adding the “business is free” and “we have peace, which allows us to develop the economy quickly”.

Kobakhidze highlighted the progress made in the past 2.5 years, including the creation of 170,000 new jobs and a “substantial” increase in average salaries from ₾712.5 ($261.98) to ₾2,005 ($737.22).

According to our plan, the amount will increase to ₾3,500 ($1,287) in four years. These are unmistakable data. These people are taxpayers who contribute money to the budget”, he said.

When 170,000 jobs were added, the number of people contributing money to the budget increased by 170,000 accordingly. Their salaries have tripled during these years, and as a result, these people contribute three times more income tax to the state budget. It is a big fallacy that only 20-25 people become rich just because the country's economy increased from ₾28 billion ($10.30bln) to ₾90 billion ($33.09bln). First of all, the economy is not a pile of cash that someone can take and bring home”, Kobakhidze added.

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In the TV programme, the Prime Minister also addressed the issue of poverty, acknowledging that while there had been a “notable improvement”, there were still 440,000 individuals living below the poverty line.

They say there are 440,000 people living below the poverty line, but it takes time. That is why we believe that as the economy grows – our main goal being to reach an economy of ₾130 billion ($47.80bln) in four years – at most 150,000 people will live below the poverty line. Ultimately, our consistent year-on-year economic growth will help reduce poverty levels”, he said.

Kobakhidze said the Universal Healthcare Programme and other targeted healthcare programmes introduced by the Government had “directly resulted in tangible benefits” for the people.

The implementation of a universal healthcare programme was a deliberate value choice. Putting people at the centre of politics was a complete departure from the past, where the dignity of individuals was most undermined by the authoritarian regime at the time”, he said.

He added the latter approach had undergone a “radical transformation” under the  new Government, with the programme one of its manifestations.

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The social budget as a whole, including separate healthcare costs, has increased fourfold [...] The average life expectancy in our country was 72 years in 2012, and this figure has now increased to 75 years. Consequently, if we consider the same number of pensioners, the number of people reaching retirement age has increased by 155,000. These people were previously condemned due to lack of funds under the previous Government”, he said.

The number of people who cannot access healthcare facilities due to financial constraints has decreased fivefold since 2012, and this figure continues to decrease year by year and will decrease even further [...] 3.3 million people have benefitted from the Programme. ₾8.5 billion ($3.13bln) was allocated from the state budget for them, and there are numerous individual cases that were financed within it”, Kobakhidze added.

The Prime Minister also highlighted the increasing state budget.

It was ₾8.5 billion ($3.13bln) [in 2012], and this year it has already reached ₾27.8 billion ($10.22bln). It is projected to exceed ₾40 billion ($14.71bln) by 2028. In terms of unemployment, it has been halved according to the current data, standing at 13.7 percent. According to the presented plan, unemployment is expected to drop to four percent by 2028. For reference, the European Union average unemployment rate is six percent. This means that in four years, our unemployment rate will be lower than the EU average”, he said.

Kobakhidze highlighted economic development as “one of the most important factors” to support and accelerate the development of the country.

The more developed the non-occupied territory of our country, which constitutes 80 percent of the country’s territory, the more interest will arise in Abkhazia and Samachablo [Russian-occupied territories of Georgia] to integrate and become part of a united, indivisible state, potentially joining the EU”, he said.

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The Prime Minister added the development of the country was the “key to progress in all areas”, saying a “stronger economy will also bolster our international standing and aid in achieving reconciliation”.