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Review of Government Meeting. Jule 11, 2001

Main topic of the Government Meeting on July 11 was the issue of salaries in the budget sector. Minister of Labor, Health and Social Security Avtandil jorbenadze presented his Ministry’s proposals regarding the issue.

The main problem in this regard is the difference between the salaries of state-managed institutions and the actual living wage. According to the Ministry’s calculations, an average salary is only 62% of living wage and the minimum salary – only 20%. Therefore, it is natural indeed that salary in Georgia had lost its function of stimulator and transformed into a kind of social aid, which is not being connected with the quantity and quality of work done. In addition to this, salary payments are permanently delayed. This causes employees of the governmental structures to look for secondary job and in result there is a permanent flow of qualified personnel from the governmental structures to the private companies or even abroad.

As Avtandil Jorbenadze has stated, such situation is directly connected with another serious problem that exists in the governmental institutions. Heads of these structures often have to appoint qualified employees on high posts with relatively higher salaries in order to keep them in the organization. Thus in the ministries it is quite common that managerial personnel’s number is bigger than staff’s. Ministry of Transport and Communications is leader – 81% of its employees are heads and deputy heads of the departments. Ministry of Economy, Industry and Trade is on the second place with 60% figure. Minister of Labor, Health and Social Security suggested the increase of the minimal salary up to the living wage level as the only way out of the present situation. President Sevardnadze agreed to this proposal. Finance Minister Zurab Nogaideli said, that proper expenditures would be included into the budget.
It is not very hard to imagine what kind of impact this process might have on the national currency. When the Finance Minister requested 17-million lari state credit from the National Bank to pay salaries, the Bank refused to give the credit fearing that this could cause lari to inflate. As we can see, even 17 million laris might endanger national currency and even 10-lari increase could equal to inflation in the present economic situation.

Finance Minister underlined the necessity of reduction of the number of governmental employees in this respect. Nowadays there are 9,100 people employed in the executive government structures. “We should think about uniting certain structures together and liquidating others at all,” Finance Minister mentioned. President and other members of the Government accepted Health and Labor Minister’s proposal to organize state commission for regulation of salary issues.

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Government Meeting on July 11 discussed project of President Shevardnadze’s decree on the Measures for Further Promotion of Economic Reforms in Georgia. The project has been elaborated at the State Chancellery with the recommendations by President’s advisor Leszek Balcerowicz.he project consist of list of instructions and measures such as: enhancement of legislation for ensuring the further growth of the economy; increase of tax collection; improvement of budget planning; anticorruption structural changes and other measures, including the instructions to the Ministries for close cooperation with Balcerowicz’s team.
Assistant to President in Economic Reform Issue Temur Basilia announced, that the project has been distributed to the Ministries, Parliament’s committees and local governance structures and according to their replies there have been no principal remarks for this project from their side.

President once again thanked Balcerowicz and expressed his satisfaction with the team’s fruitful work in Georgia. Leszek Balcerowicz, President of the National Bank of Poland, has been appointed as President’s Assistant in Economic Issues some 10 months ago.

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Government meeting heard the decision of European Space Agency. On July 5 in Rome it has been decided to create large extendable reflector for European space satellites by Georgian technology. Extendable reflector, which was created by Elgudja Medzmariashvili at the Institute of Space Structures and successfully passed orbital tests in 1999, has won the grant of the European Space Agency.

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