Budgetary Amendment Criticized as Non-Transparent

Parliament approved with 133 to 12 votes on June 8 a proposal to increase state spending by up to GEL 600 million in 2007. The opposition, however, complained of non-transparency.

The amendment brings state spending for 2007 to about GEL 4.6 billion (approximately USD 2.7 billion).

The lion’s share of the increased funding – GEL 442 million (USD 263 million) out of GEL 600 million – will go to the Defense Ministry, bringing the 2007 defense budget to GEL 955.3 million (USD 568.6 million), Finance Minister Lexo Alexishvili told lawmakers on June 8.

The amended defense budget will constitute up to 6% of the country’s GDP.

The amendment will also see the Interior Ministry benefit to the tune of GEL 114.2 million (USD 67.9 million) on top of its initial allocation of GEL 297,7 million.  

GEL 12.4 million (USD 7.3 million) will be allocated for the Tbilisi-loyal South Ossetian provisional administration.

Other beneficiaries will include:

Road infrastructure rehabilitation – GEL 29.1 million (USD 17.3 million);
Education Ministry – GEL 11.7 (up from USD 7 million) for school repair projects;
Energy Ministry – GEL 10.8 million (USD 6.4 million) for energy infrastructure rehabilitation;
Border Police – GEL 3.5 million (USD 2 million) for border infrastructure rehabilitation;
Ministry of Environment – GEL 370,000 (USD 220,000);
Central Election Commission – GEL 300,000 (USD 178,000).

The increased spending in principle received broad cross-party support, but there was much criticism by opposition politicians to the vague and undefined nature of how the money was to be spent, which amounted to what they called “non-transparency.”

“Almost 80% of the increased funds will go to the Defense Ministry, but it is absolutely unclear where and how these funds will be spent. We are always being told that this is classified information, but tax-payers should know where the money goes,” MP Davit Gamkrelidze, leader of the opposition New Rights Party, said.

The only indication of how the funds would be spent came during a session of the Defense and Security Committee last month, when Levan Nikoleishvili, the Deputy Defense Minister, said that most of the additional funding would go on the purchase of weaponry and ammunition. GEL 60 million, he said, would be allocated for a housing program for military officers. He also said that additional funds were needed for Georgia’s increased contribution to coalition forces in Iraq.

Opposition lawmakers, however, want more transparency. They demanded information on the so-called ‘secret clauses’ of the defense budget, which deal with procurement. The ruling majority, however, refused to consider the request.

“Russian special services are doing everything to get answers to the very questions you have asked,” MP Eldar Kvernadze of the ruling party told opposition politicians.

“Hiding such information only serves to keep our own people in the dark. The Russians know it anyway… The Czechs recently announced that they were willing to sell us aircraft and arms. So, there is nothing secret in it,” Gamkrelidze of the New Rights Party responded.

Kote Gabashvili, a lawmaker from the ruling party, said that information concerning defense procurement should remain secret. He said, however, that some level of parliamentary oversight was possible through the so-called ‘group of confidence.’

Parliament’s Group of Confidence, which consists of four lawmakers from the ruling National Movement party, is in charge of monitoring government spending relating to top secret projects. The opposition, however, has no representation in the group.

In theory, the opposition has the right to nominate one member to the oversight committee. Their chosen nominee, MP Davit Gamkrelidze, however, was rejected by the ruling majority in 2004, and since then, the committee has remained under total government control.

In any case, the government apparently sees no need for oversight. Finance Minister Alexishvili dismissed opposition accusations as groundless, saying that Georgia’s budget “has been recognized as one of the most transparent among eastern European states by international financial institutions.”