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Minister Denies Social Assistance Adds to Inflation

Suggestions that a one-off social assistance program will result in increased inflation are utter nonsense, Nika Gilauri, the finance minister, said on October 22.

?I do not see any problem in this program,? Gilauri told reporters. ?I am really surprised that anyone could be against this program. The state has resources and what is wrong if it provides one-off assistance to its citizens? That is precisely the function of the state.?

The state-funded one-off assistance program, worth over GEL 100 million, will involve a total of 2.8 million citizens, according to the authorities. The intended recipients ? pensioners, teachers and socially vulnerable people registered by the state ? will receive GEL 50 for electricity and GEL 50 for gas bills. Those living in the regions, however, will receive GEL 50 and 50 kg of wheat flour. An additional 700,000 rural families will also receive 50 kg of wheat flour.
Opponents, however, have claimed that the extra injection of cash into the economy will fuel already spiralling inflation. Twelve-month inflation was 9% at the end of September 2007, according to the Department of Statistics, but many economists question that figure, saying the real rate of inflation is in fact much higher.

The proposed social assistance program has also come in for criticism from opposition politicians, who claim it has been timed to undermine a united opposition bloc campaign for early parliamentary elections.

Giga Bokeria, an influential lawmaker from the ruling party, has, however, defended the proposals. ?Reforms,” he said on October 22, which the government were committed to, “might be painful for certain sections of [society] and we want to offer some alleviation.? 

This post is also available in: ქართული (Georgian) Русский (Russian)


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