The Parliament approved on December 17 the state budget for 2011 setting revenues at GEL 5.955 billion and expenditures – at GEL 5.734 billion against GEL 5.363 billion and GEL 5.607 billion in 2010, respectively.

The parliamentary minority refused to support the proposed budget and criticized it as “irresponsible”.

The government expects GEL 5.3 billion from tax revenues and GEL 150 million from privatization next year.

Finance Minister, Kakha Baindurashvili, told lawmaker that government’s conservative estimation was that economy would grow 4.5% next year and 7% annual inflation was forecasted in 2011. Annual inflation reached 10.5% in November, 2010.
 
Baindurashvili also said that the country’s external and domestic debts had reached 46% of GDP in 2010 and the figure would remain unchanged in 2011.

Breakdown of spending for various ministries has undergone certain changes compared to its initial draft submitted to the Parliament in October and revised draft in November.

Below is breakdown of 2011 funding per ministry:

• Ministry of Labor, Healthcare and Social Protection – GEL 1.604 billion (2010 - GEL 1.609 billion);
• Defense Ministry – GEL 661 million (2010 - GEL 749.5 million; 2009 - GEL 879 million; 2008 - GEL 1.547 billion);
• Interior Ministry – GEL 566 million (2010 - GEL 550 million; 2009 - GEL 573 million; 2008 - GEL 739 million);
• Finance Ministry – GEL 202.3 million (2010 – GEL 317.7 million);
• Economy Ministry – GEL 75.4 million (2010 – GEL 71.2 million);
• Ministry of Regional Development and Infrastructure – GEL 864 million (2010 - GEL 689.4 million);
• Energy Ministry – GEL 174.7 million (2010 - GEL 199.3 million);
• Justice Ministry – GEL 68.7 million (2010 - GEL 47.5 million);
• Ministry for Penitentiary System and Probation – GEL 105.5 million (2010 - GEL 125.3 million);
• Foreign Ministry – GEL 73.2 million (2010 - GEL 69.2 million);
• Ministry of Education and Science – GEL 553.8 million (2010 - GEL 552.7);
• Ministry of Culture and Protection of Monument - GEL 53 million; (2010 – GEL 57 million);
• Ministry of Sports and Youth Affairs – GEL 35 million (2010 – GEL 31 million);
• Ministry of Agriculture – GEL 69.1 million (2010 – 38.3 million);
• Ministry of Environment Protection - GEL 27.2 million (2010 - GEL 30 million);
• Ministry of IDPs from the Occupied Territories, Accommodation and Refugees– GEL 30.3 million (2010 - GEL 39.6 million);
• Office of the State Minister for Reintegration Issues – GEL 1 million (2010 – GEL 1 million);
• Office of the State Minister for Integration into European and Euro-Atlantic Structures – GEL 1.3 million (2010 - GEL 2.2 million);
• Office of the State Minister for Diaspora Issues – GEL 623,000 (2010 - GEL 950,000). 

According to the state budget, the president’s and government’s reserve funds will receive GEL 50 million each, instead of GEL 55 million this year. Initially, in the beginning of 2010 GEL 25 million was allocated for each of these funds, but the funding increased to GEL 50 million for each as a result of budgetary amendments in the course of this year.

Funding of the president’s administration, as well as the one of government will be slightly reduced to GEL 14.1 million and GEL 8.5 million, respectively.

The Parliament will receive GEL 40.1 million in 2011, plus about GEL 6 million for funding of various institutions or agencies affiliated with, or operating at the legislative body. 

Local self-government bodies will receive a total of GEL 842.5 million from the central budget in 2011. Like in 2010, the South Ossetian provisional administration will again receive GEL 8.8 million from the budget.
 
The Central Election Commission (CEC) will receive reduced funding next year, as no elections are scheduled in 2011 – GEL 12.4 million of which GEL 4.7 million is envisaged for state funding of political parties, instead of GEL 5.4 million this year.

The Public Defender’s Office will receive GEL 2.1 million next year, instead of this year’s GEL 2.2 million.

GEL 25 million is allocated for the Georgian Public Broadcaster next year. In the course of 2010 the public broadcaster received GEL 38.3 million from the state budget.

The Georgian Orthodox Church will receive GEL 22.8 million in 2011, instead of GEL 25.3 million this year.

Debates

MP Giorgi Targamadze, leader of Christian-Democratic Movement and of parliamentary minority group, slammed the proposed budget as “irresponsible”.

He said that the budget was not defining priorities correctly. He said that the government was “cheating” when saying that the agriculture sector was a priority.

Although funding of agriculture will be increased next year, it will still amount to only 0.3% of projected 2011 GDP. In 2010 funding of Agriculture Ministry – GEL 40.2 million – amounted to 0.2% of GDP.

MP Targamadze also criticized the budget for lack of transparency and called the government’s and president’s reserve funds “black holes”. 

He also criticized the budget for a failure to increase pensions, as promised by the authorities almost three years ago.

Finance Minister Baindurashvili said that 2011 was considered as the year of “budgetary stabilization” and fulfillment of promises related with increased pensions was supposed from 2012.

“It is the budget of stagnation rather than stabilization and it will drown Georgia in a deeper economic swamp than it was in 2010,” MP Giorgi Targamadze responded.