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Government’s Five-Year Program
Civil Georgia, Tbilisi / 31 Jan.'08 / 20:26

Below is a bullet-point summary of key priorities for 2008-2012 outlined in the new cabinet’s program – United Georgia without Poverty – which, together with the cabinet, was approved by Parliament on January 31.

National Security

  • Georgia’s NATO membership – the country will accomplish all the stages for NATO membership and meet all the required targets in the next five years;
  • Territorial and civil reintegration;
  • Deepening EU integration by enhancing Four Freedoms – securing free movement of goods, services; persons (first and foremost for students, entrepreneurs and scientists) and free movement of capital;
  • Normalization of relations with Russia – relations with Russia will be based on mutual understanding and mutual respect. Development of economic ties without any artificial obstacles.

Economic, Fiscal and Monetary Policy

  • Economic policy of recent years will be maintained in the next five years;
  • Average economic growth rate will be 8% annually in the next five years;
  • Share of state budgetary expenditure will be decreased from 29% to 22% of GDP;
  • Single digit inflation – as a result of a strict monetary policy, which will be carried out at the initial stage of implementation of this program, as well as due to budgetary surplus, average inflation rate will be 7% in the next five years;
  • Foreign direct investments will increase and annual FDI will amount to 10% of GDP;
  • Budget surplus will amount to at least 0.5% of GDP;
  • Income tax will go down from the current 25% to 15%;
  • International financial center will emerge in Georgia as a result of planned liberal financial system, which will attract at least USD 12 billion and create at least 10,000 new jobs;
  • Fund for Future Generations – 25% of budget surplus and 75% of income received from privatization will be accumulated in this fund. Rehabilitation costs following restoration of Georgia’s territorial integrity will be covered from this fund, PM Gurgenidze said. Two other possible cases in which the fund can be used are, he said, large-scale natural disaster or war; the fund is expected to raise at least GEL 3 billion;
  • Fund for Stable Development – 30% of budget surplus and 25% of income received from privatization will go to this fund; GEL 2 billion is expected to be accumulated in the fund, which is designed to deal with unexpected economic challenges;
    Share of exports will amount to 40% of GDP;
  • Flexible and effective privatization – only a small number of facilities will remain under state ownership and management of all state-owned facilities will be handed over to private operator companies;
  • Guarantees of private property will be secured through the constitution and better judicial practice;
  • Georgia’s sovereign credit rating will increase by at least three points in the next five years;

Population’s Welfare

  • One-third of state budget will be spent on social programs – this rate will be maintained for the next five years; practice of pointless social allowances will be changed with targeted purpose-oriented allowances;
  • Economic growth will boost employment – USD 10 billion foreign direct investment is needed for the creation of 200,000 new jobs; PM Gurgenidze said creation of 200,000 new jobs was the government’s target for the next five years;
  • Poverty reduction – number of social program beneficiaries will be halved in the next five years as a result of poverty reduction;
  • USD 100 will be the minimum monthly pension;
  • Population will be increased by 150,000 as a result of returning emigrants;
  • State-funded health insurance will be available for 1.2 million people, including socially vulnerable, teachers, military and law enforcement personnel and employees of state agencies;
    Socially vulnerable families will receive GEL 1,000 for each newborn child;

Logistics, Transport and Infrastructure

  • Free economic zone in Poti – the project will result in GEL 1.5 billion investment and create about 20,000 new jobs;
  • Additional 30% of road infrastructure will be rehabilitated;
  • Georgia will have at least three international airports;
  • Share of hydro-power generation will increase to 90% and three-fold increase in electricity exports;

Agriculture and Natural Resources

  • Share of agricultural products will increase to 25% of overall exports;
  • 200 new agriculture processing factories will be set up;
  • Natural resources will be managed by private sector;

Education and Sports

  • City of Knowledge – a large-scale complex of campuses and educational centers in Tbilisi;
  • All schools will be equipped with computers and Internet access;
  • 50 new sport complexes will be set up and 3,000 sportsmen will receive state scholarships;

Defense and Law Enforcement

  • Full transformation into contract-based military service;
  • Strengthening of protection of property rights by the police; enhancement of the crisis management system; increase of public confidence in police.

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