President Saakashvili said that Georgia’s economic problems were caused manly by the current world financial crisis rather than by the August war.
Speaking at a meeting with a group of representatives of the small and medium businesses on December 11, Saakashvili said that on his way to this meeting he was listening to an auto dealer on the radio, who said that sale of cars had declined in Georgia significantly after the August war.
“Sale of cars in the United States has declined two-fold – more than in Georgia and let’s not deceive ourselves; Georgia and the entire world is in the extremely difficult economic condition,” Saakashvili said.
“And recently I was watching on the TV one saying that number of tourists has halved in Georgia because of the August war; the tourism [industry] has been reduced almost three-fold in the world; that are the real figures,” Saakashvili said.
He said that he had recently traveled in Latvia, Ukraine and Qatar. “In Latvia the entire banking sector has been collapsed and the country is in the state of default,” he said. “Hungary is close to the state of default… In Qatar, where GDP per capita is 40-fold more than in Georgia, all the construction activities are ceased… The same situation is in Azerbaijan.”
“Our small ship is entering a storm now, where much bigger vessels can sink,” Saakashvili said. “Therefore, before we appear in this storm - as Ukraine has already appeared, as Russia has appeared right after the war with Georgia, where 80% of the stock exchange has collapsed and the salary arrears amounts to 13% of Russian economy – we should adjust everything in our ship in order to make it more sustainable and in order to avoid the fate of Titanic.”
“I think that Russia’s economy is in the condition of a Titanic today,” he continued. “Oil prices are between USD 35-40; Russia has no other export goods. It has accumulated huge salary arrears. They have canceled child feeding at kindergartens because Gazprom was financing it. A number of social allowances for teachers and pupils have been cancelled too in Russia. They thought that oil prices would be USD 150, 200, 300 and 400. They have drafted their budget for 2009 setting oil price target at USD 92 and now it appeared that they have twice less than anticipated.”
Saakashvili said that the recent cabinet reshuffle was made in the context of this world economic crisis and to better prepare for the difficulties.
“Next six months will be very difficult,” he said. “The cabinet has been reshuffled to bring new energy to tackle the challenges… We have invited people, who know very well the European experience, who know very well Georgia’s economic and financial system and understand very well those challenges, which we face.”
He also said that “unprecedented aid” of USD 4.5 billion for next two years, would play a crucial role to tackle economic difficulties.
Saakashvili said that the government would further cut “bureaucratic expenses” and would become even more vigilant to prevent, as he put it, reemergence of corruption.
“Our major achievement is that we have eradicated, almost totally, the corruption, although some petty corruption still remains,” he said.