“The usage of the budget of the Ministry of Regional Development and Infrastructure of Georgia is more than GEL 630 million. This has been the highest rate throughout the last seven years.”
On 24 November 2014, as a guest of TV Maestro, Minister of Regional Development and Infrastructure, Davit Shavliashvili, stated: “The usage of the budget of the Ministry is more than GEL 630 million and this has been the highest rate throughout the last seven years. The last government had the highest usage rate in 2011. It was less than GEL 580 million and this year, the usage is already GEL 50-60 million more.”
According to the 2014 state budget, the funding of the Ministry of Regional Development and Infrastructure was defined at GEL 875 million. According to the official data of the State Treasury, the ten-month expenditure of the Ministry is approximately GEL 630.9 million, meaning that the Ministry used nearly 72% of the budget within ten months.
Davit Shavliashvili pointed out that the Ministry had the highest ten-month usage rate throughout the last seven years. In this context, he gave the year 2011 as an example. According to the data of the State Treasury, in 2011, the Ministry of Regional Development and Infrastructure used GEL 632.9 million, 74% of the total budget. Therefore, the ten-month usage rate in 2011 was higher than the same rate in the current year, both quantitatively and by percentage.
To find out the real usage rate of the funds allocated to the Ministry now or in the past, it is necessary to take a look at the budget execution rate. We calculated what percentage of the annual revised plan the Ministry was using in the first ten months in the period of 2009-2014 (since the creation of the Ministry).
Graph 1:
Ten-Month Completion Rate of the Ministry of Regional Development and Infrastructure in Relation to the Annual Plan
As Graph 1 shows, the ten-month budget execution rate of the Ministry of Regional Development and Infrastructure in 2014 is significantly higher as compared to 2013 and 2012. Nevertheless, the statistical data point out that this number is far from being the highest. It is nearly identical to the rates of 2009-2010 and lower than the 2011 rate.
For a greater awareness of the issue, we also studied the real usage rate of the Ministry of Regional Development and Infrastructure in the period of 2009-2013.
Graph 2:
Budget Execution of the Ministry of Regional Development and Infrastructure in 2009-2013
As Graph 2 shows, the Ministry of Regional Development and Infrastructure was not using the budget by 100% during the rule of the previous government as well. This problem emerged abruptly in 2012 and 2013. In 2014, the ten-month budget execution was significantly higher than the executions of the last two years. As the ten-month plan has not been specified, we were unable to compare the completion to the relative plan. Analysing the three-quarter data reveals that the Ministry of Regional Development and Infrastructure falls short of the plan by GEL 183 million. It is highly possible that the Ministry will be unable to fully use the budget before the end of the year although the percentage of the shortfall is difficult to predict at this stage.
For the 2014 state budget to be executed, nearly GEL 1,300 million should be spent in the period of 8-31 December. The spending institutions will be unable to use such a large amount of money. The promise of the government to abstain from deficit spending until the end of the year in order to avoid the pressure of the budget expenditures on the GEL exchange rate should be considered as well. FactCheck predicts that the expenditure line of the 2014 budget will have a shortfall of at least GEL 1 billion. We have already published an articleabout the problem of the state budget usage.
Conclusion
According to the official data of the State Treasury, the ten-month completion rate of the budget of the Ministry of Regional Development and Infrastructure is nearly GEL 630.9 million which is 72% of the plan. The same rate was at the point of GEL 632.9 million in 2011 and accounted for 74% of the annual budget. Therefore, the ten-month usage rate of 2014 is not the highest rate as the Minister said. It is also very likely that the Ministry will not fully use the budget before the end of the year.
FactCheck concludes that Mr Shavliashvili’s statement: “The usage of the budget of the Ministry of Regional Development and Infrastructure of Georgia is more than GEL 630 million. This has been the highest rate throughout the last seven years,” is HALF TRUE.
