According to the decision of the Government of Georgia, the official salaries for people employed in the public sector will increase by 10% from 1 January 2022 and GEL 117 million will be spent from the budget to this end. The official salaries will increase for all public servants, including military, police, schools, etc.
According to the Law of Georgia on Remuneration in Public Institutions, the basic official salary is determined annually by the state budget. The basic official salary is multiplied by the respective coefficient specified in the same law to produce an official salary for a particular post/position. Of note is that the basic official salary was set at GEL 1,000 in 2017 and has not been changed since. After the second submission of the draft 2022 budget, the basic official salary for public servants increased and will be GEL 1,100 instead of GEL 1,000.
According to the first submission of the draft budget, a total of GEL 1,653,356,800 was envisioned for labour remuneration and the number of public servants was 112,712. In the second submission of the draft budget, the amount of funds intended for labour remuneration was already GEL 1,830,014,800 which was attributable to the aforementioned decision. However, of note is the fact that the number of employees in the new draft increased by 40 and is now 112,752.
Whilst speaking about the number of public servants and official salaries, of particular interest has always been the number of contract workers and their labour remuneration.
According to the Law of Georgia on Remuneration in Public Institutions, a contract worker is an individual who is appointed to or accepted for work under on the basis of an employment contract for a certain period of time in order to accomplish non-permanent tasks (Article 8).
The employment of contract workers, as opposed to permanent workers (who are mostly appointed after undergoing a selection competition), involves relatively easier procedures which increase the probability of nepotism and politically-motivated appointments.
According to the report on the execution of budget of the first nine months of 2021, GEL 246,593,640 was spent for the labour remuneration of contract workers which is GEL 44,355,140 more as compared to the figure (GEL 202,238,500) of the same period of the previous year. Unfortunately, the budget execution report does not contain the number of contract workers; therefore, we cannot discuss the growth of the number of contract workers together with the growth of salary appropriations.
Since we only have a nine-month budget execution report, we have to take the other nine-month periods of the previous years in order to see the trend.
Table 1: Budget of Labour Remuneration for Contract Workers by Years (GEL)
Source: Ministry of Finance
As Table 1 shows, the salaries of contract workers have been rising since 2011, except for 2011 when the salaries actually decreased. This can be explained by the fact that 2013 was the Georgian Dream’s first year in power and since they always scolded the United National Movement for the growth of the number of contract workers, they decided to cut the number and, therefore, the budget of remuneration for contract workers. However, the growth trend was still in place in later years. The years 2012, 2014, 2015, 2020 and 2021 are distinguished in this respect when salary appropriations for contract workers increased by 60%, 65%, 28%, 22% and 22%, respectively.
As mentioned earlier, the budget execution reports do not contain figures about the number of contract workers employed in the entire public sector. However, we can take a look at the number of employees in government LEPLs and NNLEs. To make the figures comparable, we again take the nine-month periods. This figures are only available from 2015 and so we will analyse this particular period.
Graph 1: Number of Contract Workers in Government LEPLs and NNLEs
Source: Ministry of Finance, Budget Execution Reports
According to the budget execution reports, the number of contract workers in government LLEPs and NNLEs is mostly growing in the nine-month periods and in terms of annual figures. The exceptions are 2017 and 2020 when the number of contract workers did drop.
Generally, of mention is that the practice of the last years shows that contract positions are largely occupied by individuals loyal to or affiliated with the ruling party. Their number increases mostly before the elections. There were elections in every year from 2012 to 2021 – in 2015 and 2019 interim elections and in other years, presidential, parliamentary and local self-government elections. Therefore, it is impossible to delineate any correlation between the number of contract workers and the growth of their salary appropriations with the elections in the reporting years.
In summary, we would like to say that the number of contract workers and the existing practice of their appointments remains a significant challenge for the bureaucratic apparatus. Frequently, the number of contract workers in budget organisations exceed the legally allowed threshold.
