Delivering a speech during the economic debates held in the Parliament of Georgia on 1 October 2013, Zurab Japaridze, member of the Parliamentary Minority, responded to the accusations of the Majority alleging that economic progress was being forged throughout the last years. In response to these accusations Japaridze declared that the data demonstrating the economic growth of Georgia had been published not only on the websites of the Ministry of Finance and the National Statistics Office but also on the websites of numerous prestigious international organisations. Zurab Japaridze also points out that similar statements coming from the Majority are scaring away investors and disrupt the process of attracting investments. He also disputed the accusations that in recent years the economy was growing mainly owing to the funds from privatisation and fines by asserting that the sums brought in by privatisation amounted solely to 3% of the budget while the money accrued through all sorts of fines over the last years totalled no more than GEL 100 million.
FactCheckset out to investigate whether or not the economic growth of recent years was at the expense of sums brought in by privatisation and fines.
Indicators of the State Treasury Consolidated Budget
As gathered from the table, except for 2009 the indicator for Receipts was seeing an increase in all years starting from 2004. The indices of Total Fines also have a tendency of increase but 2008 and 2011 are characterised with minor variations. As for Privatisation, its indicator reaches its peak in 2008 and starts decreasing in the following years. As the share of privatisation in the budget, it is to say Receipts, was constantly changing we tried to establish its average share throughout the last nine years by dividing the sum of percentages 47.50% by 9 which gave a result of 5%. Evidently the given result constitutes only a small portion of the budget but it is still higher than the 3% indicated by the MP.
In regard to fines, we analysed the total amount of all types of fines since the MP specifically refers to those and included them in the category Total Fines. Aiming to calculate an average amount of fines for a year in the period between 2004 and 2012 we divided the sum of total fines for all nine years – GEL 789 million by 9, as in the previous case, which resulted in GEL 88 million. If we base our calculations solely on recent years, as pointed out by the MP, in 2010-2011-2012 the average equals GEL 145 million. This indicator amounts to a small portion of the budget as well but is 45 million higher than the 100 million mentioned by the MP.
According to the receipts of consolidated budget of Georgia for nine months of 2013, cash-based receipts of the state budget for three quarters of 2013 amounted to GEL 5.483 million of which 30 million came from privatisation while 100 million are brought in by fines and these constitute only small portions of the existing budget.
Conclusion
On average the sums brought in by privatisation amounted to only 5% of the budget in the years 2004-2012. As for the fines, an average indicator for those in recent years (2010-2012) equals GEL 145 million while in the years 2004-2012 the average is at 88 million. Notwithstanding the fact that these figures, marginally but nevertheless, differ from those mentioned by the MP, one circumstance is paramount in this matter – in the period under review the contribution of sums acquired through privatisation and fines to the state economy was highly insignificant.
Accordingly, we conclude that Zurab Japaridze’s statement: “Claiming that the economy was growing due to fines and the sums brought in by privatisation is simply absurd. The share of sums allocated to the budget through privatisation amounted to 3% of the budget. The total amount of fines, including patrol fines, over the last years totalled 100 million lari,” is TRUE.
