Government of Georgia – Appearance 2008

The cabinet meeting of August 9, 2008

At the beginning of the meeting, the Prime Minister of Georgia Vladimer Gurgenidze asked the Minister of Health, Labour and Social Protection Aleksandre Kvitashvili to brief the participants of the meeting on the number of the casualties in the conflict region.

The Minister of Health, Labour and Social Protection Aleksandre Kvitashvili informed the audience that by the given moment 55 persons died with 15 civilians and 40 military servants among them. It is of great concern that during the last 18 hours the number of the injured and the casualties is increasing. The flow of the injured is arriving mostly from Senaki and other places too where the air raids took place. In the morning, in Gori, during the air raid the ambulance facility was destroyed; one of the ambulance doctors being in a rather critical condition was transported to Tbilisi. It is almost unimaginable that the direct, targeted blow was undertaken against the ambulance service which was marked by its distinguishable sign. I would like to thank all the doctors who performed highly effective work, although, unfortunately, the number of the victims yet amounts to 55.

The prime minister asked the audience to honor the war victims by a minute of si­le­n­ce.

The prime minister addressed the Minister of Health, Labour and Social Protection to brief the population (by publicizing the information through the mass media facilities) about the number of the wounded and the victims. He emphasized that the medical sy­s­tem is functioning well, although during the last two days it has been under a serious test. The prime minister thanked the medical service staff for the civil heroism that they had committed and expressed the hope that the time will soon come that the number of the wounded as well as of the casualties will decrease.

He also underlined unprecedented heroism of the armed forces and the police regiments; he paid special tribute to their endurance, strong character, professionalism and motivation which they performed not only once during the recent two days and wished them peaceful and victorious return to their homes.

Later on, the prime minister of Georgia noted that the cabinet meeting was la­u­n­ch­ed in order to discuss the emergency situation and the actions to be taken in the war situation, which are necessary for uninterrupted work of all segments of the country's economy in the conditions of large-scale Russian aggression. Our energy system is working without delays pertaining to electric as well as gas supply. Of course, we made proper calculations and plans on how to act in case the Russian jet plains would start bombing energy infrastructure. So far, such facts have not occurred, although we received information that the Russian jets have already bombed our strategic pipelines. The pipelines were not damaged but the shells dropped nearby them and this means that the Russians started shelling our strategic facilities as well.

The pipeline, apart from its global significance has no military tactical function. This is one more telling example of the barbarous campaign that Russia has started against us. I would like to assure you that all the facilities are in place, the whole system is mobilized and we have concrete plans on how to act in case this type of facilities are damaged.

Yesterday, all day long, the transport system was working without delay; it is sill well functioning except for the cases when small segments of the transport infrastructure were physically damaged. Indeed the Russian aircraft tried to do so and it is very likely that they will renew their efforts. The transport system is operational and the damaged in­f­ra­s­t­ru­c­tu­re will be repaired within the shortest period of time. The Ministry of Economic Development and the relevant agencies are drafting the action plans in order to eliminate the damages in the most efficient way and within the shortest time period possible.

Later, the prime minister of Georgia emphasized the effective work carried out by the Ministry of Agriculture, the Ministry of Economic Development and the Ministry of Finance; as a result of their efficient activities, several months storage of strategic food products and fuel for civilian consumption has been created. It is of great importance that our population is well informed of this situation. It's also notable that neither yesterday, nor today there were any cases reported on mass and panic purchase of food products; I am sure that it will continue the same way, because there is hardly any basis for panicking. Reserves are sufficient and taking in view our strategic location on the map and keeping in mind the stable functioning of our transport infrastructure, you will conclude that not only there is no point for panicking but even for slightest doubt whatsoever that the said reserves will be exhausted in a few days. The above mentioned three ministries are working intensively in this direction.
Today's cabinet meeting will discuss the issues pertaining to the regime of procurements in the war situation, which will be presented by the Minister of Finance Nika Gilauri. This is envisaged by the Law on the War Situation. The Ministry of Finance will be granted special rights on undertaking procurements. In order to execute these rights, on the first stage, eight million Gel will be allocated from the reserve funds of the government and afterwards, the allocations will equal to the amount of demand.

At the background of the extraordinary and grave situation that we are facing now, it is worth noticing that despite the informational setting and the circumstances in our country, the Ministry of Economic Development performed an excellent job and at the same time, the interest of the investors towards Georgia has not cooled down either. Yesterday, on the privatization auctions 14 various facilities were sold including one facility being in bankruptcy regime. The amounts gained in the course of the said auctioning process equaled to 6 and 3 million dollars.

One more fact of paramount importance that should be known and recognized by everyone is that the Ministry of Finance and the relevant agencies including the minister himself have deserved our deep gratitude because collection of unprecedented amount of revenues - 24.7 million Gel was reported yesterday. It should be noted that the average flow of revenues on typical work days ranges within the limits of 15-20 million Gel. For instance, during the peaceful days in August, not compared with yesterday's results, the revenues amounted to not more than 17 million Gel; yet yesterday, the amount equaled to 24.7 million or in other words, to more than 50%. The whole structure of the Ministry of Finance is mobilized and is working effectively in 24 hour regime; we are sure that they will continue in the same pace.

I would like to address all the tax payers in Georgia, all citizens of the country, the juridical persons, whether local or foreign ones, making business in our country, all those who are liable to paying taxes, that at the background of the events that took place during the last two days, you saw quite clearly the importance of every single Gel that is collected from you; you do know that Georgia' government is adherent to low and simple tax structure and our tax system is the lowest and the most effective compared to the neighboring states and even to the countries of East Europe. The tax revenues are spent not only on combating poverty, developing the country, creating and strengthening the infrastructure, but also, as you have seen, on creating an effective, professional, highly qualified and extremely well equipped armed forces. This merit goes to all of you. I am deeply convinced, that in these days, despite complexity of the current period, collection of tax revenues will be continued the same way effectively as it used to.

After this, the prime minister of Georgia asked the Minister of Finance Nika Gilauri to present information on the work of the customs agency. The Minister of Finance of Georgia mentioned that the customs office is functioning the same way efficiently as it used to during recent times. There are no delays at the check points and the atmosphere is calm enough; therefore, there are no problems in this fiscal area.

The prime minister thanked the Minister of Finance for the provided information and underlined, that he also wanted to touch upon the work of the banking system of the country which was perfect in its performance yesterday as well as today. I had no doubts about it but now we have clearly seen the sustainability of the system, which is so high that it can endure even the war situation without any problems or complications. By the way, the National Bank took an important and timely step when it opened and conducted the trade at Tbilisi Stock Exchange today as well. To my astonishment, perhaps, partially because of the grave background, strengthening (very slightly, to 30 thousandth digit) of the exchange rate of Gel was fixed. I would like to emphasize that the currency reserves of the National Bank, in fact, amount to 1.5 billion Gel; this figure proved to be unchanged during the last two days compared to the data of the end of the last month. Besides, you do know, that this spring, the Fund for Stable Development and the Fund for Future Generations have been established in our country in which additional 370 million dollars are accumulated. The country is marked with integrity and sustainability; the reserves of strategic food products and fuel are in place, we have money and the transport infrastructure; in case of damage, relevant agencies are in complete readiness to rehabilitate the said infrastructure in the shortest period possible; all the governmental agencies are performing effective work. High level of tax collection has been set and our economy is ready to face any kind of tests and emergencies. I wish you all to continue your further work with the same success.

Thank you.

Organizational Department of the Chancellery of the Government of Georgia