On December 30, 2011, Prime Minister of Georgia, Nika Gilauri, met with journalists. Nika Gilauri summarized results of 2011 and talked about 2012 priorities. We present the Prime Minister's speech.
"Good day. I would like to congratulate on coming New Year to you and the whole Georgia and wish you the happy, healthy and successful 2012. According to the established tradition, at the end of the year, on December 30, the Prime Minister of Georgia makes report to the public. I keep the tradition this year as well. We have gathered today for the reason that I inform you briefly about 2011: what challenges, what problems and successes we had. 2011 was a simple and effortless year neither for Georgia, nor for the world or the region. The main economic challenges for Georgia still remain unemployment and creating jobs. Very many of our citizens are looking for jobs and can not find them; many of our citizens are employed, but do not have respective salary; many of them have certain profession, but there is a very low demand on this profession. This is the most important problem for the public. Our goal is to create jobs and reduce unemployment. The 10-Point Plan which we have presented to the public serves this goal. The 10-Point Plan of Strategic development is one of the most important documents created by the government of Georgia this year, which includes very specific steps to be taken by the State for the next four years to create jobs and eliminate the main problem - unemployment. I will start reviewing the year 2011 by assessing foreign policy. 2011 is the year of Georgian foreign policy victory. During the last years, from 2008, including 2011, Russia has tried to internationally isolate Georgia. Russia tried to say and prove that Georgia is a country which shall not be a member of international community. But in 201
1, this attempt ended by total failure. One of the main victories of Georgian government is foreign policy victory, as the European Union started negotiations on free trade with Georgia, and as opposed to Russia's interests, on the contrary, the US and the European Parliament adopted resolution on occupied territories, according to which Russian army is an occupant on the territory of Georgia. This is the greatest victory of our foreign policy. Very hard negotiations with respect to Russia's becoming a member of the World Trade Organization have come to an end. The negotiations were not very simple and it has completed very successfully for Georgia. All our very specific demands are completely satisfied. Russia wanted this document to include that there would be different trade regimes between Russia and the occupied territories, while there would be a different regime between Russia and the rest of Georgia. This document confirms that there is a uniform trade regime between Russia and Georgia and, directly or indirectly, Russia has signed the unity of Georgia, and that Abkhazia and South Ossetia are the integral parts of Georgia. Apart from this, there are monitoring regime, independent third party and information exchange mechanism described in this document. So far, we have not known what kind of production was imported in the occupied territories and what type of trade was under way. After adopting the document, we will know absolutely all details; information exchange mechanism has been worked out and we will know everything about what is traded between Russia and the occupied territories. There were very many events last year, but the facts I have presented were to be mentioned and I consider that Georgia has achieved its victory in the last three year foreign policy struggle in 2011.
There were very many challenges in terms of economy in 2011. Everyone admits that the world has come into a new economic crisis. Against this background, Georgia shows higher Gross Domestic Product than it was predicted; we are one of the exception countries increasing the predicted numbers. The Monetary Fund and our experts have determined that Georgian economy would grow by 5.5% in 2011. Apart from this, all countries have determined prognoses of their economic growth. In the third quarter, 80% of countries decreased their prognoses, whereas Georgia has increased it up to 6%. This has been reflected in the budget, but according to the preliminary data, Georgian economy will increase by 6.5% in 2011. This is the first time we have exceeded the USD 3,000 limit; in 2011, Gross Domestic Product of Georgia amounts to USD 3,100 per capita. This year, Gross Domestic Product of Georgia amounts to USD 3,100 per capita. In 2003, Gross Domestic Product amounted to USD 900 per capita. According to 2012 budget, total expenditure of Georgia will amount to GEL 8.5 billion, while in 2003 Georgian economy amounted to GEL 8.4 billion in total. The next year budget of Georgia equals to 2003 Georgian economy, while the budget in comparison to the 2003 budget has increased 11 times. The most important fact was increasing credit rating by rating agencies. Against the background that Fitch and Standard&Poor's decreased credit ratings of very many European and American countries, and increased it for only four countries during the whole year; one of them was Georgia. By this
, risks of Georgia have decreased; rating agencies have assessed economic policy of the country positively. This means that if banks in Georgia need to attract new resources, they will be able to obtain them comparatively cheaply and decrease interest rates. If the country needs additional resources, we can enter international markets and get cheaper loans. If Georgian companies need to sell companies or get partners they can sell their companies more expensively. This means increasing our ratings from „B+" to „BB" by rating agencies. We have got into BB class and this is quite a big achievement. Budget deficit has reduced; 2011 budget deficit will amount to 3.7% and this will be further reduced next year. We have had one of the most successful reductions during the last years. 2009 budget deficit was 9.2% and we have reduced it to 3.7%. Apart from this, inflation is one of the most problematic questions of the public concern. At the beginning of the year, this was 11%, in May, it reached 14% and now it has fallen to 2%. We have carried out quite successful policy, although, in reducing inflation, international markets were of great importance. This year, foreign reserves of Georgia have increased by 35%, this is a record high growth. Banking sector has increased by 30% in total. Credit portfolio has increased by 24%. Banking sector assets amounted to GEL 1.3 billion in 2003, while it amounted to GEL 12 billion in 2011. Banking sector had quite healthy and good year which positively reflected on the economy of the country. Export has been increased by 40% and number of visitors has been increased by 40% as well. Decreasing of foreign loan is very important; last year, this was slightly higher than 33%, while this year, it will amount to 31.3%. We have determined that this will be further reduced next year, falling to 29%. Unemployment is one of the most important issues. This is the first year when unemployment is reducing in Georgia. Every year, unemployment was slightly growing; this was caused by the fact that public sector was reducing number of employees, while private sector was increasing it; but equilibrium has been achieved and this year, according to preliminary data, unemployment will be reduced from 16.5% to 15.7%.
This year, very important projects has been finished or started in the field of infrastructure: East-West highway, Mestia road - one of the most difficult infrastructural projects, which was completed this year, construction of Kobuleti bypass road has been started, we have started Samtredia-Zestaponi road construction, Samtskhe-Javakheti road construction has been completed - very many important projects have been finished this year and results are presented. Important new road projects have been started: Three projects have been stared in railway - Tbilisi bypass main railroad, Tbilisi-Batumi main railroad rehabilitation and Kars-Akhalkalaki railway. In total, 3,000 people have been employed in road infrastructure; Next year, additional 8,000 people will be employed on these constructions in railway.
This year was one of the successful years for energy sector. Construction of ten new hydro power plants has been started in Georgia. Not only the fact is important that energy sector satisfies demand of Georgia and exports electricity, but also the fact that industry of attraction new investments has been established. Construction of ten new hydro power plants has been started this year, and that of ten more new hydro power plants will be started next year. In total, this is about investments of USD 3.5-3.7 billion in this field, which will come in Georgia during the next 4-5 years. These are at least 13 thousand new jobs.
This was one of the hardest years in agriculture. There are certain achievements. First of all, I would like to emphasize establishing of saving economy which has not ex
isted so far. This year this was the first time that saving economies have been established in Georgas on 20 thousand tons. We have carried out maize and wheat programs. The wheat program was successful, although the maize program could be more successful; there were certain shortcomings indeed and we have already been working on their correction.
This was one of the most important years in education - we have finished school formula reform and corrected existing shortcomings. It was important that certification of school teachers has started. A joint aim has been set to everyone: the Ministry, Principals and teachers - students have to study, work and become better. This aim is to be achieved as a result of several reforms we have implemented: encouragement of directors, if there 12th grade students show best results in examinations; encouragement of certified teachers - certified teachers are given salary addition amounting to GEL 75, if they pass English language and computer examinations, while the will be given additional GEL 125 if they are included in the best 25%; their total salary will amount to GEL 1,000. No one could imagine this 3-4 years ago in Georgia. First grade students will continue to get computers. This is important that these computers have inscriptions „Made in Georgia" and I am very proud of this. This is a new industry which has started in Georgia this year. Did anyone think that 30 new hospitals equipped with modern technique would be opened in Georgia within a month, 3-4 months ago? Everyone would say that this was impossible. Such kind of thing has never occurred in Georgia. We have promised the public to open 150 new hospitals and we will keep this promise. Great part of this has already been fulfilled, more than 50 hospitals have been opened, and this process shall be continued in January, February, March, April, and May. Additional 20-30 hospitals/clinics will be opened in Georgia within the next five months. Health care was not affordable - now hospitals have already been loaded. According to my information, the public is content with having such types of clinics in regional centers. The next stage is to get medical education higher, train doctors and make the service financially affordable; not geographically, but financially.
The next year reform is also to be mentioned - growth of pensions. Healthcare and education reforms can be considered as the most important reforms, as I think, they are most significant reforms. Education reform - because school reform has really been finished and Healthcare reform - because it has been started and will be finished next year. Both of them were very difficult, and both of them had certain shortcomings and problems, but I think that we will have significant success in both of them, which the public will see. All reforms need certain period of time in order that the public perceive them specifically. The most important fact for Georgian economy was "BB" promotion - this is not only assessment of one specific field, but also that of the economy, economic policy and geopolitics of the country in total, i.e. this is an assessment of how high or low risks of the country are - all kinds of risks: geopolitical, political, internal political, foreign-economical, trade, etc. This is a sum of risk assessment. These risks have been decreased while they have been increased all over the world."
Prime Minister's Press Service