by Suren Deheryan and Lusine Khachatryan
Nick Gvishiani, an independent budget and finance analyst, considers that the anti-corruption struggle of the new Georgian authorities will allow the government to meet its budget obligations in 2004 for the first time in a dozen years. "From the former government down, robbery was everywhere and tax-payers were concealing their incomes with impunity. Today, a sense of fear is developing among tax-payers—they're paying 100 percent taxes."
Since the Rose Revolution last November, the new Georgian authorities are trying to enact thorough reforms of the country's badly weakened state structures. "We, indeed, inherited a plundered and deserted country from (ex-president) Shevardnadze," Nino Burjanadze, the Speaker of the Georgian Parliament said. "The country was in a critical condition. Even being an oppositionist, I couldn't believe that the state budget was absolutely empty and the army had only two days' ration."
The first step taken by the new government was to resume timely payment of state salaries and pensions, which had gone unpaid for months. The pension debt alone amounted to 130 million lari (about $65 million).
The State Insurance Fund will pay off 40m lari ($20m) of the debt during 2004. Since May, pensions in Georgia have increased from 14 lari ($7) to 18 lari ($9) with a further rise to at least 21 lari envisaged for early 2005.
However, such efforts on the part of the Government make little practical impact on pensioners, since the official poverty level is regarded as 65 lari ($32) and a minimal basket of goods in the cost of living index is priced at 130 lari ($65), or seven times the present pension. "The pensioner had 46 tetri (23 cents) to spend per day and now has 56 tetri (28 cents)," says Nodar Kapanadze, head of the state statistics division on household and living standards.
That is enough in Tbilisi, Georgia's capital city, to buy only 1 kilogram of potatoes, a loaf of bread or 100 grams of butter. A pensioner with no other source of income faces misery indeed.
There are around 900,000 pensioners in Georgia. Women in Georgia retire on a state pension at 60 and men at 65. Regardless of work history and size of salary, everybody is provided with the same amount, topped up for single pensioners with an additional 22 lari.
"The country is choking with extreme poverty all around. One part of the population is below the poverty line and another is far above it. It is extremely difficult to find a middle class today in Georgia," Kapanadze says.
According to the January 2003 census, 52 percent of Georgians live on the brink of poverty and 16 percent survive on less than $1 per day. The census also indicates that 930,000 people emigrated from Georgia between 1989 and 2002, around one in five of the population and on a par with Armenia. Other sources suggest that emigration may have been as high as 1.2 million.
The heaviest outflow took place between 1992 and 1994, when around 420,000 left following the civil war that ousted Zviad Gamsakhurdia, the first president of independent Georgia, and brought Eduard Shevardnadze to power. Shevardnadze had been the Soviet Foreign Minister during the Perestroika era before returning home.
Georgia's internal instability also prompted the departure of large numbers of people from the country's national minorities. Long-established communities of Armenians, Russians, Greeks and Jews declined sharply. Among Russians alone, the total population fell from 341,000 to just 68,000 in the latest census.
In 1987, the last record before the break-up of the Soviet Union, Armenians numbered 437,000. The official count now is around 250,000 (though the Armenian community puts the number at about 400,000). Since independence, many left Georgia for Russia, Europe, and the United States in search of work and opportunity
"Emigration has diminished in the past few years. Whoever was able to, has left the country. Those who remain either have no opportunity to get out or hope for a better future," says Alexander Vadachkoria, head of the state demography statistics division.
The impact of poverty is seen too in birth and death rates for Georgia's population. The natural population increase has shrunk from more than 51,000 to virtually nothing in less than 20 years.
Georgia's economy remains in desperate need of reform. According to data from the International Labor Organization, 14 percent of the working population, or 406,000 people, is jobless. Unofficially, the total is higher. The average wage is 110 lari ($55), and people employed in state apparatus get an average of 70 lari ($35).
The economy is expanding, thanks to high levels of foreign investment. In 2003, some $340 million was invested in Georgia by foreign individuals or companies, contributing to a doubling of economic growth to 11 per cent last year. Experts estimate that construction work on the Baku-Tbilisi-Ceyhan pipeline to carry oil from Azerbaijan to the Mediterranean played a major role in this growth spurt. The $2.95 billion project began in 2002 and the first oil is expected to flow through the pipeline next year.
"Of course, domestic economic indicators are high today but poverty continues to grow at the same time," says Kapanadze, from the household survey division. "Mainly, the spheres that are developing employ only a small part of the population. The overwhelming majority of people are either involved in trade or agriculture."
Henrik Muradian, Head of the Union of Georgian Armenians, states that Georgian Armenians are mostly involved in the food and clothing trades, earning perhaps 5 lari ($2.50) a day.
"Go to any market, trade center or even a barber shop and you will find that Armenians work everywhere," says Muradian. "But, unfortunately, there are no significantly wealthy Armenians any more. The rich Armenians have all left Georgia."
Georgia's 3,800 schools are in extremely poor condition after years of under-investment. Child beggars are a common sight in Tbilisi and as many as a third of youngsters are estimated to be out of school, most for reasons of poverty.
"This is natural for countries in transition," said Misha Mindadze, head of the school and children's rights division of Georgia's Education and Science Ministry. "Nevertheless, the problem is solvable and we are working on it. The street kids must be returned to school." Even though Georgia budgets 700,000 lari ($350,000) each year for the teaching of Georgian language in Armenian schools, Armenian educators say the government rarely fulfills its pledge.
"The state language of Georgia is Georgian," says Burjanadze, the Speaker of the Parliament. "Anyone who wants to be integrated into the society must understand that it is impossible without speaking the state language. Today, it is absolutely important for us to be able to implement a state language program that will help the national minorities to learn Georgian."
She added: "We understand very well that Georgia is a multinational state and that if we divide our citizens into Georgians, Armenians, Azerbaijani and Abkhazians we will never build up this country."
According to Mindadze, the World Bank is going to allocate $60 million for improvements in the education system. He said the reforms would also target ethnic Russian, Azeri and Armenian schools in Georgia.
Textbooks for Armenian schools are provided free by the Ministry of Education and Science in Armenia. The teaching staffs of these schools also need replenishment since most of the teachers are pensioners and no specialists have been sent out from Armenia for 15 years now.
"All schools in Georgia have equal rights notwithstanding their national background," says Kakha Lamaya, of the Education and Science Ministry. "The concern to solve the problems of non-Georgian and Georgian schools is common." There are three Armenian schools in Tbilisi. Each class has an average of just 5 pupils while for each grade there are 2-3 classes.
"Many parents prefer to take their children to Russian-based schools, hoping that a Russian education guarantees a better future for their children," said Varazdat Mendelian, the 73-year-old headmaster of School Number 93 in Tbilisi. Nelly Karapetian, 44, is one such parent. She explained: "The level of Russian schools is higher than that of the Armenians'. The best teachers are working in those schools, therefore the tutoring is better."
It is a situation that does not find favor with Gennady Muradian, head of the Armenian Union in Georgia. He says: "Poor Armenian children. They neither know proper Georgian nor Armenian. It's better for them to attend Georgian schools."