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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
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DE RUEHSI #2977/01 3321407
ZNR UUUUU ZZH
R 281407Z NOV 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 8312
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TBILISI 002977 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC 
 
TAGS: PGOV SOCI ECON GG
E.O. 12958: N/A 
SUBJECT: GOVERNMENT LAUNCHES NEW SOCIAL ASSISTANCE PROGRAMS AHEAD OF 
ELECTIONS 
 
 
¶1.  Summary:  Responding to social concerns voiced at the November 
2-7 anti-government demonstrations in Tbilisi, the government of 
Georgia has announced a number of initiatives to provide relief to 
vulnerable groups.  The timing of the announcements prompted 
government opponents to accuse the ruling National Movement and 
President Saakashvili of attempting to gain favor among the 
electorate.  Nevertheless, the beneficiaries of the different 
programs are still happy to receive what has been offered.  The 
programs in some respects are an acknowledgment of previous 
shortcomings by the government.  End Summary. 
 
¶2. On November 16, the Ministry of Finance allocated GEL 13.9 
million (USD 8.6 million) from the state budget to finance flour to 
be supplied to the rural population, within the framework of a 
presidential subsidies program. The program provides a one-time 
transfer of 50 kg of flour to low income groups and teachers in the 
villages. 
 
¶3. Another initiative will provide the vulnerable population of 
Georgia with foodstuffs and wine.  According to a November 13 
decree, a one-time package of assistance in kind will be distributed 
all over Georgia to the poorest families.  The package includes 2kg 
of sugar, 2 kg rice, 2 jars of condensed milk, 3 kg of tangerines, 2 
kg of apples, 1 liter of vegetable oil, 200g of biscuits, and 1 
bottle of wine per family.  The Ministry of Agriculture will get a 
GEL 6 million (USD 3.6 million) transfer from the state budget to 
finance the project. 
 
¶4. Provision of rural families with firewood is yet another 
initiative by the president.  Vouchers providing for distribution of 
5 cubic meters of firewood per family will be distributed in 
villages.  Those who have already paid for firewood will be able to 
use vouchers next winter. 
Commercials sponsored by the government advertising the program 
"Let's Spend the Winter in Warmth Together" are running on the 
public broadcasting channel to inform people about the initiative. 
 
¶5. Tbilisi City Hall plans to carry out a new program to place 
students in jobs in December this year.  According to the Mayor, 
5,000 students will be employed.  They will mainly perform work on 
soil preparation for planting.  The details of the program and its 
budget will become known in the near future. 
 
¶6. David Tkeshelashvili, Minister of Labor, Healthcare and Welfare 
Protection, announced that about 100,000 people will be placed in 
jobs in 2008 through an existing job placement program.  The program 
will include job training for future employees.  Eight newly opened 
professional centers will participate in this process jointly with 
various organizations and enterprises.  Some technical issues of the 
program are still being worked out.  President Saakashvili urged 
businessmen and industrialists to employ participants of the job 
placement program in jobs to be created in the next two years. The 
state will pay employees for three months if private employers will 
employ them in 2008.  This program is expected to cost USD 2.3 
million. 
 
¶7. The Ministry of Finance's requirement, imposed two years ago, 
that all merchants use cash registers has bred resentment because of 
the extra expense it entails.  Opposition parties played upon this 
fact to mobilize vendors to protest against the government in 
November.  As a result, merchants in bazaars and open-air markets 
have been exempted until July 1, 2009.  According to the Tbilisi Tax 
Department, the extra time will allow entrepreneurs to bring their 
business and financial situation into order. 
 
¶8. The President announced an increase in the minimum salary for 
school teachers to GEL 200 (USD 120).  In addition, health insurance 
vouchers will be distributed to 70,000 teachers in secondary schools 
starting January 1, 2008, as part of a Teachers' Health Care 
Program.  According to then-Minister of Education Lomaia, the price 
of the health insurance package to the teachers will be GEL 10 
(about USD 6) per month.  The State will cover the remaining costs. 
In fact, the state will fully cover the costs in the first stage of 
the program (2008-2009), while co-funding will be introduced later. 
The program provides for full or partial covering of various 
medicines, treatment and other medical services.  The total budget 
of the program for 2008 will be GEL 8.4 million (about USD 5 
million). 
 
¶9. The minimum pension will go up from the current GEL 38 (USD 23) 
to GEL 55 (USD 34) starting from December 1, 2007, requiring GEL 14 
million spending (USD 8.5 million) from the current year's budget. 
A further increase to GEL 78 (USD 48) will occur early next year, 
costing the government GEL 250 million (USD 152 million) per year. 
 
¶10. Full members of Georgia's Academy of Sciences will get an 
additional GEL 1600 (USD 987) per month salary starting December 1, 
and member-correspondents will receive a GEL 1000 (USD 617) per 
month increase.  There are 65 members and 65 member-correspondents 
in the Academy. 
 
TBILISI 00002977  002 OF 002 
 
 
 
¶11. On November 26, Parliament adopted a decision by which all 
property-related legal disputes with the government will be resolved 
in the property-owners' favor, if they are physical persons.  There 
are 7000 cases which the parliament exempted from the law settling 
ownership issues that was passed in 2007.  These disputes relate 
mostly to land and apartments, and the threat to people's homes and 
businesses has become a serious cause of public discontent, 
especially in Tbilisi and the Adjara region. 
 
¶12.  Comment: These latest moves by President Saakashvili and the 
National Movement will quickly be denounced by the opposition as an 
attempt to curry favor and draw votes in advance of the January 5 
presidential election.  They coincide with Saakashvili's efforts to 
reach out to pensioners, health care professionals, businessmen and 
others, in an effort to counter his reputation for being out of 
touch with the public.  Saakashvili has in the past concentrated on 
market-based reforms that should in fact, in the long run, bring 
significant benefits to Georgia as a whole, but that involve 
short-term pain as well.  The programs the government is now 
undertaking, while seemingly temporary in nature, aim at those who 
may not have immediately benefited from the reforms he has promoted. 
 We also note that the IMF has warned against the inflationary 
effect of excessive government spending.  The government has 
undoubtedly considered that, but has decided for its own reasons to 
implement the new programs.  End comment. 
 
TEFFT