A new wave of restrictions: what are they and what do they mean for the country?
By Veronika Malinboym
Wednesday, December 2As the number of confirmed cases continues to grow every day, the government of Georgia decided that the most effective way to fight the spread of the virus was to introduce (and re-introduce) an additional set of healthcare-related regulations. But what are they, exactly, and what impact will they have on the overall state and further development of the country?
The new regulations include a curfew from 21-00 PM to 05-00 AM, the abolishment of public transport, all educational facilities being moved to work remotely, and restaurants and cafes allowed to offer takeaway and food delivery services. The new restrictions will be partially lifted for the New Year and Christmas festivities. However, as of now, they are expected to last until January 2021.
What does this mean for the country’s economic growth?
The outbreak of the global pandemic has already hampered the country’s economic development, and, despite being able to maintain a record 5.1% average economic growth between 2005-2019, Georgia is now faced with a major economic shock. Georgian Finance Minister Ivane Matchavariani has already stated that the potential economic growth for 2021 should be revised. Originally estimated at 4.3%, the number is likely to drastically decrease in December following the newly introduced regulations.
Nevertheless, the government is still adamant to continue its support towards the local businesses, especially to the industries that suffered most because of the COVID-19 crisis. As such, in 2021, the employees of the tourism sector will be exempt from both property and personal income taxes. Similarly, the restaurant and hospitality sectors will receive “the most effective support”, said PM Gakharia in his recent statement.
Despite the governments’ efforts to seemingly ease the tension imposed upon various economic sectors, the benefits that they currently have to offer do not satisfy the needs of the local entrepreneurs and non-white collar workers that risk losing the ability to support themselves and provide for their households. During the last few days, many people took it to the streets of the large cities across Georgia to express their anxiety and dissatisfaction with the governments’ handling of the ongoing crisis.
Throughout the outbreak of the COVID-19 in Georgia, approximately 400-500 thousand people lost their jobs because of the scarce state of the national economy. As of today, the accommodation and food services has shrunk by 40%, entertainment and recreation sector suffered a decrease by 24.1% administrative and support service activities declined by a whole 54%.
Such numbers, to a common viewer, might mean very little, and, at best, illustrate just how much the Georgian economy is struggling. However, behind the dry numbers, you will find thousands of personal stories – stories about people, who simply do not and cannot adapt to the new realities. It is the same people, who, on a daily basis, work as hard as they can – at the local markets, repair shops, and small restaurants – all with the simple goal of providing for their families. Of course, for many white-collar workers, the new lockdown will simply mean working remotely, however, a large portion of the population of Georgia will be left on the verge of poverty as a result of the new measures.
Is something better than nothing?
The government has also introduced a social benefits package: vulnerable groups will be eligible for GEL100 assistance for the next 6 months, and individuals who lost their jobs amidst the pandemic will, too, be eligible for assistance that will amount to GEL200 for the next 6 months. Employees of the sectors that were temporarily forced to postpone their activities will be issued one-time assistance of GEL300, and self-employed individuals will be able to postpone their bank loan repayments, on top of receiving the aid of GEL300. PM Gakharia announced that the overall cost of the stage four assistance package will be GEL1.10 billion.
While the intention is noble, one does not have to be an expert to realize that such pay-outs will barely be enough to support a small household, let alone an extended family. A similar view is shared by the opposition parties, which have already condemned the new measures and blamed the ruling Georgian Dream party for mishandling the second wave of the pandemic. Leaders of the European Georgia party expressed their concerns about the new set of regulations potentially resulting in the "people becoming even poorer." The party leaders have also called for government officials to consult with representatives of different social groups, including members of the opposition, before introducing such measures.
In turn, the country’s PM claimed that the opposition rallies that occurred earlier this month were carried out without full consideration of the necessary regulations, thus contributing towards the increase in increasing the number of new cases.
Nonetheless, the government’s decision to introduce new regulations was welcomed by the healthcare officials, who claimed that the new set of restrictions could reduce the number of new cases by almost a half, and, thus, significantly ease the strain placed over the overloaded healthcare system. That, coupled with the government’s commitment to assist both the businesses and the citizens affected by the crisis, does give some hope that Georgia will, indeed, be able to make a meaningful recovery by the end of January next year.
With the political crisis yet to be resolved and with the new restrictions coming up, it is to see whether the country will be able to come to an effective solution to the many crises it is currently facing. Will the desire to score political points outweigh the welfare of the country’s citizens this time?