Budget and pension - no good news for the majority of pensioners

The head of Parliament’s Healthcare Committee Dimitri Khundadze requests that the Prime Minister of Georgia increase pensions for 2016. At the present, this is not envisaged in the state budget draft of 2016.

GEL 1.48 billion will be allocated to cover the monthly old-age pensions next year, which is just GEL 1 million more than this year. The minimal monthly old-age pension was increased by GEL 10 to GEL 160 from September, 2015.

Khundadze stated that the current financial crisis, in which the national currency has seriously depreciated against the dollar, the current pension has become less helpful for pensioners.

It is hard not to agree with Khundadze. Most Georgian pensioners, especially in more remote regions or villages, live on their pensions.

Moreover, in many villages, the pension serves as the only major steady source of domestic income; an alarming fact, given that living costs in Georgia are increasing.

To eat normally, 160 GEL is not even enough for 10-day food in Georgia, especially if one lives in a town or a city and does not not produce food in a garden or on owned land.

The amount of the proposed increase is also a matter of speculations; it is unlikely that another 10 GEL will change anything for the needy.

Even the Ministry of Finance of Georgia stresses that in the current economic climate, an increase of pensions for all Georgians is impossible.

The only pensioners that will get 20% more pension from next year will be those living in mountainous regions, as the law had been adapted for mountainous regions, with the aim of supporting remote areas and preventing their abandonment.

Analysts believe that the money might be found for increasing the pensions at the expense of good management of administrative expenses.

The government will doubtless be concerned about pensioners, as 2016 is an election year in which the government will require significant public support. Pensioners, therefore, are a big electoral power.

Even in the case of a slight increase, the poverty faced by pensions will not change.

The cost of living is dramatically increasing in Georgia, while salaries, pensions and social benefits mainly remain the same.

Georgia requires a well-planned economic policy to somehow overcome its long-lasting poverty problems.