FINANCIAL CRISIS GRIPS GEORGIA.

Publication: Monitor Volume: 4 Issue: 212

Twenty-eight-year-old Finance Minister Mikhel Chkuaseli, one of Georgia’s foremost reformers, resigned on November 14 after approximately one year in office. His resignation capped that of all of the Finance Ministry’s deputy ministers and department chiefs at a tense cabinet session chaired by President Eduard Shevardnadze. The president described Georgia’s financial situation as “alarming” and “dramatic.” The government is rapidly falling behind on the payment of wages and pensions due to revenue shortfalls. Chkuaseli had threatened to resign in September in a successful effort to pressure parliament to approve the IMF’s financial guidelines and the new tax code. The leftist opposition and even some government ministers–notably state minister (equivalent to prime minister). Vazha Lortkipanidze are blaming the financial crisis partly on the policies that Chkuaseli promoted (Prime News, November 14).

Politically, the crisis could not have come at a worse time for Georgia. The country went to the polls yesterday for the first local elections since it became independent. The government, the opposition of various stripes and foreign observers consider these elections a test of Shevardnadze’s popularity and the viability of the ruling Union of Citizens of Georgia. Moreover, the arrears of up to four months in the disbursement of military pay are politically risky in the wake of last month’s military mutiny.

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