You're reading: Georgia’s new premier promises big spending ahead of poll

TBILISI - New Georgian Prime Minister Vano Merabishvili promised big social stimulus measures on Wednesday, including a sharp hike in pensions, with an eye on parliamentary elections in October when the government will battle a rising new opposition party.

President Mikheil Saakashvili named Merabishvili prime
minister last week, asking him to tackle Georgia’s 16 percent
unemployment and implement agriculture and healthcare reforms.

Addressing the parliament at his approval hearing,
Merabishvili promised to focus job creation, spending more on
social benefits for the poor, increasing pensions and providing
a better access to health insurance.

“We plan to spend 20 billion lari ($12 billion) from the
budget in the next four years on implementation of all tasks
presented in our new programme,” Merabishvili said.

Under the policy programme called “More benefit to people”,
pensions are expected to rise to $100 from the current $65 from
2013, at a cost of 6 billion lari.

The policies also include 3 billion lari on health
insurance, 4 billion lari on agriculture, 4 billion lari on
education and 3 billion lari on social benefits. Merabishvili
promised to attract $4 billion in foreign investment and create
more than 270,000 new jobs in the next four years.

Georgia’s economy was crippled by a five-day war with Russia
in August 2008 and the global crisis that followed shortly
after, crimping foreign investment and forcing the former Soviet
Union country to rely on international aid.

Saakashvili’s ruling United National Movement faces a
growing competition from a newly-created opposition group, led
by a billionaire Bidzina Ivanishvili.

Opinion polls show Ivanishvili’s Georgian Dream coalition
lagging behind, although it has gathered large numbers to
rallies in the Caucasus state of 4.5 million people.

“This move (Merabishvili’s appointment) is aimed at further
strengthening of the ruling party’s position ahead of and after
the election, which this party is hoping to win,” Alexander
Rondeli, the head of the Georgian Foundation for Strategic and
International Studies (GFSIS) think-tank, told Reuters.

“Saakashvili promoted one of his best managers, who is also
popular,” Rondeli said.

Former defence minister Bacho Akhalaia replaced Merabishvili
as a interior minister. Former Education Minister Dmitry
Shashkin took the defence portfolio, becoming the first defence
minister in Georgia’s history who is Russian by nationality.

Merabishvili, 44, became one of the most powerful figures
after the bloodless 2003 Rose Revolution that brought
Saakashvili to power.

As interior minister since December 2004, he presided over
police reforms and a crackdown on corruption, winning praise
from some international institutions and observers.

Critics, however, accuse him of brutal repression of
opposition rallies in 2007 and 2010.

Like the president, he is considered pro-Western and hostile
towards Moscow.