Budgetary Priorities in Georgia: Expenditure Dynamics since the Rose Revolution
Since the “Rose Revolution” one of the most significant changes in the fiscal field has been the continued expansion of the Georgian state budget. This has undeniably shown the increase of the state’s capacity, in this case illustrated by the state’s increased revenue-collecting capacity. This expansion has been coupled with significantly lowered taxes that took effect after the adoption of the new tax code in 2004. Since 2003 state revenues1 (including grants) have tripled, increasing from 933,055,000 GEL2 to 2,948,747,000 GEL in 2006. This comes as a significant reverse of the previous tradition of almost annual sequestering of the budget under President Shevardnadze.
Although Georgia has not traditionally had any comprehensive strategic document formulating the policy priorities of the government, the real, de facto priorities are best reflected in the state budget expenditures. The practice of operating without a ‘master plan’ was reversed in 2006 with the adoption of the Basic Data and Directions (BDD) document. The document provides not only the data analyzing the previous year’s fiscal performance and the contours of the next year’s financial plans, but the government’s medium-term strategy and priorities for action for 2007-2010 along with the expected results and outcomes for that period.