COMPENDIUM CULTURAL POLICIES AND TRENDS IN EUROPE
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Georgia/ 6. Financing of culture  

6.1 Short overview

The Georgian national economy had developed at a quite quick rate until the first half of 2008. In 2006, economic growth increased by 9.4% and in 2007 by 12.3%. In the first half of 2008, economic growth increased by 9%, however, beginning from the second half of 2008, the Georgian economy began to move backwards because of the Russia-Georgia military conflict and the world economic crisis. The amount of direct foreign investments decreased as the pessimism of consumers and investors worldwide increased. Since October 2008, the turnover of enterprises in Georgia dropped and the tax revenues in the state budget reduced accordingly. This resulted in the economic recession in the country. The growth of the gross domestic product in 2008 was only 2.1%.

During the drafting of the budget for 2009, economic growth was forecasted at 2%, though within that year the effect of the world economic crisis on Georgia still continued and according to the forecast updated in the first half of the year, the growth of GDP was determined at -1.5% and, according to the final forecast in 2009, the Georgian economy actually dropped by -4%. This factor affected on the state budget and the tax revenues decreased by 600 million GEL. The consolidated budget deficit increased from 3% to 6%.

However, the total funds allocated in Georgia in the cultural sphere have been growing consistently. On one side, this is related to the economy, the growth of GDP, and on the other side, this is the result of the domestic and foreign cultural policy. The shift which took place in the policy after the Russian-Georgian military conflict helped to focus on the promotion of culture in Georgia which in turn has led to increased budgets in this field.

However, the budgetary data for any particular year is not comparable due to the method of collection and it is hard, therefore, to calculate the percentage of expenses allocated to culture in the total state expenditure http://www.mof.gov.ge/budget/by_year.

Culture in Georgia is financed by both the state and local budgets

Budgets and Expenditures: Ministry of Culture and Monument Protection

In 2010, the budget of the newly reformed Ministry of Culture and Monument Protection amounted to – 77 025 000 GEL. Unlike previous years, the total budget of the new Ministry was allocated to culture – 30 810 000 EUR accordingly (1 EUR = 2.5 GEL).

In 2011, the budget of the Ministry of Culture and Monument Protection amounted to 69 381 200 GEL. The total budget of the new ministry allocated to culture was accordingly 30 165 740 EUR. In 2012, it was 100 057 200 GEL (43 503 130 EUR), in 2013, 80 000 000 GEL (34 782 610 EUR) and in 2014 80 000 000 GEL (34 782 610 EUR) (1 EUR = 2.3 GEL). In 2012 the increase of the budget was mainly caused by the Parliamentary elections. In 2014,

Local budgets

The information about allocation of funds for culture and cultural spheres at the local, regional and municipal levels has been difficult to collate, mainly due to the small funds and poor infrastructure. An exception was the large cities with big budgets, where municipalities had separate departments for culture. However, in 2005 the independent departments for culture were liquidated even in Tbilisi and integrated in the department of social affairs, sports and youth.

However, Tbilisi municipality often finances various cultural events, not just in Tbilisi, but in other cities and towns as well, though the exact budget data (or the transparent access to those data) are not available. Such funding transfers are often dependent on the interests of the ruling establishment and are often the subject to public debates (the lack of transparency of transfers and political assessments thereof are discussed by strong NGOs such as the Georgian Young Lawyers Association.)

The local budget data have not been available since 2008.

The estimated expenses to be spent on culture from the local budget in 2006 was 69 940 200 GEL (actual expenditure: 67 421 900 GEL). In the first six months of 2007, estimated expenses amounted to 35 388 800 GEL (actual expenditure: 28 824 500 GEL).

GDP and per capita expenditure

In 2009, due to the world economic crisis, the economic growth in Georgia was determined at -4%. However, in 2010 the economic growth was at 6.4 %.

In 2012, the nominal indicator of the gross domestic product amounted to 26 167.3 million GEL, that is 5 423.9 million GEL more than the indicator for 2010.

Table 8:    Dynamics of GDP, in million GEL, 2005-2013

 

2005

2006

2007

2008

2009

2010

2011

2012

2013*

GDP

11 620.9

13 789.9

16 993.8

19 074.9

17 948.6

20 743.4

24 344.0

26 167.3

27 009.2

*              Planned.

According to the Ministry of Finance data, from January-June 2007, as compared with the same period of the previous year, the actual gross domestic product increased by 12.5% and exceeded 7.5 billion GEL in nominal terms. The significant share in the growth of GDP is due to industry, trade and transport. These three branches provided the growth of GDP by 5.5%, or 44% of the total rise in GDP.

In 2006-2007, the state cultural expenditure per inhabitant amounted to 15.6 GEL and 20.5 GEL respectively that is 0.5% of GDP per inhabitant. (Source: Ministry of Finance, Ministry of Culture and Monument Protection). In June 2007, as compared with December 2006, the general rate of customer prices increased by 4.1%. During the twelve-month period (from June 2006 to June 2007) the inflation rate was 7.3%.

The expenditure of households on cultural events and commodities is available in chapter 8.2.1) however, since 2003, such studies have not been held and new data are not available.

According to data for 2003 from the State Department for Statistics, recreation and culture represented 1.8% of the total personal consumption in households, which is half of the 2002 figure of 3.9%.


Chapter published: 26-01-2016

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