Welfare Politics

Three Hundred Million Lari Worth of Praise

Vakhtang Megrelishvili
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In a hot politico-economic summer, social topics may seem rather uninteresting at first glance. However, in parallel with today's political turmoil, the Georgian government, international organizations and other interest groups have nonetheless "managed" to also discuss social issues.

In early June a conference on Early Child Survival and Development was held in Tbilisi. It was a high-level conference. Everyone knows that people are always interested in the hot news of the past few hours and, consequently, those journalists hustling around His Excellency the Prime Minister of Georgia, as he was introduced by the conference organizers, asked him about issues that were in no way related to the topic of the conference. In my opinion, though, the issues discussed at the conference are much more significant over the long term than those feeding the all day-long curiosity of society.

It is difficult to guess what prompted international organizations to step up their activities lobbying for changes in the social policies of Georgia. Such actions might well be conducted to justify the excessive budgets of international organizations so that they can report these activities to their head offices, but it does not really matter to us why our already troubled government is continuously being brainwashed.

The former government did not always accommodate the recommendations of international and donor organizations concerning social strategy, pursuing a relatively independent social policy. Anywhere in the world the social sphere is always associated with election politics. Georgia is no exception in this regard. Proof of this is the direct correlation between the Georgian election cycles and changes in social expenditure.

The range of changes in social spending was confined to a certain limit during the rule of the former government. The recent change of power has led, in percentage terms, to a record high increase of the past decade. However, it is clear that meeting the expectations of a nation waiting for manna from heaven is difficult.

In its relations with donors the former government found it convenient that the goals it had set were shared by both sides and that the results it achieved were also appreciated by both sides with more or less enthusiasm. At the end of the day, the outcome of any social policy is still gauged by dry figures which show the reduction in poverty, an improvement in health indicators, increased access to services and other similar parameters. As this article does not intend to discuss what may, in reality, lead to an improvement of these listed parameters, let's just assume here that the government's social policy can indeed positively affect those parameters.

If, for example, international organizations were initially skeptical about the former government's social policy and advocated other types or scales of intervention, the results of the surveys that they themselves conducted thereafter used to prove that the government was on the right track, something they found difficult to deny.

It seems that the time to reinstate justice has come – and not only for the Georgian Dreamers. Donor organizations have decided that it is time for a root and branch revision of social policy by the Georgian government. They have decided that the Georgian government must start marching to beat of their drum, just like Eduard Shevardnadze's government did.

If the policy fails to bear fruit, then so what? What's the problem? The blame for failure can always be put on the lack of resources and consequently, more resources be demanded. What could be better? New projects will emerge, as well as the need for greater assistance from consultants and, even more, for borrowing more money and increasing the country's debt.

I assume everyone knows that UNICEF is the United Nation's Children Fund. The conference in Tbilisi in early June was organized by that organization. As one can learn from UNICEF's website, the Georgian government deserves to be praised for its social initiatives: "The new Government has taken important steps to improve the social situation in the country, including providing free health insurance, doubling social benefits and increasing pensions," says the UNICEF Representative in Georgia Mr. Sascha Graumann.

UNICEF is not interested in this in general terms, but because of the improvement of conditions for its target group – children. UNICEF worries too much about the poverty of Georgian children.
This organization certainly employs competent people. Studies conducted by them show that over a certain period of time 54 percent of the most impoverished 10 percent of the population receives social assistance. They know that a population's income and expenditures fluctuate –when the income of one family decreases, the income of another increases at the same time. They also know that more than half of the families with instable incomes fall under the low-income category. However, welfare is not measured by cash alone and some no less important indicators include: property, which, in the event of need, can be converted into income; relatives, neighbors and circles of friends who may provide assistance in times of need; the level of education and the state of an individual's health either increasing or decreasing the chance of overcoming a crisis; and the place of residence, which affects the possibilities of finding new jobs.
Regardless of sufficient competence, the recommendations of UNICEF to the Georgian government are something which the most ardent socialist would envy. The organization advises the government to introduce universal social assistance for children and, as one of best options, suggests that it spend 30 GEL per child each month, which will cost the country 300 million GEL a year. According to their estimates, a monthly benefit of 30 GEL for every child between 0 and 16 years of age can reduce extreme poverty from 9.1% to 4.5% and specifically, extreme poverty among children from 9.4% to 3.9%. The total number of children living in extreme poverty will decrease from 77,000 to 26,000. Are not these figures impressive? Let's now see what this means in practice.

Let's assume that the average family consists of four members – two adults and two minors. The study considers such a family to be extremely poor if each member spends less than 61 GEL a month. If the government gives this family 30 GEL per child, i.e. 60 GEL per month, the income of each member of this family will increase by 15 GEL, up to 76 GEL (assuming they previously had 61 GEL a month). Hurrah! In this case the government will have achieved a fantastic result and will have cut the number of children living in extreme poverty by more than half.

Let's now imagine that our goal is the same and that we continue the unfair social policy of the former government. The objective set is to pull 77,000 children out of extreme poverty. We have an unfair social assistance system which, in the assessments of UNICEF, the World Bank and the new government, contain mistakes.

Let's imagine that to insure against those mistakes, we opt to aid not 77,000 children but twice as many – 154,000, in order to cover the targeted group to the maximum possible extent. Imagine also that we give these children assistance of not 30 GEL but double that amount to 60 GEL.

What will the result be? The income of each member of the same family will reach 91 GEL (again, assuming a previous income of 61 GEL a month) and some 8,000 children will remain in extreme poverty because the amount of increased assistance will only be enough for pulling families out of extreme poverty if we correctly identify those families.

Interestingly, the UNICEF documents do not contain a single word about taxpayers. As if 300 million GEL would come out of thin air and not be paid by the population, including those families with children living in extreme poverty.

But, that will not be enough, will it? There will be a need for 100% of children in Georgia to go to kindergarten, naturally, at the cost of the state; women will necessarily have to eat bread enriched with nutrients. This can naturally not be achieved unless bakeries are subject to controls so as to avoid any accidental intake of cheap bread which we eat at risk to our health. If such intervention pushes up the price of bread, then so what? What's the problem?! Where 300 million GEL are spent, surely additional tens of millions can also be spent. Perhaps we should even spend more to deserve our praise from Sascha Graumann?

According to UNICEF estimates, all this will save Georgia 1.3 billion GEL within 10 years – I may provide an "analysis" of this calculation next time if am not too busy.

The fastest highway to hell is that paved with tear-jerking wishes instead of asphalt. What can be more tear-jerking than the wish for the welfare of children and their special care? I remember at school I was taught that Lenin loved children. Can there be any more generous act than caring for children?

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