Georgian President Mikheil Saakashvili today chaired a meeting of the Cabinet of Ministers outside the Gremi cathedral in Qvareli District. Several issues were discussed, including an initiative to open 100 new agricultural processing businesses by the end of 2008. The president noted that the programme was of great importance from the standpoint of Georgia's economic development and overcoming unemployment. He called on all government members to support the initiative and assigned each minister to head up the implementation of the parts of the programme that fall within their respective competences.

"This is a programme under which 100 new agricultural processing businesses are to be created. This is a programme which will allow us, according to our calculations, to create jobs for tens, if not hundreds, of thousands of Georgians. Each business that employs at least 200 people will create another several thousand jobs in the supply chain. If we work with great commitment and according to a set scheme, as we did when carrying out radical reforms, then we can create at least another 100,000 jobs in agriculture and the processing industry.

"The main thing today is to use our land to create jobs. At this new stage in the privatization process we need good investment programmes so that we can attract money not only to develop our infrastructure, education system and armed forces, but also to create jobs. Therefore we are announcing a new scheme for purchasing land according to which an investor can purchase a plot of land for only 20 per cent of market value on the condition that he/she establish a new processing business either within the next year or according to a schedule to be agreed in advance. In this case 80 per cent of the value of the land will remain with the investor so that they can achieve their aims and increase their profits," the president said.

"Within a year after this programme is started 30m-40m lari will be returned to those investors so that they can develop their businesses. Within the first three years the Georgian government will put an additional 600m-700m lari in this sector to develop infrastructure and ensure that these people work successfully," he said.

Saakashvili noted that unemployment was much higher in Georgia's rural regions than in the cities and said the programme would create many jobs for the country's villagers.

"A person can have land and work that land, but if he does not take part in the economy, he cannot be considered employed. At this stage the main task before the Georgian government and the Georgian state is to employ qualified people. Last year we drew up a new employment programme in which 50,000 people have taken part. Of them, 10,000 have found permanent employment." "There is a deficit of qualified personnel, but the newly opened vocational educational centres will help to resolve this problem. The country's economic growth is in direct proportional relation to the level of qualification of the country's workers," he said.

Saakashvili also touched on the battle against corruption and expressed his hope that Georgia would retain its ranking as number one reformer country in the world. He also stressed the need to further improve the business climate in Georgia. As for the development of infrastructure, the president said that all major motorways in the country and all roads leading to district centres must be in top condition by the end of 2008 and added that the Georgian government had a plan to achieve this.

The president said that the only problem inhibiting the development of agricultural production had been the lack of electricity and the fact that many processing plants had been working on generators. This made it impossible to develop the industry, he said.

"We have effectively overcome the energy crisis. This year we have several reliable sources. At present Georgia is being fully supplied with gas from Azerbaijan. We are already exporting electricity to other countries, including to the Russian Federation. We do not expect any complications in this regard this winter, so the people can be calm about that. We will manage to supply all processing plants with unlimited electricity.

"The electricity tariff in Georgia is the lowest in the region and we have seen that these profits extend to the agriculture sector. We have completely exempted direct supply of agricultural products and selling them to processing plats from the VAT. This is very significant. We have completely exempted imports of machinery and technology from taxation and seen immediate results. Last year several processing plants were opened. We have also retained customs rates on certain products in order to protect our nation's agriculture at this transitional stage. We have seen results in this area as well: we are already exporting eggs. It is interesting to note that two years ago, when we began working on this issue, Georgia was failing to produce enough eggs to meet even 30 per cent of its own demand. At present, however, 20,000 crates of eggs are exported from Georgia per month, which means yearly profits of 800,000 lari. This is a good beginning for an industry which several years ago was completely devastated.

"We are also exporting mutton. There has emerged a market for this product in Arab countries, so we can expect mutton exports to increase. So really, Georgian products not only have the ability to satisfy the demands of the domestic market, but also conquer other countries' markets. Now our main task is to develop exports, particularly after the initial shock of the Russian embargo. Georgian agriculture products are being exported to 12 new markets, but we still have a lot left to do," the president said.

Saakashvili added that economic growth of 12-15 per cent was to be expected this year and that this indicator would be dependent on how effectively the government will work in the second half of the year. He said that that figure was a great achievement, though the state must pursue a policy that will promote growth evenly across the economy.

"The programme to build 100 new businesses is the government's message to each of our citizens living in Georgia's regions," he said.

Saakashvili also spoke about ways to improve Georgian wine and export it to other countries. He said that several winemakers had got to grips quite well with the demands of the market and were producing very competitive products, which he said was very important given that the market is becoming more competitive itself.

The president also discussed exports of fruits and vegetables, saying that there are good opportunities to increase exports of these products to EU countries, though preparation and help from the government was necessary to achieve this.

Georgian Prime Minister Zurab Noghaideli presented the new programme and said that relevant draft legislation had already been drawn up.

The president thanked Kakheti Province governor Gia Natsvlishvili and Environment Minister Davit Tqeshelashvili for their efforts in keeping Kakheti clean. He also praised Culture Minister Giorgi Gabashvili for his work in efforts to restore cultural monuments throughout the country.

Saakashvili took interest in reports that Refugees and Resettlement Minister Giorgi Kheviashvili had received several thousand lari in government assistance to receive medical treatment in Europe and asked Health Minister Lado Chipashvili to shed light on the issue. Chipashvili flatly denied that state funds had been given to Kheviashvili. Kheviashvili did not comment.

Saakashvili then said: "We must explain everything very clearly to society so that all these question marks are removed. I do not mean to say that government members should not receive health care. Many officials have medical insurance. In Georgia there should be assistance for the poor (and a relevant system is working well), as well as insurance for government members. However, they should pay all such expenses with their own funds, from their own salaries. If the insurance does not pay out the full cost, then you must pay the rest from your own pockets.

"The state pays you quite good salaries and you have sufficient incentive to work honestly and not be corrupt and not take extra funds from the state. The country does not have any more money for you. I think this should serve as a warning and a recommendation for everyone. In the future all such questions should be answered quickly, so that there is no delay and no room for ambiguity. This is very important," President Saakashvili said.

Communications Office
of the President of Georgia