Institute for War and Peace Reporting | Giving Voice, Driving Change

Georgian Pensioners "Betrayed"

Officials say they cannot afford significant pension rises, and try to curb prices instead.
By Natia Kuprashvili
  • Elderly Georgians feel cheated at what they say is a broken pledge to raise their pensions. (Photo: Giorgi Kupatadze)
    Elderly Georgians feel cheated at what they say is a broken pledge to raise their pensions. (Photo: Giorgi Kupatadze)

Elderly people in Georgia accuse the government of breaking a promise to raise pensions, leaving them struggling to get by.

Dima Gurabanidze, 67, voted for President Mikhail Saakashvili and his United National Movement in the 2008 presidential and parliamentary elections, but now feels betrayed.

He recently found out that his pension will not be going up this year, so he will remain on 80 laris, or 45 US dollars, a month.

“Relatives and friends help, otherwise I wouldn’t survive for a week on 80 laris,” he said.

The minimum monthly income needed for subsistence in Georgia is estimated at 150 laris.

“They promised us they’d raise the pension to 100 dollars, and we believed them, given that the government could easily do it if it wanted to,” Gurabanidze said. “And now they tell us it isn’t going to happen for at least three years.”

Georgia has a higher retirement age than neighbouring post-Soviet states, and the lowest average pension. On average, old people get 50 dollars a month in Georgia, compared with 65 dollars in Armenia, 125 dollars in Azerbaijan and 240 dollars in Russia.

The government shows no sign of changing its mind. The economy ministry is forecasting that average payments to the country’s 800,000 pensioners will have risen by no more than 20 per cent by 2014.

Giorgi Khuroshvili, the government’s secretary for parliamentary affairs, insisted welfare was a principal concern, and pointed that pensions had risen from 14 to 80 laris a month since it came to office, and payments were up to date.

Giorgi Khuroshvili, the government’s secretary for parliamentary affairs, acknowledges that Georgia faces something of a demographic crisis.

“The labour force that’s needed to generate the revenues that would allow the country to meet its pension obligations is falling, while the number of people of pensionable age is increasing,” he said.

Levan Vepkhadze of the opposition Christian Democrats reminded fellow members of parliament that the ruling United National Movement had promised to increase pensions.

“Here is a simple example. What do we need to do to get the pension up to 100 dollars? We need to give every pensioner an extra 70 laris, which would increase our outgoings by 600 million,” he said, arguing that even with the government trying to cut spending, this was something it could afford to do without too much trouble.

The opposition has dubbed this year’s spending plan “the budget of broken promises”.

Petre Tsikarishvili, leader of the United National Movement majority in parliament, countered that if the various benefits, subsidies and medical insurance that pensioners received were calculated in monetary terms, they were already on well over 100 dollars a month on average.

Khuroshvili confirmed that the government was trying to save money by simplifying the pension system and integrating other forms of benefit into the overall sum paid.

Gurabanidze does not understand how politicians derive a figure of 100 dollars a month for pensions and benefits.

“You can count whatever you like, but I get no state assistance apart from my pension, and the same is true of most of my friends,” he said. “Sometimes I think I’m living in one country while the parliamentarians are talking about some completely different place.”

Pension increases over recent years have been wiped out by rampant inflation.

President Saakashvili has described inflation as the biggest economic problem facing Georgia, and instructed parliament to draw up plans to curb price rises, which came to more than ten per cent year-on-year in November.

“Food prices have risen at a significantly higher rate in than overall prices in recent years,” Tsiuri Antadze, a professor at Tbilisi State University, said. “As of the end of 2010, the inflation rate compared with December 2003 was 70.8 per cent, whereas food prices had risen by 220.4 per cent over the same period. The purchasing power of today’s [80 lari] pension is equivalent to just 40 or 42 laris expressed in 2003 prices.”

Antadze added that since the minimum pension was recalculated in 2006, the amount needed for basic subsistence had consistently been undervalued.

“The official figure is now lower than the realistic minimum, yet there’s no criticism of the fact that pensions don’t even reach this lower figure,” she said.

Like many pensioners, Gurabanidze is deeply disappointed in Saakashvili and his government.

“Misha [Saakashvili] is always insisting that Georgia is first; that it’s ahead of the other post-Soviet states in every respect,” he said. “I worked as a maths teacher for 21 years, but today the unemployed and pensioners in other countries are better off than me.”

Natia Kuprashvili works for the Georgian Association of Regional Broadcasters.

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