The Georgian authorities are worried by the increase in the cost of foodstuffs, amounting to nearly 20-30%. The process started in 2008. Saakahvili provided an explanation: "Previously, the Chinese just went hungry. Several years ago, they started eating. Don’t you think it is a serious thing when 1.5 billion people start eating? It was due to this fact that world food prices have soared." Although an ostensible overstatement, this statement contains a grain of truth – many experts say that the quick economic growth in China partly caused the process.
However, low agricultural productivity in Georgia is likely to provide a more realistic explanation. The average income in Armenia is somewhat higher than in Georgia, and in Azerbaijan it is substantially higher. That is why food costs in Georgia are lower than in Armenia and Azerbaijan. This brings about a proportional rise in prices, because the open borders make it possible to import goods from Georgia and it is more profitable than selling it in the domestic market.
Saakashvili has acknowledged that the authorities do not have the leverage for reining the prices in, but the state may help the most poor families, suffering from inflation most. The Ministry of Finance has issued two types of vouchers – an “electro-energy voucher”( $11.5) and a “groceries voucher”($17.25). The vouchers are red paper sheets, with the head of the family's name, surname and address printed on it. These vouchers are distributed among families, not citizens, and no matter how many people comprise any one family.
The authorities claim the vouchers will make it possible for families to pay nearly half of their energy expenditure (1 kW·h costs about 10 cents in Tbilisi) and spend the saved money on food. An “electro-energy voucher” can be used only in one way – for covering energy expenses. A “groceries voucher” may be changed for 30 lari at any bank branch.
Economists and right-wing politicians accuse Saakashvili of populism and a violation of liberal economic principles. Officials say it is an act of solidarity. The form contains a second line, where the owner may fill a poor neighbour’s name in. There are many families in Georgia for which $17 is important. However, the Caucasus mentality makes it difficult to accept money in cash, but when the money is given as a certificate, it is acceptable. Saakashvili has taken into consideration that for poor families to get $17 is like winning a lottery. Georgian citizens have started filling in the forms zealously, feeling that they are doing a good deed. And Saakashvili has proved himself to be a caring, innovative and creative ruler.
Comparisons between the vouchers and product cards are unjustified – there is no product deficit. The shops are full of various groceries – but they cost too much.
