Embassy of the United States

2008 Press Releases

U.S. Government Transfers $250 Million to the Government of Georgia for Budget Support

November 21, 2008

U.S. Government Transfers $250 Million to the Government of Georgia for Budget Support

In accordance with the agreement signed on October 22, 2008, in Brussels by USAID (United States Agency for International Development) Administrator Henrietta H. Fore and Minister of Finance of Georgia Nika Gilauri, the United States Government has transferred $250 million to the Government of Georgia for budgetary support. The funds transfer was designed to assist Georgia to quickly respond to the economic shock which resulted from Russian invasion of August 2008 by directly supporting country’s economic reconstruction and recovery.

The cash transfer flows directly from the recommendations of the UN/World Bank Needs Assessment. The United States Government acted quickly and delivered this component of it’s $ 1 billion pledge to help Georgia.

The $250 million grant will fund Georgia’s budget expenditures to cover state pensions, state compensation and state academic stipends ($163.3 million), health care costs for people living below the poverty line ($26.1 million), allowances to individuals displaced by the conflict in Abkhazia ($6.1 million), financial support to schools through a voucher system on a per-student basis ($24.2 million), and compensation and salaries for government employees of all ministries excluding the Ministry of Defense and Ministry of Interior ($30.3 million).  The grant will be fully expended by February, 2009.

Both governments are interested in ensuring complete transparency in the distribution of these funds and complete accountability. To that end the Government of Georgia will report monthly beginning December 31, 2008, on the disbursement of these funds. These reports will be publicly available via the internet. A firm approved by USAID will perform a financial audit, scheduled to start on or about March 31, 2009.