Georgia anxious to restructure its foreign debts

Georgia will raise a question on restructuring its foreign debts at a meeting of the CIS economic council to be held in Moscow on September 4 to 7. In particular, Georgia owes $159m to Russia, $28m to Kazakhstan, $20m to Armenia and $17m to Azerbaijan, sources in the Georgian state office reported to RBC. Moreover, Georgia owes $315m to Turkmenistan, Georgia's main creditor.

In spite of the fact that the Georgian parliament did not approve budget cuts, the government may implement the cuts regardless, according to Georgian Minister of State Avtandil Jorbenadze. Apart from decreasing expenditures for defense, security, health care and social programs, the cuts envisage virtually no foreign debt payments. If the creditors do not agree to restructure Georgian debts, the country will be pushed to the verge of bankruptcy. It is possible, however, that the IMF will petition the Paris club of creditors to restructure Georgia's foreign debts. According to preliminary data, the Paris club will consider this issue in early 2004 and not in September 2003 as planned earlier.