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UN's Engagement with Saakashvili Included $1500 a Month, Soros and Sweden Also Paid

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, August 25 -- Georgian President Mikheil Saakashvili was paid $1500 a month by the UN Development Program earlier this decade, on top of his official presidential salary, UNDP has told Inner City Press. UNDP says the goals of these payments, in which the Swedish government and financier George Soros joined, were to allow the Georgian "government to recruit the staff it needed and also to help remove incentives for corruption."

  While receiving these $1500 monthly payment, Saakashvili committed to increase tax collection in Georgia. Deals were signed with , among others, British Petroleum, for the Baku - Tbilisi - Ceyhan oil pipeline. UNDP, and presumably its two co-funders, applauded this development.

   Last week at the UN, Russia accused the UN's Office for the Coordination of Humanitarian Affairs of being biased in its mapping of refugee flows created by the Georgia - South Ossetia - Russia conflict. Russia also accused UN political chief Lynn Pascoe, an American, of being biased in his briefing of the Security Council. The US Committee for UNDP lists and offered praise for this paying of Saakashvili's salary.

  Inner City Press first reported on UNDP's Governance Reform Program in Georgia in late 2006. Earlier this month, as the Georgian conflict heated up, Inner City Press asked UNDP how much was spent under the program? Where did the funds come from? Who got paid? Has the program continued?

UN's Ban Ki-moon and Saakashvili, UN funding to Saakashvili not shown

  Six days later, UNDP responded to Inner City Press that

On Georgia, the Governance Reform Program initiative you asked about, was two-pronged. To enable the government to recruit the staff it needed and also to help remove incentives for corruption, UNDP created a Salary Supplement Fund, funded initially by $1 million from OSI and $500,000 from UNDP, and later supplemented by another $1 million from the Swedish International Development Cooperation Agency (SIDA). This fund was designed to provide leading public servants with a wage that, though modest by international standards, was sufficient for Georgia. The fund targeted the country's highest officials: the President, Prime Minister, and Speaker of the Parliament each received $1,500 per month, ministers, $1,200, deputy ministers, $700.

In order to make the programme as efficient as possible, a clear "exit strategy" was built into the program, so that the government committed to assuming responsibility for the salary supplements over three years. The government was required to make a credible commitment to increase tax revenues in order to cover this rise in expenditure. Transparency was viewed as essential, and the government agreed to post all details of the salary supplements on an open website ( Finally, and most importantly, the government agreed that the salary supplements would be one piece of a larger effort to streamline the existing bureaucracy and create in its place a well-paid and well-organized civil service.

The second prong of the initiative was a Capacity Building Fund. This was designed to provide the government with short-term specialist expertise in areas of urgent concern and longer-term support in capacity building at a variety of ministries and other state institutions.

The government has been so successful in improving tax collection that the salary supplement program for top officials was fully taken over by the state budget after just a single year (rather than the planned three). Thanks to a drive to curb evasion and improve administration, tax revenue increased by 50%, or 4 percentage points of GDP, just in 2004. Unused UNDP and OSI funds earmarked for salary supplements were at this point transferred to the Capacity Building Fund for use in civil service reform.

  Notably, the web site that UNDP says it insisted on was slow to load on Monday. So much for transparency... Why would Soros' Open Society Institute use UNDP to channel money to "top-off" Saakashvili's and a few others' salaries? In how many other countries does UNDP perform this function? This last, we'll be reporting further on. But first, UNDP should answer some questions.

Watch this site. And this (on South Ossetia), this, on Russia-Georgia, and this --


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These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund.  Video Analysis here

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