World Bank Supports Georgia’s Efforts to Increase Private Sector Competitiveness

World Bank Supports Georgia’s Efforts to Increase Private Sector Competitiveness

The FINANCIAL -- The World Bank Board of Executive Directors on April 28 approved an IBRD (International Bank for Reconstruction and Development) loan of US$60 million for the First Programmatic Private Sector Competitiveness Development Policy Operation for Georgia.

This is the first in a series of three Development Policy Operations (DPOs) aimed at strengthening shared prosperity and eliminating extreme poverty in Georgia through policies that stimulate private sector productivity, foster investment and create a fair business environment that enables growth by small and medium enterprises (SMEs) and new firms, according to the World Bank.

The development objective is to increase private sector competitiveness through second generation business environment reforms, financial sector deepening and diversification, and increasing firms’ capacity to innovate and to export.

“These policies have been prioritized in the Government’s development strategy Georgia 2020, which sets out its vision for inclusive development. The DPO series is also a core element of the World Bank Group Country Partnership Strategy (CPS) for 2014-2017, and contributes to the CPS goal of enabling the private sector to become the main driver of employment creation and provider of income opportunities for the bottom 40 percent of the population,” said Henry Kerali, World Bank Regional Director for the South Caucasus.

“The policies supported by this DPO are expected to improve the living conditions of Georgian households by enhancing private sector competitiveness and increasing the country’s growth potential. Promoting a business-friendly environment, financial sector development, enhancing social and financial safety nets, and spurring innovation and trade lie at the center of Georgia’s inclusive growth agenda,“ said John Gabriel Goddard, World Bank Senior Economist and Task Team Leader for this Program.

This DPO series will support the reforms addressed in the Government’s strategy by strengthening public-private dialogue, connecting small and medium sized enterprises (SMEs) to markets and information, and enhancing the public procurement system. Reforms are also being introduced to strengthen social and financial safety nets, particularly through comprehensive pension reforms and the introduction of a deposit insurance system. Reforms in the capital and insurance markets will help to address supply and demand-side constraints to accessing financial services. Reforms to upgrade the telecommunications sector; the introduction of an innovation support framework aligned with European Union (EU) practices; and upgrading of the services provided by state institutions in the areas of metrology, standards and accreditation, will underpin long-term productivity growth and leverage the benefits of membership in the Deep and Comprehensive Free Trade Area (DCFTA) and the Association Agreement with the EU.

This DPO is part of a larger package of reforms supported by the World Bank Group. The Inclusive Growth DPO that is being implemented in parallel supports reforms to strengthen fiscal oversight of public institutions and improve the coverage and quality of health and education services.

This is an IBRD flexible loan of US$60 million with a 25 years maturity and 14 years grace period.

World Bank commitments to Georgia since 1992 total approximately US$ 2.27 billion.

 

Author: The FINANCIAL

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