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Tbilisi hosts International Business Conference

By Salome Modebadze
Tuesday, November 30
A two-day conference organised by the International Finance Corporation (IFC) in partnership with the World Bank and the Government of Georgia opened yesterday at the Radisson Blu Iveria Hotel. The conference, which is focused on improving the business environment and supporting private sector growth in Georgia and other countries, brings together hundreds of senior decision makers from 30 countries across Eastern Europe and Central Asia to share their reform experience and challenges, drawing lessons from the design and implementation of successful reforms. These include establishing a one-stop shop for business licensing, trade facilitation and tax administration along with strengthening the rights of creditors and borrowers.

Applauding the guests for their commitment to the reform processes, Snezana Stolijkovic, IFC Director for Eastern Europe and Central Asia welcomed the Georgian Government’s impressive efforts to improve the environment for businesses. “This year’s Doing Business Report includes a new measure to look at how the business regulation environment has changed over the past five years. Georgia’s persistent efforts have resulted in Georgia being among the first of the 174 world economies by this measure. As the 12th easiest place to do business globally Georgia remains the leader in Eastern Europe and Central Asia,” Stolijkovic said stressing the importance of sharing experiences across the region and maximizing opportunities to learn from each other.

“My colleagues form the World Bank group and I look forward to learning from all of you as well. We have brought a team of IFC and World Bank private sector development specialists including some from the region’s environment climate advisory team and doing business team in Washington to help us share their best practices. It’s the first sharing event of this style in Europe and Central Asia and I’m sure it will provide a wonderful opportunity to share experiences of all the countries not only on what has worked well but also what didn’t work and how can we learn from that,” she said explaining how many changes have been driven in some countries of the region across borders of European Union (EU) countries encouraging private sector development.

Talking about the necessity of joining domestic environmental improvements with the international situation for further progress, Asad Alam, World Bank Regional Director to the South Caucasus hoped that the discussions would be successful for al the sides. “Georgia - one of the smallest countries continued reforms even during the crisis. And particularly in recovery they will talk of the reform program of the Government of Georgia on how to strengthen the business environment in the country,” Alam said emphasising the necessity to invest in tourism, agriculture and hydro-power, which according to him will be achieved through the successful reforms established by the Georgian Government.

In his presentation of the Georgian success story, the Georgian Prime Minister, Nika Gilauri spoke of the progress which Georgia has made over the last few years. “We have looked at everything from the private sector’s point of view as the main philosophy of our policy was to create jobs. Georgia is not rich enough to create investment thus the only solution to the problem remains to attract international investors to our country. Georgia, because of its geopolitical situation should be three times better than the other countries surrounding us,” Gilauri said highlighting the additional geopolitical risks for the country which have been the reason behind Georgia’s bold decisions.

Being proud to be a part of the Governmental team dealing with what was Georgia’s biggest problem – corruption, Gilauri talked about the reforms which have proved to everyone across the world that in a very short period of time you can fight corruption, can have a democratic Government and be successful at the same time. “This has all been important for the whole world because that’s what Georgia represents nowadays. We are exporting reforms and I’m proud of it!” Gilauri said stressing the importance of ordinary people’s engagement in all these processes since the Rose Revolution in 2003 gave President Saakashvili a mandate to do anything and everything in his power to fight corruption.

Highlighting the difficulties caused by the Russian invasion and world financial crisis affecting the Georgian economy together with the internal political problems in 2008-2009, Gilauri spoke on how Georgia had survived all these events and made a great progress in 2010. Defining the future intensions of Georgia, the Prime Minster mentioned the keen interest of investors, attracted by the Georgian statehood. According to Gilauri, Georgia’s Labour Code doesn’t create special rules between employer-employee which makes the investors feel comfortable and consequently hire more people, thus creating employment. “The Constitutional changes we are currently executing say that from 2012 Government expenditure cannot be more than 30% of GDP; budget deficit can’t be more that 3% and Government debt to GDP can’t be more than 60% and there can’t be budget earmarks in the frames of the Liberty Act. The world is developing and we are following – the Georgian economy is not similar to other countries but the starting point for making business making is close to them,” he stated.

The Doing Business Report analyses the regulations that apply to an economy’s business during its lifecycle, including start-up and operations, trading across borders, paying taxes and closing a business. To see the results of Georgia’s reform efforts in practice, the participants had an opportunity to visit Georgia’s Property Registry/Business Service Centre, a one-stop-shop for construction permits, tax administration, customs and the Service Centre of the Ministry of Internal Affairs of Georgia.

Analyst Gia Khukhashvili spoke to The Messenger about the achievements in reform making in Georgia through technical package and simplification of procedures at various fiscal agencies. “Particular goals have been achieved in our country through reforms but a real competitive environment for attracting more civilised capital is still lacking,” the analyst explained, adding that all these reforms are simply traps for foreigners. “The internal situation in Georgia is so bad that we had better stop following the futile propaganda. Conferences are not enough for decision making because investors generally rely on what they see and what they hear,” he said explaining that foreigners investigating the relevant business environment are not very attracted by Georgia’s internal situation.