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ADB: Georgia’s Economy will Grow Faster if Government Carries out Reforms, Cares of Macroeconomic Stability

An interview with Zhang Wenchai, Vice-President of the Asian Development Bank (ADB)

Georgia’s economy will grow faster if the government carries out reforms, cares of macroeconomic stability and learns to finish  the projects in time. This is an opinion of  Vice President of the largest donor – the Asian Development Bank (ADB). How he evaluates the country’s business environment and prospects, we’ll learn from his interview.

First of all, let’s talk about your visit; you organized an investment forum which took place in Tbilisi the other days. What results did you expect and whether your hopes have justified?

This forum is really a very important event for us. It was   organized jointly with  the Georgian government, especially the Ministry of Economy and achieved the goals. Forum was held at a high level and was attended by the  largest businessmen from various  countries as well as representatives of government and international financial institutions. We’ll see the first results from Asia, where  the interest in the region is high enough, in a short time.
How would you assess the economic situation and business environment in Georgia?

Although, Georgia’s economic growth was low in 2013 , now  growth started to gather pace and our forecast growth  will reach  5.5 %  this year. In  the following years, the country has great potential for economic growth, if  it  really implements reforms, takes care of macroeconomic stability, which in turn is  based not only on consumption, but investing  in the private sector and exports growth.

In the past ten years, Georgia has spent much effort to improve the business climate for small enterprises?

In general, USD 125 million was allocated for the private sector, including financial intermediaries and two banks, our organization’s strategy in the current five years is to support the country’s sustainable economic growth, especially companies established on the basis of the private and public partnership, we will also support the government to carry out reforms in the public sector.
Whether the specific details are known about their duration and the value?

In the first stage, I think we’ll help Georgia  in terms of costs and revenues in public administration and financial management . The next two credit lines will focus on the pension system and capital market formation. We are in a process of developing and do not have detailed information. The project duration is 3 years, but it will take several years to create it, the overall cost will reach  USD 75 million.
How many projects did you fund and how much was allocated for this purpose? 

Over the past seven years, the Asian Development Bank approved a  loan worth USD  1.4 billion for Georgia, we are providing financial support to  many projects, including rehabilitation of roads and communications.

Mainly  infrastructural projects?

Yes, we are funding  development of urban water supply and transport as well as regional projects that will connect  Georgia with the neighboring countries. Energy export requires construction of roads and infrastructure, we are lending to the private sector, including small and medium-sized businesses.