The World Bank Group has confirmed a $60 million USD loan for Georgia to increase its competitiveness and economic growth, which are two of the most important components of the cooperation strategy between the World Bank and Georgia in 2010-2013.
This was an IBRD (International Bank for Reconstruction and Development) flexible loan of $60 million USD with a 25 year maturity and 14 year grace period.
The loan was allocated for the First Programmatic Private Sector Competitiveness Development Policy Operation for Georgia yesterday.
By strengthening competition in the private sector it is possible to improve the conditions of the Georgian population and to experience economic growth,” said World Bank Group economists John Goddard.
“Providing the desirable conditions for the businesses, developing the financial sector, increasing the social and financial safety network, supporting the innovations and trade is an agenda of Georgia,” he said.
This loan was 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.
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 prioritised in the Government’s development strategy Georgia 2020.
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.