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New 10-Point Action Plan by the Georgian Government to Help Private Sector in Financial Planning

Published: November 1, 2011 | 4:29 pm
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The COMMERCIAL TIMES

Georgian business sector says the new 10-Point Action Plan by government opens new opportunities as they’ll be aware of the government’s priorities and will plan their business strategy more  precisely.

Georgian PM Nika Gilauri presented government’s 10-Point Action Plan for Employment and Modernization on November 1 at Radisson Blu Iveria Hotel.  The action plan includes main directions of Georgia’s economic development in 2011-2015 and strategic solutions for employment issue in the country. Georgian PM and Dimitri Gvindadze, the Minister of Finance of Georgia, delivered detailed speeches regarding the concrete tasks Georgian government will be carrying out in the coming 5 years in order to achieve the main goal, which is decreasing unemployment and  creating new jobs.

The event was organized by Georgian Chamber of Commerce and Industry (GCCI). Over 150 businessmen from large and medium size companies attended the presentation.

“10-Point Action Plan by Georgian government is a live document, which will be updated every six months,” declared Georgian PM. “In the beginning of 2009 Georgian government initiated an anti-crisis Economic Stimulus Package, which has been carried out successfully. During the 2009 international financial crisis Georgia managed to overcome triple shock caused by foreign crisis, the Russian aggression and internal political issues. However, during the last three years Georgia proved to have the best growth economy in the region. The second action plan by Georgian government is this 10-point document defining the country’s priorities in the coming 2011-2015 years, the main goal of which is creating jobs,” Gilauri said.

“It’s important that the representatives of Georgia’s private sector get informed about the government’s new initiatives through the presentation delivered by the Prime Minister. The 10-point action plan by the Georgian government includes lots of aspects that are significant for the local private sector. The country’s macroeconomic stability issues are very important for Georgian businessmen and foreign investors,” noted Kakha Baindurashvili, the President of GCCI.

“Macroeconomic stability and other fiscal issues included in the 10-Point Action Plan are the major aspects that condition healthy development of the country’s private sector. Healthy business sector means strong economy and decreased poverty indicator,” stated the Minister of Finance of Georgia.

Georgian President Mikheil Saakashvili announced new initiatives concerning business sector earlier in Batumi. President made a suggestion to businessmen gathered at the government`s enlarged meeting in the Black Sea town of Batumi on October 27.  Saakashvili promised certain advantages to those businesses, which will employ senior citizens, the entrepreneurs who employ citizens of age from 45 to 60 will be exempted from income taxes.

“I think it’s good that the government is focusing on employment because it’s probably the biggest issue that is politically interesting in Georgia today. I’m also glad that the government is focusing on agriculture and it’s very good that they forgave the debts of the farmers,” said David Lee, General Director of MagtiCom. “Employing senior citizens is also an interesting initiative. In MagtCom average age of our employees is quite young-30. However, we have lots of older workers as well.”

“It’s important to know Georgian government’s priorities beforehand. This way business sector will have a clearer vision for planning its financial strategy. It’s also a good gesture for investors planning to put money in Georgia as they’ll be better aware of the concrete steps happening in Georgia’s economy,” said Temur Chkonia, a Georgian businessperson and the owner of Coca-Cola Bottlers, Georgia.”

“Planning is one of the most crucial aspects for businessmen. Knowing ahead the government’s economic strategy will help private sector to better manage their finances,” said Paata Kurtanidze, the founder of the pharmaceutical company Aversi.

Georgian PM focused on the following aspects:

Macroeconomic Stability

Improvement of stable ad healthy macroeconomic environment in the country for creating new jobs (growth economy, guarantee small and controllable budget deficit, single-digit inflation, conservative and programmed management of foreign debts and other parameters that condition fiscal stability of the country).

“Not everyone understands why macroeconomic stability is important. However, business people do know how difficult it is to create jobs and attract investments without strong macroeconomic parameters. Complicated macroeconomic environment can lead any country to bankruptcy, which is what happened to Greece. In this respect Georgia has the healthiest economy globally. Foreign debt in reference to GDP is 32% and is further decreasing; total debt in reference to GDP makes-41% and it’s also decreasing. As for budget deficit, we decreased it from 9.2% to 3.7%, which is the lowest indicator in the region. 20 countries have showed decreased economic growth while Georgia is the only country in the world to increase economic growth forecast minimum up to 6%. We have the healthiest banking sector in the region with 30-35% growth portfolio. National Bank of Georgia has the highest indicators of deposits and reserves ever.

Georgia-Tourism, Trade and Logistics Center of the Region

During the last two years Georgia is the leader in the number of foreign visitors to the country with 40-50% growth annually. Mestia, Anaklia, Batumi, Signagi, Gudauri,-the entire tourism infrastructure is being developed. Georgia has already become a regional center; Batumi Port and Kulevi Port are the only means for import-export issues for many countries. Just recently APM Terminals, Maersk bought shares of Poti Port and made entrance in the post Soviet area starting with Georgia.”

Launching New Infrastructure and Energy Projects: Annually 30 000 people will be employed in roads projects, 8 000-10 000- in railway projects, 20 000- in water projects, 13 000-15 000 in- energy projects.

“Georgia is an energy center of the region. The country exports electricity in almost all the neighboring countries, 1.5% of the world oil consumption goes through Georgia, we’re in leading positions in gas field as well.”

Infrastructure

“Georgian President recently opened a hotel in Shuamta, the owner of which said that if there was not the Gombori road the hotel would not have guests because this road shortens the travel time. On one hand we create new jobs by hiring people for road infrastructure projects and on the other hand we have well-functioning businesses opening new outlets. In total USD 500 million, supported by Asian Development Bank (ADB) grant, will be spent in water projects, which will also help private sector to better operate their businesses. 10 new hydro power stations are being built currently and 6 more will be added next year.”

Agriculture Development

“Agriculture is becoming a profitable business to focus on. 35 thousand tones of storages have already been completed in Georgia and this is a big step forward for our farmers as they won’t be urged to sell the production right away and will be able to watch best price time. Increased local production and decreased import will condition good price guarantee on agricultural products.”

Health and Social Issues

“150 renovated medical outlets will be opened in Georgia. In the next 6 months we’ll have 100 outlets completed and the rest 50 will be finished by the end of the next year. In the near future Georgian government plans to provide all its citizens over 60 with insurance.”

Education

“Millennium Corporation will finance the establishment of a New Technology University in Georgia, which will be owned or managed by American University. In addition it will be a significant scientific center.”

 

 

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