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Introduction.
The emergence of a democratic, prosperous and independent Georgia is in the United States' long-term interest. Buoyed by a free and fair presidential election and the end of internal armed conflict, Georgia is poised to consolidate democratic rule and to take significant steps to build a market-oriented economy. As a strategically located free-
market democracy, Georgia has the potential to become a major stabilizing force in the Caucasus Region. The country already plays a pivotal regional role because through its ports and rail systems, humanitarian aid and other goods are transported to Armenia and Azerbaijan, while Georgia's pipelines carry critical energy resources from Central Asia and Russia. Much of the vast oil resources of the Caspian Sea area is expected to be exported through Georgia. The United States also has humanitarian concerns in Georgia. Although Georgia's civil conflicts have subsided, large numbers of internally displaced persons (IDPs) remain, and their economic situation is desperate.
The Development Challenge.
Georgia has a population of 5.2 million in an area the size of West Virginia. Over the past several years, Georgia's economic and political stability has been severely hampered by internal conflicts (the Abkhazian revolt and South Ossetian separatist movement) and the disruption of regional trade caused by the break-up of the former Soviet Union. While the fighting has ceased and a sense of optimism prevails, Georgia remains a fragile state. Corruption continues, although progress has been made in reducing overt lawlessness. President Eduard Shevardnadze, the internationally respected former Soviet Foreign Minister, and now one of the most reformist leaders in the former USSR, was returned to power in recent elections, and will have the support of a strongly pro-reform legislature.
After a late start following independence, Georgia has made great strides in macroeconomic stabilization. Georgia successfully negotiated a one-year $112 million Stand-By Arrangement with the International Monetary Fund (IMF). The program calls for reducing inflation through tight financial policies, removal of restrictions in the financial system, and liberalization of prices, commerce, and foreign trade. Results are already evident. Inflation was down to two and a half percent a month during the first half of 1995 (from over 60% a month in 1994). Georgia has maintained a stable exchange rate since the end of 1994, first with the "coupon" and now with its new currency, the "Lari." The fiscal deficit was reduced from approximately 19% of GDP in 1994 to six percent in 1995. Revenues are up and expenditures have been cut through the elimination of subsidies and government downsizing.
Another brake on economic progress is Georgia's $1 billion debt burden, mainly the result of purchases of natural gas from abroad. This total is among the highest of the former Soviet republics in terms of total debt to value of export ratio. The Government of Georgia (GOG) is expected to get some relief from its international creditors in negotiations on external arrears and debt servicing.
Since 1992, the bulk of USAID assistance has been in the form of emergency humanitarian aid. To meet the changing nature of the development challenge in Georgia, USAID is gradually shifting its emphasis toward economic and social sector restructuring and democratization. Given its late start down the reform path, Georgia's successful transition to free-market democracy will require donor assistance beyond the year 2000.
USAID has been the largest bilateral donor, providing more than half of the country's emergency needs, and assisting over 750,000 Georgians since 1992. Human suffering was reduced substantially. During the same period USAID assistance has financed heavy oil for electricity generation and winter heating. Over 100,000 displaced persons have received non-food assistance and over 35,000 supplemental food packages. And in an effort to help heal the scars of war, more than 100 female victims of the Abkhazia conflict and their families have received psychological counseling and 60 women have been the beneficiaries of reconstructive surgery.
USAID has also financed humanitarian assistance activities of international organizations, such as UNICEF, to control the diphtheria epidemic through the provision of vaccines to immunize those children and adults most at risk. TheCaucasus Logistics Advisory Unit (CLAU - under the World Food Programme) manages the rail, port, and communications network throughout the Caucasus, making possible timely and efficient delivery of humanitarian assistance. The CLAU operation, U.S. Center for Disease Control, and PVO programs --all financed by USAID-- are helping to build GOG and local NGO capacity to manage and respond to humanitarian emergencies. However, Georgia's government and NGO community require further capacity strengthening before social services can be effectively provided.
Other USAID assistance concentrates on economic restructuring, energy reform, democratic governance, and exchanges and training. A USAID-financed economic advisor worked with the Deputy Prime Minister for Economic Reform to help the government meet IMF requirements and negotiate with the IMF and World Bank (IBRD) for stabilization and sector loan programs to address critical distortions and imbalances in the economy.
In concert with other donors, USAID contributed to the reduction of Georgia's budget deficit, largely by proposing major cuts in expenditures. Most government subsidies for goods and services have been reduced and most subsidies to state enterprises eliminated. The civil service has been reduced by 30%. The GOG adopted a new Central Bank law and has taken initial steps to increase the liquidity of state-owned and commercial banks. Under the privatization program, approximately 70% of identified small firms and 80% of medium-to-large enterprises have been privatized. However, despite the initial progress on policy reform, assistance is still required to help the GOG establish an enabling environment that fosters investment and private sector growth, including necessary laws, codes, and regulations to encourage and regulate business in an open, competitive market.
In the energy sphere, USAID-provided maintenance equipment and commodities are improving the performance of existing thermo- and hydro-electric facilities. Training in the energy field is leading to improvements in general management, billing, and collections. At the policy level, USAID assistance resulted in the Georgian Parliament passing an energy law which assigns specific functional responsibilities within the power sector. Prior to the law, spheres of responsibilities were amorphous and spread among a variety of entities. This complex restructuring process has not gone smoothly and continued assistance will be required to achieve more rational management and organizational objectives.
The people of Georgia have an excellent opportunity to build a prosperous, democratic society grounded in the rule of law if the country develops its external markets quickly and effectively, and harnesses its skilled labor force, agricultural resources and industrial capacity. Furthermore, if Georgia can attract outside investment it should be able to compete effectively in the international marketplace. Political stability is a prerequisite. The Government must seek expertise in law, commerce, finance, public administration, and social welfare to achieve sustainable economic and political development. growth. To sustain economic reforms, achieved largely through USAID's support of, and collaboration with IMF and World Bank assistance, Georgia must reestablish external markets, reduce balance of trade deficits through export-led growth, and attract new technology as a result of increasing foreign investment. Georgia's leaders must strive to create an enabling environment for economic and political growth that promotes rather than controls business. Georgia should pursue accession to the World Trade Organization to retain its independence and become identified as a competitive producer and exporter to global markets. The Shevardnadze Administration gives every indication that it intends to move swiftly to implement bold economic reforms.
USAID assistance in the area of democratic governance is relatively recent. USAID resources contributed to Georgia's November 1995 free and fair elections, a major achievement in a country just emerging from protracted civil conflict. In July 1995, the USAID-funded Parliamentary Human Rights Foundation installed an Internet link in the Georgian Parliament, giving that body access to western legal resources, including those of the United Nations and the World Bank. Internet access is proving to be an indispensable resource for Georgians involved in reforming the country's legal infrastructure. Additional hookups for the Supreme Court, Executive Office, Ministry of Health, universities, and non-governmental organizations should help accelerate reforms as well as broaden the base of effective reformers.
USAID expects that Georgia will have the institutional and other resources to continue its own transition. Current plans are to phaseout Freedom Support Act (FSA) assistance within the next several years.
Other Donors.
Major donors include the International Monetary Fund, the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development, and the European Union. Bilateral donors include Germany, Great Britain, and Italy.
FY 1997 Program.
Strategic Goal: Economic Restructuring
The newly established Center for Economic Policy Analysis and Reform (CEPAR) will work directly with Minister of Economy and the President's chief advisor for economic reform. The staff of the Center will work with the government and the international financial institutions (IFIs) to monitor the performance of the economy and to identify policy and institutional constraints which impede private sector growth, and to identify opportunities for market-driven development. On the basis of consultations with government, parliament and private businesses, CEPAR will conduct applied economic analyses to identify key policy options. Further, CEPAR will support policy makers and key national leaders in the formulation of economic reforms required to achieve an enabling environment for private sector growth. CEPAR also will help establish the analytical capacities within economic and legislative institutions to produce an integrated policy framework designed to accelerate the growth of private enterprise.
Furthermore, CEPAR will be the focal point to develop the legal and regulatory framework necessary to accelerate the growth of the private sector. Legal assistance will be available through CEPAR to Georgian institutions and policy makers responsible for organizing, drafting, and enacting economic laws to stimulate exports. New, or revised commercial laws will be targeted to ensure that laws and regulations accelerate private investment and broad based economic growth. CEPAR's role will complement other legal work performed under USAID democracy objectives as commercial law and civic codes will be integrated into Georgia's new Civil Code.
Existing tax laws need to be strengthened to broaden the Georgian tax base and, as required by the IMF, to provide greater authority to the State Tax Service to collect tax arrears. New tax laws enacted in 1992 require improvement and enabling legislation. While the IMF is assisting the reorganization of the State Tax Service, USAID will provide training and advisory services to improve tax administration, collection, and audit. USAID will also assist in national budget formulation, including a review and implementation process. Expected results would be an improved and transparent system of annual budgeting, revenue and expenditure, leading to greater efficiency in the targeting of public expenditure and a reduction in the budget deficit.
The European Union developed a plan to extend Georgia's new Central Bank electronic payments system to the commercial banking sector. Resources to implement the plan will be provided by USAID. USAID will also finance training in portfolio management and lending procedures and provide resources through the Eurasia Foundation to initiate a small and medium enterprise (SME) lending program. Lending will begin in 1996. To help stimulate the demand for credit, the International Executive Service Corps will identify and assist clients in the preparation of viable investment and business plans. USAID, through a grantee, will provide technical assistance to farmers' unions in the areas of business management and member services, especially targeting qualifying farmers' unions to receive loans under the Eurasia SME credit facility.
The newly established Trans-Caucasus Enterprise Fund will also contribute to USAID's goal of a competitive market economy. As commercial laws and regulations are developed and private banks and financial restructuring take hold, we anticipate our strategic objectives will shift to greater support for accelerated development and export-driven growth, where the Fund will have greater importance.
Since most donors, not to mention the PVO and NGO community, do not have sufficient understanding of the prospects of targeted investments in the small and medium enterprise sector, particularly in the areas of agricultural production, agro-processing, and performance of specific agricultural markets, USAID is financing a private sector assessment in these areas. The work will lead to the identification of investment opportunities that hold the greatest promise of increasing incentives for domestic production and marketing. This would have the added benefit of reducing needs for donor-financed food aid.
In energy, USAID's emphasis is twofold: (a) to increase energy efficiency and reduce waste in power generation, distribution, transmission, and utilization through technical assistance; and (b) to assist in the development of aninstitutional and policy framework to support these changes. To establish an economically sound and environmentally sustainable energy sector in Georgia, USAID resources will be used for the rehabilitation of the energy supply system; power sector restructuring and corporatization, including legislation and regulatory reform; the provision of technical assistance and commodities for more efficient gas transmission, and upgrading maintenance capacity and recommissioning of inoperable equipment where feasible. The European Union, the World Bank, and the European Bank for Reconstruction and Development are also expected to make other significant contributions to the energy sector.
Strategic Goal: Democratic Transition
Through USAID-financed technical assistance and training provided by the U.S. Justice Department and in partnership with the American Bar Association and other organizations, an integrated program for judges, prosecutors, investigators, defense attorneys, and NGOs will continue.
Despite limited resources, USAID took an important and innovative step in promoting the open flow of information by establishing Georgia's Internet linkages, both international and domestic, through the national parliament. USAID will continue to provide assistance in the form of technical refinements and training through the Parliamentary Human Rights Foundation and selected PVOs.
In FY 1997, USAID will finance the following activities:
- Drafting of implementing legislation for the new constitution, based on international democratic norms, including civil and criminal codes, as well as human rights legal safeguards;
- Retraining and strengthening of Georgia's judiciary, including a program of court reform;
- Retraining and strengthening of Georgia's private legal profession, and support for advocacy groups;
- Providing technical and training support for newly independent media;
- Providing training for political parties and members of parliament to promote greater accountability and effectiveness;
- Providing technical support to the parliament, including continued access to the Internet, and retraining and reorganization for parliamentary staff;
- Support for capacity-building of indigenous NGOs involved in democratic legal and social reform; and
- Providing limited training and support for municipal/local government reform, including preparations for future local elections.
Strategic Goal: Social Stabilization
Humanitarian assistance will continue at gradually reduced levels for the most vulnerable segments of the Georgian population. This will include financing for basic commodities such as fuel and food. USAID, in concert with other donors, is strengthening the capacity of the Georgian government and local NGOs/PVOs to target more effectively these citizens at risk. Through a USAID-financed Save The Children Federation (SCF) grant, sub-grants for "bridging" activities will promote self-reliance and stimulate economic recovery at the local community level. Activities will include financing for rural and urban projects promoting income generation and enterprise development. Inaddition, USAID in cooperation with the World Bank, the Georgian Government and local NGOs, has launched a Social Investment Fund pilot. Together, these efforts will help speed USAID's reorientation away from emergency humanitarian assistance and pave the way for the country's transition to a vibrant market economy.
|
Strategic Objectives |
Economic Restructuring |
Democratic Transition |
Social Stabilization | Cross-cutting / Special Initiatives | Total |
| Privatization | |||||
| Fiscal Reform | 1,000,000 | 1,000,000 | |||
| Private Enterprise | 5,000,000 | 5,000,000 | |||
| Financial Reform | 4,400,000 | 4,400,000 | |||
| Energy | 6,500,000 | 6,500,000 | |||
| Citizens' Participation | 2,600,000 | 2,600,000 | |||
| Legal Systems | 1,000,000 | 1,000,000 | |||
| Local Government | 1,000,000 | 1,000,000 | |||
| Crises | 9,500,000 | 9,500,000 | |||
| Social Benefits | 2,000,000 | 2,000,000 | |||
| Environmental Health | |||||
| Cross-cutting / Special Initiatives | |||||
| TOTAL | 16,900,000 | 4,600,000 | 11,500,000 | 33,000,000 |
USAID Representative: Fred Winch
Purpose: Increased soundness of fiscal policies and fiscal management practices.
Background: Georgia does not have a coherent national budget law or methodology. There is no consolidated budget formulation unit or treasury. Each government unit prepares its annual budget following its own traditional format and individual circumstance. Georgia faces a major problem to develop a national budget system to apportion revenues between federal and regional levels. Existing tax laws require strengthening to broaden the tax base and, as required by the IMF, to provide greater authority to the State Tax Service (STS) to collect taxes.
USAID Role and Achievements to Date: USAID will assist the government to improve national revenue and expenditure systems to reduce deficit spending and improve government development programs. A US Treasury team has assessed Georgia's fiscal policies, and during 1996-97 will concentrate on national budget and tax administration issues.
Description: USAID assistance to the Ministry of Finance will concentrate on developing modern, streamlined, effective national budget functions: schedule for budgetary action; formulation process; review process (executive and parliamentary branches); and budget execution process, including controls. Laws to explain these new procedures will be developed in parallel. A federal budget system will include regional autonomy for both revenue generation and budgetary expenditures which is consistent with the expected division of federal and municipal power in the newly elected government. The longer range goal will be to assist the government to develop a computerized financial management system (FMS) that incorporates new executive budget and treasury functions, including federal and regional apportionments. The U.S. Treasury will provide short- and long-term technical assistance to the State Tax Service to augment the IMF's pilot activity designed to improve tax administration. The U.S. Internal Revenue Service (IRS) will assist the STS develop an efficient centralized organization with clear functional supervision from headquarters down to regional and through to district level operations. Tax administration functions to be targeted include audit, collection, and tax return data. The statutory framework and the tax administration organization itself will be developed and reorganized to provide for organizational efficiency. The STS will receive training in tax administration policies and operations, including audit supervision, and processing tax returns. A tax payer education service program is also a high priority.
Host Country and Other Donors: USAID assistance in budget formulation augments the IMF assistance to develop a national treasury. USAID assistance to improve tax administration is coordinated with the IMF's pilot program to improve tax administration policies.
Beneficiaries: The national budgeting law will benefit all citizens who will know for the first time how their government allocates tax revenues for public expenditures. Taxpayers will understand and accept a tax system that is transparent and fairly administered. All Georgians will benefit from a more efficient revenue system.
Principal Contractors, Grantees or Agencies: US Treasury and IRS.
Major Results Indicators: *
Amount of budget deficits
Amount of government budgetary transfers to state-owned enterprises
Amount of revenues available from cost efficient tax administration
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specificindicators and targets, which will be completed by June 1996.
Purpose: Accelerated development and growth of private enterprise.
Background: Georgia's current macroeconomic policies, legal-regulatory framework, and corresponding institutions are inadequate to fully support the country's transition to a market economy. Institutions with responsibility for economic policy, and commercial laws and regulations must develop their capacities to conduct policy analysis and formulation based on valid economic information and sound analysis. Private enterprise growth is stymied because corruption persists and personal relationships take precedence over competition in the market place. New laws, codes and procedures are urgently required to encourage and regulate business in an open, competitive market.
USAID Role and Achievements to Date: USAID technical advisors guided the government through its negotiation with the IMF and the IBRD to acquire credit to conduct the macroeconomic policy adjustments and structural reforms which have put Georgia on the road to a market economy. USAID economic policy and legal assistance works with Georgia's national leaders to develop economic policies, laws and regulations to establish the market environment for private sector, particularly export-driven, growth and the absorption of new technology.
Description: The Center for Economic Policy Analysis and Reform (CEPAR) currently conducts applied economic analyses to identify key policy options. The CEPAR will continue to support policy-makers and key national leaders in the formulation of economic reforms required to achieve an enabling environment for private sector growth and identify opportunities for market-driven development. CEPAR will continue to establish the analytical capacity in economic and legislative institutions to produce an integrated policy framework designed to accelerate the growth of private enterprise. Legal assistance will continue to be available through CEPAR to Georgian institutions and policy makers responsible for organizing, drafting and enacting economic laws, especially in export-driven markets. CEPAR's role will continue to complement other legal work performed under USAID democracy objectives as new commercial law and civic codes are integrated into Georgia's new Civil Code. The newly established Trans-Caucasus Enterprise Fund will also contribute to USAID's goal of a competitive market economy.
Host Country and Other Donors: The CEPAR provides an operational adjunct to the Minister of Economy and the President’s chief advisor for economic reform.
Beneficiaries: The government’s economic policies, commercial laws and regulations and reformed institutions will set the stage for new investments and the rapid import of new technology which in turn will reemploy Georgia's skilled labor force in manufacturing and agriculture.
Principal Contractors, Grantees or Agencies: USAID activities are implemented by a US firm, Chemonics.
Major Results Indicators: *
Number of laws implemented to expand private sector
Number of regulatory procedures necessary to strengthen competitiveness in key economic sectors
Commercial tax system in place that is considered equitable and transparent
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Background: Successful economic recovery will depend in large part on an increased capacity to mobilize savings and the capacity of commercial banks to serve as efficient financial intermediaries between savers and investors. The formation of a viable banking sector currently is hindered by: (1) the absence of a modern electronic payments system (EPS) to conduct timely financial transactions; (2) managers untrained in modern portfolio management; (3) a regulatory environment that discourages lending to the private sector; and (4) financial institutions that are either lacking or do not respond to market forces. The development of market-oriented capital markets will attract domestic and foreign investment, resulting in workers being retrained according to market needs. Presently, the private sector has virtually no access to credit at affordable rates. Savings mobilization, commercial lending and foreign transactions will not be possible until Georgia’s commercial banks operate like their western counterparts. The commercial banking sector should be opened to outside capital with appropriate guarantees for repatriation of profits and protection against arbitrary capital market controls.
USAID Role and Achievements to Date: USAID technical assistance has helped Georgian entrepreneurs develop small and medium enterprises and develop new products and services.
Description: USAID assistance will support implementation of an electronic payments systems that will permit more timely financial transactions to take place among domestic banks and between the central bank and its seven regional clearing branches; improve banking supervision; and provide financial market data to bank managers and their clients. USAID will provide short-term technical assistance to train commercial bank managers and officers. The focus of this training will be portfolio management, including savings mobilization, debt management, strengthening of audit and supervision functions and the development of sound lending policies and procedures. The Center for Economic Policy and Reform (CEPAR) will provide assistance to formulate laws and regulations to improve commercial bank policies and operations to support private enterprise lending. USAID-funded Eurasia Foundation will select a commercial bank to initiate a small and medium enterprise lending program. Loan funds could be used to form small companies which harness the technological expertise existing in the Georgian labor force, refocusing on new products and services, as appropriate. To help stimulate demand for credit, USAID-funded non-government organizations will identify and assist clients to prepare viable investment and business plans. USAID will provide technical assistance to private farmers' unions and other producer groups to improve association organization, management and services to their membership.
Host Country and Other Donors: The development of the electronic payments system is a cooperative effort among USAID, the European Union, World Bank and the IMF. The IMF and the World Bank have provided all technical assistance to date including the development of an EPS installation plan and training program. The European Union is developing the plan for a private banking telecommunications network.
Beneficiaries: USAID will assist Georgia establish a robust private enterprise sector with a primary focus on export-
led growth, building on the stabilization achieved through efforts of the IFIs. USAID-financed trade and investment programs will ultimately replace technical assistance to the banking sector. Informal retail trade will give way to the production of technology- and export-driven goods and services. In the long term, several million Georgians will benefit from these reforms.
Principal Contractors, Grantees or Agencies: USAID activities are implemented by US firms, and US private voluntary organizations, including Save the Children Federation, CARE, Eurasia Foundation, Volunteers in Overseas Cooperative Assistance, and International Executive Service Corps
Major Results Indicators: *
Number of licensed viable private commercial banks
Amount of funds for equity/credit provided to small and medium-sized businesses from private commercial banks
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Purpose: A more economically sound and environmentally sustainable energy system.
Background: Georgia's energy situation is severe. Energy supplies have become intermittent at best, and prolonged blackouts are commonplace. The shortage of power has accelerated the rate of economic decline that started in 1989 with the beginning of the breakdown of the former Soviet Union. The continuing shortage of energy threatens political security, stagnates the transition to a market economy, and endangers public health. With respect to electric generation, the country's installed capacity is about 4,900 MW of which about 2,800 MW is hydro and 2,100 thermal. Georgia's operating capacity is producing less than 15% of installed capacity. The absence of regulatory reform and sector restructuring also impedes economic progress and prospective investment. Georgia is a candidate for a gas transmission pipeline to transport Caspian Sea gas to the West.
USAID Role and Achievements to Date: USAID's emphasis is two-fold: to increase energy efficiency and reduce waste in power generation, transmission, distribution, and utilization through technical assistance and limited commodity support; and to assist in the development of an institutional framework to support these changes and to promote restructuring and privatization in the energy sector. With respect to significant achievements thus far, a de facto restructuring of the Georgian power industry was recently initiated. From a vertically integrated monopoly with all generation, transmission, and distribution in one entity, Sakenergo, the sector has seen most of the distribution function assigned to municipalities and a small number of hydro power plants sold to private investors as part of the Goverment's overall privatization program. These recent actions represent a significant first step in the direction of utility industry restructuring and eventual privatization. The Georgian Government has also recently established a Commission both to promote development of an institutional framework supportive of restructuring and eventual privatization of the industry, and to coordinate international donor programs in the energy sector.
Description: USAID focuses on three activity areas: power sector restructuring and privatization, including legislation and regulatory reform; limited commodity support to facilitate restructuring and privatization; and energy supply system rehabilitation. Assistance is channeled through three institutional contractors: one provides technical assistance in support of power sector restructuring and privatization, including legislative and regulatory reform; another provides technical assistance and commodity support to facilitate restructuring and privatization as well as energy supply system rehabilitation; and the third is providing short-term training in all activity areas.
Host Country and Other Donors: The European Union has completed a series of comprehensive assessments in the areas of tariff structure, accounting, billing, and metering practices. The World Bank is currently conducting a $30 million loan appraisal for maintenance and rehabilitation work in the areas of electric generation, transmission, and to some extent distribution. USAID is undertaking a pre-loan analysis to complement proposed World Bank activities in the areas of electric generation, transmission, and distribution. The European Bank for Reconstruction and Development has recently approved an $18.1 million loan to the local power company to rehabilitate the Rioni hydro station and improve operations and water treatment at the major thermal station.
Beneficiaries: Approximately 1.3 million residential and commercial consumers of electricity.
Principal Contractors, Grantees, or Agencies: Three institutional contractors: Hagler Bailly (restructuring and privatization); Burns and Roe (rehabilitation of power systems); and the U.S. Energy Association (training in all energy areas).
Major Results Indicators: *
Percent of heat and power plants with energy conservation measures
Percent of total volume of electricity and heating produced and distributed by privatized sources
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Purpose: Increased better-informed citizens' participation in political and economic decision-making.
Background: Like other countries emerging from the shadow of communist rule, Georgia is struggling to consolidate nascent democratic institutions and practices. Civil society is weak and fragmented: political pluralism, independent media, and indigenous non-governmental organizations (NGOs) need to be developed and strengthened for democracy to survive, and for a market-economy to flourish.
USAID Role and Achievements to Date: USAID-funded activities in the area of independent media have led to the establishment of the first independent television network in Georgia. Internews, with USAID and USIS funding, has worked to train and develop independent media outlets and implementors in Tbilisi and outlying regional cities. A series of Internews' sponsored conferences prompted seven of the country's strongest independent television stations to agree to form the Georgia's first independent television network. The network is expected to serve as a nation-wide platform for objective news coverage and quality documentaries, as well as a coordinating unit for independent television journalists. Additionally, USAID activities supported the development of the country's first domestic election monitoring NGO, and continue to support the strengthening of this indigenous organization. The National Democratic Institute (NDI), with USAID funding, provided substantive consultation, training and resources to a coalition of Georgian NGOs interested in developing a domestic monitoring organization. With NDI's assistance, this domestic monitoring organization, the Georgian Fair Election Society (FES), trained and deployed more than 1500 domestic monitors for the November 1995 election.
Description: USAID contractors and grantees will continue to work with independent television stations, political parties, parliamentarians, and indigenous NGOs to foster the growth of civil society and grassroots democratic reform efforts in Georgia. NDI is providing training to political parties and factions, both inside and outside the current parliament, on building organizational capabilities, operating as effective parliamentary factions inside the legislature, upgrading parliamentary skills, strengthening party-constituency linkages, and building substantive political platforms. As requested by the Georgian Parliament, a program for restructuring and retraining of parliamentary staff will begin in FY 1996. ISAR (formerly the Institute on Soviet-American Relations) and the Eurasia Foundation are providing assistance to indigenous democratically-oriented (non-humanitarian assistance) NGOs, working to improve management and communications capacity, and working to strengthen these organizations' ability to participate effectively in the development of democratic legislative and social reform. Also, activities will focus on improving inter-
NGO coordination and developing effective strategies for communicating NGO interests/positions to the press and the general public. Internews is working with Georgian independent television journalists, providing limited but critical equipment assistance, and training programs to bolster journalists' capacity to produce quality news reports on political developments. Media assistance will also focus on developing media associations and networks, providing training in management, advertising, and journalists' rights and responsibilities. These activities will continue in FY 1997, and evolve based on the changing needs and growth of Georgian civil society.
Host Country and Other Donors: The above activities are being coordinated with other USAID activities, such as the Eurasia Foundation, as well as with the U.S. Information Service (USIS). Additionally, USAID's efforts are being coordinated with international donors working in these areas, including the United Nation's Development Programme, the European Union, and the Organization for Security and Cooperation in Europe (OSCE, formerly CSCE). The Georgian Parliament, and various Georgian NGOs are integrally involved in these efforts.
Beneficiaries: USAID-funded activities in this area seek to benefit individuals and organizations actively involved in civic participation and democratic reform efforts, as well as the population at large over time, in encouraging further and deeper citizen participation in the country's transition to a democratic market-oriented state.
Principal Contractors, Grantees, or Agencies: Current grantees include Internews, NDI and ISAR. Additional grants and contracts will be established with various private/public US firms and NGOs for expanded assistance in this area.
Major Results Indicators: *
Number of NGOs brought into the legislative process
Percent of news coverage expressing opposing views
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Purpose: Legal systems that better support democratic processes and market reforms.
Background: Georgia inherited a Soviet legal infrastructure that presents substantial obstacles in the country's evolution toward a market-oriented society based on the rule of law. Georgia's legislative infrastructure, judicial structure, and overall legal system all require assistance in reform, reconstruction and retraining.
USAID Role and Achievements to Date: USAID-funded consultant Herman Schwartz, an American constitutional law expert, was extremely influential in the development of Georgia's new constitution, specifically, his advice and cautions regarding an explicit separation of powers are positively reflected in what has been called the most solidly democratic constitution of all the former Soviet republics. USAID has also funded Georgian drafters of the country's Civil Code to travel to the Netherlands to participate in USAID-funded conferences which provided European and U.S. drafting expertise.
Description: USAID contractors and grantees will begin work in FY 1996 with legal institutions, such as the Parliament, Constitutional Court, Ministry of Justice, Procuracy and Executive Office, on legislative and institutional reform and restructuring. In addition, USAID will sponsor assistance in the retraining of the country's judges, lawyers and parliamentarians in international legal norms, as well as work at the grassroots level with indigenous bar associations and legal advocacy non-governmental organizations, and the dissemination of legal information to the general population. These activities will continue in FY 1997, and evolve based on the changing needs and growth of Georgia's legal infrastructure.
Host Country and Other Donors: These programs will be coordinated with other USAID-funded activities, particularly in the area of commercial law reform, with the economic restructuring activities of the newly developed Center for Economic Policy and Research (CEPAR). USAID's efforts will be coordinated with international donors working in these areas, including the United Nation's Development Programme, the European Union, and Germany's GTZ legal consultants.
Beneficiaries: These efforts will benefit Georgia's legal institutions and legal advocates in the transition to a governmental system based on the rule of law and market principles, and thus will benefit the people of Georgia who rely on these institutions, both governmental and non-governmental, to support and protect their individual and property rights in accordance with the constitution and internationally recognized human rights statutes.
Principal Contractors, Grantees, or Agencies: The American Bar Association's Central and East European Law Initiative (ABA/CEELI) has already begun work in this area in Georgia. Additional implementors have not yet been determined.
Major Results Indicators: *
Percent of population knowing/understanding specific rights
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Purpose: More effective, responsive, and accountable local government.
Background: In the period following Georgia's independence in 1991, municipal officials were faced with major transition challenges. The de facto devolution of responsibility to local governments for many functions previously carried out by the national government, in combination with declining central budgets and shortage of skilled personnel, left local authorities increasingly isolated from the center and unable to halt the degradation of municipal services. Local and municipal governments need assistance in developing greater administrative capacity and effi
ciency, as well as in the construction of a rational intra-governmental administrative and financial system.
USAID Role and Achievements to Date: USAID has been holding off on local government assistance in order to benefit from an extensive World Bank assessment which has recently been conducted, as well as to develop a dialogue with the Government of Georgia on the scope of decentralization (i.e., the question of local elections and municipal taxing authority), prior to beginning activities in this area. FY 1996 will be the first year for USAID funding of such assistance.
Description: A USAID contractor/grantee will work with senior municipal staff, providing training in key technical areas, e.g., taxation, city management, and budgeting, in selected cities. Contractor/grantees will also work to develop a mayors' municipal association, which will aid in the dissemination of lessons learned and best practices among municipal officials and help to create an effective mechanism for lobbying the central government on issues of concern to local governments.
Host Country and Other Donors: USAID will coordinate it's efforts with the World Bank and the European Union. The European Union in particular is working with the Government of Georgia on civil service reform at the central government level.
Beneficiaries: This effort will initially seek to benefit Georgian citizens in a few targeted cities. However, the number of beneficiaries will grow through an evolving network of municipal/mayors' association. Georgian citizens will benefit from more transparent, effective and efficient local governments with the capacity to provide the municipal services required to insure a higher standard of living.
Principal Contractors, Grantees, or Agencies: To be determined.
Major Results Indicators: *
Passage of legal, fiscal and procurement reforms that empower local governments
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Background: The economic crisis and associated collapse of the social safety net coupled with internal conflicts, have left Georgia's most vulnerable populations without viable means of support. Until economic conditions improve, employment and household income will continue to decline, increasing the size of the vulnerable population. As international resources available for humanitarian assistance decrease, it becomes increasingly important to target aid to those who are most in need. At the same time, the government must become increasingly responsible for managing the affairs of its vulnerable population, particularly refugees and internally displaced persons (IDPs).
USAID Role and Achievements to Date: Through funding to the International Office of Migration (IOM), USAID provided technical assistance and training to the Government of Georgia (GOG) Coordination Bureau for International Humanitarian Assistance (CBIHA), which enabled the bureau to establish its charter and become operational. Through the U.S private voluntary organization (PVO), Save the Children Federation (SCF), USAID assisted in developing the capacity of CBIHA to collect data, track and coordinate all humanitarian assistance coming into the country. In 1995, primary responsibility for data collection and analysis, and monthly publication of a national report on international humanitarian assistance and market information was transferred from SCF to CBIHA. The monthly report is distributed to over 200 organizations and has been the primary source of quantitative data used by international organizations, NGOs, and government ministries to target and coordinate humanitarian assistance.
Description: In order to refine the targeting of humanitarian assistance, USAID is co-financing a major national assessment of vulnerability in partnership with the UN's Department of Humanitarian Affairs (UNDHA), European Community Humanitarian Organization (ECHO) and CBIHA. Through SCF, USAID is funding the team leader of the assessment. Household data on income, nutrition and health status will be collected to establish country-specific vulnerability criteria for identification of humanitarian aid beneficiaries. USAID continues to fund IOM to carry out capacity building within the GOG in the areas of emergency management and coordination of humanitarian aid. Both the newly established Ministry of Refugees and Resettlement (MRR) and the CBIHA receive technical assistance and training through IOM programs.
Host Country and Other Donors: As noted above, USAID is implementing its efforts to better target humanitarian assistance in partnership with UNDHA, ECHO and CBIHA. IOM works closely with the UN High Commission for Refugees, UN Development Program and MRR on migration issues.
Beneficiaries: The estimated vulnerable population is expected to drop from 700,000 to 500,000 with improved targeting methods. Of this number, USAID activities are expected to benefit some 200,000 persons, both IDPs and non-IDPs, through income generation and direct humanitarian assistance.
Principle Contractors, Grantees, or Agencies: USAID implements activities primarily through SCF and IOM.
Major Results Indicators: *
Number of services privatized
Change in numbers of public/private partnerships
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.
Background: The economic crisis and associated collapse of the social safety net coupled with internal conflict, have left Georgia's most vulnerable populations without viable means of support. Until economic conditions improve, employment and household income will continue to decline, increasing the size of the vulnerable population. Currently the Georgian government does not have the resources to provide adequate support and benefits to those in need, necessitating continuing international assistance in the short term.
USAID Role and Achievements to Date: Since 1993 USAID has provided humanitarian assistance through U.S. non-
governmental organizations (NGOs) and international organizations to assist Georgia's vulnerable population, particularly internally displaced persons (IDPs). This assistance met critical and immediate needs over the past three years for supplemental food, non-food household items, pharmaceuticals, medical services, water and sanitation facilities, some basic agricultural inputs, and heavy oil for emergency energy needs.
Description: Through funding to U.S. non-government organizations and international organizations, USAID provides humanitarian assistance in the form of food, pharmaceuticals, water and sanitation rehabilitation, and heavy oil for emergency energy needs. USAID-funded NGOs are also implementing bridging activities in the areas of micro-
enterprise development, income generation, provision of inputs and technical assistance in agriculture, and reactivation of light industry in vulnerable communities.
Host Country and Other Donors: Significant levels of humanitarian assistance are provided by and through the European Union and U.N. organizations such as U.N. High Commission for Refugees, World Food Program, UN Children's Fund, and UN Department of Humanitarian Affairs.
Beneficiaries: Food assistance is provided to over 50,000 pregnant and lactating women and children under five and to 30,000 vulnerable people in Southern Georgia. Pharmaceutical assistance provides coverage for over 650,000 women and children in Tbilisi. Water, sanitation and other rehabilitation efforts are targeted for IDPs living in Western Georgia. Provision of heavy oil for emergency energy is expected to benefit most of the population. Bridging activities that increase household income are targeted for the most vulnerable populations among IDPs, farmers and others.
Principle Contractors, Grantees, or Agencies: USAID funds humanitarian assistance through U.S. non-governmental organizations and international multilateral organizations, including most prominently Save the Children Federation, CARE, United Methodist Committee on Relief, and International Council of Orthodox Churches.
Major Results Indicators: *
Amount of temporary assistance appropriately targeted
Numbers of people with reduced suffering because of access to food, shelter, clean water, etc.
* These are illustrative indicators. ENI missions are in the midst of the complex process of developing meaningful, measurable country-specific indicators and targets, which will be completed by June 1996.