The European Union (EU) has transferred GEL 140 million (EUR 48.1 million) of non-reimbursable aid to Georgia in acknowledgement of commonly agreed reform progress in 2017 in several sectors: trade and business development, vocational education and employment, agriculture, and integration of internally displaced people (IDPs). Payments were also made for Georgia's justice sector, public administration, public finance management and regional development policy. These funds are provided within the framework of EU budget support programmes ongoing with the Government.
Based on independent reports, the EU assessed progress in regards to Government commitments in each of the mentioned sectors and came to the following conclusions:
1. Support to EU-Georgia Deep and Comprehensive Free Trade Area (DCFTA) and Small and Medium sized Enterprises (SMEs): Georgia has made good progress in the areas of trade and private sector development, in line with the agreed roadmap. This included the timely adoption of a number of national legislative acts aimed at enabling a favourable business environment, including on food safety, technical barriers to trade, and market surveillance. Enterprise Georgia provided advisory services and trainings to over 220 SMEs, and in cooperation with the Georgian Chamber of Commerce, disseminated information on the benefits of DCFTA to the private sector on regional level.
2. Employment and Vocational Education and Training (EVET): With EU support, Georgia achieved notable results in developing a labour market information system and introduction of a new service model for the employment support services. The established Labour Market Information System (LMIS) allows citizens to get information on in-demand professions in different sectors and regions of Georgia. Interested citizens can now access information at which schools they can be trained in these professions. Further, the new model of the public Employment Support Services (ESS) improved matchmaking of employers with potential employees. Improved occupational standards, the revised VET education programmes and trained VET teachers contributed to better meeting the needs of the labour market. The EU notes a 51.6% increase in the number of citizens registering for VET programmes in the last three-year period. The EU emphasises the importance of social dialogue and recommends involving employers, employees and trade unions more systematically in all important policy decisions.
3. Agriculture and Rural Development (ENPARD II): Good results have been achieved in key areas. Georgia, with support of the EU, boosted the development of agricultural cooperatives and achieved improvements in the area of food safety, agricultural statistics and seed certification, the latter through a landmark seed law. Further, the Georgian government developed, adopted and started implementation of a strategic framework for rural development in line with EU best practices. The EU recommends accelerating the implementation of key reforms in the area of farm registration and agricultural extension, in order to improve the delivery of services provided to farmers through Information and Consultation Centres.
4. Support to conflict-affected/displaced population and its host communities in Georgia: Overall, Georgia made good progress in management and implementation of the Livelihood Action Plan. The Government of Georgia provided better support to the employability, requalification, education and training of internally displaced people. The number of IDPs participating in job seeking trainings, receiving professional counselling, enrolling in public education institutions increased in 2016. However, there is room for improvement regarding the procedures in order to receive the support. Further, the EU notes that grants managed by Ministry of Internally Displaced Persons and Enterprise Georgia have proven to be successful instruments in promoting self-employment among the IDP population.
5. Support to reforms in the Justice sector: The EU welcomes the following achievements: better accessibility and use of state-funded free legal aid, enhanced capacities of the Public Defender's Office, diversion of juveniles from the criminal prosecution to resocialization programmes, maintaining vocational education opportunities to prisoners, rehabilitation programmes for probationers, decreased mortality rate in prisons and disease transmission rates and importantly the introduction of a prosecutorial strategy. However, there remains the need for systematic and increased engagement of all juveniles in out-of-cell activities. The EU also notes that an independent investigative mechanism to investigate wrong-doing of law enforcement officials has not yet not been established and that the government did not provide sufficient evidence that all cases of alleged ill-treatment were investigated efficiently and promptly, and that its performance-based evaluation criteria for prosecutors have yielded its expected effects. In 2016, in-depth review of cases for male adult prisoners for early release was not introduced. The EU also notes that in parallel to the good progressing of sporadic registrations the process of systematic registration of land titles did not reach the agreed targets in the specified timeframe.
6. Public Administration Reform:
Throughout the past year, the Government of Georgia continued the implementation of Public Administration reform despite constraints of the State Budget. An important achievement is the adoption of 11 decrees implementing the new civil service law. The decrees include rules for recruitment and appraisal as well as the code of ethics applicable to all civil servants in central and local administrations. The EU also acknowledges the improvements made to policy planning in five major ministries. Public officials' assets declarations are now checked, underlining Government's efforts to strengthen integrity in public service. However, the EU assessment points out that the adoption of the civil service decrees was delayed at a critical phase of this important reform.
7. Support to Public Finance Policy Reforms (PFPR) in Georgia: One of the main goals of the programme is to strengthen the checks and balances system. The programme is successfully implemented by the Ministry of Finance, Parliament and the State Audit Office with better financial management by all three institutions. However, the assessment also points to limited human and financial resources of the main Parliamentary Committee and a certain dissatisfaction of the committee with the Parliamentary Budget Office. Further, the EU sees a need ensure implementation of "Financial Management and Control Procedures" related to risk management and accountability obligations in all pilot line ministries.
8. Support to Regional development policy implementation in Georgia: Georgia has made good progress in implementing Regional Development Programmes which resulted in constant improvements of infrastructure and services provided to the population residing in the regions. However, the EU assesses the lack of reliable statistical data from the regions and municipalities as a major weakness. An approximation to European Regional and municipal statistics is recommended (NUTS classification).
Budget support is an instrument for EU cooperation which involves direct financial transfers to the state budget of the partner country. Funds are transferred annually, and only when commonly agreed results are met. Government is required to maintain a satisfactory track record of implementing macroeconomic policies, public financial management, and budget transparency for all payments, and in addition specific targets are included in various policy areas, such as SME development, education, public financial management, etc. If the EU considers performance on any of these points is insufficient, it withholds a part or the whole disbursement until credible reassurances or measures have been established. This is a way of fostering partner countries' ownership of development policies and reforms, and addressing the source, not the symptoms, of underdevelopment. Most budget support for Georgia is part of a wider support package to a specific sector and is combined with funding for accompanying projects, for example grants and technical help for cooperatives under the ENPARD Programme.
For more information, please contact:
Tamriko Mikadze, Press and Information Officer, Delegation of the European Union to Georgia, Tamriko.Mikadze@eeas.europa.eu