The FINANCIAL — “Do not wait, do it,” recommended Angela Prigozhina, Private and Financial Sector Country Sector Coordinator in the South Caucasus of the World Bank while addressing the Georgian Government with news from the World Bank.
Georgia should improve efficiency in its business environment. To achieve this goal Georgia should enforce competition legislation and create a level playing field, anti-monopoly agency, rules and practices enforcement, which will take 0-3 months; Enhance property rights protection (0-3 months); Enhance investor protection legislation and regime, including FDI aftercare (6-12 months), The World Bank recommended.
For increased access to markets Georgia should establish institutions to support entrepreneurship and business skills development, export promotion, access to information and markets. Completing these tasks will take a 6-24 month period of time, the World Bank believes.
Georgia should also introduce instruments of financial assistance to defray a portion of the cost that firms incur to acquire the requisite capacity to compete on the global market (for example, matching grants for business development services, export product development and benchmarking, export promotion, quality standards compliance and certification), which will take 6-12 months; Provide basic infrastructure to enable firms to adhere to international standards by building accredited control laboratories (12-24 months); Formulate policies to promote backward links between foreign firms and the domestic economy (3-6 months).
Lack of access to finances is named as one of the biggest challenges for Georgia, according to The World Bank. To solve this problem, the Bank recommends that Georgia should develop special SMEs’ support and credit enhancement programmes, which will take 6-12 months.
Georgia should establish special early-state risk capital financing vehicles (12-24 months), the report suggested; Advance capital markets and develop new funding instruments and institutions (12-36 months); Enhance credit market infrastructure (6–12 months).
For increasing firm level Research and Development (R&D) and industry-research linkages Georgia should develop a comprehensive innovation programme (3-6 months); Enhance Innovation Infrastructure (12-24 months); Introduce programmes and policies that encourage R&D in firms (3–6 months); Introduce programmes and policies that incentivize industry and researchers to effectively collaborate and foster R&D commercialization (3-6 months).
For facilitating firm exit and restructuring Georgia should change the insolvency law to include incentives that motivate the banking sector to provide post-petition financing (will take 6-12 months); Allow creditors and borrowers to initiate pre-insolvency proceedings and debt restructuring, and increase loss-recovery ratio (will take 6-12 months).
For developing skills Georgia should reorient higher education programmes to produce more industry-relevant skills for the priority sectors identified. This reform will take 1 year, the report suggested. The country should emphasize industry-relevant vocational training and education courses that cater to the technical needs of the various priority sectors identified by the Government (will take 6-12 months).
The World Bank believes that for raising awareness Georgia should change the school curricula to encourage innovative thinking which is possible to be done in 6-12 months; Enhance the capacity and role of professional associations and academia in promoting entrepreneurial culture, knowledge transfer and networking (0-12 months); Increase awareness of entrepreneurship by showcasing successful entrepreneurs (0-3 months); Enhance public private partnership and dialogue, and establish efficient M&E mechanisms for public policy for entrepreneurship and SME support and innovation (constant).
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