USAID Financing Georgia in Transition

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The FINANCIAL — “After the August 2008 military conflict in Georgia the U.S. Agency for International Development assisted nearly 40 thousand families affected by the war,” Stephen Haykin, the Mission Director for USAID programmes in Georgia told The FINANCIAL.


He said that the value of the assistance was over 76 million USD and that USAID provided at least 64 million USD for local agro business partnerships. The USAID budget for the year 2011 was a little over 52 million USD. The strategy and directions that USAID have had since 2010 will remain stable in 2012 as well.

“We do not yet know what the final budget for 2012 will be because the budget is being finalized for this year and the allocations have not yet been announced. The budget is calculated to support democratic government participation, delivery of social services, improvement of economic competitiveness and welfare, strengthening of democracy and governance, enhancement of energy security and safeguarding the environment,” said Haykin.

“In 2012 Georgia and the USA are celebrating the 20th anniversary of diplomatic relations between the two countries since the end of the Soviet Union,” he added.

Haykin started his mission in September 2011. He lives in Georgia with his wife.

“I have experience in Kenya and Congo and in other countries. I led the mission through Madagascar’s political, economic and humanitarian crisis of 2002. I think it helps me as my experience now is in managing people, in managing all relationships. But also those missions exposed me to a wide range of activities and environmental and humanitarian assistance programmes. I was working on transition issues. I was responsible for managing health, economic growth, democracy and governance, peace and security, improving democratic governance and so on. All these experiences will help me here in Georgia.

I am very pleased to be here because I see that this is a country that is making very good progress and is a good example of reforms for other developing countries. Actually I asked to come here because of that; because there is very positive growth in the country.”

Q. USAID tried to restore investor confidence in Georgia after the August War. How would you assess the situation nowadays, has that confidence been restored?

A. Yes, restoring investors’ confidence is of course a progressively growing process. We think that the country has made really big progress since 2004. The first thing is maintaining and reserving strong macroeconomic management. And we are working on improving traditions which attract investment. Getting investments here has fully recovered to primary levels but it remains a work in progress. Confidence still needs to be built, this can be achieved through improving environmental business, continuing reforms, implementing reforms and working on such issues to make finances available.

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Q. Since 2005 Georgia has moved up to 12th place from 112th among 181 countries surveyed on the World Bank’s annual Doing Business ranking. What was the contribution of USAID in these processes?

A. We had a project between 2005 and 2009 called The Business Climate Reform project. USAID Business Climate Reform began to deliver technical assistance, engaged with Government of Georgia counterparts in work planning, and attended to the myriad administrative details required for successful project start-up. This project was about improving the business climate in Georgia. It improved legislative, policy, and regulatory framework for businesses. The project made significant strides in streamlining business and collateral registration procedures. It was supporting the Government in working on 18 of the 23 reforms in the areas covered by the Doing Business opportunity. We had a direct role in assisting the Government to address issues relating to starting businesses, tax payments, training border crossings and licensing proper administration, all of which is evident in the survey results showing that Georgia is eagerly developing services.

Q. The Embassy of America is implementing a 20.5 million USD four-year New Economic Opportunities project. In your opinion is four years enough time to solve all problems and how will the country’s rural areas look in four years’ time?

A. The New Economic Opportunities project is designed to improve rural incomes, reduce poverty levels, improve food security, and address critical, small-scale infrastructure priorities in targeted communities. Also, to increase citizen’s participation in addressing local needs. The project will target ten municipalities and will benefit 70,000 households that are considered vulnerable.

Q. What is the biggest success of USAID in Georgia? The biggest problem you solved, or the biggest project you implemented here in Georgia?

A. It is very difficult to name one specific thing because we have been so active in some very different areas. But I will give you some examples of very important projects. After the August 2008 conflict we assisted nearly 40 thousand families. The value of the assistance was over 76 million USD, and at least USD 64 million went to local agro business partnerships. This is one of the areas. As I mentioned we have supported business climate reforms and helped improve business.

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We provided significant assistance to the country on improving the reliability of electricity which is one of the biggest achievements in recent years. We provided assistance in improving management and operations at the regional energy distribution company.

We have supported the civil registration agency in establishing a transparent customer oriented registered system. This is a unified, centralized, and multifunctional civil registration system to maintain population information for a wide variety of public services and administrative needs, including citizenship and identity documentation, birth certificates, and population statistics. That is making it easier for Georgians to get important personal documents such as passports. In one month the civil registration agency registered nearly 130,000 internally displaced persons in 2008 and also supported and helped the IDPs to have access to services.

Q. Which fields are the most attractive for US and foreign business in Georgia and how have these fields changed during the past few years? Could you forecast what fields will be interesting in the future as well?

A. USAID is very interested in economic growth activities which are focused on developing institutional and human capacity within government agencies and the private sector. Projects are designed to improve the business environment, expand access to capital, enhance business skills, improve agricultural productivity, increase competitiveness of targeted business sectors, and expand economic opportunities in rural communities. Our project Economic Prosperity Initiative is a 4 million USD project promoting enterprises and economic development in the country. Through that programme we have identified some very promising sectors we are focusing on with Georgian partners. These are both agricultural and manufacturing services. This includes wine tourism, information and communication technology, apparel, transportation and logistics, the whole area of meetings, conferences and exhibition tourism etc.

We also support hydropower investment opportunities. We think that development of agriculture and agro business will be important in general, in the future.

Q. How much has the situation in Georgia changed since USAID started helping the country?

A. I think we have been significantly supporting the Georgian people and we have made important progress in the country. The progress is about the strengthening of democratic institutions, of the economy and economic environment which has experienced important changes. Also, social services and the provision of basic services, and infrastructure has been improved since USAID started supporting the country.



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