The FINANCIAL — The largest project USAID implemented in 2012 was the Power and Gas Infrastructure Programme.
The FINANCIAL — The largest project USAID implemented in 2012 was the Power and Gas Infrastructure Programme. USAID’s budget for fiscal year 2012 was USD 52.2 million with the following sectoral breakdown (in millions of USD):
Conflict Mitigation and Reconciliation $0.5, 1%
Democracy and Governance $19.9, 38%
Health and Education $7.4, 14%
Economic Growth $24.4, 47%
The FY2013 budget has not been finalized yet. USAID expects a modest reduction from 2012 levels.
“There have been many successes in USAID’s nearly twenty year history partnering with Georgia,” ,” Stephen Haykin, the Mission Director for USAID programmes in Georgia, told The FINANCIAL. “After the August 2008 conflict, USAID assisted nearly 40,000 farm families, including all internally displaced persons, by improving crop yields on more than 36,000 hectares of land in conflict-affected areas. The Business Climate Reform project achieved significant results, which contributed to Georgia’s rise from 112th on the World Bank’s Doing Business 2006 survey to 12th on the 2012 survey. Energy programmes provided assistance to improve management and operations at the Government of Georgia’s largest regional energy distribution company. For many Georgians – especially for those outside Tbilisi – these improvements meant consistent electricity in their homes and businesses for the first time in fifteen years,” he added.
“The October 2012 parliamentary elections were widely viewed as the most competitive and peaceful in Georgia’s history. USAID support enabled the Central Election Commission (CEC) to increase election transparency and helped political parties develop campaign strategies informed by voter research. Assistance also supported international elections observer missions,” Haykin said.
“USAID’s Applied Civic Education and Teacher Training Program has been improving the quality of school-based civic education in Georgia and encouraging participation of youth in civic and democratic processes. It has achieved a number of successes, including creating a 50-hour accredited training course for civic education teachers, establishing 200 school-based civics clubs throughout Georgia, developing civics curriculum materials on active citizenship, and forming a national forum of civics teachers to encourage the best practices in civic education,” he added.
As for the upcoming programmes, in 2013, USAID intends to support democratic checks and balances and accountable governance, inclusive and sustainable economic growth, and a healthy, stable and integrated society.
Q. Which fields were the most attractive for US and foreign business in Georgia this year? Could you forecast what fields will be interesting in 2013 as well?
A. American investors are involved in a number of fields in Georgia, from communications to aviation, from hotels to food production. Generally, U.S. and foreign investors are interested in the same sectors the Georgian Government is promoting – hydropower, tourism, agriculture, and logistics. I expect that this trend will continue in 2013, especially logistics. Businesses are looking to see what signals the new government will send and how the different political groups will work together. Our hope is that the incoming government will facilitate increased levels of private sector investment, development, and growth.
Q. USAID is involved in the healthcare system and has a programme for improving the system. What are the achievements so far?
A. When USAID began operating in Georgia twenty years ago, the original programme focus was humanitarian assistance in response to conflict in South Ossetia and Abkhazia through providing food, clothing, medicine and other equipment to those displaced by conflict. In health, our work started back in the second half of the ‘90s by supporting the routine essential immunization of all children in Georgia. After a decade of extensive support from the international community (USAID, UNICEF, Government of Japan, WHO, GAVI), we were able to graduate our assistance in immunization in 2007.
Since 2006, USAID has provided technical assistance to the Government of Georgia to improve the healthcare system. Since 2009, USAID’s project contributes to these efforts by strengthening insurers’ capacity to provide quality health insurance services, providers’ capacity to manage and deliver quality healthcare services, and the government’s capacity to guide and monitor health reforms.
The impressive 48% decline in the total abortion rate from one of the highest registered rates in the world (3.2 in 2005 down to 1.6 in 2010) was mostly due to the donor assistance, with USAID being a leading donor along with UNFPA. The total fertility rate increased from the below the replacement rate of 1.6 in 2005 to 2.0 in 2010, which is very important for the sustainable development of the 4.2 million population Georgia.
USAID has also provided a loan guarantee to TBC Bank for an USD 8 million loan to a private hospital investor, for the construction and renovation of eight hospitals in West Georgia.
Q. What were the main problems in the healthcare system before USAID started its project?
A. The major problem that Georgia’s health sector faced was a lack of financial access to even basic healthcare services for most of the people, hurting the disadvantaged and vulnerable segments of the population most of all. Inefficiency of an over-expanded medical facilities network and low quality of medical services was another major drawback/challenge. The total abortion rate in Georgia was documented as highest in world, with very little information about voluntary contraception available. The burden of TB and emerging HIV infection was almost unbearable for the poorly functioning state.
Q. The US Government supported a nuts training programme in Georgia. What is Georgia’s potential in producing nuts and can it be profitable for the country? Will the nuts sector be an important source of revenue growth in agriculture?
A. Georgia is one of the top six producers and exporters of hazelnuts in the world. Hazelnuts account for 24% of Georgian agricultural exports. The amount of land currently dedicated to Georgian hazelnut production is expanding, and for good reason. Hazelnuts have a clear-defined value chain, and they are a leading export crop for Georgia, as they continue to attract foreign confectioners such as Ferrero International among other international large companies. Due to the growing global demand for hazelnuts, large companies are able to choose suppliers who produce a large quantity of high quality of goods. Georgia is in a position to attract additional global buyers.
The hazelnut value chain faces several key constraints: Georgian hazelnut yields are significantly lower than international averages, thus reducing net income, quantity available for processing by the Georgian hazelnut sector, and amount sold/exported on an international scale. Because of the fragmentation and small size of hazelnut producers, they have different varieties which they harvest at different times, and they use different production and storage technologies – which impacts quality. Georgian hazelnut processors typically sell directly to the European market on the basis of price or through Turkish suppliers. Other non-traditional buyers exist who will pay more for hazelnuts and who wish to develop long-standing relationships with consistent sellers.
In partnership with AgriGeorgia LLC Ferrero International’s local subsidiary jointly implement hazelnut farmers training to increase farmers’ productivity. More than 800 farmers were already trained in orchard floor management, pruning, integrated pest management (IPM), and harvesting and post-harvest handling. For the next year the trainings will be provided to 1,000 farmers.
In August and September 2012, USAID, in close cooperation with GIZ Private Sector Development Program South Caucasus in Georgia, carried out a series of meetings and workshops with hazelnut value chain actors operating in Samegrelo, Guria, and Kakheti regions to refine the understanding of the main gaps and challenges affecting the product quality across the hazelnut value chain countrywide. GIZ, USAID and the GOG, will provide relevant assistance to increase quality standards and quality infrastructure capacity.
USAID, in collaboration with the Georgian Accreditation Center (GAC) and the American National Standards Institute (ANSI) has been working to improve Georgia’s capacity in accreditation and conformity assessment. Both areas are considered key technical barriers in increasing the export of Georgian products to international markets. Universally recognized and accepted test results and certificates from these laboratories will validate the quality of Georgian produce and enable Georgian exporters to have better access to more high-end markets such as established supermarket chains. EPI’s impact assessment for the hazelnut sector alone indicates that this accreditation will result in increased export value between USD 7 to USD 14 million annually.
Q. A lot of problems have been discovered in the court system. How does USAID help this system and what have the results been so far? In your opinion what are the main problems in the court system today, and how can Georgia solve them?
A. According to the U.S. State Department’s 2011 Human Rights Report, “Shortfalls in the rule of law, such as concerns about ensuring the judiciary’s independent and even-handed application of due process protections” was named as one of the three most important human rights problems in Georgia.
Some of the problem areas that consistently come up are lack of transparency of courts in general, lack of transparent and objective disciplinary proceedings against judges, opaque judicial selection, appointment and promotion rules and extremely weak role of individual judges and judges’ self-governance in administration of the judiciary.
USAID’s current project in support of justice system reform is the Judicial Independence and Legal Empowerment Project (JILEP), implemented by the US organization East-West Management Institute. As a result of JILEP technical assistance and consultations, some important steps have been made towards the transparency of the High Council of Justice (HCOJ).
JILEP supports nearly 30 non-governmental watchdog organizations and media outlets that have pooled their efforts to advocate for justice system reforms through the Coalition for Independent and Transparent Judiciary. The creation of the Coalition is an important result itself, since it is not a frequent practice in Georgia for civil society organizations to join their efforts to strengthen their advocacy.
Through JILEP, USAID has worked with both Transparency International and the Georgia Young Lawyers Association to build their capacity to undertake effective court monitoring activities. This is the first time in Georgia that NGOs have engaged in court monitoring and made their findings public. Both organizations publish their monitoring reports quarterly.
Q. Due to the pre-election period and governmental changes in the country, some investors have lost confidence in doing business here. Some of them have suspended their business in the country. They are waiting for more political stability. What do you think about this? Will such a political situation be an obstacle for investors in Georgia?
A. We have heard similar reports from foreign investors, many of whom were looking for signs of stability and a democratic election. I don’t think this is unusual or unexpected. Georgia faced a true test in its first democratic transition of power and so far, Georgia and its leadership are giving investors renewed confidence. So we remain optimistic. We look forward to further improvements in the business environment, including improvement in the administration of justice, increased competition and greater respect of international labour and environmental standards, all within the context of a private-sector oriented economy.
Discussion about this post