The FINANCIAL — The World Bank Group’s Board of Executive Directors on April 28 approved an IBRD (International Bank for Reconstruction and Development) loan of US$60 million for the First Inclusive Growth Programmatic Development Policy Operation (DPO) for Georgia. This is the first in a series of three operations spanning 2015-2017.
This operation will support the government in improving public service delivery and strengthening fiscal oversight by implementing reforms in public financial management, social services, and the framework for civil services. The policy actions are anchored in the Country Partnership Strategy for 2014-2017 and are consistent with the government’s development strategy – Georgia 2020, according to the World Bank.
The DPO supports two objectives: strengthening fiscal oversight of public institutions and improvements in budgeting and the framework for civil service reform; and improvements in the coverage and quality of social services and in monitoring of outcomes.
“This operation supports the government in improving its public service delivery and fiscal management to make growth more inclusive. The first generation reforms which started a decade back have helped Georgia improve its business environment, achieve sustained growth rates and maintain low inflation,” said Henry Kerali, World Bank Regional Director for the South Caucasus. “However, socio-economic vulnerabilities persist in the country. To tackle these issues, further improvements in the living standards of Georgians will need to come from investment in human capital, enhanced private sector competitiveness, and fiscal, social and environmental sustainability.”
“The main development challenge faced by the country is achieving more inclusive growth, which will require investment in human capital and improvements in private sector competitiveness,” said Mona Prasad, World Bank Senior Economist and Task Team Leader of the DPO program. “While private sector development, supported by another DPO series in Georgia, will help create more jobs, this DPO series will help build human capital and support macroeconomic stability and effective policy making.”
The new operation approved today builds on previous development policy operations that concentrated on building competitiveness for sustained growth. The current DPO series lays the foundation for inclusive growth by supporting further reforms in the areas of public financial management and the social sectors. The design of the reform program was led by the government. The areas chosen were those where the World Bank had a strong track record of engagement, and the reform actions were based on a realistic assessment of the country’s implementation capacity.
This is an IBRD flexible loan of US$60 million with a 25 years maturity and 14 years grace period.
World Bank commitments to Georgia since 1992 total approximately US$ 2.27 billion.