The Georgian Government has maintained a record of strong growth and macroeconomic stability since early 2004, achieved through a mix of sound fiscal and monetary policies and ambitious structural reforms. The four Poverty Reduction Support Operations (PRSOs) form a program designed to support implementation of key objectives of the Government reform program. The government has continued to make progress in its reform agenda, with the emphasis on developing a dynamic competitive private sector as the key driver of investment, growth and employment and with a transparent and efficient public sector playing a supporting role by providing basic public services.
The PRSO Program, a series of four annual poverty reduction operations started in 2005, is supporting implementation of key policy reforms in the areas of: public sector accountability, efficiency, and transparency; electricity and gas sector services; private sector development; and social protection, education and health care services. PRSO IV, the last of the series, is expected to support the government efforts in translating its reform achievements into lasting institutional changes, long-term sustainable growth prospects and reduced poverty.
The PRSO program will end this year. The program has been at the center of the Bank’s operational strategy in Georgia and is strongly linked to the majority of investment operations in the Georgia portfolio. The PRSO program has supported the government in developing the capacity to implement and enforce policy reforms across the four pillars of its focus. It has also strengthened the institutional capacity for monitoring and evaluation, and the capacity for evidence-based policy making.
"We are determined to build on our achievements and persevere in our reform efforts to set solid foundations that improve standards of living of Georgians."
—Nika Gilauri, Minister of Finance
"Our consultation with the World Bank during the preparation and implementation of the PRSO program led to the identification and implementation of four reform areas in our medium term reform strategy: (i) strengthening public sector accountability, efficiency and transparency; (ii) improving electricity and gas sector services; (iii) improving the environment for private sector development; and (iv) improving social protection, education and health care services. During the PRSO program, we have made substantial progress towards meeting or exceeding the objectives of our medium-term structural reform program."
—Lado Gurgenidze, Prime Minister
The connection between national policy objectives and budget allocations was strengthened, as was the efficiency of public resource us, supported by an improved treasury system and financial reporting framework. These measures, along with bold anti-corruption reforms, are allowing Georgia to start addressing decades of neglect of its basic infrastructure.
There have been striking improvements in the energy sector over the last three years. In 2003 Georgia had a national average of 7 hours of electricity per day per household. The collection rate was 35 percent. By 2006, electricity service had reached 24/7 for all paying costumers and the collection rate was 80 percent.
Simplification of procedures for registering a business, paying taxes and labor regulations, and customs administration reform, have significantly improved the investment climate.
Most of the existing fragmented social and health care assistance programs are being consolidated into targeted poverty benefits. In 2006, Georgia introduced a poverty benefit program targeting the extreme poor who represent about 11 percent of the population. This is the first social assistance program that targets the extreme poor and is not based on status.
A more transparent funding mechanism has been adopted for the education system. The quality of educational services has improved through the adoption of national and international assessment systems.
The Ministries of Finance
The Ministry of Economic Development
The Ministry of Health, Labor and Social Affairs
The Ministry of Education and Science
The Ministry of Energy
The Office of the State Minister on Reform Coordination
The State Procurement Agency
The Chamber of Control
Rosalinda Quintanilla, Lead Economist, Task Team Leader
Afsaneh Sedghi, Economist
Faruk Khan, Country Economist
Mariam Dolidze, Economist
Bjorn Hamso, Sr. Energy Economist
Arman Vatyan, Sr. Financial Management Specialist
Aleksandra Posarac, Lead Economist
Tamar Gotsadze, Health Specialist
Shiyan Chao, Sr. Economist (Health)
Karina Mostipan, Sr. Procurement Spec.
Guranda Elashvili, Procurement Asst
Karl Skansing, Consultant
Siew Chai Ting, Lead Financial Management Specialist
Hannah Koilpillai, Senior Finance Officer
William Dillinger, Lead Public Sector Management Specialist
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