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Increasing the Ease of Business in Georgia

To create a better business enabling environment, the Georgia Business Climate Reform Project partnered with the local government to promote fiscal reform, improve commercial law, and streamline business regulations, resulting in more than $740 million in annual benefits to Georgia.
Once ranked number 112 on the World Bank’s “Doing Business” survey, bold reforms to Georgia’s business climate catapulted it to eleventh place in 2010. A commitment to aggressive reform by the Government of Georgia and support from USAID under the Georgia Business Climate Reform (GBCR) project underpinned what the World Bank calls an “unprecedented” climb in the history of the survey, moving Georgia past countries such as France and Germany.
 
Through GBCR, USAID and Chemonics worked with the Georgian government to improve public management and streamline services for businesses and the public, including simplifying administrative procedures. The project also partnered with the government to improve tax and customs administration as well as to assist in the analysis, drafting, amendment, and implementation of commercial laws and improved business regulations.
 
The creation of a single window for permitting at the Georgia Customs Department office has improved many services.

In just four years, the Georgian government was able to pass the type of reforms that typically take eight to twelve years. External project audits have estimated that these reforms can be translated into $743.7 million in annual monetized benefits to the public and private sectors — a return of $57 for every dollar spent on the project. These results, as well as the project’s methodology for quantifying the economic benefits of the reforms, helped generate political will and identify priorities. In addition to fiscal reform in customs and tax, the project also provided assistance in regulatory streamlining and commercial law.
 
GBCR reached many areas of business and governance and the project has had a great impact on the procedures and regulations of many governmental agencies. In one example, government efforts supported by the project unified and streamlined the business and tax registration process. By the end of the project, businesses could be registered in just two hours with only one document, requirements for notarization, minimum payment, and official company seals having been eliminated. In another example, the State Revenue Service now has an up-to-date electronic business registry that generates e-abstracts possessing the same legal force as paper documents. As a result, between January 2005 and May 2009, the number of registered businesses increased by 67 percent.

 

Project Results

  • $743.7 million in annual monetized benefits to the public and private sectors — a return of $57 for every dollar spent
  • 121 percent increase in number of registered taxpayers from 2005 to 2008
  • 97 percent increase in total tax revenues from 2005 to 2008
  • 92 percent increase in foreign trade from 2005 to 2008
  • 67 percent increase in businesses registered from January 2005 to May 2009
  • Foreign direct investment increased from seven percent of gross domestic product in 2005 to 12 percent in 2008

Project Duration: 2005-2009

Final Report

    impact

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