|Tbilisi, April 17, 2006 – The International
Finance Corporation and BP, the two largest investors in the Georgian economy,
recently launched the Georgia Small and Medium Enterprise (SME) Policy
Project. The project aims to improve the business enabling environment
in the country by streamlining regulation of the private sector. The SME
Policy Project will work closely with the Georgian government to improve
two regulatory issues in particular, inspections and permits/licenses.
Implemented by IFC, the Georgia SME Policy
Project is a three-year, $1.5 million initiative. BP and its oil and gas
partners have contributed $750,000 under the Regional Development Initiative
(RDI). The Canadian International Development Agency (CIDA) has contributed
$250,000, while IFC is providing $500,000.
The project has the following objectives:
- Reducing the regulatory burden to businesses.
The project will work directly with key regulatory agencies to improve
their practice of conducting business inspections and issuing operating
permits/licenses, by streamlining their procedures according to international
best practices. This will increase the efficiency and transparency of the
- Monitoring the business environment for
SMEs. The project will conduct surveys of entrepreneurs in Georgia,
providing first-hand information on administrative barriers hindering SME
development. The IFC SME survey reports will present clear recommendations
for improvement to the government. The survey instrument will also be used
to measure the effect of administrative reforms on businesses against a
baseline established by IFC’s first survey in Georgia, conducted in 2004.
- Improving SME access to information. The
project will produce easy-to-read materials aimed at helping Georgian SMEs
comply with government regulations. These materials will raise this awareness
of small businesses about their rights and responsibilities as participants
in a market economy.
A developed SME sector is critical for Georgia
to ensure future economic growth and stability: SMEs constitute 97% of
the country’s active firms. However, SMEs’ share in GDP remains extremely
low – only 10% in Georgia as compared to more than 60% in most European
Union countries. Although the Georgian government has taken a number of
steps to streamline the regulatory framework for businesses, further improvement,
in accordance with best international practice, is necessary.
Tania Lozansky, IFC’s Principal Operations
Manager for SME Policy, emphasizes, “IFC has contributed to a more hospitable
environment for SMEs in a number of CIS countries, by leading the drive
to implement regulatory reform. I believe that our extensive experience
can now be applied successfully to improving the business climate in Georgia.”
David Glendinning, Communications and External
Affairs Manager of BP Georgia, added: “BP and its partners in oil and
gas pipeline projects have committed more than $100 million to social investment
projects. SME development is one of the most important areas of BP’s social
investment initiatives, which we believe will help the country maintain
its rapid progress in social and economic development.”
IFC and BP signed an agreement to conduct
the Georgia SME Policy Project on March 2, 2006, at the Invest in Georgia
Forum in New York City.
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other
institutions of the World Bank Group but is legally and financially independent.
Its 178 member countries provide its share capital and collectively
determine its policies.
The mission of IFC is to promote sustainable
private sector investment in developing and transition countries, helping
to reduce poverty and improve people’s lives. IFC finances private sector
investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY05, IFC has committed more than $49
billion of its own funds and arranged $24 billion in syndications for 3,319
companies in 140 developing countries. For more information, visit www.ifc.org
BP is of one of the world's largest
energy companies. Its main activities are the exploration and production
of crude oil and natural gas; refining, marketing, supply, and transportation;
and the manufacture and marketing of petrochemicals. BP also has a growing
presence in gas and power and in solar power generation. For more information,
BP first came to Georgia in 1996, where it
has spent the last 10 years building up a business that includes construction
and operation of strategic oil and gas pipelines, fuelling operations through
Air BP, and exploration in the Black Sea.
BP and its partners have an established track
record of implementing major social investment projects in Georgia. The
company seeks to complement the direct contribution made through its core
business operations with social investment and community programs focusing
on a range of themes. As a major long-term investor in Georgia with an
interest in fostering social and economic development, BP and its oil and
gas partners established Regional Development Initiative. This is an innovative
mechanism to provide a long-term contribution to sustainable socioeconomic
development across Azerbaijan, Georgia, and Turkey. It will combine the
experience, skills, and resources of BP and its partners with the expertise
of development organizations. Projects will contribute to the achievement
of national and international development goals.
BP's partners in the Regional Development
Initiative are: Statoil, SOCAR, TPAO, Total, LUKAgip, NICO, Chevron, ExxonMobil,
ITOCHU, Devon, Amerada Hess, ENI, ConocoPhillips, INPEX.