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GOVERNING FOR GROWTH (G4G) IN GEORGIA ANNUAL REPORT (PUBLIC) YEAR 2
USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA
30 October 2016 This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
GOVERNING FOR GROWTH (G4G) IN GEORGIA ANNUAL REPORT (PUBLIC) YEAR 2
USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA CONTRACT NUMBER: AID-114-C-14-00007 DELOITTE CONSULTING LLP USAID | GEORGIA USAID CONTRACTING OFFICER’S REPRESENTATIVE: REVAZ ORMOTSADZE AUTHOR(S): G4G STAFF CONTRACT REPORTING: 6000 30 OCTOBER 2016
DISCLAIMER: This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
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ACRONYMS AA Association Agreement ABCO Association of Business Consulting Organizations of Georgia ACCESS Advancing CSO Capacities and Engaging Society for Sustainability ACT Analysis Consulting Team AD Analytical Department ADB Asian Development Bank ADR Alternative Dispute Resolution AEO Authorized Economic Operator ALFG Association of Legal Firms of Georgia AmCham American Chamber of Commerce APMA Agricultural Project Management Agency ARI Angel Resource Institute AYEG Association of Young Economists of Georgia BA Business Association BAG Business Association of Georgia BAU Business as Usual BEC Business and Economic Centre BORSA Turkish Stock Exchange Istanbul CCC Culture of Collaborative Consultations CENN Caucasus Environmental NGO Network CI Confidential Information CIPE Center for International Private Enterprise CIS Commonwealth of Independent States CIT Corporate Income Tax CLDP Commercial Law Development Program CMWG Capital Markets Working Group CMWG Capital Markets Working Group COR Contracting Officer’s Representative CPSR Certified Procurement System Readiness CSO Civil Society Organization CTC Center for Training and Consulting CzDA Czech Development Agency DAM Day Ahead Market DAP Day Ahead Planning DC Defined Contribution DCFTA Deep and Comprehensive Free Trade Area DDL Development Data Library DEA Data Exchange Agency DEC Development Experience Clearinghouse DSO Distribution System Operator EBRD European Bank for Reconstruction and Development EC European Commission
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EC-LEDS Enhancing Capacity for Low Emission Development Strategies ECS Energy Community Secretariat ED Environmental Development EDA Enterprise Development Agency EEC Energy Efficiency Center EF Environmental Flow EIA Environmental Impact Assessment EIEC Environmental Information and Education Center EMCAS Electricity Market Complex Adaptive System EMRA Turkish Energy Market Regulation Authority ENVSEC Environment and Security Initiative EPAC Economic Policy Advocacy Coalition EPI Economic Prosperity Initiative EPIAS Turkish Market Operator EPRC Economic Policy Research Center ESCO Electricity System Commercial Operator ETA Energy Traders Association ETD Association of Turkish Energy Traders ETM Electricity Trading Mechanism EU European Union FABLAB Fabrication Lab FABSHOP Fabrication Shop FCPA Foreign Corrupt Practices Act FDI Foreign Direct Investment FSA Food Safety Agency G4G Governing for Growth in Georgia GA Georgian Amelioration GAMMA Georgian Environmental Consulting Company – LLC “GAMMA” GAU Georgian American University GBA Georgian Bar Association GCCI Georgian Chamber of Commerce and Industry GCF Georgian Co-Investment Fund GDP Gross Domestic Product GEA Georgian Employers Association GEDF Georgian Energy Development Fund GEMM Georgian Electricity Market Model GEO Georgian Environmental Outlook Geostat National Statistics Office of Georgia GFA Georgian Farmers Association GGI Good Governance Initiative GIA Georgian Insurance Association GIB Georgian Institute of Building GIG Energy Georgian Investment Group Energy GILMD Georgia Irrigation and Land Market Development Project GIPA Georgian Institute of Public Administration
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GIRCA Georgian International Road Carriers Association GIS Geographic Information System GITA Georgian Innovation and Technology Agency GiZ German Society for International Cooperation GLIP Georgian Lawyers for Independent Profession GLNA Georgian Lawyer’s National Association GNERC Georgian Energy and Water Supply Regulatory Commission GoG Government of Georgia GoGC Georgian Oil and Gas Corporation GPA Government Procurement Agreement GSE Georgian State Electrosystem GSMEA Georgian Small and Medium Enterprise Association GWBA Georgian Women Business Association GWP Georgian Water and Power GYLA Georgian Young Lawyer’s Association HACCP Hazard Analysis and Critical Control Points HEPA Hazelnut Exporters and Producers Association HICD Human Institutional Capacity Development HIPP Hydropower Investment Promotion Project HPEP Hydro Power and Energy Planning Project HPP Hydro Power Plant IBEDC International Business and Economic Development Center IBSU International Black Sea University ICC International Chamber of Commerce ICCA Infrastructure Construction Companies Association ICT Information and Communications Technology IDFI Institute for Development of Freedom of Information IEE Initial Environmental Examination IFC International Finance Corporation IFI International Financial Institution IFRS International Financial Reporting Standards IHE Institute for Higher Education ILMD Irrigation and Land Market Development IMF International Monetary Fund INRMW Integrated Natural Resources Management in Watersheds IOH Insolvency Office Holder IRATF Insolvency Reform Advocacy Task Force ISET-PI International School of Economics at Tbilisi State University Policy Institute ISO International Organization for Standardization ISP Internet Service Provider IWRM Integrated Water Resources Management JILEP Judicial Independence and Legal Empowerment Project KfW Kreditnstalt fur Wiederaufbau KM Knowledge Management LEAP Long Range Energy Alternatives Planning
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LWG Legislative Working Group MARKAL Numerical model for country-wide economic analysis of energy-related systems M-CEP Market-Centered Energy Planning MCH Market Clearing House MENRP Ministry of Environmental and Natural Resources Protection MISO Midcontinent Independent System Operator MIT Massachusetts Institute of Technology MoA Ministry of Agriculture MoE Ministry of Energy MoESD Ministry of Economy and Sustainable Development MoF Ministry of Finance MoFA Ministry of Foreign Affairs MoHLSA Ministry of Health, Labor and Social Affairs of Georgia MoJ Ministry of Justice MoU Memorandum of Understanding MP Market Player MPs Members of Parliament MRDI Ministry of Regional Development and Infrastructure of Georgia MSC Mediterranean Shipping Company M-TAG Media for Transparent and Accountable Governance NALAG National Association of Local Authorities of Georgia NAPR National Agency for Public Registry NARMA National Agricultural Risk Management Agency NARUC National Association of Regulatory Utility Commissioners NBE National Bureau of Enforcement NBG National Bank of Georgia NEA National Environmental Agency NEST National Employment Savings Trust NFA National Food Agency NGO Non-Governmental Organization NIH National Institute of Health Nord Pool Norwegian Market Operator NPLAW Nodia and Partners Law Firm NVE Norwegian Energy Regulator OECD Organization for Economic Cooperation and Development OGR Office of Global Research OSCE Organization for Security and Cooperation in Europe OTC Over the Counter PCA Post Clearance Audit PM Prime Minister PMCG Policy and Management Consulting Group PMP Performance Monitoring Plan PPA Power Purchase Agreement PPD Public-Private Dialogue PR Public Relations
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PSC Public Service Commission PSDA Public Service Development Agency PX Power Exchange Q&A Question and Answer REC Regional Environmental Center for Caucasus RFA Request for Applications RIA Regulatory Impact Assessment RPTS Reform Progress Tracking System RRM Revenue Requirement Model RS Revenue Service SAIDI System On Average Interruption Duration Index SAIFI System Average Interruption Frequency Index SIDA Swedish International Development Agency SME Small and Medium Enterprise SoW Scope of Work SP Service Provider SPA State Procurement Agency SPS Sanitary and Phytosanitary Statkraft Norwegian Generation Company StatNett Norwegian Transmission System Operator TADAT Tax Administration Diagnostic Assessment Tool TAG Trade Advisory Group TAKAS Turkish Settlement and Clearing Bank TECR Threshold Environmental Checklist Review TEIAS Turkish Transmission System Operator TEU Twenty Foot Container Equivalent Unit TFS Trade Facilitation System TI Transparency International ToR Terms of Reference ToT Training of Trainers TPU Tax Payer’s Union TRWG Tariff and Regulation Working Group TSU Tbilisi State University TYNDP Ten Year Network Development Plan UK United Kingdom UNDP United Nations Development Program UNESCO United Nations Educational, Scientific and Cultural Organization USAID United States Agency for International Development USDA United States Department of Agriculture USFS United States Forest Service USG United States Government USoA Uniform System of Accounts USPTO US Patent and Trademark Organization UST US Treasury USTA United States Trade Administration
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USTR United States Trade Representative VAT Value Added Tax VOLL Value of Loss Load WB World Bank WBC Women Business Council WCO World Customs Organization WEAP Water Evaluation and Planning WEG World Experience for Georgia WFD Water Framework Directive WG Working Group WMO World Meteorological Organization WP Work Plan WRM Water Resource Management WTO World Trade Organization
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CONTENTS
1. INTRODUCTION ...... 12
2. SUMMARY ...... 12
3. PROJECT HIGHLIGHTS DURING THE REPORTING PERIOD ...... 13
4. PROGRESS OF ACTIVITIES BY REFORM ...... 17 4.1 OVERALL INSTITUTIONALIZED FRAMEWORK FOR PUBLIC CONSULTATION ...... 17 4.1.1 PROGRESS AGAINST THE WORK PLAN ...... 17 4.1.2 PPD SUCCESSES AND LESSONS LEARNED ...... 22 4.1.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 23 4.2 ENERGY STRATEGY REFORM ...... 23 4.2.1 PROGRESS AGAINST THE WORK PLAN ...... 23 4.2.2 PPD SUCCESSES AND LESSONS LEARNED ...... 24 4.2.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 24 4.3 ELECTRICITY TRADING MECHANISM REFORM ...... 25 4.3.1 PROGRESS AGAINST THE WORK PLAN ...... 25 4.3.2 PPD SUCCESSES AND LESSONS LEARNED ...... 28 4.3.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 29 4.4 WATER RESOURCE MANAGEMENT REFORM ...... 29 4.4.1 PROGRESS AGAINST THE WORK PLAN ...... 29 4.4.2 PPD SUCCESSES AND LESSONS LEARNED ...... 34 4.4.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 34 4.5 TAX ENFORCEMENT AND ADMINISTRATION REFORM ...... 34 4.5.1 PROGRESS AGAINST THE WORK PLAN ...... 34 4.5.2 PPD SUCCESSES AND LESSONS LEARNED ...... 36 4.5.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 37 4.6 CUSTOMS ADMINISTRATION AND ENFORCEMENT REFORM ...... 37 4.6.1 PROGRESS AGAINST THE WORK PLAN ...... 37 4.6.2 PPD SUCCESSES AND LESSONS LEARNED ...... 38 4.6.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 39 4.7 TRADE FACILITATION/TRANSPORT AND LOGISTICS REFORM ...... 39 4.7.1 PROGRESS AGAINST THE WORK PLAN ...... 39 4.7.2 PPD SUCCESSES AND LESSONS LEARNED ...... 40 4.7.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 41 4.8 BANKRUPTCY AND LIQUIDATION REFORM ...... 41 4.8.1 PROGRESS AGAINST THE WORK PLAN ...... 41 4.8.2 PPD SUCCESSES AND LESSONS LEARNED ...... 42 4.8.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 42
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4.9 LAND OWNERSHIP REGISTRATION REFORM ...... 42 4.9.1 PROGRESS AGAINST THE WORK PLAN ...... 42 4.9.2 PPD SUCCESSES AND LESSONS LEARNED ...... 43 4.9.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 43 4.10 STATE PROCUREMENT SYSTEM ...... 44 4.10.1 PROGRESS AGAINST THE WORK PLAN ...... 44 4.10.2 PPD SUCCESSES AND LESSONS LEARNED ...... 45 4.10.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 45 4.11 PENSION REFORM ...... 45 4.11.1 PROGRESS AGAINST THE WORK PLAN ...... 45 4.11.2 PPD SUCCESSES AND LESSONS LEARNED ...... 46 4.11.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 46 4.12 CAPITAL MARKETS REFORM ...... 46 4.12.1 PROGRESS AGAINST THE WORK PLAN ...... 46 4.12.2 PPD SUCCESSES AND LESSONS LEARNED ...... 47 4.12.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 48 4.13 CROP INSURANCE REFORM ...... 48 4.13.1 PROGRESS AGAINST THE WORK PLAN ...... 48 4.13.2 PPD SUCCESSES AND LESSONS LEARNED ...... 48 4.13.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 48 4.14 INNOVATION AND TECHNOLOGY POLICY ...... 49 4.14.1 PROGRESS AGAINST THE WORK PLAN ...... 49 4.14.2 PPD SUCCESSES AND LESSONS LEARNED ...... 50 4.14.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 50 4.15 BUILDING CODE REFORM...... 50 4.15.1 PROGRESS AGAINST THE WORK PLAN ...... 50 4.15.2 PPD SUCCESSES AND LESSONS LEARNED ...... 51 4.15.3 CHALLENGES TO ACHIEVING REFORM RESULTS ...... 51
5. WORK PLAN OUTPUT TABLE ...... 52
APPENDIX A: ANNUAL PMP INDICATOR RESULTS ...... 72
APPENDIX B: DONOR COORDINATION MATRIX ...... 92
APPENDIX C: UTILIZATION OF USG PERSONNEL AND COLLABORATION WITH OTHER DONOR-FUNDED PROJECTS ...... 102
APPENDIX D: UTILIZATION OF INTERNS ...... 104
APPENDIX E: G4G ADVISORS UTILIZED IN GOG INSTITUTIONS ...... 105
APPENDIX F: UTILIZATION OF PRIVATE SECTOR AND CIVIL SOCIETY ORGANIZATIONS ...... 106
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APPENDIX G: SUMMARY OF GRANT ACTIVITIES ...... 112
APPENDIX H: G4G ORGANIZATIONAL CHART...... 116
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1. INTRODUCTION Governing for Growth (G4G) in Georgia is a five-year, $19.3 million US dollar USAID project that supports the Government of Georgia (GoG) as it creates an improved business enabling environment in which legal and regulatory reforms are fairly and transparently conceived, implemented and enforced through consultative dialogue. G4G aims to enhance governance in select business enabling areas, including: Tax and customs administration; Electricity trading policy, including cross-border trading; Water resource management; Trade facilitation; Land registration; Other reform areas as identified during implementation of the project. The G4G approach supports the effective formulation of the government policies necessary to drive economic development through the promotion of constructive Public-Private Dialogue (PPD). This requires strengthening of the governmental institutional capacity to develop, implement, and enforce reforms, and strengthening the capacity of private sector and civil society actors to effectively engage the government on the development, implementation, and enforcement of reforms. G4G is implemented through five main components: 1. Support inclusive PPD; 2. Strengthen GoG capacity to develop, implement and enforce reforms; 3. Improve water resource management across multiple competing interests; 4. Improve governance of energy trading policy, including cross-border electricity trading; 5. Strengthen the capacity of private sector and civil society actors to advocate for reforms. This report documents the results and progress made by G4G during project Year 2 (from October 1, 2015 through September 30, 2016). Within each reform area, activities are organized by component. This structure permits a view of activities focused on a given reform area, seen in the context of a project-wide effort. 2. SUMMARY During Year 2, G4G achieved several critical milestones on the path towards creating an evidence-based culture of reform in Georgia, including: Launching the Trade Facilitation System (TFS), finalization/implementation of the Reform Progress Tracking System and PPD Quality Tracking System, adoption of the Estonian Corporate Income Tax (CIT) model and systemic Land Registration Law, and launching the Tax Payment Simplification system. Regulatory Impact Assessment (RIA) institutionalization has also gained significant ground as a number of ministries have realized its value and now actively advocate for RIAs in new issue areas. At the close of Year 2, G4G cumulatively (since project inception) has: Leveraged approximately $840,000 USD of additional resources; Completed 74 technical deliverables; Hosted 80 PPD events with over 3,518 attendees; Conducted 66 trainings with over 1,469 participants (951 females and 518 males); Issued 41 event releases; Issued 7 newsletters; Employed 32 Georgian youth interns; Conducted outreach to over 53 other donor-funded projects; Awarded 27 grants; The total amount of grant awards is $1,101,050 USD, with $174,173 USD in cost share leveraged.
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3. PROJECT HIGHLIGHTS DURING THE REPORTING PERIOD G4G’s Year 2 timeline covered the period from October 1, 2015, to September 30, 2016. During the summer of 2016, G4G conducted work planning and submitted the Year 3 Work Plan in August and in September 2016, the Year 3 Work Plan was approved. Key events and milestones related to the project’s areas of work in Year 2 include: Doing Business in Georgia Improvements (Overall Ranking Improves from 23 to 16). In 2016, Georgia’s indicators in the World Bank (WB) “Doing Business 2017” report improved, an achievement for the GoG with some success being attributable to USAID and G4G support. Particularly, Georgia strengthened Minority Investor Protection by increasing shareholder rights and their role in business decisions, an area where G4G contributed to the drafting process. Getting Electricity is also an improved category. Through the previous Hydropower Investment Promotion Project (HIPP), USAID introduced a performance based tariff system on average interruption duration index (SAIDI) and system average interruption frequency index (SAIFI), in which penalties are now introduced on utility services for low performance scores. The tariff system improves quality of service and reliability of electricity supply. World Bank “Doing Business 2017” report In the areas of Paying Taxes and Trading Across Borders, G4G supported reforms on Tax Payment Simplication, Corporate Income Tax and the Trade Facilitation System, are expected to impact the indicators in the “Doing Business 2018” report.
PPD Quality Receives First Evaluation. Within the framework of the grant program to create a PPD quality tracking system, the Institute for Development of Freedom of Information (IDFI) assessed draft laws submitted to the Parliament of Georgia between October 2014 and September 2016, and selected 24 draft laws with the most economic impact for evaluation in terms of PPD extent and quality. To evaluate the PPD process, IDFI conducted interviews with authors of the draft laws and other stakeholders. At the end of Year 2, IDFI held a presentation of the annual assessment report of the quality of dialogue between public and private sectors in Georgia and awarded the Ministry of Finance (MoF), Georgian Innovation and Technology Agency (GITA) and Ministry of Environment and Natural Resources Protection of Georgia (MENRP) with certificates. The laws with the highest quality of PPD were the Tax Code’s Estonian CIT Model, the draft Law on Innovations and the draft Waste Management Code.
Graph from IDFI depicting the draft laws with the top PPD performance
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Tax Environment Improves. In December 2015, after five years of work by the government with USAID’s support, the Revenue Service (RS) has launched a new tax payment simplification system, eliminating the challenge of using 125 treasury codes and reducing them to a single code. Under the new and modernized system, tax payers will experience a simplified tax payment and refund process. This reform is estimated to save GEL 500,000 for taxpayers, 11,200 hours of manual labor for RS staff members and over 5,000 transactions per year. New CIT legislation was adopted on May 13, 2016, and will become effective in January 2017. G4G support included conducting a RIA, technical Giorgi Tabuashvili, Director General of the RS and First assistance from Estonian tax experts and an awareness-raising PPD. Deputy Minister of Finance
Enabling Trade. In May 2016, two key events served as major steps for improving the environment for importers and exporters in Georgia. On May 18, the Trade Facilitation System was launched in Poti. TFS was officially launched by the Minister of Justice who also introduced its benefits to the broader public. Currently, G4G is supporting further integration of the system. Formally established in December 2015, the Trade Advisory Group (TAG) held its first meeting on May 31, 2016. Members selected the TAG’s and Deep and Comprehensive Free Trade Area (DCFTA) Subcommittee’s Chairman and Deputy Chairman and identified priorities for future discussion. TAG Irakli Gvenetadze, Chairman of Data Exchange Agency (DEA), provides an overview of the TFS enables investors to provide input to the GoG on trade related issues such as free trade agreements.
Associations Lead the Way. Economic Policy Advocacy Coalition (EPAC) was established by 33 associations to advocate for economic policy reforms with a united voice. Today, EPAC unites 63 organizations. As testimony to its legitimacy, EPAC mobilized stakeholders to advocate for land registration reform, holding meetings with executive and legislative branch officials, educating media and mobilizing civil society organizations. The GoG halted the proposed legislation and on March 17, the GoG approved a revised version of the draft Law on Systemic Nato Beruashvili presenting a certificate Registration of Land Titles and Improvement of Cadastral Data. to Irakli Margvelashvili of the Association of Pharmaceutical This is one example from the list of the Coalition’s achievements. Companies Representatives in Georgia On September 16, EPAC held its first annual conference to celebrate its successes and plan for its second year of activity. Over 70 members and partners from Government, civil society, the private sector and diplomatic corps attended the conference. New members that joined EPAC during the year were presented certificates.
Women Participate in Dialogue. In March, G4G and Georgian Women Business Association (GWBA) organized the 2nd “Women’s Role in Economic Growth and Policy Development” conference. Women leaders from business, government and civil society made presentations about their accomplishments and challenges for over 200 participants. The conference was closed with an award ceremony for three of the most successful women leaders from business, government, and civil society as elected by members of EPAC. Women Leader Awards went to: Ketevan Bochorishvili, Deputy Minister of Economy and Sustainable Development, Mariam Kodua, Georgian nut producer from LLC ‘’Keskia,’’ and Irma Saralidze
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Nino Zambakhidze, Chairwoman of Georgian Farmers’ Association. Under G4G’s Year 2 gender activities to empower women, two women directly benefited from participation. Irma Saralidze, a participant in the “Empowering Women in Business” grant project, from Kutaisi, owns a hostel business. In the past, due to the hardships of finding work in Georgia, Irma decided to make her own house a hostel. With the training, mentorship, and knowledge she gained from the project, Irma received a grant from Enterprise Georgia, an agency under the Ministry of Economy and Sustainable Development (MoESD) that facilitates small and medium enterprise (SME) development. With this grant, she was able to upgrade her hostel for an enhanced guest experience. Prior to the project, Irma and most of the other participants were not familiar with the advocacy process. With the knowledge gained from “Empowering Women in Business,” Irma now plans to participate in advocacy initiatives for women’s empowerment through civil society organizations (CSOs) and government forums. Lali Sukhitashvili, a natural bee products producer from Kissikhevi, Kakheti region that also participated in the “Empowering Women in Business” project, used this opportunity as well. She applied to the Community Development Center that implements the project – “Social economics – Opportunities for the Kakheti region Development,” in cooperation with the Regional Development Agency of the Republic of Poland. Lali was chosen as one of nine applicants to be considered for funding. After consideration, she won the competition and received a grant for development of her business.
Building Leaders for Tomorrow. On December 24, three participants in a civil servant training program conducted by the Academy of the Ministry of Finance in collaboration with G4G were offered internships with the option of future employment. Acting Minister of Finance, Nodar Khaduri, awarded students with certificates for successfully completing the program. Nineteen university students selected through an open contest, administered by G4G, attended the training and all were offered internship opportunities upon completion. The training introduced legal and ethical standards, public servants’ rights and Nodar Khaduri presenting awards obligations, mechanisms of protection from violation of the public
servants’ rights, as well as related regulations. G4G, in cooperation with GITA and International Youth Organization AIESEC, held the first annual “Youth Innovation Summit 2016” on March 11-12 at Techno Park. Opening remarks from Deputy Minister of Economy and Sustainable Development, Ketevan Bochorishvili, and G4G Chief of Party, Milo Stevanovich, highlighted the importance of creating a business enabling environment to stimulate innovation and entrepreneurship. Panel presentations were given by young innovators. Specially invited consultants from Israel, Udi Aharoni and Omer Pomerantz, conducted a master class for 50 students. Aharoni, from the Lahev School of Management, delivered a master class on innovations and business development while Pomerantz provided insight on Israeli Innovation Policy development.
Stakeholders Agree Electricity Trading Mechanism (ETM) is the Way Forward. In Year 2, G4G continued its support to Georgia’s Energy Sector development in strategy and ETM. In May, G4G, in cooperation with the Ministry of Energy (MoE), held the annual “Cross Border Electricity Trading Summit.” The meeting was in the format of a former annual conference organized under USAID projects to bring together international counterparts involved in cross-border electricity trading. With over 100 in attendance, guests were able to hear first-hand from GoG representatives, and private sector stakeholders, about progress on ETM development in Georgia. Officials from the Turkish Thomas Morris of USAID transmission system operator (TEIAS), Turkish energy regulator,
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Turkish energy traders association, Serbian power exchange and Serbian electricity coordinating center also delivered presentations on the expected operations of the proposed ETM. ETM has also been identified as a key priority in the GoG’s proposed Energy Strategy. In draft form, the document is currently undergoing public and stakeholder review via the MoE’s website.
Water Rises on the GoG’s Agenda. With G4G support, Water Resource Management (WRM) has been elevated as a priority for the Government. The draft Water Resource Management Law has been developed and will be submitted to the Parliament for adoption in the spring of 2017. The Ministry of Environment and Natural Resources Protection has agreed to use the Water Evaluation and Planning (WEAP) software model, identified and tested by G4G, for WRM. MENRP also accepted the G4G developed guidance document on delineation of surface water bodies, an important part of WRM. Water Resource Management Discussion Panel Through a panel discussion organized by G4G and the International School of Economics at Tbilisi State University (ISET) in November 2015, the challenges facing Georgia’s water resources were examined by the GoG. Moderated by Eric Livny, Director of ISET, the discussion began with a video giving testimonials from the private sector and Georgian citizens, stressing the realities of water resource management. Panel members presented their perspectives and experiences with water, often opposing perspectives of other panel members. Examples of issues raised included hydropower’s relationship to environmental flow, irrigation management, and water scarcity for the regions. Due to the lack of a comprehensive water management strategy, the government and stakeholders realized their legitimate and competing interestests that can ultimately produce counterproductive effects.
Stakeholders Enable Insolvency Reform. Insolvency is the lowest ranking indicator for Georgia in the annual WB “Doing Business” report. In response to challenges, G4G conducted a grant program to advocate for insolvency reform in Year 2. Through an intensive advocacy campaign, G4G, through its grantee Association of Georgian Legal Firms (ALFG), mobilized interested parties and effectively engaged government in dialogue on the need of reforming the insolvency system. Through G4G’s initiative, insolvency reform was prioritized on the GoG’s agenda and work on the new law with active involvement of MoESD is underway. Nana AmiSulashvili, Executive Director of ALFG Enhancing State Procurement in Georgia. Under EPAC’s activities, G4G organized a series of PPD events with participation of the State Procurement Agency (SPA) and Business Ombudsman’s Office on the State Procurement System, where EPAC members advocated for legislative changes. Eventually, the GoG amended the legislation allowing two-stage tenders, eliminating a major concern of the private sector, that the former system neglected quality criteria for goods and services. G4G, in cooperation with the SPA, delivered a six-day training of trainers (ToT) session on the State Procurement System in Georgia to EPAC member management. Participants received detailed information on the substance of state procurement, regulating legislation, dispute resolution, and electronic system of state procurement and operations of the SPA. Participants are now enabled to deliver this knowledge to their member organizations. Participants indicated a high degree of satisfaction with the program and received EPAC members with certificates in state procurement certificates upon completion of the program.
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Innovation: Full Speed Ahead. With G4G providing assistance to GITA through PPDs, study tours, and consultancy, the Law on Innovation was adopted by the Parliament in July, and became effective in August. The new law will facilitate the process of the development of startup early stage financing and enabling environment by state led programs and grants. In September, G4G and GITA organized a media study tour on innovation and technology to increase public awareness of innovation developments. Participants had the opportunity to see first-hand the Creating GITA coasters at a accomplishments of GITA in crafting Georgia’s innovation ecosystem. FABLAB The tour included a training session and site visits to fabrication labs (FABLABs) in Western Georgia offering the possibility of digital fabrication and rapid prototyping. In the frame of the tour, journalists visited the Fabrication Shop (FABSHOP) in Batumi where “startups” offer consumers their inventions and custom-designed products produced at the FABLABS in Kutaisi and Batumi.
GoG Embraces RIA. As a major milestone in developing evidence based policymaking, the GoG announced its decision to institutionalize RIA on September 27, 2016. By February 2017, the Government will develop a legislative package for RIA, using G4G’s recommendations for modelling. The legislation is intended to be approved at the spring session of the Parliament.
David Usupashvili, Speaker of the Parliament, discussing RIA
4. PROGRESS OF ACTIVITIES BY REFORM
4.1 OVERALL INSTITUTIONALIZED FRAMEWORK FOR PUBLIC CONSULTATION
Sustainable institutionalized dialogue platform to improve the quality of all legislations; REFORM OBJECTIVE emergence of a Culture of Collaborative Consultation (CCC).
4.1.1 PROGRESS AGAINST THE WORK PLAN
SUPPORT PUBLIC PRIVATE DIALOGUE Support National PPD platform. In order to track government policies and engage stakeholders to participate in collaborative consultations, in Year 2, G4G continued work on the following PPD platforms: TAG, European Bank for Reconstruction and Development (EBRD) Investment Council, Business- Parliament PPD Platform, EPAC and journalists dialogue. In Year 2, the MoESD approved a Ministerial Decree and, based on G4G recommendations, created TAG, the DCFTA subcommittee, and established the TAG secretariat. The first TAG and DCFTA subcommittee meetings were held on May 31, where the Chairman and Deputy Chairman of both groups were appointed. G4G consultant, Kevin Latner, provided mentorship to TAG members and the TAG secretariat, worked with members on TAG’s action plan, reviewed committee structure, responsibilities, each committee’s procedures and communications. On July 28, a TAG meeting was organized to discuss the status of the negotiations with China and trade barriers with Turkey. On July 29, The MoESD organized a DCFTA subcommittee meeting, where representatives of the European Union (EU) "Facility
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for the Implementation of the Association Agreement in Georgia" project, presented the objectives of the project and discussed possible areas of cooperation with the DCFTA subcommittee. G4G issued a grant to Business and Economic Center (BEC) to build a PPD platform in the Parliament of Georgia and facilitate dialogue between legislators and the business community. Three policy reforms were identified from G4G’s reform portfolio: Land registration reform, pension reform and RIA Institutionalization in Georgia. For each policy reform area, BEC identified Members of Parliament (MPs) interested in selected policy reform areas. After selecting reform areas, BEC conducted stakeholder mapping, prepared research papers for MPs on targeted policy issues, arranged stakeholder and expert workshops to identify and agree on problems, policy recommendations and legislation solutions. PPDs were then conducted to discuss policy issues and provide recommendations. To organize structured PPDs on these reforms, and to mitigate inherent risks of PPD, three discussion platforms were created, each of them including prominent MPs and staff members from different committees and factions. Public discussions within their respective platforms were held on: New rules under the draft Law on Systemic Registration of the Rights on Land Parcels and Improvement of Cadastral Data, the concept of Pension Reform in Georgia and RIA Institutionalization in Georgia. G4G continued collaboration with the “Investment Council” and on April 22, participated in a working group meeting to finalize the proposed changes in the Law on Entrepreneurs. The meeting was attended by private sector and business organization representatives. Based on the working group’s (WG) consensus, the proposed changes were forwarded to the MoESD for consideration. To summarize its overall PPD activity, G4G organized PPDs during Year 2 in the following areas: Challenges and opportunities for developing water allocation plans in Georgia, water resources management, ongoing and upcoming reforms in Customs Administration, new food labeling rules, draft Law on Innovation, TFS, the Estonian CIT model, three PPDs on State Procurement, the Insolvency System, rules on the usage of food additives under DCFTA, Competition Policy under DCFTA, Land Registration, Pension Reform, RIA, Authorized Economic Operator (AEO) and e-commerce. Additional PPDs are covered in the reform related sections of this report. Engage Media in the National PPD. As part of G4G’s activity to engage media in national level PPD, G4G continued building capacity of G4G WG journalists through coffee and conversation sessions and off-site study visits. In Year 2, G4G conducted four “Coffee and Conversation” sessions with media professionals on water resources management, the EBRD Investment Council, land registration reform, and pension reform. In November, G4G organized an offsite media tour on pension reform to raise awareness of journalists about the concept and benefits of Georgian pension reform proposed by the government to become effective in 2017. In June, G4G collaborated with Georgian Energy and Water Supply Regulatory Commission (GNERC) to organize media training on regulation of electricity sector and electricity competitive markets. In September, G4G, in collaboration with GITA, organized a media study tour on innovation and technology. The tour included a training session and site visits to FABLABS in Western Georgia and the FABSHOP in Batumi, where innovators can offer consumers their products created in the FABLABS. Engage Youth in the National PPD. G4G continues to carry out capacity building activities with youth through open sessions conducted in cooperation with EPAC members and educational institutions. In November, G4G, in cooperation with the Academy of the Ministry of Finance, conducted training for students interested to become public servants. Forty-two students were selected from public and private universities through a competitive process. The goal of the program was to prepare and educate selected students in ethical and legal standards of public service, public service structure and functions of governmental institutions in policy formation and implementation. After completion of the training, students that passed the program’s test received a certificate from the Minister of Finance. Seventeen students completed the internship program at the MoF and seven are currently employed in the public sector. In February, G4G, in collaboration with two EPAC members, Georgian Bar Association (GBA) and Georgian Lawyers for Independent Profession (GLIP), launched a series of Q&A sessions designed
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specifically for law students. Within the project’s framework, 13 Q&A sessions were conducted on prevailing legal and economic issues in Georgia for 20 selected students in order to raise awareness, provide accurate information and encourage more active involvement among youth in policy advocacy. The Q&A session campaign was completed in April, with a final examination taken by all participants. The top four students were offered an internship at G4G and EPAC member organizations, seven of which are currently employed in relation to their fields of study. G4G also provided open lectures and workshops for students on reform related topics. For example, G4G RIA consultant, Roman Ladus, delivered an open lecture on RIA at GIPA. G4G trade consultant, Kevin Latner, delivered a Q&A session with law students covering PPD and an overview of TAG and its importance. IBSU students participated in a G4G youth workshop led by G4G consultant, Camelia Bulat. The interactive session covered leadership, entrepreneurship, marketing and communications topics. In total, 81 students participated in G4G organized lectures and workshops. G4G, GITA and the international youth organization, AIESEC, held the first annual “Youth Innovation Summit 2016,” on March 11-12 at GITA’s Techno Park. Opening remarks from Deputy Minister of Economy and Sustainable Development, Ketevan Bochorishvili, and G4G Chief of Party, Milo Stevanovich highlighted the importance of creating a business enabling environment to stimulate innovation and entrepreneurship. Panel presentations were given by young innovators, sharing their experience for participants. Consultants from Israel, Udi Aharoni and Omer Pomerantz, conducted a master class for 50 students. Aharoni, from the Lahev School of Management, delivered a master class on innovations and business development while Pomerantz provided insight on Israeli innovation policy development. Engage Women in the National PPD. Under the grant program “Empowering Women in Business,” the Association of Young Economists of Georgia (AYEG) organized four study visits to businesses in Tbilisi, Kutaisi, Telavi and Gori for 12 participants. Beneficiaries of the project had the opportunity to get advice and learn from successful entrepreneurs at their respective facilities. Following the study visits, AYEG conducted mentorship sessions for the participants covering essential topics for effective business management, including start-up. In Quarter 2, the “Empowering Women in Business” project concluded and AYEG held the event - "Challenges Faced by Women Entrepreneurs." Participants had the opportunity to discuss problematic issues for women in business at a round table discussion with government representatives. In February, G4G, in coordination with EPAC, organized an awareness campaign on Competition Law for women entrepreneurs. Mariam Kuchuloria, Executive Director of the Center for Competition, delivered a presentation to 12 women entrepreneurs from the association “Women for Tomorrow.” Kuchuloria discussed the essence of competition and its importance, anti-competitive agreements, cartels, abuse of market dominance, monopolies, competition legislation and recommendations to avoid potential non- compliance. On March 31, G4G and GWBA organized the 2nd annual conference: “Women’s Role in Economic Growth and Policy Development.” Women leaders from business, government and civil society made presentations about their accomplishments and challenges for over 200 participants. A market exhibition of Georgian women entrepreneurs and their products were also displayed at the event. The conference was closed with an award ceremony for three of the most successful women leaders from business, government, and civil society as selected by members of EPAC. Women Leader Awards went to: Ketevan Bochorishvili, Deputy Minister of Economy and Sustainable Development, Mariam Kodua, nut producer from LLC ‘’Keskia,’’ and Nino Zambakhidze, Chairwoman of Georgian Farmers’ Association. The conference was followed by a two-day leadership program delivered by Camelia Bulat, G4G consultant. Bulat provided training for more than 30 participants in team building, collaborative negotiation skills, effective communication in the public and private sector, and effective advocacy. On September 28, G4G, in cooperation with Women Business Council (WBC) and Tbilisi City Hall, organized an “Access to Finance Conference” for women entrepreneurs. Approximately 100 women entrepreneurs attended the conference to discuss new perspectives of developing their businesses through government and donor support initiatives. New opportunities of accessing financial and technical assistance for businesses were presented by Deputy Minister of Economy and Sustainable Development, Ketevan Bochorishvili, G4G’s Chief of Party, Natalia Beruashvili, representatives of EBRD, Sakpatenti,
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GITA. The conference was followed by a two-day coaching session delivered by G4G consultant, Camelia Bulat, for 15 women entrepreneurs. Reform Progress Tracking System (RPTS). At the beginning of Year 2, G4G awarded a grant to ISET for implementing the RPTS. The project’s overall goal is to analyze reform progress to support policy- making and PPD, and thereby promote informed debate on reform priorities and policy decisions, improve accountability, and help build trust between the government, private sector and general public. The tangible result will be a functional system that informs the public on how reform efforts of the Georgian government have progressed against their intended objectives. In Year 2, ISET developed the RPTS concept model, operational/financial plan, business/system requirements and a working prototype of the web-based system. ISET organized a ReforMeter Steering Committee meeting in September to review project objectives and the system development concept, discuss board policies and procedures, and review the reforms that will be monitored during the project’s first phase. System launch is planned for December 2016. PPD Tracking System. In Year 2, G4G issued a grant to IDFI to develop and implement the PPD Tracking System. The project aims to assess the extent and quality of inclusive consultation during four phases of the policy-making process, primarily for economic policy reforms. The phases reviewed are: Policy design and development; legislation drafting; RIA, and; circulation and public comments. IDFI assessed the draft laws submitted to the Parliament of Georgia in the period of October 2014 - September 2016, and selected 24 draft laws with the most economic impact for evaluation in terms of PPD extent and quality. Through the interviews with authors of the draft laws and other stakeholders, IDFI ranked laws according to the quality of PPD. In September, IDFI and G4G held a presentation of the results of the annual assessment, and awarded the top three laws with the highest degree of private sector involvement in the drafting process. The awarded laws were the Tax Code’s Estonian CIT Model (authored by MoF), Law on Innovations (authored by GITA) and Waste Management Code (authored by MENRP).
GOG CAPACITY STRENGTHENING Support National PPD Platform. Refer to the section “SUPPORT PUBLIC PRIVATE DIALOGUE.” Support National RIA Framework. In Year 2, G4G worked with the GoG to institutionalize the RIA process and advocated for implementation of recommendations on RIA National Framework of Georgia, developed by G4G. On June 14, G4G grantee for establishing a PPD platform in Parliament, BEC, organized a PPD event in Parliament on RIA institutionalization in Georgia. Key RIA stakeholders, including the Speaker of the Parliament, Deputy Ministers of Economy and Sustainable Development and Finance, GoG’s Parliamentary Secretary’s Office, as well as private sector and civil society representative attended the event. G4G RIA consultant, Roman Ladus, discussed the “Recommendations on RIA National Framework for Georgia” report. GoG representatives confirmed the decision to take decisive steps to introduce the RIA mechanism in 2017. In August 2016, the interagency working group on RIA institutionalization, led by the GoG’s Parliamentary Secretary’s Office, was established to develop the enabling legislative package. The Government plans to complete the drafting by February 2017, and RIA legislation is intended to be approved at the spring session of the Parliament. RIA national framework will be modeled according to the G4G’s recommendations. At the initial phase, RIA will be mandatory for the predefined list of laws and technical regulations, and after five years, all other laws and bylaws. The amendments will be introduced in the Law of the Normative Acts, Parliamentary Regulation, Government Regulation and the special Government’s Decree will be prepared that will define the RIA process and roles of GoG institutions in detail. In Year 2, G4G supported capacity building on RIA for relevant government institutions. In June, G4G, in cooperation with the EU funded project on “Legislative Impact Assessment, Drafting and Representation Location” conducted a five-day training session on RIA process and methodology. Participants included staff from the line ministries, GoG’s Parliamentary Secretary’s Office and Budget Office of the Parliament. As part of RIA capacity building, G4G initiated pilot RIAs with participation of civil servants. The RIAs on the draft Law on Consumers’ Rights Protection and Pension Reform, with MoESD RIA Department participation, are underway and are planned for completion in Year 3.
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Evidence Based Policymaking: To further promote an inclusive policymaking process in the country, G4G issued a grant to conduct the “Business Perception Survey on the Policy Reforms” and selected Analysis and Consulting Team (ACT) to implement the project. The survey will enable the GoG to receive sufficient information about the business climate in Georgia. USAID Economic Prosperity Initiative (EPI) conducted similar surveys in 2011, 2012 and 2014, which will enable comparison of the previous surveys’ results with the current one. ACT will complete the survey in November 2016.
PRIVATE SECTOR & CSO STRENGTHENING EPAC Coalition Strengthening. G4G continued to strengthen the Coalition in Year 2. After its official establishment, in October 2015, G4G held a meeting with EPAC members to discuss establishment of working groups, set up advocacy strategies and identify common priority reform areas. Member organizations selected priority areas for advocacy, which are: Competition law, tax policy, land registration, access to finance and state procurement, and established respective WGs. In December, EPAC held a WG meeting on Competition Law, where Mariam Kuchuloria, Executive Director of the Center for Competition, presented the preliminary results of qualitative research evaluating Georgian competition reform. Tengiz Lomitashvili, of TBSC Consulting, discussed different aspects of the Competition Law under the DCFTA, and provided an overview of EU best practices, emphasizing the importance of effective legislation. It was agreed that the Center for Competition will begin organizing information sessions on Competition Law for SMEs. In April, G4G and the Center for Competition, held a PPD event on competition policy. Fifty-seven representatives from the private sector, Competition Agency, business associations and EPAC attended the event. Irakli Sokolovski, of Dechert LLC, discussed exclusivity and pricing policy in Competition Law. The Center for Competition presented results of quantitative research among businesses. G4G organized the first EPAC WG meeting on the State Procurement System in December. The WG agreed to develop a questionnaire and conduct a survey to identify common issues. Based on identified priorities, G4G organized a series of PPD events with participation of the SPA and Business Ombudsman’s Office on the State Procurement System, where EPAC members advocated for legislative changes. Eventually, the GoG amended the legislation allowing two-stage tenders, eliminating a major concern of the private sector, that the former system neglected quality criteria for goods and services. G4G mobilized EPAC members to attend the two-day seminar - “WTO Government Procurement Agreement (GPA) Obligations, Accession Process, and Commercial Benefits for Georgia,” in Tbilisi on May 23-24. The workshop was organized by the United States Department of Commerce Commercial Law Development Program (CLDP) in cooperation with EBRD, the World Trade Organization (WTO), U.S. Embassy Tbilisi and the U.S. International Trade Administration (USTA). On May 24, G4G presented project activities, the mission of EPAC and outlined their cooperation with the SPA. During Year 2, EPAC’s Land Registration WG conducted significant activities to advocate for Land Registration reform. In February 2016, the GoG prepared a draft Law on Land Registration that lacked a comprehensive solution to challenges in the area, and contradicted a previously drafted version developed by the Ministry of Justice (MoJ) with G4G assistance. In response, G4G and EPAC held meetings with executive and legislative branch officials, educated media and mobilized CSOs. On March 10, EPAC submitted a joint letter addressed to the Prime Minister and copied to relevant ministers and parliamentarians advocating for action. The new legislation was subsequently withdrawn, and the original law on systemic registration was resubmitted. In June, the Parliament approved an improved draft Law on Systemic and Sporadic Registration of Land Titles and Improvement of Cadastral Data, together with changes to other related legislation. On July 12, G4G hosted an EPAC WG meeting on Tax Policy to introduce ongoing reform of CIT. G4G’s tax policy expert, together with experts from GLIP and Georgian Small and Medium Enterprise Association (GSMEA), presented particularities of the new taxation model. The differences and similarities of the new and old models were discussed, including the method of grossing-up of taxable expenditures in order to identify taxable amounts, and types of expenditures which become taxable when distributed (corresponding to the types of costs which where non-deductible under the old regime). The overall attitude of EPAC members towards the new model was positive; however, they expressed
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concerns with regard to remaining uncertainties on what kind of administrative approaches the RS would take in specific cases. On July 18, G4G hosted the first EPAC WG meeting on Access to Finance. The meeting was initiated by EPAC member, Association of Business Consulting Organizations of Georgia (ABCO Georgia). During the meeting, G4G Access to Finance Advisor, Ilia Gogichaishvili, presented a summary of Capital Market and Pension Reform activities, followed by a discussion. ABCO Georgia proposed a new concept on access to finance for micro-entrepreneurs that was circulated to all EPAC members for further consideration. On September 16, G4G hosted its one-year anniversary ceremony where the newly appointed British Ambassador, Justin McKenzie Smith, and US Ambassador, Ian Kelly, recognized the Coalition’s importance in establishing a platform for constructive dialogue between civil society and government. “EPAC plays a central role to ensure that there is a link between a concern and an action,” – stated US Ambassador Ian Kelly. G4G’s Chief of Party, Natalia Beruashvili, awarded new members of EPAC by certificates of acknowledgment. Thirty new members joined EPAC during its first year and the Coalition is now comprised of 63 organizations. Over 100 representatives from government, diplomatic, civil society and the private sector participated in the event. EPAC Members’ Capacity Building. In Year 2, G4G continued capacity-building activities for EPAC member business associations and CSOs. In December, G4G, in cooperation with the EU project “East- Invest 2,” organized a two-day workshop on PPD advocacy best practices for Georgia, led by three international consultants. EPAC members, together with the consultants, identified major gaps in Georgian advocacy practice, identified problems and proposed solutions. In January, the EU project “East Invest 2” organized a study tour in Bavaria, Germany, on organizational capacity building and advocacy skills. Six EPAC members participated in the study tour, including: Representatives of the Center for Competition, Georgian Tourism Association, GSMEA, GLIP, Georgian Hazelnut Producers and Exporters Association, and the Tax Payer’s Union (TPU). In March, the same project in cooperation with G4G, conducted a five-day training session for EPAC members on “Communication in Advocacy and Public Private Dialogue.” The sessions were conducted by the following consultants: Ludger Fischer, Lobbyist in Brussels and author of articles and books on advocacy, Dennis Bazylevych, Lobbyist in Ukraine and a leading specialist/trainer on advocacy, and Anastasia Baklan, communications expert of the Ukrainian National SME Platform. In March, G4G organized a two-day ToT workshop on “Effective Communications Skills and Advocacy.” The workshop was delivered by G4G consultant, Camelia Bulat. Representatives from EPAC’s member organizations and non-member CSOs attended the workshop. The participants acquired skills in planning, preparation, verbal communication, and written presentations. Through modeling of the best practices and latest techniques in training delivery, the participants were introduced to new approaches, training design and overcoming distractions. The participants obtained skills for advocacy of policy reforms and effective communication with the government and civil society. In May, G4G, in cooperation with ISET and TPU, conducted a three-day workshop on competition policy, led by international expert, Anastasia Shepetova. Shepetova provided an overview of Competition Policy at the EU level and explained the EU approach, competition policy single market, and presented the theory of perfect competition and demand estimation tools. Representatives from the Center for Competition discussed current challenges and existing problems. The workshop was attended by representatives of business associations and Competition Agency employees. During May and June, G4G, in cooperation with the SPA, delivered a six-day ToT session on the State Procurement System in Georgia to EPAC members. Participants received detailed information on the substance of State Procurement, regulating legislation, dispute resolution, and electronic system of state procurement and operations of the SPA. Training sessions were conducted for 17 EPAC members. Trained participants will, in turn, deliver this knowledge to their member organizations.
4.1.2 PPD SUCCESSES AND LESSONS LEARNED By building consensus, trust, understanding between the public and private sectors, and better diagnosis of business environment problems, each PPD had an immediate effect in improving the quality of
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particular reform efforts. The Parliamentary Committees and administrative officials took many private sector concerns into account during events organized under G4G’s activity to establish a PPD platform in Parliament. PPD on RIA has shown that the main drivers of the RIA Institutionalization process are the business community and their commitment will be further utilized in order to advance the reform. “PPD Quality Tracking in Georgia” revealed best cases of PPDs among 24 draft laws and awarded corresponding GoG agencies with certificates. Involvement of top-level stakeholders and level of publicity of the initiative will encourage other GoG institutions to improve access to information and open dialogue in the policymaking process. 4.1.3 CHALLENGES TO ACHIEVING REFORM RESULTS The lack of implementation knowledge and coordinated planning remain as the main obstacle for building a culture of collaborative consultation. This was illustrated by the latest development in establishing TAG. Ineffective communication with the business associations from the MoESD and postponing scheduled TAG meetings resulted in insufficient CSO support when considering candidates for TAG. G4G plans to build capacity of TAG members and the secretariat to ensure effective functioning of the TAG, while maximizing value for the private sector. Even though the GoG understands the importance of RIA Institutionalization, due to the lack of civil servants’ capacity involved in RIA, challenges will surface with its implementation. G4G, therefore, will conduct capacity building activities for civil servants. There is certain resistance from some state institutions to be actively involved in the PPD quality assessment process. IDFI will conduct training for GoG stakeholders to elaborate details of the PPD tracking mechanism and encourage participation. 4.2 ENERGY STRATEGY REFORM
Coherent Strategy that leads to the effective, economically justifiable and sustainable REFORM OBJECTIVE energy production, delivery and consumption consistent with environmental requirements.
4.2.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE G4G supported the MoE in the process of Energy Strategy document development by participating in meetings and providing comments and recommendations on the initial draft. Comments mainly considered focusing on development of the competitive electricity market, strengthening cross border trading, establishment of day ahead and balancing markets and establishment of clearing mechanism. Recommendations also suggested roundtables with the private sector and civil society in the decision- making process. G4G also made suggestions regarding structure of the strategy document, essential supplement annexes, necessity of responsibility assignment to involved stakeholders and periodical status updates of the strategy document’s implementation. Finally, after conducting a series of meetings and discussion panels, MoE developed a draft Energy Strategy document, with involvement of other energy stakeholders, private sector representatives and experts. At this stage, the draft is published on the MoE website for final comments from interested parties. Based on discussion with Deputy Minister of Energy, Irakli Khmaladze, MoE has already conducted dialogues with all interested parties, including civil society, energy experts and private sector representatives prior to finalizing the draft, thus there is no further need of PPDs. Considering the above mentioned request, G4G decided to cancel any further PPD activities on Energy Strategy in Year 2. G4G, with "World Experience for Georgia" (WEG), Open Society Georgia Foundation and the Kingdom of Netherlands Embassy, conducted the energy conference - “Georgia’s Energy Sector Achievements, Challenges and Outlook.” Governmental and non-governmental organizations (NGOs), donor agencies, diplomatic missions, and representatives of political parties and energy specialists openly discussed
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energy sector issues and strategic directions. The main goal of the event was to ensure inclusiveness of civil society voices and concerns in the strategy development process. GOG CAPACITY STRENGTHENING To support MoE in strategic energy planning, the G4G Energy team conducted two workshops on the Long-Range Energy Alternatives Planning (LEAP) model for the Analytical Department (AD) of the MoE. LEAP is developed by the Stockholm Environment Institute and is widely used for energy policy analysis and climate change mitigation assessment. The objective of the workshops was to build capacity among junior analysts at the MoE to perform proper analysis of energy demand and supply forecasts. The workshops structure included presentations of the modeling system, benefits of using the LEAP model, software characteristics, modeling methodologies, current users, initial data requirements of the model and types of scenarios that can be created and evaluated. G4G was invited as a member to participate in donor organizations’ and energy sector stakeholders’ joint meeting to discuss the major issues in the energy sector and identify next steps. Topics of discussion included the draft Energy Strategy document, coordination issues between donor/IFI organizations and identification of subsidy recipients/vulnerable customers. Discussions also included establishment of the electricity day-ahead and electricity balancing markets in Georgia and allocation of specific roles and responsibilities among different energy stakeholders in the competitive market. G4G closely collaborated with the AD of the MoE to develop the work for “Business as Usual” (BaU) scenario development for Market Allocation (MARKAL) Georgia model. G4G grantee, WEG, conducted a survey on energy and water end-use consumption for the commercial and industrial sectors in Georgia and its findings were presented to G4G and stakeholders. The results of the survey will be used by the MoE for the MARKAL Georgia model. It will also support ministries, agencies, and private sector companies to perform planning, allocation and development of resources through obtaining complete end-use consumption data for long-term development of the energy and water sectors. G4G developed a new approach for demand forecasting, Market Centered Energy Planning (M-CEP), which was presented to the MoE, MoESD and market players. G4G presented the M-CEP concept and illustrated global energy sector trends in the development of solar energy and battery technology, discussing their impact on long-term energy planning. Examples of future demand over-estimation by other countries, and the consequences of ignoring consumer participation in the energy market were highlighted. G4G plans to support the MoE in awareness-raising related to recent developments in energy efficiency and solar energy and their impact on energy consumption and long-term energy planning.
PRIVATE SECTOR & CSO STRENGTHENING To support the MoE and other stakeholders in strategic energy planning, and to collect accurate national energy statistics for industrial and commercial energy demand, G4G, in coordination with USAID’s Enhancing Capacity for Low Emission Development Strategies (EC-LEDS Georgia), conducted a national survey. The survey was conducted by G4G grantee, WEG, on energy and water end-use consumption for the commercial and industrial sectors in Georgia.
4.2.2 PPD SUCCESSES AND LESSONS LEARNED Based on recommendations of G4G, MoE conducted several roundtables, held individual meetings and consultations with GoG and private sector representatives prior to finalizing an Energy Strategy document. The final draft is published for final public discussion. Knowledge and skill development, as well as sharing international practices is needed for stakeholders who should participate in strategy document implementation.
4.2.3 CHALLENGES TO ACHIEVING REFORM RESULTS Lack of analytical capacity in the GoG could be a serious challenge in Energy Strategy development and energy planning.
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It is essential that MoE begins coordinating energy demand forecasts and its drivers with other ministries (MoESD, MoF, Ministry of Agriculture (MoA)). Competitive energy markets have created options that place more control over energy consumption, energy production and system services in the hands of consumers. Lack of knowledge and understanding of modern trends in technology and electricity market development could be a serious challenge in effective energy planning. Without a proper mechanism in place, it is likely resources will be used inefficiently which will create under-utilized energy infrastructure as seen in different countries.
4.3 ELECTRICITY TRADING MECHANISM REFORM
Effective ETM to enable Foreign Direct Investment (FDI) necessary for development of REFORM OBJECTIVE small and medium hydropower plants which are vital for clean and low cost energy for Georgia.
4.3.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE ETM PPD and Conference. G4G, in cooperation with TBC Bank and the EU project “Civil Society Dialogue for Progress,” implemented by WEG, organized a joint conference - “Georgia’s Energy Sector - Progression towards EU and ETM.” The conference brought together more than 100 government and private sector energy stakeholders. The objective of the event was to share experience on ETM reform issues and energy sector development that include the need to harmonize ETM with the regional electricity markets, particularly with Turkey and Southeast Europe. G4G and the MoE held the “Cross Border Electricity Trading Summit” for regional energy sector stakeholders in May, which was considered the most significant energy policy and investment related event of the year. The GoG presented an overview of ETM developments in Georgia. Officials from the Turkish transmission system operator (TEIAS), Turkish energy regulator, Turkish energy traders association, Serbian power exchange and Serbian electricity coordinating center delivered presentations on the expected operations of the proposed ETM. The summit also included an overview of private sector developments and overall investment climate in the energy sector. G4G, in collaboration with GNERC, organized the PPD event “Competitive electricity market development in Georgia” in Bulachauri, Mtskheta-Mtianeti region, with participation of media and NGOs. Attendees had an opportunity to receive detailed information on international electricity markets, legal requirements of the EU energy package, net metering rules, distribution grid code, as well as discuss practical application of ETM. USoA and Tariff Methodology PPD. During Year 2, G4G was planning to collaborate with EBRD’s project on Uniform System of Accounts (USoA) to support PPD initiatives for GNERC in USoA and tariff methodology. Due to a delay in commencement of activities, and based on consultations with EBRD, G4G decided to cancel the event. GOG CAPACITY STRENGTHENING Capacity Building on ETM. A study tour was planned to Turkey on ETM during spring of Year 2. Earlier in Year 2, G4G visited Istanbul to hold preliminary discussions with Turkish stakeholders and organize the study tour. Following the preparatory visit, G4G facilitated a visit of EPIAS to Georgia and organized meetings with the relative Georgian counterparts (MoE, GNERC, Electricity System Commercial Operator (ESCO), Georgian State Electrosystem (GSE), Georgian stock exchange, National Bank of Georgia (NBG)). The discussions focused on enhancing cross-border electricity trade between Georgia and Turkey, establishment of a PX node, introduction of bi-directional trade and the creation of a regional pool with the possibility of electricity market coupling in the near future. EPIAS also expressed its interest to host a study tour for Georgian energy stakeholders and share deeper knowledge of its core functions. The study tour to Turkey was cancelled due to security concerns. G4G participated in a study tour to Norway with the MoE, GSE, ESCO, GNERC and SakRus Energo (transmission company). The visit sought to educate Georgian energy stakeholders in modern electricity
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trading practices in Norway, especially in operation of a competitive electricity market. Norwegian Ministry of Petroleum and Energy, Norwegian Energy Regulator (NVE), Transmission System Operator (StatNett), Market Operator (Nord Pool) and Generation Company (Statkraft) shared their experience with the study tour participants in competitive electricity trading practices and fully functional electricity markets. G4G organized meetings with WB and International Monetary Fund (IMF) to discuss the status of ETM implementation, while also stressing the importance of coordinated actions between and with the MoE and MoESD during implementation of the competitive electricity market. WB expressed its concern regarding current practices using the government-backed long-term power purchase agreements (PPAs) that adversely impact economic and financial stability of the country. WB considers introduction of a competitive market in Georgia as the only alternative to PPAs and offered support to G4G in ETM implementation. MoE presented the results of negotiation with the European Commission on accession to the Energy Community Treaty. A significant outcome in terms of ETM implementation is the MoE’s commitment to introduce the new trading platform by 2019. The negotiations with the European Commission were launched under the European Union-Georgia Association Agreement (EU-AA) framework and finalized in May 2016 by developing the accession protocol draft. The protocol is planned to be signed on October 14, at the Energy Community Treaty Ministerial. G4G plans to support the GoG to implement Treaty requirements for ETM. G4G was requested by the Energy Community Secretariat (ECS) to support a new project to be implemented under the EU Eastern Partnership Assistance Program. The project will provide technical assistance to Georgian authorities in the electricity market reform process. G4G provided the ETM Road Map, Georgian Electricity Market Model (GEMM) 2015 Report and information on G4G’s electricity market simulation software. ENERGY (ELECTRICITY) TRADING POLICY GOVERNANCE G4G actively supported the MoE, ESCO, GSE and GNERC in assessment of the future market model and detailed steps towards ETM implementation. In this regard, a number of important activities were undertaken: ETM Market Model Development. Based on data provided by GSE, G4G developed over 20 scenarios for the electricity market covering different market models, considering seasonality, market liberalization, and market opening. As a result, the first phase of simulation was finalized, several scenarios were selected and a presentation on preliminary results was conducted. The simulations revealed the following challenges: - Growing consumption of electricity by Abkhazia through the Enguri power plant; - Inappropriate pricing of peak vs off-peak periods; - Need for all market players participating in the parallel market to have a clear understanding of the complexity and challenges of the new market. G4G is a member of the working group led by the USAID project “Georgia Human and Institutional Capacity Development 2020” (HICD) for strengthening institutional capacity of ESCO. G4G continues its participation in the process of identifying fundamental causes of performance gaps and developing recommendations for improvement and future market structure. G4G continued to work with donors and international financial institutions (IFIs) to drive the process of ETM implementation and to create a common voice for the donor and IFI community. Several discussions were held for finding common approaches with International Finance Corporation (IFC), WB, EBRD and G4G on technical issues related to the development of the competitive electricity market, market model and future steps. G4G held a number of meetings with the Deputy Ministers of the MoE, Mariam Valishvili and Irakli Khmaladze, along with the Analytical Department, International Relations Department, Investment Projects and Energy Departments at the MoE. The MoE is considering a competitive electricity market as the only viable alternative to long term PPAs. The decision on detailed design and structure of the new market model will be made by the MoE, after the EBRD financed project “Electricity Trading Platform,”
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will be completed and recommendations are developed. EBRD has selected the vendor and after GoG approval, the project will commence tentatively in the beginning of Year 3. The MoE declared implementation of the competitive market model by 2019. It was also indicated that 60% of the electricity market should be open by 2020. G4G will work closely with EBRD’s consultants and will support the MoE in simulating EBRD’s proposed market design. Turkey-Georgia Cross-Border PX Node. The issue of a Turkey-Georgia cross-border power exchange (PX) Node was raised as an important priority during the EPIAS visit to Georgia. The Turkish side expressed its interest and readiness for moving forward in that direction. The same issue was raised during the National Association of Regulatory Utility Commissioners (NARUC) workshop held in February 2016. Consultations are still ongoing with Turkish counterparts. G4G facilitated a meeting at the MoE dedicated to the establishment of PX in Georgia. The meeting brought together representatives of the MoE, GSE, ESCO, Georgian Stock Exchange, Georgian Co- Investment Fund and USAID. The Georgian Stock Exchange presented the concept of PX and market clearing house (MCH), possible involvement of Georgian Stock Exchange in PX and MCH operations and next steps for establishment of these entities. To develop a cross-border trading mechanism with Turkey, G4G’s international experts, Zoran Vujasinovic and Dejan Stoicevski, held multiple meetings with representatives of GSE and ESCO. Topics of discussion included introduction of the bi-directional electricity trading concept and identification of relevant measures to move from the current one-directional trade to more sophisticated and modern bi- directional trade between Georgia and neighboring countries. ESCO and GSE expressed their readiness to begin implementation of the concept. G4G also participated in a meeting between Armenian and Georgian power sector representatives, organized by USAID Armenia. G4G presented a status update of ETM implementation in Georgia and introduced the PX node concept. As a result of the meeting, a Memorandum of Understanding (MoU) was signed between the Ministry of Energy of Armenia and MoE of Georgia, where parties agreed to cooperate on liberalization of the cross-border trade, harmonization of legislative framework, involvement of traders in cross-border trade and application of market base pricing mechanisms. Build consensus on Market Clearing House among MoE, ESCO, NBG, GNERC and Georgian Stock Exchange. G4G held meetings with stakeholders for development of the market clearing mechanism and establishment of a MCH. Due to preliminary observations, GSE is willing and able to settle and clear the hourly balancing market. Another entity willing to become the MCH is Georgian Stock Exchange. Both entities are willing to implement electricity day-ahead hourly trading and clearing operations. During Year 2, G4G held meetings with counterparts, reviewed best international practices and by the end of reporting year prepared the report - “Proposed Concept of Clearing House.” ETM Software. MoE has requested G4G to develop an interim tool (software) to enable the MoE to the launch the parallel (shadow) market. In order to switch to the new market model, the MoE is committed to design and implement a competitive electricity market with an hourly settlement period and liberalized prices. A parallel market needs to be implemented to analyze the possible impacts on electricity market players/retail consumers. The evaluation of the parallel market will also guide decision makers for a smooth transition of the current electricity market toward daily and hourly competitive electricity trading and resolve disagreements on perceived shortfalls from transition. G4G regularly participated in coordination meetings with the MoE, WB and EBRD for development of the electricity market-trading platform. G4G held several meetings with GSE to discuss basic principles on how to run parallel market software. The parallel market software will run operations based on new market model structure and also analyze price impact on electricity consumers and generators. At this stage, G4G is waiting for EBRD’s recommendations on future market structure and design of the “Electricity Trading Platform.” G4G’s energy team attended training on the Electricity Market Complex Adaptive System (EMCAS) at GSE. An EMCAS simulation runs over six decision levels, ranging from hourly dispatching to long-term planning. At each decision level, operators make certain decisions, including determining electricity consumption, generation commitment, bilateral contracting and unit dispatch. Trainings were provided by Argonne National Laboratory with the support of USAID. The main goals of the training were capacity
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building of GSE staff, simulation of electricity market developments and strengthening of long-term planning skills. Market Monitoring. G4G was planning to collaborate with the project “Strengthening Capacities of GNERC in Regulatory Cost Audit and Market Monitoring,” under the EU Twinning II project. For this purpose, G4G participated in discussions regarding future development of the electricity market, institutional arrangements and requirements of the EU on market structure. Areas of potential cooperation and coordination between G4G and the EU Twinning II project were discussed several times. It was discovered that Twinning II covers activities considered under G4G’s work plan and thus, based on consultations and in agreement with GNERC, G4G decided to cancel the activity. Market Monitoring NBG. During Year 2, G4G reviewed best international practices regarding the role of the Central Bank in development of an electricity market clearing mechanism. The market clearing mechanism guarantees the financial credibility of the market players and reduces the counter party risk. Under current Georgian legislation, NBG is authorized to regulate and supervise the system operator, payment system provider, issue normative acts and determine sanctions regulating payment services. The report regarding monitoring of MCHs was prepared by G4G in Year 2. Technical Assistance to GNERC. In addition to a number of meetings with GNERC, G4G participated in the Regulatory and Technical Review, organized by the US NARUC, to discuss trading schemes of the cross-border PX node. Turkish Energy Market Regulatory Authority (EMRA), and Transmission System Operator (TEIAS), also participated in the event. Experts from the Michigan Public Service Commission (PSC), Kentucky PSC and Midcontinent Independent System Operator (MISO) Turkish stakeholders suggested to establish a market operator to enable Georgian generators’ participation in the Turkish Electricity Market without making comprehensive changes to Georgian-Turkish bilateral agreements. NARUC expressed its interest in G4G’s approach towards ETM development, thus Giorgi Chikovani from G4G, was invited to a separate discussion session to provide brief information on the ETM Road Map and development of a PX Node between Turkey and Georgia, proposed by G4G.
PRIVATE SECTOR & CSO STRENGTHENING Women Integration in Energy Sector. G4G re-announced the grant for “Women Integration in the Energy Sector” to conduct a gender survey in the energy sector and conduct workshops on the role of women in the Energy Sector. Due to a lack of interest and ineligible applications, G4G was not able to issue the grant several times. G4G cancelled the activity. Youth Integration in ETM Policy Development. As a part of youth integration process in ETM policy, Jake Delphia, G4G Senior Energy Expert, conducted the youth seminar “Market Versus Planning Approach to Resolve Transmission Congestion,” for students of ISET. Participants also included representatives from USAID, CSOs, the MoE and GNERC. Promotion of Energy Sector Associations. In February, G4G organized a workshop for electricity market players. Market players expressed their interest to establish an association as a mechanism for communicating with a unified voice to Georgian officials and requested G4G’s support in the formation process.
4.3.2 PPD SUCCESSES AND LESSONS LEARNED After observing the ETM development process, it is clear that success of the reform depends on the MoE’s final decision on the future market design and assignment of roles and responsibilities to relevant stakeholders. A common understanding, integrated work, unified voice and better awareness of international best practices will substantially increase the pace of reforms. There are different approaches concerning future market structure and ETM implementation. As the MoE holds the key role in the policy making process, it must make a decision on further developments in the energy sector, which will serve as a guide to undertake necessary steps by relevant stakeholders contributing to successful implementation of ETM. There are different approaches concerning future market structure and ETM implementation. G4G has been actively working with the GoG to guide them on decision-making processes related to introduction
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of the competitive market. The decision on future market structure and platform design is pending as GoG is waiting for the results of EBRD’s “Electricity Trading Platform” project, to be finalized by 2017. As a result, initiation of the new market model has been delayed. In order to achieve success in ETM implementation, it is also critical to have the private sector well prepared for the new market model and have their capacity in place to meet new requirements. G4G, in agreement with the MoE, is planning to work intensively with private market players on ETM related issues.
4.3.3 CHALLENGES TO ACHIEVING REFORM RESULTS For the successful implementation of ETM, the GoG needs to engage the private sector in a more timely and comprehensive manner. In particular, G4G recommended to the MoE to include market players in the next phase of the market simulation working group. Market players have developed cohesion as a group and consensus for messaging their concerns to government. After conducting PPD on cross border electricity trading, it became clear that there is substantial interest among international and local representatives of energy traders, hydropower developers and electricity market players in ongoing and planned reforms in the energy sector. Presentations by the MoE and other state entities were followed by active discussion between private sector and GoG representatives. The private sector also expressed readiness to assist the government in supporting reforms in the energy sector of Georgia due to its impact on Georgia’s economic development. G4G’s effective engagement and substantive work with the energy stakeholders and journalists (from the electronic and printed media and television) resulted in awareness raising and capacity building of mass media and CSOs. This revealed that awareness of the existing energy regulations and future market model is very low among the private sector. It was decided to hold regular working sessions with private companies and CSOs to raise their capacity and involvement in energy sector reforms.
4.4 WATER RESOURCE MANAGEMENT REFORM
Equitable transparent sustainable allocation of fresh water resources across multiple REFORM OBJECTIVE competing interests is necessary to prevent grave failure to serve legitimate needs.
4.4.1 PROGRESS AGAINST THE WORK PLAN
SUPPORT PUBLIC PRIVATE DIALOGUE Water Resource Management PPD. During Year 2, G4G strengthened and facilitated PPD to catalyze reforms and to promote inclusive policymaking within the Water Resource Management sector. G4G brought together a wide variety of actors, such as the national and regional governments, private sector, civil society and academia to identify existing challenges related to water resource allocation between various interests and to create a common understanding of the concepts and approaches for sound and sustainable water resource management. G4G held a high-level panel discussion on Water Resource Management on November 11, 2015, leveraging dialogue between different sectors, governmental agencies, the private sector and CSOs to uncover the need for the government to collaborate in the management of Georgia’s water resources. Panel members presented their perspectives and experiences with water, often opposing perspectives of other panel members. Due to the lack of a comprehensive water management strategy, the government and stakeholders have legitimate competing interests that can be counterproductive to reform. In parallel, G4G held a series of PPDs on water allocation issues at the regional level under the framework of the Green Paper. Water allocation plan framework and challenges for its implementation were discussed among municipalities of Mtskheta and Dusheti, private organizations, local communities, different governmental agencies and CSOs. To summarize concerns from various stakeholders, international water allocation best practices, challenges and opportunities for developing water allocation
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plans in Georgia were discussed in Tbilisi. Feedback and recommendations from the participants were incorporated into the draft Water Resource Management Law. Tbilisi Municipality Environmental Strategy PPD. To further strengthen dialogue on water management issues, G4G supported the inclusive process of the development and finalization of the Tbilisi Municipality Environmental Strategy. On October 16, G4G supported Tbilisi City Hall in conducting a public discussion with stakeholders on the Tbilisi City Environmental Strategy 2015 - 2020. The event was organized in response to a request from the municipal department of ecology and greening of Tbilisi City Hall. Together with other topics, Water Resource Management issues were discussed during the meeting. GOG CAPACITY STRENGTHENING Harmonization with the EU. G4G developed a Georgian Water Resource Management Guideline according to EU practices. A series of meetings were conducted by G4G led by international water expert, Peter Rončák, with key representatives of MENRP and NEA. As a result of the consultation with MENRP, the Water Framework Directive (WFD) “Guideline #10 - Rivers and Lakes: Typology, Reference Conditions and Classification Systems,” was selected for adopting as it is the most appropriate for Georgia. The Guideline was prepared in accordance with the WFD Guideline and through active consultation of various stakeholders. In addition, various departments of MENRP and NEA received training related to the practical application of the Guideline. The consultation process revealed that giving legally binding statute to the proposed WFD Guideline methodology would ensure the application of the common methodology throughout the country; moreover, use of different (in some cases inconsistent) methodologies in different basins could be avoided. As a result, MENRP developed the draft sub-legal document “On Rules for Identification of Water Bodies and Defining Their Borders” and included the Guideline as an annex of above sub-law. It is expected that the proposed sub-law will become part of draft Water Resource Management Law package and will enter into force after its adoption. Thus, the proposed Guideline will become a management tool to WFD implementation at the national level. G4G continues support to MENRP in improving policy and the regulatory background in Water Resources Management. On August 20, G4G met with the Water Management Resource Unit under MENRP to discuss MENRP’s priorities regarding the obligations born under the EU-Georgia AA. MENRP and G4G discussed a roadmap for the implementation of the EU-Georgia AA in the fields of environment and climate action, which identifies several guidance documents to be developed. MENRP asked G4G to continue support in developing WFD guidance documents applicable for Georgia. As a result of the discussion, the first set of WFD guidance documents identified in the EU-Georgia AA Roadmap was selected. Tariff Methodology for Irrigation and Drainage. G4G supported Georgian Amelioration (GA) through capacity building (several workshops delivered), on key concepts from the best international practices to be incorporated in draft tariff methodology and developing the draft tariff methodology itself. G4G was regularly participating in Tariff and Regulation WG meetings along with representatives of GA, MoA, GNERC and the World Bank Irrigation and Land Market Development Project (WB-ILMD). The WG addressed the issues covering tariffs, sector structure, strategy and institutional arrangements of the irrigation and drainage sector. As a result of a long and inclusive process, the draft tariff methodology for both irrigation and drainage (never introduced in Georgia) has been developed, considering Georgian irrigation sector specifications. The final draft was delivered to GA and USAID. The document provides alternatives regarding approaches for the calculation of irrigation tariffs. G4G, in cooperation with ISET, conducted a RIA on draft tariff methodology. On the basis of stakeholder consultations, the RIA identified and analyzed three main policy options: Option 1 - Baseline Scenario: The government does not introduce a new tariff methodology and keeps the status quo interim decree in force; Option 2 - Lower-Bound tariffs: The government adopts a lower-bound pricing model with a two- component tariff that covers the company’s operation and maintenance costs; and, Option 3 - Upper- Bound tariffs: The government adopts an upper-bound pricing model with a three-component tariff that covers the company’s operation and maintenance costs, plus return on investment. The document
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clarified that introducing the new tariff methodology can contribute to achievement of the goals set by the GoG to ensure sustainable and efficient functioning of irrigation and drainage service providers (SPs). This will happen only in the presence of sufficient investments in irrigation infrastructure and under properly functioning land and financial markets with relevant monitoring policy, i.e regulatory framework. Additionally, GA requested G4G’s assistance in development of the Revenue Requirement Model (RRM), to be used by GA for the development of a clear plan on how to generate revenues or reveal costs, which they will not be able to sustain. By having a clear revenue model, GA can focus on different type of customers, fund development plans, start cost optimization and raise capital. The model considers technical specifications and customer groups for different schemes and reflects all the requirements of the draft tariff methodology. G4G completed the draft RRM and delivered it to GA and USAID. Comments and Recommendations on Draft Hydro-Amelioration Law. During Year 2, G4G supported GA in development of the draft Hydro-Amelioration Law. At the first stage, regular meetings were held with representatives of GA to discuss the outline and main concepts of the law. The draft development process was delayed due to additional consultations required by the government regarding the institutional and regulatory framework for the amelioration sector. Later, an informal decision was made that GNERC will set the tariffs for irrigation and drainage. WG meetings continued with involvement of GNERC. The initial draft Law was provided to G4G for review and recommendations on March 30, 2016. Since, several discussion sessions were held and considering the comments of all involved parties, draft was revised. G4G was also asked to provide comments/recommendations on the second draft as well. The report on comments and recommendations on the revised draft Law was prepared by G4G and submitted to GA and USAID. G4G was asked to continue participation in the WG and support the draft finalization process, as another draft version was also presented by WB for further discussion. It is expected that the draft Hydro- Amelioration Law will be submitted to Parliament by spring 2017. WATER RESOURCE MANAGEMENT Aragvi River Basin Water Sector Assessment. G4G and its subcontractor GAMMA (Environmental Consulting Company), within the scope of the Aragvi pilot project, worked to assess the status of the Aragvi River water resource availability for 2015 (the work includes data gathering, processing and refining existing methodology). Significant activities were undertaken in the process including: Meetings with representatives of the GoG, CSOs, donor supported projects and academic sector; Interviews with Water Resources Service and NEA staff members of the MENRP, as well as other government stakeholders; Development of hydrological monitoring needs assessment and water balance parameters estimation; Collection of needed, available input data and identification of data gaps. The main drawback during estimation was the lack of input data, although G4G and its subcontractor held several meetings to obtain available inputs. The whole working process was supported by G4G international water resource management expert, Georg Petersen, providing significant inputs using best international practices. Finally, the water balance for the Aragvi River Basin was developed. Report represents the calculation of water balance on monthly basis. The developed estimation is an important tool to assess the current status and trends in water resource availability in the area over a specific period of time. It is a user-friendly model, which allows easy modification of water-balance parameters and provides estimates of water-balance components for a specified location. Furthermore, the proposed water balance will support the water management decision-making process, by assessing and improving the validity of visions, scenarios and strategies. A workshop was held to present and discuss the Aragvi River Basin water balance with representatives of MENRP and NEA. The respective report has been submitted to USAID. Environmental Flow (EF) Assessment. One of the important aspects in water resource management and allocation is assessing EF. Development of the EF framework is part of the government’s commitment under the EU-AA. EF assessment and introducing the standards will impact different sectors
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and a number of water users. Consequently, the standardized methodology for the calculation of the EF in rivers will be an integral part of the environmental impact assessment procedures. G4G proposed revisions and testing of the draft EF methodology developed under another USAID project, “Integrated Natural Resources Management in Georgia’s Watershed Project” (INRMW). In response to G4G’s request, Dr. Michael McClain, Professor of Eco-Hydrology from the UNESCO-IHE Institute of Water Education and one of the authors of above-mentioned methodology, presented the EF methodology to high officials of MENRP and NEA. G4G’s effective engagement and substantial work with the MENRP, NEA, international experts and CSOs resulted in the revitalization of EF methodology framework by the GoG. After discussion, MENRP approached G4G with request to finalize the environmental flow methodology through testing within the Aragvi River Basin pilot project and then conducting training for relevant stakeholders. In response, G4G designed the grant program on “Refining of Environmental Flow and Preparatory Work for Environmental Testing and Training.” The grant was awarded to the local Georgia’s Environmental Outlook (GEO) in September 2016. Through this effort, G4G is piloting a new way of collecting, processing and calculating minimum flow requirements for Georgia. It is expected that updated EF methodology can help GoG to develop the water policies for more equitable and sustainable water use. On September 21, a project kick-off meeting was conducted, where G4G and GEO representatives introduced the project to MENRP and agreed on an environmental flow field testing timeframe and methodology. The kick-off meeting was followed by a five-day training session (including 2 days field work in Aragvi River Basin) for the representatives of MENRP, NEA and MoA. Trainings were delivered by GEO international consultants - Professors Michael McClain, Rebeca Tharme and Francisco Martinez- Capel. This activity will be finalized in Year 3. Gauging Station at Aragvi River Basin. G4G developed a draft concept paper on the improvement of the hydro-meteorological network in Aragvi River Basin. The aim of the concept paper is to identify opportunities for strengthening national hydro-meteorological data collection at the pilot level. In regard to the existing challenges, G4G, through it subcontract with GAMMA and international Water Expert Georg Petersen, provided significant support to MENRP. Within the scope of Aragvi river pilot project, on the basis of recommendations and requirements (criteria) prescribed in World Meteorological Organization (WMO) Manual on Stream Gauging Volume 1 Fieldwork, locations for installment of gauging were determined. Stations are to be devices for measuring real-time runoff of Aragvi River. The location and kind of measuring devices were agreed at a workshop and field trips with representatives of NEA. The development and implementation of the minimum network of streamflow gauging stations in the boundaries of Aragvi River Basin will enable provision of accurate data required to: Determine water availability upstream and downstream of Jinvali Dam; Develop a water allocation plan and facilitate the process of permitting the surface water abstractions; Monitor or manage reservoir water level and releases for water supply, irrigation, hydropower and environmental purposes; Protect stream ecology and other instream uses. The gauging stations are planned to be installed in Year 3. PRIVATE SECTOR & CSO STRENGTHENING Water Resource Management Awareness Campaign. To raise awareness of different stakeholders on water resource management issues, G4G produced a video conveying key messages underlining the urgency for cooperation between the government and water sector stakeholders, and publicized it during a panel discussion, via Qedi Studio and through social media outlets. The general objective of the video was to raise awareness on the potential for improved water cooperation and address needs for competing interests of water resources across different sectors. G4G also held awareness raising events for students. Students became acquainted with the different methodologies of recording river flow and data collection related to water quantity and quality. A water sampling exercise was also conducted by a representative from NEA. This was a part of the G4G
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and EIEC sponsored “Career Opportunities for Students” fair dedicated to International Water Day. Over 25 students and their lecturers from Tbilisi State University, Technical University and Ilia State University attended the event. G4G managed a WRM awareness campaign, which included an information session for journalists introducing the challenging issues related to water allocation planning and water management. The session also highlighted concrete examples of water shortages and water use conflicts between different sectors. To further streamline WRM issues, Mariam Bakhtadze, G4G Water Sector Environmentalist and Sophio Akhobadze, Director of the NGO “Regional Environmental Center Caucasus,” participated in a radio program session at Palitra TV. G4G continued its assistance to the private sector, raising their awareness on new legal requirements of water related policies under the AA. Training was delivered with the aim to encourage business sector to participate effectively in national dialogue on water policy that helps to set the strategic framework for business development. Training discussions focused on the challenges and advantages of the upcoming draft EIA law and the importance of water rights (in particular water discharge and abstraction permits and need of Environmental Flow regulations) for hydropower projects. Fresh Water Resources Management Training. During Year 2, G4G continued its support to the private sector, CSOs and GoG. G4G facilitated the process of introducing decision support systems and equipping stakeholders with tools to enable sound and informed decision-making in managing water resources. G4G facilitated the process of assessment of the existing and globally utilized tools for Water Resource Management. G4G grantee, Environment and Development (ED), prepared an inventory of software packages for WRM planning. In February, G4G organized the workshop for the technical staff of MENRP and NEA. The aim of the workshop was to discuss optimal computer programs in fresh water resources planning and management and to select suitable software for their particular needs. Workshop participants identified the WEAP system as most appropriate software for water allocation planning for Georgia. To showcase suitability of the WEAP to the local context, per MENRP’s request, G4G developed a sample of the simulation model in WEAP for the Aragvi River Basin. On May 10, G4G presented the simulation model to Teimuraz Murgulia, First Deputy Minister of MENRP, and his team in order to demonstrate WEAP program capabilities and discuss simulation results. MENRP recognized the need to apply the WEAP tool at the national level for sustainable water resource management of different river basins and reflect the interests of all water-user groups and taking into account environmental and social considerations. G4G also aimed to strengthen the capacity of the private organizations, GoG water agencies and CSOs in water resource planning and management through coaching them in selected software packages for water management. As a result, five trainings in WEAP were carried out for public and private sector stakeholders involved in the Water Resource Management field. A real example of the Aragvi Basin was used during the trainings, demonstrating program capabilities and features for how it can be used in the decision-making process. Regulatory Impact Assessment. During various high level meetings, MENRP enumerated a number of areas for support at the policy level in setting standards for water allocation. At the GoG’s request, G4G issued a RFA to conduct a RIA on the draft Water Resource Management Law. MENRP requested a detailed appraisal of the potential impacts of the new Law in order to assess potential costs and benefits of such proposed regulation. It is expected that the outcome of a RIA will be presented to GoG stakeholders and Parliament to enable MENRP to facilitate the approval process by Parliament. A detailed study is required to identify regulatory costs as follows: (a) Establishment of river basin units (law requires to establish five river basin units in Georgia); (b) development of River Basin Management Plans (and update every 6 years); (c) water abstraction/discharge licenses; and (d) water use fees. Implementation of this activity will continue in Year 3.
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4.4.2 PPD SUCCESSES AND LESSONS LEARNED G4G provided an effective forum for the private and public sector to discuss water management policy administration issues. As a result of G4G involvement, various policy recommendations have been reflected in GoG water policy reforms. To support implementation of the EU-WFD, G4G initiated adaptation of the Guideline on identification of water bodies, typology, reference conditions and classification systems to the Georgian context. This guideline is one of the 34 technical documents helping countries to implement WFD. Through developing the Guideline, G4G establishes a basis for introduction of a river basin management approach. Communication with stakeholders revealed that GoG further needs support in adapting and testing other WFD technical documents. As a result of G4G communication with the GoG, G4G received positive feedback from MENRP on water policy reforms. After being acquainted with the WEAP model, MENRP expressed a need for developing water allocation scenarios for all river basins of Georgia.
4.4.3 CHALLENGES TO ACHIEVING REFORM RESULTS Lack of coordination among the GoG institutions and a lack of awareness of the river basin management concept are seen as a challenge for introduction of the new approach of WRM in practice. G4G will continue to support the GoG in capacity strengthening and raising awareness to foster successful implementation of AA requirements. Absence of quality data remains a significant challenge to develop water balance and allocation plans. G4G is working with the MENRP and other stakeholders to fill data gaps and ensure data reliability. Approval of new tariff methodology on irrigation and drainage services remains a challenge, since the new methodology will most probably result in an increase of the current tariffs. The decision remains dependent on the adoption of the Hydro-Amelioration Law and readiness to introduce a cost-based approach to tariff setting.
4.5 TAX ENFORCEMENT AND ADMINISTRATION REFORM
REFORM OBJECTIVE Direct and immediate positive effect on tax compliance for all businesses.
4.5.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE Tax Payment Simplification Reform. Since project inception, G4G provided technical assistance to the RS for implementation of Tax Payment Simplification Reform. On December 9, 2016, the RS and G4G hosted the TPS reform launch ceremony to inform the public on the reform and its benefits, opened by Director General of the RS, Giorgi Tabuashivili, and Mission Director of USAID, Douglas Ball. G4G, through its subcontractor KEDI Studio, also produced a promotional video describing the TPS reform, its benefits, USAID’s assistance and testimonials from the private sector. The video was introduced at the TPS launch event. Through the new system, the former 125 treasury codes are reduced to a single treasury code, saving time and resources for both taxpayers and the tax administration. Tax Code Review. Estonian Corporate Income Tax Model: In March, Ivo Vanasaun, G4G’s International Tax Consultant, visited Georgia to help the MoF formulate amendments to the Tax Code introducing the Estonian CIT model and to participate in public-private discussions. On March 4, G4G organized a PPD with over 100 representatives of the private sector and civil society. Lasha Khutsishvili, the Deputy Minister of Finance, the Heads of Tax Policy and Microeconomic Forecast Departments of the MoF and Vanasaun delivered presentations, followed by a Q&A session. The overall attitude of stakeholders, especially of the private sector, towards the reform appeared positive. The recurring issues addressed at the meetings were the inclusion of financial institutions in the reform and the timing of its enactment (July 2016). As July was mid-year, companies would need to close accounts twice in the same year, facing
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more uncertainties, incurring added costs and administrative burden. The MoF took the private sector’s feedback into consideration and shifted the enactment date of the new system to January 2017. It was also decided that beginning in 2019, the financial institutions would also benefit from the new system. Business Perception Survey: On July 21, G4G, CRRC and the RS organized a presentation of the Business Perception Survey findings. Attendees included representatives of the private sector, business associations, tax consultants and audit firms. Among the speakers were the Minister of Finance, Nodar Khaduri, Head of RS, Giorgi Tabuashvili and G4G Chief of Party, Natalia Beruashvili. Findings of the Survey indicate that the attitude of the majority of surveyed companies towards the work and services of the RS is generally positive. The most notable concerns were the lack of Tax Code clarity (80% of interviewees) and the heavy burden of tax (20% identifying as very heavy, particularly among value added tax (VAT) registered businesses), despite the fact that Georgia has the lowest tax rate in the region. One of the issues raised by the private sector was that despite the low level of occurrences of temporary closure of a business during an audit, each such case has a very negative effect on an individual business and should be avoided. Tax Administration Improvement. Assessment on Production/Natural Losses: On September 8, G4G grantee, Knowledge and Experience Transfer, held a PPD on “Assessment of Production and Natural Losses.” The event was attended by representatives of the RS, MoESD, Business Ombudsman Office and private sector representatives. G4G expert, Gela Mgebrishvili, presented findings of the report on practices in Germany, Austria and Poland, summarized the main opinions expressed by stakeholders and elaborated on the reform roadmap. The importance of a fair taxable base was once again stressed by the participants. GOG CAPACITY STRENGTHENING Tax Administration Improvement. International Financial Reporting Standards (IFRS) Trainings: Due to the increasing number of audits coupled with a high level of staff turnover, the RS is facing a constant need for new tax auditors. There are insufficient internal resources in the RS to deliver IFRS trainings, and G4G expressed readiness to support IFRS trainings to the newly hired tax auditors as well as build the RS’s internal IFRS training capacity through a ToT program. In March, G4G Tax Consultant, Naira Kharkheli, together with RS leadership, identified two groups of trainees (around 25 persons in each, 52 in total) and a group of future trainers (10 persons in total). Even though the ToT session was planned for a later period, future trainers have already been involved in the tutoring of junior auditors. The trainings of tax auditors as well as ToT sessions will continue in Year 3. Tax Dispute Cases Analysis: G4G and MoF leadership agreed to conduct an analysis of tax audits considered by the MoF’s Dispute Resolution Council and the judicial system to reveal the most problematic provisions of the Tax Code and examine the consistency of the existing tax dispute resolution practice. G4G short-term tax consultants, Teimuraz Tsertsvadze and David Tomadze, conducted a screening of around 1000 tax dispute cases related to audit decisions to identify relevant cases and repetitive issues. They have delivered elaborations on key issues: Use of discretionary powers by the authorities in the chain of dispute resolution process; legal grounds for dismissal of claims and legal justification to alleviate sanctions when taxpayer acted in good faith. As a next step, the experts intend to finalize the assessment on up to 10 issues and present relevant findings and final recommendations. Tax Code Review. RIA on Estonian CIT model: G4G grantee, AYEG, completed a RIA on Estonian CIT Implementation in Georgia. The RIA assessed the costs/benefits of the two policy options: The current CIT system and proposed Estonian CIT model. RIA showed positive macroeconomic impacts (on GDP, consumption and investment) over a period of 1.5 years, despite a short-term budget deficit. It also showed that SMEs are expected to benefit the most from the new system. Based on RIA findings, the GoG made the decision to implement profit tax reform in Georgia in accordance with the Estonian CIT model. Estonian Corporate Income Tax Model: In October, Risto Kaarna, analytical consultant from the Estonian MoF, conducted his second mission to Georgia to help AYEG on RIA. Kaarna also provided additional insight on the Estonian experience and the results of the Estonian CIT Impact Assessment conducted in 2010-2011, more than 10 years after reform implementation. On December 21, the findings of the RIA were presented to MoF leadership and showed positive macroeconomic impacts (on GDP, consumption
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and investment) over a period of 1.5 years, despite a short-term budget deficit. SMEs are expected to benefit the most. In March, G4G mobilized Ivo Vanasaun, Estonian Tax Consultant, to help the MoF fine- tune the proposed draft amendments to the Tax Code. During his visit, Vanasaun conducted a series of working meetings with MoF and RS staff; Sectoral Economy and Budgetary Committee of the Parliament; and “Big Four” audit firms. The Estonian consultant provided comments on the draft amendments as well as clarification on various conceptual and administrative aspects of the Estonian system that were later incorporated in the final amendments. Recommendations that were considered included: Coverage of financial institutions into the new CIT regime; defining tax calculations in the primary rather than secondary legislation, and; when paying out dividends from profits accumulated during the period from 2008 to the enactment of the new regime, only dividend tax is paid, provided that the CIT was paid on those profits under the old regime. Corresponding amendments to the Tax Code were drafted and approved by the Parliament on May 13, 2016. PRIVATE SECTOR & CSO STRENGTHENING Tax Administration Improvement. Assessment on Production/Natural Losses: G4G grantee, Knowledge and Experience Transfer, conducted several activities under the grant program “Assessment on Natural and Production Losses for Tax Purpose.” Consultations were held with stakeholders from the private and public sectors, namely, with representatives of business associations, MoF, RS, Office of Business Ombudsman and MoESD. The grantee studied the German, Austrian and Polish experience in tax treatment of production and natural losses. As the analyses clearly show: (1) Except for excisable goods, there are no set thresholds for allowable losses. In order to be deductible, the losses and reasons for their occurrence should be properly documented internally and express real losses and not a statistical figure; (2) as opposed to Georgian practice, there are no regulations enabling automatic or quasi-automatic use of indirect methods (when assessing tax liability) or inclusion of these losses in taxable income. Use of the indirect method is restricted to cases, where internal documentation is unreliable, taxpayer does not cooperate and tax evasion is highly probable. The final roadmap and recommendations were presented on September 22. One of the main recommendations supported by all stakeholders is the introduction of electronic filing system, on a voluntary basis, and, consequently, creation of a database at the RS which can support the RS to conduct fair analyses and comparison of cases and restrict the use of indirect method only to the cases where internal documentation of losses is inconsistent and unreliable. Tax Code Review. Estonian CIT Model. See GOG CAPACITY STRENGTHENING in 5.5.1. Business Perception Survey: In order to understand the business community’s perception toward tax policy, tax authorities and administration, G4G issued a grant to CRRC to conduct a tax perception survey in Year 1. The fieldwork began in September and lasted through November. The survey covered the entire territory of Georgia and encompassed a total of 1,033 companies (with 40 % large, 40 % mid- sized and 20 % small companies). The survey focused on the following topics: Tax legislation, taxpayer services, tax returns, tax audit, tax disputes, and export and import procedures. The survey showed that the majority of the surveyed companies are satisfied with RS activities. The primary concern for the private sector consisted of tax policy issues such as tax rates and dual interpretation of Tax Code provisions. The final report was submitted in December 2015. Also, refer to SUPPORT PUBLIC PRIVATE DIALOGUE in 5.5.1 for additional information. Tax Audit Survey. In June, G4G grantee, the American Chamber of Commerce (AmCham), commenced its assignment on the ”Tax Audit Survey,” to identify and analyze the existing audit practice, in particular, the frequency of cases when there is a significant difference between the initial (after audit) and final (after appeal) assessments. At the close of Year 2, two-thousand cases have been reviewed (electronically) online to build aggregate data about the Dispute Resolution Council. AmCham member companies were then interviewed. Interviews of randomly selected registered and active businesses have also begun. The final deliverable is scheduled to be completed at the end of December 2016.
4.5.2 PPD SUCCESSES AND LESSONS LEARNED G4G continued to help the MoF in making informed, analysis-based policy decisions and serve as a catalyst for PPD on tax policy and administration issues. With G4G’s support, CIT reform has followed all the steps of comprehensive policy-making. In initial phases of concept development, the MoF, with the
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help of G4G, conducted a RIA. Throughout the assessment, several meetings and consultations with experts, audit firms and businesses were conducted. After realizing the reform’s positive macroeconomic impact (RIA), the GoG decided to initiate the legislative process. A March PPD event, organized with G4G support, also proved to be successful as the GoG addressed all concerns raised by the private sector (e.g. the timing of the reform implementation, inclusion of financial institution). 4.5.3 CHALLENGES TO ACHIEVING REFORM RESULTS The RS and taxpayer might face increased uncertainty in the initial phase after introduction of the Estonian CIT model, as procedures will be changed and are not yet defined appropriately. G4G will continue a supportive role in smooth implementation of the reform through technical assistance. The components of a country’s system of tax administration have been recently assessed with IMF Tax Administration Diagnostic Assessment Tool (TADAT) and the key strengths and weaknesses of the RS were identified. G4G included in Year 3 Work Plan the activities which will potentially address issues identified in the RS’s performance.
4.6 CUSTOMS ADMINISTRATION AND ENFORCEMENT REFORM
Elimination of barriers and inefficiencies that has an immediate impact on cross- REFORM OBJECTIVE border trade.
4.6.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE Authorized Economic Operators Program. On December 11, G4G organized an introductory meeting on AEO reform where approximately 100 participants from the private sector and civil society attended. The RS presented key aspects of the AEO concept to members of the “Gold List” program and other potential participants of the AEO program. In addition, the RS presented the concept of “Approved Exporter,” changes in customs clearance procedures, border crossing and risk management modules. On September 29, G4G organized a second PPD on AEO reform. The working group established at the RS presented completed milestones and next steps. The AEO program will gradually replace the "Gold List" program in 2018. This particular event was mostly attended by companies (carriers, freight- forwarders, customs warehouses), which do not benefit from the “Gold List” program but may be affected by the new AEO regulations. During Year 2, G4G participated in the RS Customs Advisory Council, a permanent PPD platform on customs legislation and policy. Starting from November 4, 2015, three PPDs were organized and G4G assisted with the agenda and private sector communications. GOG CAPACITY STRENGTHENING AEO Program Implementation. During Year 1, G4G helped the RS to better understand the EU AEO concept and develop the AEO Action Plan for 2015-2018. After additional consultations with RS leadership in October 2015, G4G and the RS joint AEO WG began implementation of the AEO Action Plan. The WG held regular weekly meetings to develop a draft legal framework which was finalized in July 2016. Draft amendments to the Decree of the Minister of Finance #290 set AEO authorization criteria, procedures, types of AEO certificates and associated benefits. The WG continues leading the reform and will be focused on development of technical regulations and standard operational manuals during Year 3. During a study visit to the German Central Customs Directorate in Germany during May 9-13, WG members had the opportunity to discuss challenges of AEO implementation with German colleagues. German Customs has significant experience in AEO implementation, as almost half of the companies authorized as AEOs in the EU are German companies (7,500). The participants also visited the premises of one authorized company (Mister Lady - a major clothing brand) in order to get familiar with safety and security procedures in practice.
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Customs Post-Clearance Control. Strengthening of customs post-clearance audit (PCA) is another DCFTA-related area where G4G provides technical assistance to the RS. In Year 2, G4G, in collaboration with Federal Customs Service of Germany, assisted the RS to implement the PCA Development Action Plan. Following the Action Plan, on November 11-18, Rainer Neppl and Karl Sporny, PCA officers from the Federal Customs Service of Germany, conducted a series of PCA workshops for customs officers of the RS. The workshops covered the following topics: Essential powers of PCA and legal framework; basic annual audit plan, and; rights and obligations of auditees and compliance. The central topic of the mission was the preparation of RS auditors for field audits. It was agreed with the RS that field audits will begin with a pilot project. On May 9-13, Georgian customs officials, with the support of G4G, participated in a study visit on customs PCA in the German Central Customs Directorate. The delegation included the Head of Customs Department of the RS of Georgia. The study visit included workshops, meetings and site visits. The focus of the workshop was field audits: Risk analysis, interagency and international cooperation, planning and implementation of audits. The Georgian delegation presented the draft PCA Audit Plan, developed as homework after the PCA training delivered by German experts in November 2015. German colleagues suggested that further technical assistance from German Customs Administration should be made available only after the Georgian customs audit team begins implementing field audits. The RS has implemented all necessary changes to legal framework to enable customs field audits and finalized selection of companies to be audited. ETM Customs Procedures. G4G international short-term consultants, Zoran Vujasinovic and Dejan Stojcevski, conducted the “Assessment of Customs Procedures Related to Cross-Border Electricity Trading.” During the field visit on May 30 - June 3, they conducted interviews with all key GoG stakeholders to assess the technical procedures applied by market actors, customs clearance infrastructure, as well as the compliance of customs procedures to commercial needs of perspective design of ETM. According to the assessment findings, there is good mutual understanding and trust between the key stakeholders: RS and Transmission System Operator - Georgian State Electrosystem. Currently, the RS conducts its customs clearance procedures based upon electricity flow data provided by GSE, which is a step toward successful transition to bi-directional competitive electricity trading. According to the recommendations developed by the G4G consultants, in order to enable a smooth transition to open market cross-border electricity trade, procedures should be conducted per border and not per tie-line; reporting of confirmed scheduling transactions in both directions should be simultaneous (multiple contracts and parties per each border) and an accounting and common compensation mechanism should be applied. Customs Time Release Study. G4G participated in the RS’s customs time release study. The first study was conducted in 2014, by USAID’s EPI project. This particular study was under full leadership of the RS, with G4G and other donors as members (advisors) of the WG. In January, the WG defined the scope of the study, methodology and questionnaires according to World Customs Organization’s (WCO) methodology. The field work was implemented on February 16-21, 2016, and revealed positive improvements in the area of Sanitary and Phytosanitary (SPS) and physical inspections of cargo. The study report was finalized and published in April 2016. The customs time release study is an ongoing improvement tool to assist the RS in revealing the procedural and institutional weaknesses of the Customs Administration and take corrective action. PRIVATE SECTOR & CSO STRENGTHENING No specific activates were implemented within the reporting period.
4.6.2 PPD SUCCESSES AND LESSONS LEARNED The RS acknowledged the advantages of PPD and early engagement of the private sector in the reform process. It was demonstrated by the establishment of Customs Advisory Council, a permanent PPD platform on customs legislation and policy. The latest PPD events also showed RS commitment to timely reaction and resolution of issues faced by businesses.
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4.6.3 CHALLENGES TO ACHIEVING REFORM RESULTS Implementation of the AEO program will replace the existing “Gold List” program, which provides beneficial treatment for about 150 large-scale importers and other organizations regularly involved in import-export operations. These companies may face difficulties to qualify for the AEO program due to high standards and qualification criteria to be met. In order to allow businesses to conduct a relatively smooth transition from one regime to another, the two programs should operate in parallel for a reasonable timeframe. 4.7 TRADE FACILITATION/TRANSPORT AND LOGISTICS REFORM
Elimination of barriers and inefficiencies that has an immediate impact on cross- REFORM OBJECTIVE border trade and facilitate greater integration with EU countries.
4.7.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE DCFTA. In order to facilitate informed discussion on DCFTA regulatory reforms, G4G sub-contracted TBSC Consulting to develop three policy papers on: (1) Labeling of Food Products; (2) Competition Enhancement Policy; and (3) Regulatory Framework of Usage of Food Supplements in Agriculture. The papers identified problematic areas for implementation and recommended solutions to minimize negative impacts on business. In December, a PPD was held on Labeling of Food Products focused on areas of concern as identified in the paper: (1) A reasonable transition period for new labeling rules for beef producers; (2) communication systems improvement with business operators; (3) need of implementing guidelines on labeling; (4) disproportionate penalty system; and (5) confidentiality of information. In February, a PPD was held on Competition Enhancement Policy. Attended by the Competition Agency, private sector and CSOs, the discussion was based on key findings of the paper. Both public and private sector representatives agreed that in order for the Agency to effectively exercise its powers, it is important to ensure a high level of independence and transparency, as well as raise the competence and qualification of its staff. A PPD on the Regulatory Framework of Usage of Food Supplements in Agriculture paper findings was organized in March, with participation of the MoA, Food Safety Agency (FSA), food producers and CSOs. The discussion confirmed the need of awareness raising and education among private sector stakeholders on new regulations and setting a reasonable transition period for businesses to comply with new requirements. It also revealed the necessity of creating food additives control and monitoring infrastructure (e.g. labs capable to test additives, trained FSA inspectors, etc.). All three papers incorporated feedback collected at the PPDs and were submitted to the relevant governmental institutions. State Procurement Guide. Transparent, non-discriminatory, competitive and open tendering for sustainable economic development is one of the objectives under the DCFTA. To meet this objective, and to raise the private sector’s awareness on State Procurement needs and opportunities, G4G supported the SPA in developing the illustrative Guide on State Procurement. G4G, through its subcontractor, Tree Design Studio, provided design and printing of the illustrated Guide. The Guide clearly and comprehensively describes the objectives of State Procurement, the types of procurement and procedures. Through the Guide, the SPA seeks to increase the number of businesses participating in the State Procurement process and increase competitiveness. SPA distributed the Guide to private sector representatives.
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Trade Facilitation Conference. G4G sponsored the GoG’s investment forum - “Georgia – Making Business Easy,” held on September 29, 2015, in New York, New York. The Georgian delegation was headed by the Prime Minister. Additionally, there were several business leaders from the Georgian private sector. Sectors of interest for the event included energy, manufacturing, logistics, communication, real estate and tourism. GOG CAPACITY STRENGTHENING Trade Facilitation System. In October 2015, Thomas Beck, G4G international short-term expert, finalized the analysis which revealed that expected average industry benefit of the TFS with its current limited functionality equals to an average of GEL 4.35 - 4.55 per TEU (Twenty-foot Equivalent container Unit). However, the analysis also provides the price sensitivity relative to each category of system user, demonstrating what percentage of the users would be willing to participate at varying price levels. On October 5, the findings of the TFS Tariff Structure and Economic Impact Analysis were presented to DEA. Based on the analysis, DEA will develop the TFS tariff structure. The official launch of TFS took place on May 18, at Poti Sea Port. TFS is expected to eliminate over one million paper documents annually and save 3.7 hours of operator time and 26 printed pages per shipment. The resulting savings to companies from reduced transaction costs and streamlined customs clearance procedures is estimated to be GEL 4.5 million annually. At system launch, up to 25 users were connected to the system including Poti and Batumi seaports, Maersk, Evergreen and Mediterranean Shipping Company (MSC). In parallel, the Association of Freight-Forwarders of Georgia began TFS training and a public awareness campaign under a G4G grant. The grantee will develop training materials in cooperation with DEA and prepare trainers and public awareness officers. The training sessions in Tbilisi, Poti and Batumi will begin in October 2016. According to the grant, over 200 representatives of freight-forwarding companies will be trained by the end of 2016. Any feedback, problems or suggestions raised by participants will be discussed with the DEA for further improvement of TFS. DCFTA. On March 11, G4G held an offsite workshop on technical regulations and standards under DCFTA in Kakheti. The event was co-organized by the MoESD with the purpose of educating key government officials responsible for technical regulations and standards development in best practices. G4G international trade advisor, Kevin Latner, discussed WTO’s framework on technical regulations and international best practices. The MoESD delivered presentations on DCFTA requirements regarding aspects of technical regulation, as well as the Georgian legal framework. Participants received clarification on issues including standard structure, regulatory purpose, and possible content. The event was attended by representatives of the MoJ, MoA, Ministry of Health, Labor and Social Affairs (MoHLSA) and MENRP. PRIVATE SECTOR & CSO STRENGTHENING Caucasus Transit Corridor Competitiveness Study. G4G announced a grant competition to conduct a study which will identify infrastructural, policy, technology and capacity gaps in Georgia and Azerbaijan as transit corridor countries. The selection process of grantee will be finalized in November, while the final results of the study are expected in March 2017. DCFTA. In December, G4G subcontractor, Research and Consulting Group, developed the Exporter’s Guide on Rules of Origin under DCFTA. The Guide is targeted to help current and potential exporters as well as investors interested in investing in Georgia to then export to the EU. The Guide clearly explains product requirements to be qualified as “Originated in Georgia,” as well as export-related procedures.
4.7.2 PPD SUCCESSES AND LESSONS LEARNED DCFTA driven reforms have a certain level of flexibility to be adjusted to the private sector’s current capacity. Therefore, it is crucial to have regular consultations with business operators in the process of legal drafting in order to identify potential challenges imposed by the new legislation and develop solutions, which will minimize negative impacts. Ideally, the discussions should be preceded by analysis and a level of fact-finding.
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4.7.3 CHALLENGES TO ACHIEVING REFORM RESULTS DCFTA introduces new regulatory requirements for businesses which may be perceived as a burden for compliance. If the benefits of DCFTA are not communicated effectively to the business community, there may be resistance to implementation. The successful operation of TFS requires high-level coordination between various public and private sector stakeholders, especially at the initial stage of the launch when the system could reveal faults and shortcomings, requiring prompt corrective action. G4G will closely follow the development of the system and continue to play a facilitator’s role until the system’s operation and governance reach sustainable levels.
4.8 BANKRUPTCY AND LIQUIDATION REFORM
Reformed bankruptcy regime to remove barriers to entrepreneurship, efficiently recycle REFORM OBJECTIVE assets back to productive use and restore viable businesses to financial health through business rescue.
4.8.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE Insolvency Awareness. G4G continue to hold PPD events with public and private stakeholders on insolvency reform needs and opportunities. One of the first roundtable discussions was held February 15, on the current status and future of the insolvency system in Georgia. The four international donor organizations that have evaluated the Georgian insolvency system (EBRD, IFC/WB, GiZ, USAID), along with technical experts, government officials and private sector representatives, gathered to discuss the need for an improved insolvency system as well as actions to be taken for progress. Presentations at the meeting highlighted the importance of the insolvency system for the private and financial sectors, the added benefits of an effective insolvency regime, deficiencies of the Georgian insolvency framework and low ratings in the 2016 WB “Doing Business” report. On February 17, G4G delivered a presentation on the need for comprehensive and cross-ministerial insolvency system reform to the Prime Minister at the second Investor’s Council session. Also in attendance were the Minister of Economy and Sustainable Development, Minister of Finance, Director General of the Revenue Service, Heads of EBRD, IFC, Asian Development Bank (ADB) and associations who are standing members of the Council (AmCham, Business Association of Georgia (BAG), and the International Chamber of Commerce (ICC)). G4G grantee, Association of Law Firms in Georgia (ALFG), held two PPD sessions, several roundtable discussions and a conference under the grant program “Insolvency Reform Advocacy Campaign.” The first PPD session was held on June 25-26, with members of the Insolvency Reform Advocacy Task Force (IRATF), representatives of different Government Institutions (MoESD, MoJ, MoF, National Bureau of Enforcement (NBE), and Business Ombudsman) and members of the legal drafting committee convened through GiZ working on the draft Insolvency Law. Participants emphasized problematic cases in their sector and presented their perspectives of insolvency. The second PPD session was held on August 9. In addition to the first PPD session participants, the second session was attended by judiciary and private sector representatives. Deputy Minister of Justice, Mikheil Sarjveladze, and Deputy Minister of Economy and Sustainable Development, Nikoloz Gagua, highlighted the importance of Insolvency Reform in Georgia and the readiness of the GoG to continue collaboration with the private sector on reform activities. In the final session of the event, the grantee presented its Insolvency Reform Sustainability Plan. On July 14-15, ALFG, held a conference: “When Crisis Generates Opportunities.” The conference, attended by approximately 50 business and public sector representatives, served to mobilize and educate broader groups within the business community, public officials and experts working in insolvency. Insolvency practitioners gave the following presentations: Economic Significance of Insolvency; Managing Business under Insolvency; RS as a Creditor, and; Creditors Rights and Rules of Claim Recovery and Disposal of Assets and Maximization of Proceeds. The conference entailed five
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sessions, each followed by interactive Q&A sessions. The conclusions developed during the conference are expected to contribute to informed discussions of the official drafting committee tasked with amending the current law. GOG CAPACITY STRENGTHENING Concept Development. ALFG developed the Insolvency Reform Sustainability Plan in the framework of the grant program “Insolvency Reform Advocacy Campaign.” The Plan was distributed during the second PPD session among the participants and is used by the members of the legal drafting committee convened through GiZ working on the draft Insolvency Law. PRIVATE SECTOR & CSO STRENGTHENING Advocate for Insolvency Reform. G4G presented shortfalls of the Insolvency System in Georgia to EPAC during a coalition meeting held on October 20. Members expressed their interest to advocate for the reform and readiness to participate in dialogue with the GoG. In addition, G4G held meetings with representatives of GLFA and AmCham to discuss findings and recommendations of the “Assessment of the Insolvency System in Georgia.” G4G designed a grant program on an Insolvency Reform Advocacy Campaign. The objective of the grant was to create a formidable advocacy campaign for insolvency reform by making it a prioritized interest of the public. During April-August, ALFG implemented the grant program. Throughout the assignment, ALFG held several workshops, interviews and lectures, followed by two PPD sessions with the representatives of government and business sector. The effort has contributed to building a consensus in the business community and the Government regarding the urgency for reforming the insolvency system. Refer to Insolvency Awareness under the section “SUPPORT PUBLIC PRIVATE DIALOGUE” in 5.8.1. 4.8.2 PPD SUCCESSES AND LESSONS LEARNED PPD sessions revealed a high level of interest on the need to reform the insolvency system in Georgia from both public and private sector stakeholders. Due to the MoESD’s recognition of the business sector’s interest level in insolvency, PPD will serve as a primary catalyst to move this reform forward. With the GoG’s (MoESD, MoJ) current level of interest in the area, and openness to further discussion with the private sector, promise exists for comprehensive reform of the insolvency system. 4.8.3 CHALLENGES TO ACHIEVING REFORM RESULTS Despite agreement between the MoJ and GiZ, which resulted in forming the legal drafting committee working on the draft Insolvency Law, the process is moving only in minor increments. Even though it was agreed that the first draft of the Law would be developed by the end of September, main concepts of the draft are not agreed upon at this time. There is still controversy over the NBE’s role as a trustee in insolvency proceedings. 4.9 LAND OWNERSHIP REGISTRATION REFORM
Certainty, clarity and predictability in land rights that is crucial for effective economic REFORM OBJECTIVE development of land.
4.9.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE Land Registration Reform PPD. On April 11, G4G, through its grantee BEC, held a PPD event in Parliament to discuss the new draft Law on Registration of Property Rights on Land Plots and Improvement of Cadastral Data. The event was led by the Chairman of the Legal Committee of the Parliament, Vakhtang Khmaladze. Representatives of WB, GiZ, Transparency International (TI) and G4G highlighted the importance of “systemic registration” and discussed the disadvantages of “sporadic registration” promoted under the State project. The event was attended by 40 representatives of the public sector, NGOs, donor organizations and members of the Legal, Agrarian and Sectoral Economy Committees. After the PPD session, the Legal Committee of the Parliament provided its official legal conclusion to the MoJ on the draft Law. The conclusion reflected all areas raised during the PPD. The
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document highlighted the importance of systemic registration as the only mechanism to solve the problems of land registration. It also suggested to clearly separate the provisions regulating systemic registration under the Pilot project and the sporadic registration under the State project, and recommended not stimulating the sporadic registration and limiting it to only urgent cases. As a result, the MoJ revised the draft Law to incorporate the comments from Parliament. The recommendations on separating the provisions regulating systemic and sporadic registration as well as clarifying the terminology were taken into consideration and the revised version of the draft Law was submitted to the Parliament. GOG CAPACITY STRENGTHENING Preparation for Pilot. On June 3, Parliament adopted the Law on Systemic and Sporadic Registration of Property Rights on Land Plots and Improvement of Cadastral Data. The provisions of the Law regulating systemic registration were prepared with G4G’s support and followed the majority of G4G recommendations in the initial version of the draft (May 2015). The provisions regulating sporadic registration were added by the MoJ in the later version of the draft Law, which was eventually submitted to the Parliament on March 24, 2016. All major comments and recommendations made by G4G during the First and Second Parliamentary hearing of the draft Law were mainly related to the provisions on sporadic registration. PRIVATE SECTOR & CSO STRENGTHENING Advocacy on the Land Registration Reform. To advocate for Land Registration Reform, G4G conducted meetings with various executive and legislative branch stakeholders, raised media representatives’ awareness on land reform and mobilized CSOs around the issue. In February 2, G4G held an EPAC working group meeting on Land Registration Reform, where members expressed interest and readiness to advocate for the systemic approach of the land registration. On March 10, EPAC submitted a joint letter to the Prime Minister, Ministers of Justice and Economy and Sustainable Development, and several parliamentarians, advocating for a systemic approach in land registration consistent with the initial draft law prepared with G4G assistance. In April-May, as part of the advocacy campaign, G4G grantee, BEC, organized workshops and PPDs in the Parliament to discuss the draft Law on Registration of Property Rights on Land Plots and Improvement of Cadastral Data. To prepare MPs for the first hearing of the draft Law, on April 8, BEC organized a workshop attended by various stakeholders, such as WB, GIZ, TI Georgia and the Georgian Farmers Association. The objective of the workshop was to exchange opinions on the draft Law. Based on comments, BEC prepared a memo for the MPs to educate and equip them with necessary information for the PPD. Discussions focused on the advantages of systemic registration as opposed to sporadic registration promoted under the State project. Between the first and the second Parliamentary hearings, on May 4, G4G and BEC organized a second workshop for interested parties to discuss in detail the draft Law. Based on this discussion, BEC developed a letter of recommendation for MPs, which was submitted to the Parliament’s Legal Committee. The letter highlighted the importance of putting in the law the declaration of Government’s intention to implement systemic registration throughout Georgia based on pilot project results. It also contained comments on several technical aspects of the Law. The recommendations were discussed at the second hearing of the Legal Committee on May 6. 4.9.2 PPD SUCCESSES AND LESSONS LEARNED PPD at the Parliament revealed a high level of interest among MPs on the need for Land Registration Reform. Donor organizations and NGOs working with the GoG on the reform provided MPs with detailed information on the advantages of systemic land registration. This resulted in separating the provisions regulating the systemic and sporadic registrations as well as clarifying the terminology. 4.9.3 CHALLENGES TO ACHIEVING REFORM RESULTS The MoJ displays deep skepticism on systemic Land Registration Reform, and views PPD/outreach as political advocacy rather than technical assistance. Moreover, the sporadic approach is preferred by the
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MoJ over the systemic approach, which leads G4G to question if there is sufficient commitment from the GoG to conduct the pilot properly.
4.10 STATE PROCUREMENT SYSTEM
REFORM OBJECTIVE To be updated.
4.10.1 PROGRESS AGAINST THE WORK PLAN
SUPPORT PUBLIC PRIVATE DIALOGUE PPD on State Procurement System. On February 23, G4G, in cooperation with Infrastructure Construction Companies Association (ICCA), facilitated a PPD on the State Procurement System. Discussion topics included the rule for defining overhead expenses and planned profit during the procurement of construction services by the State. Attendees included Ekaterine Sepashvili, Deputy Minister of Infrastructure and Regional Development, Zurab Dznelashvili, Deputy Business Ombudsman, representatives of the SPA, members of the ICCA and other private stakeholders. By the initiative of SPA’s leadership to inform the private sector on all novelties in the State Procurement System, on April 15, G4G and the SPA held a PPD event on State Procurement. Fifty representatives attended the event from civil society and the private sector. Head of the SPA, Levan Razmadze announced that the Agency plans to meet regularly with business representatives to better understand their needs, identify common challenges and work together on solutions. EPAC members that attended stated that the majority of their recommendations were considered and are to be implemented in September. Because of the high interest from the private sector to be involved in regular dialogue with the Agency, G4G and SPA organized additional PPD events in Tbilisi and Batumi (June-July). In the course of these PPDs, the SPA presented new methods of procurement, including two-stage tenders and tenders without a reversed auction, which was later introduced from August 2016. The two-stage tender will address one of the major concerns of the private sector raised during previous PPDs, that the current system neglects quality criteria for goods and services. GOG CAPACITY STRENGTHENING The Business Perception Survey on State Procurement, conducted by CRRC (June), identified a lack of information and knowledge as one of the potential reasons of low business participation in State Procurement. To address this deficiency, G4G’s local communication expert, Konstantine Magradze, commenced his assignment on “Development of a Communication Strategy for State Procurement,” to equip the SPA with tools to better reach the private sector on State Procurement opportunities. The communication strategy should use a targeted approach to minimize skepticism towards state tenders. PRIVATE SECTOR & CSO STRENGTHENING Business Survey on State Procurement. G4G designed a grant program to conduct a comprehensive business survey on State Procurement in Tbilisi and the regions to determine the deficiencies of the system as perceived by businesses. CRRC was awarded the grant and commenced its assignment in February 2016. Data collection, which included 1000 interviews, was conducted from May to June. The survey identified a lack of information and knowledge as one of the potential reasons of low business participation. According to survey findings, a relatively large number of companies who have never participated in state tenders have limited information on state tenders as well as other opportunities in State Procurement. ToT Trainings on State Procurement. During the period of May 31 - June 5, G4G, in cooperation with the SPA, delivered a six-day ToT session on the State Procurement System in Georgia to EPAC members. Participants received detailed information on legislation, dispute resolution, the electronic system of State Procurement and operations of the SPA. Trained participants will, in turn, deliver this knowledge to their member organizations.
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4.10.2 PPD SUCCESSES AND LESSONS LEARNED During the PPDs, Head of the SPA, Levan Razmadze, expressed willingness to regularly meet with private sector representatives to better understand their needs, identify common business challenges and work together to solve them. As a result of PPDs, two-stage tenders and tenders without a reversed auction were introduced in August 2016. The two-stage tender addressed one of the major concerns of the private sector, that the previous system neglected quality criteria for goods and services.
4.10.3 CHALLENGES TO ACHIEVING REFORM RESULTS None at present. 4.11 PENSION REFORM
Effective public dialogue on anticipated pension reform which is crucial to its acceptance REFORM OBJECTIVE by the public.
4.11.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE PPD on Pension Reform. On April 5, G4G conducted a PPD event to discuss the Pension Reform concept approved by the GoG. Vice Prime Minister and Minister of Economy and Sustainable Development of Georgia, Dimitri Kumsishvili, opened the session and highlighted the importance of the reform. Otar Dzidzikashvili, Head of the Capital Market Development and Pension Reform Department, presented the key features of the reform proposal followed by WB representatives who gave an overview of pension reform in Central and Eastern European countries. The ‘automatic enrollment’ model was discussed using the example of the United Kingdom (UK) and New Zealand pension systems, presented by UK Pension Regulator and National Employment Savings Trust (NEST) representatives. A common theme in questions from participants was the investment strategy of the pension fund. Following the PPD event, MoESD, WB consultants, a representative of UK Pension Regulator and G4G participated in a discussion on the Pension Reform concept with Parliamentary Committees of Sectoral Economy, Finance and Budgetary Issues and Health and Social Protection. Questions were raised by MPs on management of the Pension Fund and investment policy. G4G grantee, BEC, organized a Pension Reform workshop, which brought together experts, think tanks, unions, commercial banks and other large employers to discuss concerns that exist in regards to the current Pension Reform concept. Based on these discussions, BEC has prepared and distributed the paper entitled “Overview of the Current Pension Reform and the Stakeholders’ Opinions” to MPs. Following the workshop, BEC organized a PPD on pension reform at the Parliament of Georgia to discuss Pension Reform together with MPs and the GoG. The event also aimed to come closer to an agreement on the major components of the proposed reform and to enhance more informed participation of the MPs during adoption of the legislative package. GOG CAPACITY STRENGTHENING Public Outreach. Following the MoESD’s request, G4G mobilized an international public outreach advisor to develop the Pension Reform Public Outreach Strategy and Action Plan. The Strategy is expected to help the Government ensure maximum participation in the new Pension System by increasing awareness of the reform of the population and enable them to make an educated decision on participation. To support the GoG’s request, G4G hired international PR expert, Rafal Szymczak, and local PR expert, Anna Tskhovrebova, who will be consequently hired by Pension Agency to be established in 2017. The work on Pension Reform Public Outreach Strategy and Action Plan began in mid-September. The first visit of international consultant took place on September 26 – 30 and aimed to explore stakeholders’ opinions regarding Pension Reform, as well as to get detailed information on the Government’s plans for the reform’s implementation. G4G held 15 meetings with government institutions, employer’s
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organizations, trade unions, financial industry representatives, the Georgian Stock Exchange and independent experts. The following key findings were identified: Implementation of the reform is generally supported (with some doubts and question) by stakeholders; the reform is seen as important for the economy of Georgia; reform implementation constraints could be the lack of credibility of Georgian politicians and the government. Also, there are conflicting perspectives on how employers will influence (encouraging/discouraging) participation and projections of employees’ participation rates. All observations will be further discussed during Szymczak’s next visit through interviews with communications specialists, sociological experts, and during focus group meetings. PRIVATE SECTOR & CSO STRENGTHENING Pension Reform Awareness Rising. G4G organized a media tour on pension reform to train journalists on critical issues in regards to pension reform. For further information, refer to section 5.1.1, SUPPORT PUBLIC PRIVATE DIALOGUE, Engage Media in the National PPD. Regulatory Impact Assessment. G4G awarded a grant to ISET Policy Institute to conduct a RIA on Pension Reform. The first draft of the report shall be prepared by the middle of November and the final one by the end of January 2017. 4.11.2 PPD SUCCESSES AND LESSONS LEARNED The first PPD event on Pension Reform was widely successful and informative, but also revealed some drawbacks in the reform process. Particularly, MPs were not fully engaged in the reform, which would definitely be an impediment in the legislative portion of the reform process. For this reason, BEC organized a PPD session at the Parliament of Georgia to engage MPs in the reform process and bring both executive and legislative bodies on the same page. 4.11.3 CHALLENGES TO ACHIEVING REFORM RESULTS The success of the new pension system will largely depend on the number of participants in the system. An effective PPD and outreach strategy is an important success factor, since the system is voluntary and potential participants may be skeptical. To address this issue, G4G is assisting the GoG in organizing PPDs as well as designing the Pension Reform Public Outreach Strategy. The GoG will heavily rely on RIA to tackle skepticism on the reform.
4.12 CAPITAL MARKETS REFORM
Effective public dialogue on anticipated capital market reform to stimulate participation by REFORM OBJECTIVE business community.
4.12.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE Capital Market PPD. No specific activities were planned during the reporting period. GOVERNMENT OF GEORGIA CAPACITY STRENGTHENING Capital Market Reform Roadmap Implementation. In Year 2, G4G continued supporting the GoG in the development of the strategy on Capital Market Reform. The MoESD prepared the Capital Market Development Strategy and Action Plan, relying on findings from the Capital Markets Diagnostic Study conducted by ADB and G4G (July 2015) and PPD sessions organized by G4G in Year 1. The GoG approved the Strategy and Action Plan in May 2016. In Year 2, G4G finalized the diagnostic study of the legal context of Georgian capital markets. The report includes a detailed analysis of securities legislation in Georgia and lays out principle-based legal recommendations as legislative extensions to the recommendations proposed by the Capital Markets Diagnostic Study.
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Quick changes were made in the NBG regulation to allow corporate securities be used for collateral by the banks. In addition, the GoG amended the Law on Registration Fees to eliminate the 0.1% listing fee on the Georgian Stock Exchange. These changes were in line with the recommendations made in the Capital Markets Diagnostic Study. One of the immediate steps under the Capital Markets Development Strategy is the development of the new Law on Investment Funds. In Year 3, G4G will provide technical assistance to MoESD with regard to drafting the Law on Investment Funds. Minority Shareholder Protection Rights. In December, G4G was invited to participate in the MoESD’s WG tasked with improving Georgia’s indicators related to minority shareholder rights protection under the WB “Doing Business” report. The WG is led by Irma Kavtaradze, Deputy Minister of Economy and Sustainable Development. G4G provided recommendations on possible legal amendments related to protection of minority shareholders’ rights. As a next step, the drafting committee was organized by the Investor’s Council and led by Irma Kavtaradze. The committee consisted of representatives from the MoJ, Prime Minister’s Office, Parliament, Georgian Stock Exchange and G4G. The amendments to the Law on Securities Markets of Georgia and to the Law on Entrepreneurs were drafted to improve protection of minority shareholder rights. G4G was the only international donor organization represented in the committee and played an essential role in reconciling differing views between the public and private sectors in light of the government’s goal of improving its “Doing Business” ranking without jeopardizing private sector interests. In late February, the relevant amendments to the Law on Securities Markets and to the Law on Entrepreneurs were adopted by the Parliament. Amendments to the Law on Securities Markets improve transparency by introducing additional control mechanisms to ensure authentic financial reporting and improve corporate governance practices. The amendments to the Law on Entrepreneurs deal with the annual and interim dividend distribution, grants preemptive rights to shareholders to participate in capital rising pro rata, and protects the voting rights of particular asset classes. Study Tour in Turkey on Electricity Trading and setting up the Market Clearing House in Georgia. G4G conducted preparatory work for a study tour in Turkey, where high-level meetings with Borsa Istanbul and Takas Bank (clearing, settlement and custody bank in Turkey), have been organized. Takas Bank expressed readiness to host a Georgian energy and capital markets delegation for a study tour at offices in Istanbul as well as provide advisory support in setting up the respective clearing house in Georgia. Borsa Istanbul provided an overview how the Over the Counter (OTC) market operates in Turkey and a presentation of the Turkish Capital Market. The presentation was shared to the MoESD, which is considering the idea of establishing a Bond Markets Association in Georgia. PRIVATE SECTOR AND CSO STRENGTHENING G4G met with representatives of IFC Advisory Services Group in Eastern Europe and Central Asia to discuss activities for private sector development in Georgia, in particular, corporate governance issues. G4G plans to build the capacity of private sector companies - the potential issuers of securities - on achieving organizational transformation and improving their company risk profile, which will help to create attractive securities on the local capital market. On July 7, G4G met with securities brokerage firm, Galt & Taggart, to discuss challenges the private sector faces and areas that need to be improved to support the development of local capital markets. It was highlighted during the meeting that implementation of a comprehensive Capital Market Reform will require significant private sector engagement. It was therefore proposed to establish an advisory committee with the participation of major private sector stakeholders to confer with government officials on a regular basis on the status of reform implementation. 4.12.2 PPD SUCCESSES AND LESSONS LEARNED No specific PPD activities were planned during the reporting period.
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4.12.3 CHALLENGES TO ACHIEVING REFORM RESULTS Changes in the GoG’s Capital Market Working Group (CMWG) led to revision of the initial concept of the capital market reform and development of the new strategy and action plan resulted in delay of reform advancement. There is a lack of commitment in the near future to take initiative on this reform.
4.13 CROP INSURANCE REFORM
REFORM OBJECTIVE Immediate increase in access to finance for rural businesses.
4.13.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC-PRIVATE DIALOGUE PPD on Crop Insurance. ISET, grantee for implementation of the RIA on Crop Insurance reform, and G4G, held meetings with private sector stakeholders to discuss the crop insurance model. On November 5, ISET organized a PPD event to present the findings of the RIA report to stakeholders. The RIA findings stimulated an informative discussion among Agricultural Project Management Agency (APMA) of the MoA, insurance companies and field experts regarding the effectiveness of the proposed models. GOVERNMENT OF GEORGIA CAPACITY STRENGTHENING Regulatory Impact Assessment. In Year 2, ISET completed the RIA on Crop Insurance. The RIA assessed the costs-benefit of two policy options: Currently implemented pilot project or establishment of public-private partnership through National Agricultural Risk Management Agency (NARMA), the so called NARMA model. The assessment concluded that introduction of NARMA might have more potential for long-term development of the agricultural insurance market in Georgia and is more cost-effective compared to the first option. However, this is conditional to the willingness of all parties involved to commit to this long-term process and invest the required resources (financial and intellectual). APMA will shape the final design of the long-term state agro-insurance system based on RIA results. Legal Drafting. The RIA revealed that the suggested NARMA model could be effective, provided the parties (including the state) are willing and ready to invest more financial resources. The RIA also revealed the need for proper information gathering through pilot projects. It was decided to continue the pilot project and postpone the NARMA concept until 2017. PRIVATE SECTOR AND CSO STRENGTHENING No specific activities were planned during the reporting period.
4.13.2 PPD SUCCESSES AND LESSONS LEARNED PPDs held in the course of RIA implementation proved to be an essential part of the decision-making process. The private sector’s feedback has been well received by APMA leadership.
4.13.3 CHALLENGES TO ACHIEVING REFORM RESULTS Insurance companies have been skeptical regarding NARMA, particularly after the losses incurred in the pilot project. They have also voiced concerns that their long-term commitment may not be possible unless a long-term commitment is made by the government for larger sums to achieve sufficient market penetration.
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4.14 INNOVATION AND TECHNOLOGY POLICY
Immediate improvement on Innovation and Technology regime vital for Small and Medium REFORM OBJECTIVE Enterprise (SME) development and access to finance for innovation.
4.14.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC-PRIVATE DIALOGUE Legal Framework. Law on Innovation: In January, G4G and GITA organized a PPD event on the draft Law on Innovation. The draft was circulated among participants prior to the event. Over 30 people from the private and public sectors participated in the discussion. The Parliament adopted the new Law on Innovations on July 12, 2016. Law on E-Commerce: On September 30, MoESD, with G4G support, organized a PPD with private sector representatives on the main principles of the draft Law on E-Commerce. The event was attended by 24 intermediary service provider companies such as internet service providers (ISPs), hosting companies and e-commerce business representatives. Participants agreed on the main principles of the draft Law and expressed readiness to review the draft in detail and provide additional comments and suggestions in written form to be discussed during the next PPD. Awareness Raising. In September, G4G, in collaboration with GITA, organized a media study tour on innovation and technology. For further information, refer to section 5.1.1, SUPPORT PUBLIC PRIVATE DIALOGUE, Engage Media in the National PPD. In March, G4G, in cooperation with GITA and international youth organization AIESEC, organized the first annual “Youth Innovation Summit 2016.” For further information, refer to section 5.1.1, Engage Youth in the National PPD, under the section “SUPPORT PUBLIC-PRIVATE DIALOGUE.” GOG CAPACITY STRENGTHENING Legal Framework. Law on Innovation: G4G has been actively cooperating with GITA to develop innovation and technology policy. G4G representatives continued to participate in four WGs organized by GITA to facilitate: (1) Legislative Reforms; (2) Innovative Infrastructure; (3) Education and Science; and (4) PR and Publicity. On July 12, 2016, the Parliament adopted the new Law on Innovations. The Law regulates funding of innovation activities in the country and the development of innovation infrastructure. In addition, the Law protects the legal rights of innovators. G4G has provided technical assistance throughout the drafting process. Law on e-Commerce: In November 2015, MoESD and G4G established a WG for e-Commerce Law development and review. G4G Advisors, Malkhaz Nikolashvili and Tamar Buadze, were nominated as the WG members. In June, the MoESD circulated the first draft among GoG institutions and held the first interagency meeting. In September, the draft was presented to broader audience of GoG agencies as well as the private sector. Adoption of the Law on e-Commerce is part of the government’s commitment under the AA. The aim of the Law is the protection of the consumers by making the information services more transparent and standardized. In addition, the Law on e-Commerce will regulate the rights and obligations of intermediary service providers in the e-commerce process. G4G reviewed the draft based upon the EU Directive as well as upon the laws of several EU member-states. The adoption of the Law is planned for the Autumn Session of the Parliament this year. Innovation Policy Study Tour. In October, G4G and WB jointly organized the innovation and technology legislation study visit to Belgrade, Serbia. The participants included members of the Legislative Reform WG. The visit was hosted by the Serbian Innovation Fund, whereby Serbian counterparts shared their experience on the implementation of innovation promotion legislation and activities. The participants found the visit particularly useful for advancing the proposed Georgian regulatory framework package on innovation promotion.
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In March, with G4G support from legislative reform WG members visited the US to learn about legislative mechanisms of promotion and management of innovation, technology transfer and commercialization mechanisms utilized in the US. Meetings were held to discuss the legislative framework for innovation and technology development, technology transfer and commercialization, innovation centers and funds management with representatives of public and private institutions. These discussions included representatives from: Center for Innovative Technology, Angel Resource Institute (ARI), United States Patent and Trademark Organization (USPTO), 1776 Incubator, Germantown Innovation Center, South Asia & Eurasia Office of Global Research (OGR) at the National Institute of Health (NIH), Deloitte Monitor, Harvard University Office of Technology Development, Technology Licensing Office of Massachusetts Institute of Technology (MIT) and Tech Transfer Group. The participants also met Dr. Vaughan Turekian, the Science and Technology Adviser to the US Secretary of State. Innovation Ecosystem. Malkhaz Nikolashvili developed the template of the Innovation Centers Financial Business Plan which can be used by innovation centers and laboratories to be opened throughout the Georgia. PRIVATE SECTOR AND CSO STRENGTHENING Sector Study. Sector Study. G4G in coordination with GITA, design a grant program “Georgian Innovation and Technology Sector Study.” Under the grant program the methodology and the first annual sector study for 2016 will be developed. The study will identify the key areas and fields, where Georgia has competitive advantage and prepare the outline of the sector in Georgia: describe the development progress as well as prepare the investment-attractive handbook. The report should be conducted on annual basis, to trigger the development and identify new challenges year by year. As part of the sector study grantee have to prepare the directory of the innovations and sector players (innovative businesses and professionals). The study will be conducted in Year 3. Regional Development. In Year 2, G4G announced the grant program for “Regional Innovation Events” and selected a winner – NGO Elva. Under the contemplated program, the grantee is expected to conduct ten awareness/training sessions and organize conferences in different regions of Georgia with the focus on innovation development policy and entrepreneurship.
4.14.2 PPD SUCCESSES AND LESSONS LEARNED G4G continues consultations and discussions with MoESD and GITA, the private sector, media and CSOs around the legislation and policy development on innovation. By actively engaging the private sector and interested CSOs, G4G will help to ensure that proposed incentives, policies and infrastructure are conducive to innovation development in Georgia. 4.14.3 CHALLENGES TO ACHIEVING REFORM RESULTS Innovation is a relatively new policy area for Georgia, with public awareness and understanding being limited at this time. With limited public knowledge of the programs and opportunities GITA has developed, innovative activity from the public is low, and public feedback on legislation remains limited.
4.15 BUILDING CODE REFORM
Effective outreach will raise awareness and preparedness on new building regulations for REFORM OBJECTIVE sector stakeholders.
4.15.1 PROGRESS AGAINST THE WORK PLAN SUPPORT PUBLIC PRIVATE DIALOGUE No specific activities were planned during the reporting period. GOG CAPACITY STRENGTHENING
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On January 28, 2016, GoG approved Government Resolution no. 41, on Non-Structural Building Code, developed with USAID EPI support in accordance with international best practices. New Non-Structural Building Code will become effective in January 2017. The effective enforcement of the new regulation will depend on the relevant capacity of central and local government institutions involved in construction permitting and inspection, therefore G4G designed a grant program to train government officials and professionals in the construction industry. In June, G4G selected Georgian Institute of Building (GIB) to implement the grant program – “Building Code Awareness Raising and Training.” As a result of the grant program, 150 civil servants responsible for construction permitting and inspection and 75 professionals from the private sector will be trained on the Non-Structural Building Code. The intensive course will be delivered in all regions of Georgia. The grant program also includes a ToT component for sustainability. During Year 2, GIB conducted Phase I ToT sessions in both East and West Georgia. The ToT participants included officials from the GoG and municipalities responsible for issuing construction permits and inspections as well as several private sector representatives. The purpose of the training is to help the GoG to build a trainer network capable to provide Non-Structural Building Code training to the construction officials in the future. GIB delivered Phase I of training to the staff of Tbilisi, Kvemo-Kartli, and Mtskheta-Mtianeti Municipalities, as well as MoESD, Technical and Construction Supervising Agency and the private sector. The training covered the following topics: Use and occupancy classification; types of construction; general building heights and areas; fire and smoke protection features and protection systems; means of egress and accessibility; detailed occupancy requirements; exterior wall coverings and roofs. Trainees were given assignments for Phase II training, where sample designs (for apartment residential building, mixed use high-rise building, school and shopping mall) will be discussed in detail.
PRIVATE SECTOR & CSO STRENGTHENING Building Code Awareness Raising. Refer to “GOG CAPACITY STRENGTHENING” under section 5.15.1.
4.15.2 PPD SUCCESSES AND LESSONS LEARNED None noted as of yet.
4.15.3 CHALLENGES TO ACHIEVING REFORM RESULTS The new requirements may increase compliance costs for construction businesses. If not communicated effectively, the new regulations could face resistance from the private sector.
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5. WORK PLAN OUTPUT TABLE Component Activities Outputs Timing Comments Description Status Added By 1. Overall Institutionalized Framework for Public Consultation Maturity: Map/Identify Lead: Tamar Kapianidze
Priority: High Impact: Sustainable institutionalized dialogue Counterparts: MoESD, RS, MoA, MoE, MoJ, MoF, platform will improve the quality of all IDFI,TI, Youth Parliament of Georgia legislation. Creating the culture of collaborative consultation. 1.1. Support Public 1.1.1. Support National PPD Platform. (1) Recommendations Complete WP2 Oct-15 First TAG and DCFTA Private Dialogue Assist MoESD in establishing TAG: a) Support on TAG Standard Sep-16 subcommittee meeting development of the standard operating Operating conducted May-16. procedures for the establishment and ongoing Procedures Leadership and management of a TAG; b) Work with MoESD and management structure in relevant civil society organizations to conduct place. one TAG meeting, and subcommittee meetings as appropriate.
(2) Based on the findings of the Assessments on 1 conference Complete WP2 Nov-15 Two conferences held in Collaborative Governance Gaps, in cooperation Dec-15 Oct-15. with the other USAID projects (GGI, ACCESS) organize a conference on PPD lessons learned.
(3) Organize PPD events on contentious policy 3 PPD events Complete WP2 Oct-15 In total 54 PPDs were reform issues. Sep-16 held on various policy reforms. (4) Assist the Georgian Investment Council Economic Policy Complete WP2 Oct-15 Expertise provided on platform. Analysis/Papers Sep-16 taxation and minority shareholder rights. (5) Support Business-Parliament Platform: 3-5 sessions Complete WP2 Oct-15 Four sessions held: Two Establish thematic PPD discussions in G4G Sep-16 sessions held on Land reform areas. Registration reform, one on Pension Reform and one on RIA.
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1.1.2. Engage Media in the National PPD. (1) Report with the Complete WP1 Feb-15 Identify constraints that economic journalists face assessment and Feb-16 in covering reforms. recommendations
(2) Based on the findings of assessment on 10 Capacity In Progress WP2 Nov-15 Five training sessions constraints journalists face in covering reforms, Building Trainings Dec-16 held. End date moved conduct capacity building trainings for economic from Sep-16 to Dec-16 profile journalists. due to the decision to bring the journalist from an international media outlet to conduct master classes. (3) Conduct trainings on G4G reforms and site 2 trainings, 2 site Complete WP2 Oct-15 Three site visits held, visits for WG member journalists. visits Sep-16 topics included pension reform; competitive electricity markets and innovations and technology. (4) Conduct "Coffee & Conversation" sessions on 3 coffee & Complete WP2 Oct-15 Four sessions held, general PPD issues. conversation Sep-16 topics included: Water sessions resource management, EBRD's investment council, pension reform and land registration. 1.1.3. Engage Youth in the National PPD. Youth debates on In Progress WP2 Oct-15 End date moved from (1) Support Youth Debate. G4G reforms Sep-16 Sep-16 to May-17 due to RFA re-announcement.
(2) Build capacity of youth to effectively 3-5 capacity Complete WP2 Oct-15 communicate and advocate for reforms. The building workshops Sep-16 topics cover but not limited to leadership, public speaking, civic engagement, and youth role in public policy/reforms. (3) Conduct Job Fair in cooperation with 2 job fairs Complete WP2 Nov-15 One job fair completed in Governmental Institutions and Business Sector. June-16 cooperation with Together with governmental institutions GNERC; One in (Academy of the Ministry of Finance, Training cooperation with IBSU. Center of the Ministry of Justice) G4G will organize a job fair for the students interested in building their carrier in public sector. Another job fair will be organized in cooperation with business association to provide job opportunities for students interested in working in private
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sector.
1.1.4. Engage Women in the National PPD. Annual Conference Complete WP2 16-Mar (1) Strengthen women’s participation in policy Women’s Role in making and economic reforms. Economic Growth and Policy Development (2) Build the capacity and increase leadership 2-3 workshops Postponed WP2 Oct-15 Postponed to Yr 3. skills of female students. Sep-16 (3) Conduct consultation sessions for women 1-2 capacity Complete WP2 Oct-15 entrepreneurs to better advocate and involve in building workshops Sep-16 policy making process. 1.1.5. Develop and Implement Reform Design reform Complete WP1 Feb-15 (a) Concept model- Progress Tracking System. progress tracking Sep-18 complete. (1) Design reform progress tracking system. system: (b) Operational Business (a) Concept Model; Plan-in progress. (b) Operational (c) Business and System Business Plan; Requirements-in (c) Business and progress. System Requirements.
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(2) Implement reform tracking system Reform tracking In Progress WP1 Feb-15 Working prototype system Sep-18 complete. implementation: (a) Working Prototype; (b) Baseline data entry; (c) Operational System/website; (d) Sustainability Plan; (e) Three - five trainings and workshops.
1.1.6. Develop and Implement PPD Tracking PPD Tracking In progress WP1 Jul-15 Concept Model- System. Develop and Implement PPD Tracking System Sep-18 complete. System System. development and development in progress implementation by IDFI.
1.2. GoG Capacity 1.2.1. Support National PPD Platform. Two workshops Complete WP1 Aug-15 Strengthening Consultation and education for GoG officials to Sep-16 support establishment of the Trade Advisory Group. 1.2.2. Support National RIA Framework. (1) Report with the Complete WP1 Aug-15 Prepare the report with assessment and assessment and Nov-15 recommendations that include the institutional recommendations and procedural aspects of RIA as well as RIA methodology. Draft RIA Complete Methodology (2) Conduct 2 workshops for GoG on the 2-3 trainings Complete WP1 Aug-15 Two workshops institutional aspects of the RIA and cost benefit Sep-16 conducted. analysis in the context of the RIA.
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(3) Support GoG capacity for evidence-based Business In Progress WP2 Oct-15 End dates moved from analysis. Perception Survey Dec-16 Sep-16 to Dec-16, on policy reforms because the company interviews coincided with summer break period and were extended to autumn. 1.2.3. Implement Regulatory Impact RIA on irrigation Complete WP2 Oct-15 RIA on Electricity Market Assessments (RIA). Conduct two RIAs for tariff methodology Sep-16 Opening cancelled due to selected priority policy reforms. MoE's request.
RIA on Electricity Cancelled Market Opening
RIA on selected In Progress WP2 Jan-16 Being conducted on Law policy reform to QTR 1 Nov-16 on Consumer Right's test proposed RIA Protection and Pension methodology. Reform. End date moved from Sep-16 to Nov-16 due to MoESD’ delay in selection of the policy topics for RIA. 1.3. Private Sector & 1.3.1. Engage Business Associations in PPD. Two 4 - day off-site Complete WP2 Oct-15 Civil Society Conduct capacity building workshops for training seminars Sep-16 Organizations Georgian business associations. Strengthening
1.3.2. Training for Association Management. Two 4 - day Complete WP2 Nov-15 Conduct ToT management training for business seminars Sep-16 association representatives. 1.3.3. EPAC Coalition Strengthening. Develop EPAC Action Plan Complete WP2 Oct-15 the capacity of targeted private sector and civil Sep-16 society actors to organize stakeholders and advocate for improvements to the country’s economic competitiveness.
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1.3.4. EPAC Members’ Capacity Building. 2 workshops Complete WP2 Oct-15 Conduct workshops on public policy advocacy, Sep-16 leadership and executive communication training; how to engage effectively with public officials when representing broad business interests enhance association governance, communication and branding for EPAC. 1.3.5. Assist EPAC Platform. Develop policy Economic Policy Complete WP2 Oct-15 Policy papers developed papers, conduct detailed research of private Analysis/Papers Sep-16 by G4G and used for sector issues, support advocacy. evidence based discussion within EPAC platform. 1.3.6. Assist EPAC Coordination. Support for Information Complete WP2 Oct-15 Eight working group bi-monthly and ad-hoc meetings, discussions, Sessions/Periodic Sep-16 meetings conducted. covering current business issues and obstacles Meetings to trade, speakers and presentations. 2. Energy Strategy Reform Maturity: Design Maturity: Design Lead: Giorgi Chikovani Priority: Priority: High Priority: High Impact: Coherent Strategy will lead to the effective, Counterparts: MoE and its economically justifiable and sustainable energy production, agencies delivery and consumption consistent with environmental Donors: USAID EC-LEDS, EU requirements. INOGATE
2.1. Support Public 2.1.1. PPD on Energy Strategy Reform. 1-2 PPD Events Complete WP2 Nov-15 Private Dialogue Support Ministry in conducting a roundtable with Sep-16 several private sector representatives and participate in the event. 2.2. GoG Capacity 2.2.1. MoE Capacity Building on Energy Reference scenario Complete WP2 Oct-15 Strengthening Strategy. Support Analytical Department of MoE in LEAP Dec-15 in development of Business-As-Usual and other scenarios for MARKAL/LEAP Georgia (standard energy sector analysis software).
2.2.2. MoE Capacity Building on Energy Workshops Complete WP2 Nov-15 Two workshops Strategy. Support Energy Strategy development Aug-16 conducted. process (Capacity Building on Energy Planning). 2.2.3. MoE Capacity Building on Energy Survey report and Complete WP1 Sep-15 Submitted to USAID in Strategy. Conduct national survey on use of data set May-16 May-16. primary energy sources (for commercial and industrial consumers).
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2.3. Private Sector & 2.3.1. CSOs Capacity Building on Energy 1-2 workshops with Complete WP2 Nov-15 One workshop conducted Civil Society Strategy. Conduct one or more meetings of CSOs Aug-16 in August-16 Organizations interested CSOs to review the draft strategy and Strengthening help bring comments to consensus. 3. Electricity Trading Mechanism (ETM) Maturity: Implementation Lead: Giorgi Chikovani Priority: High Impact: Effective ETM to enable FDI necessary for development of Counterparts: MoE, ESCO, SME Hydro-power plants which are vital for clean and low cost GNERC, GSE energy for Georgia. Donors: EU INOGATE, IFC, WB, ADB, EBRD, KfW, EU Twinning, NARUC, USEA 3.1. Support Public 3.1.1. ETM PPD. Provide Technical assistance 1-2 PPD Events Complete WP2 Dec-15 Two PPDs conducted in Private Dialogue and advocacy support to MoE to conduct PPD on July-16 May and June-16. market development issues. Stakeholder Complete WP2 Oct-15 consultations Aug-16 3.1.2. ETM Conference. Organize ETM 1 Conference Complete WP2 Oct-15 Conducted on Nov 11, Conference for private and public sector Aug-16 2015. stakeholders. 3.1.3. Uniform System of Accounts (USoA) 1-2 PPD Events Cancelled WP2 Aug-16 Cancelled due to EBRD and Tariff Methodology PPD. Support public- Sep-16 conducting similar private dialogue between regulator and private activity. sector stakeholders.
3.2. GoG Capacity 3.2.1. Capacity Building on ETM. Organize Study Tour to Complete WP2 Mar-16 One preliminary tour to Strengthening Study Tour for GoG stakeholders and private Turkey and Sep-16 Turkey conducted Jan- companies. selected EU 16. One study tour to country Norway conducted May- 16. 3.3. Energy (Electricity) 3.3.1. ETM Market Model Development. Based Proposed Market Complete WP2 Nov-15 Trading Policy on software developed by G4G, support Market Model/Road Map Apr-16 Governance Simulation (MoE, ESCO, GSE, GNERC). 3.3.2. Turkey-Georgia Cross-Border PX Node. Consultations, Complete WP2 Dec-15 Improve the enabling environment for a Cross- suggested trading Jun-16 Border PX Node (MoE, ESCO, GSE). scheme, coordination with Turkish counterparts 3.3.3. Build consensus on MCH among MoE, MCH design Complete WP2 Apr-16 ESCO, NBG, GNERC and GSE. agreed between Aug-16 stakeholders
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3.3.4. ETM Software. Monitor Development of Stakeholder Complete WP2 Oct-15 Electricity Trading Platform (WB, GSE, ESCO, consultations Aug-16 GNERC). 3.3.5. Market Monitoring. Support GNERC in Comments and Cancelled WP2 Jan-16 Cancelled due to EU electricity market monitoring. recommendations Jun-16 Twinning project on Market conducting similar Monitoring Plan activity.
3.3.6. Market Monitoring. Review best practice Summary Report Complete WP2 Jan-16 on the role of Central Bank in the process of and Jun-16 electricity trading and provide recommendations. recommendations 3.4. Private Sector & 3.4.1. Women Integration in Energy Sector. Survey Cancelled WP1 Aug-15 Cancelled due to lack of Civil Society Engage NGO to conduct gender survey in the Sep-16 interest in tender. Organizations energy sector and hold a workshop on Role of 3 Workshops Cancelled WP1 Aug-15 Strengthening Women in the Energy Sector. Sep-16 Training on ETM Cancelled WP1 Aug-15 Sep-16
3.4.2. Youth Integration in ETM Policy Conference at GTU Complete WP2 Mar-16 Conference conducted Development. Hold conference of young energy Jun-16 Jun-16. sector specialists on energy trading. 3.4.3. ETM Awareness Campaign. Support Promotional Complete WP2 Oct-15 1000 ETM brochures promotion of ETM. Materials Sep-16 produced. 3.4.4. Energy Association of Market Players 1-3 Complete WP2 Jan-16 One workshop conducted (MPs). Capacity building of Energy Association. trainings/workshop Sep-16 Feb-16. s on ETM and/or Association Development
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4. Water Resource Management Reform Maturity: Identify/Design Lead: Giorgi Chikovani Priority: High Impact: Equitable transparent sustainable allocation of fresh water Counterparts: MENRP, MoE, resources across multiple competing interests is necessary to MoESD, MoA, MRDI, GSE, prevent grave failure to serve legitimate needs. GNERC, MoHLSA Donors: ADB, UN, WB, EU, KfW, EIB, MCG
4.1. Support Public 4.1.1. Water Resource Management PPD. 1-2 PPD Events Complete WP2 Jan-16 Five PPDs conducted. Private Dialogue Support MENRP in arranging PPD events on Sep-16 water management related policy and law. 4.2. GoG Capacity 4.2.1. Harmonization with the EU. Develop Guidance Complete WP1 Sep-15 Strengthening Water Resources Guidance Document document Jan-16 Applicable for Georgia. 3 WG meetings 1 training session
4.2.2. Tariff Methodology for Irrigation and Outline of the draft Complete WP2 Mar-16 Drainage. Support Development of Framework law Sep-16 Law Outline and Tariff Methodology for Irrigation and Drainage. Tariff methodology Complete WP2 Oct-15 Sep-16
Draft Revenue Complete WP2 Mar-16 Requirement QTR2 Sep-16 Model
4.3. Water Resource 4.3.1. Water Demand Forecast. Develop water Assessment In Progress WP2 Apr-16 RFA re-announced and Management demand forecast for various sectors. Jan-17 grantee selected. 4.3.2. Aragvi River Basin Water Sector Assessment Complete WP2 Nov-15 Assessment. Conduct hydrological monitoring Report on Water Sep-16 needs assessment; develop water balance. Balance
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NEW: 4.3.3. Water Allocation Scenarios. 2 allocation In Progress WP2 Sep-16 RFA announced. Develop water resource allocation scenarios in scenarios for July-17 WEAP model Aragvi River Basin
4.3.4. Environmental Flow Assessment. Environmental flow In Progress WP2 March- SoW in development. Testing and training. methodology 16 Jan- testing on pilot river 17 basin and training sessions
4.4. Private Sector & 4.4.1. Water Resource Management White White Paper Postponed WP2 Year 3 Postponed due to Civil Society Paper. Develop White Paper - Sectorial policy pending approval from Organizations analysis document. GoG. Approval will occur Strengthening after allocation plans are agreed upon. 4.4.2. Water Management Awareness Promotional Complete WP2 Jan-16 Campaign. Support Water Management materials Sep-16 Awareness Raising. 4.4.3. Fresh Water Resource Management 5 training sessions Complete WP1 Sep-15 Draft compendium on Training. Conduct trainings to CSOs on fresh Sep-16 computer models water resource management planning and developed. Workshops implementation and examples of best with gov't and CSOs international practices; provide international held. A computer model examples of green papers and work on is selected for developing a green paper on fresh water stakeholder training. resource management. Development of sample model in WEAP for Aragvi River basin underway. 4.4.4. Innovative Technologies for Water (a) Handbook on In Progress WP2 Apr-16 Grant has been awarded. Reuse and Wastewater Treatment. Support best practices and QTR3 Feb-17 MENRP and the private sector in analyzing the innovative most applicable technologies for Georgia in technologies. wastewater treatment and water reuse. (b) Conference.
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5. Tax Enforcement and Administration Maturity: Design/Implementation Lead: Maia Daiauri Priority: High Impact: Direct and immediate positive effect on tax compliance for Counterparts: MoF, RS, BAG, all businesses. Parliament, AmCham, ICC, Georgian Banks Association Donors: EU Twinning, UST, IFC
5.1. Support Public 5.1.1. Tax Payment Simplification. Conduct 1 PPD event Complete WP1 Oct-15 Tax Payment Private Dialogue public outreach to taxpayers on tax payment Dec-15 Simplification launch held simplification reform. on Dec 9, 2015. 5.1.2. Tax Payment Simplification. Produce Promotional Video Complete WP1 Sep-15 promotional video for taxpayers on new payment Nov-15 system.
5.1.3. Tax Code Review. Organize PPD to 1 PPD event Postponed WP2 Oct-15 Postponed to Year 3. discuss the public rulings. Sep-16 Work on public rulings to be renewed in Year 3 due to awaiting analysis of tax dispute cases.
5.1.4. Tax Code Review. Discuss RIA results on 1 PPD event Complete WP2 Oct-15 Event held Mar-16. Introduction of Estonian CIT Model to Georgia. Sep-16
5.2. GoG Capacity 5.2.1. Tax Administration Improvement. 3 training sessions In Progress WP2 Oct-15 Trainings are underway. Building Conduct IFRS trainings for tax auditors. Dec-16 Planned until Dec 16. 5.2.2. Tax Administration Improvement. Analysis In Progress WP2 Sep-15 Screening of cases Conduct analysis of Tax Dispute Cases. Nov-16 underway. End date was moved from Sep-16 to Nov-16 due to MoF’s delay in providing the cases for analyses. 5.2.3. Tax Code Review. Provide advisory Comparative legal Complete WP1 Oct-15 support on Estonian CIT model. analysis and Dec-15 recommendations on legislative changes 5.2.4. Tax Code Review. Provide technical Legislative Complete WP2 Oct-15 Adopted by the assistance on the introduction of the Estonian package Sep-16 Parliament on May 30. CIT Model to Georgia. Conditional upon results of RIA.
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5.2.5. Tax Code Review. Provide support in Tax code Cancelled WP2 May-16 MoF decided to conduct updating amendments package to the Tax Code amendments Sep-16 RIA on EU VAT directive based on EU and other best practices. package for to prioritise the submission to approximation process. Parliament 5.2.6. Tax Code Review. Provide technical Draft public rulings Postponed WP2 Mar-16 Postponed to Year 3. assistance in drafting of public rulings on Sep-16 Work on public rulings to problematic issues of tax legislation. be renewed in Year 3 due to awaiting analysis of tax dispute cases.
5.3. Private Sector & 5.3.1. Tax Administration Improvement. Assessment report Complete WP2 Oct-15 Civil Society Conduct assessment on production and natural Aug-16 Organizations losses in the selected business sector(s) based Strengthening on international best practice. 5.3.2. Tax Code Review. Conduct of RIA on RIA report Complete WP1 July-15 selected tax code changes. Engage think tanks Jan-16 to conduct RIA. 5.3.3. Tax Code Review. Conduct business Business Complete WP1 May-15 1 PPD event also perception survey (baseline and follow up) in perception survey Dec-15 conducted on July 21. coordination with CSOs (AmCham, ICC, BAG). 5.3.4. Tax Audit Survey. Conduct survey Tax Audit Survey In Progress WP2 Jan-16 Assessment began in reviewing cause, effect, and perception of tax Nov-16 late Jun-2016. End date audits among private sector. moved from Sep-16 to Nov-16. 6. Customs Administration and Enforcement Maturity: Design Lead: Bondo Bolkvadze Priority: High Impact: Elimination of barriers and inefficiencies will have Counterparts: RS, GFFA, GIRCA immediate impact on cross-border trade. Donors: GIZ, US Customs (ask USAID to coordinate the meeting)
6.1. Support Public 6.1.1. Authorized Economic Operators (AEO) 1 PPD Complete WP2 Oct-15 Private Dialogue program implementation. Conduct PPD event Dec-15 on AEO concept. 6.2. GoG Capacity 6.2.1. Authorized Economic Operators (AEO) Draft legal Complete WP2 Oct-15 Completed Jul-16. Organizations program implementation. Assist RS in legal framework Jul-16 Strengthening drafting and capacity building of RS relevant structural units. 6.2.2. Customs Post-Clearance Control. 1 training session Complete WP2 Oct-15 Provide technical assistance to build capacity of in Georgia Sep-16
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RS PCA. 1 training session in Auditors’ Training Centre of German Customs 6.2.3. ETM Customs Procedures. G4G will Assessment Complete WP2 Oct-15 Completed Jul-16. conduct assessment of current customs Sep-16 procedures for cross-border electricity trading to identify required changes based on best international practices. 6.2.4 Customs Time Release Study. Participate Study Complete WP2 Feb-16 in RS Working Group to conduct Customs Time QTR 2 Apr-16 Release Study. 6.3. Private Sector & 6.3.1. Authorized Economic Operators (AEO) 2 workshops Complete WP2 Oct-15 Civil Society Program Implementation. Increase awareness Sep-16 Organizations of AEO program among transport and logistics Strengthening companies which could potentially benefit from AEO status and easier access to EU markets.
7. Trade Facilitation/Transport and Logistics Maturity: Implementation Lead: Bondo Bolkvadze Priority: High Impact: Elimination of barriers and inefficiencies will have Counterparts: RS, MoESD, immediate impact on cross-border trade and facilitate greater Georgian Railway, GFFA, GIRCA, integration with EU. AmCham, BAG, ICC, EUGBC Donors: EU, GIZ, USAID REG
7.1. Support Public 7.1.1. DCFTA. Facilitate GoG's thematic DCFTA 2-3 public Complete WP2 Oct-15 Three PPDs conducted. Private Dialogue awareness raising meetings in coordination with awareness events Sep-16 MoESD and business associations in G4G supported policy areas. 7.1.2. DCFTA. Develop and print brochures on 500 brochures Complete WP2 Oct-15 One-thousand, one DCFTA topics. printed Sep-16 hundred brochures printed on procurement. 7.1.3. DCFTA. Facilitate analysis-based 3 Policy Papers on Complete WP1 Aug-15 discussion on DCFTA issues. Selected DCFTA Feb-16 topics 7.1.4. DCFTA. Support re-design and DCFTA Portal Cancelled WP2 Oct-15 Cancelled due to EU development of DCFTA Portal. Sep-16 project conducting similar activities.
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7.1.5. Trade Facilitation System (TFS). 1 TFS Steering Complete WP2 Oct-15 Coordinate public-private cooperation during TFS Committee meeting Sep-16 testing and launch. 7.1.6. Trade Facilitation Conference. Support Trade/Investment Complete WP2 Oct-15 GoG in organizing a trade/investment Conference Feb-16 conference. 7.2. GoG Capacity 7.2.1. Trade Facilitation System (TFS). Study and Complete WP1 Aug-15 Strengthening Conduct TFS Tariff Structure Economic Impact recommendations Nov-15 Assessment. 7.2.2. DCFTA. Provide capacity building of GoG Workshop Complete WP2 Mar-16 institutions on international best practices on QTR 2 Mar-16 technical regulations and standards development. 7.3. Private Sector & 7.3.1. Caucasus Transit Corridor Updated Study In Progress WP2 Nov-15 RFA announced. Civil Society Competitiveness Study. Update Caucasus Dec-16 Organizations Transit Corridor Competitiveness analysis. Strengthening 7.3.2. DCFTA. Support production of plain DCFTA Guide Complete WP1 Sep-15 language guide (electronic version) for private Dec-15 sector on rules of origin and customs tariffs and quotas for Georgian produced goods under DCFTA. 7.3.3. Trade Facilitation System (TFS) User 5 Training In Progress WP2 May-16 Grant awarded. Training. Provide user training on system. Sessions QTR 2 Jan-17 Implementation to begin in Oct-16. 8. Bankruptcy and Liquidation Maturity: Design Lead: Tamuna Buadze Priority: Medium Impact: Reformed bankruptcy regime will remove barriers to Counterparts: MoESD, MoJ entrepreneurship, efficiently recycle assets back to productive use Donors: GIZ and restore viable businesses to financial health through business rescue. 8.1. Support Public 8.1.1. Insolvency Awareness. Conduct PPD on 1-2 PPDs Complete WP2 Jan-16 3 PPDs conducted. Private Dialogue the need for insolvency reform. Sep-16 8.2. GoG Capacity 8.2.1. Concept Development. Support GoG Plan of Action Complete WP2 Oct-15 Strengthening with technical assistance in developing Action Sep-16 Plan for Insolvency reform. 8.3. Private Sector & 8.3.1. Advocate for Insolvency Reform. 3-5 workshops Complete WP2 Apr-16 Civil Society Organize workshops and discussions to raise Sep-16 Organizations public’s attention to the insolvency reform Strengthening importance.
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9. Land Ownership, Registration and Titling Maturity: Design Lead: Tamuna Buadze Priority: High Impact: Certainty, clarity and predictability in land rights is crucial Counterparts: MoJ, NAPR, for effective economic development of land. This is currently a MoESD, MoAg, MoE, MRDI, Local major barrier to the investment. Municipalities Donors: WB to provide $2.1 million loan for project implementation; EU budget support of 80 million might include nationwide rollout of land registration reform starting from 2017. 9.1. Support Public 9.1.1. Land Registration Reform PPD. Facilitate 2-3 workshops Complete WP1 Oct-15 Private Dialogue PPD for civil sector representatives in the Sep-16 process of developing the Land Registration strategy and draft law.
Recommendations Complete WP2 Mar-16 on draft Law on QTR2 Sept-16 Land Registration.
Law on Land Complete WP2 Mar-16 Registration QTR2 Sept-16 adopted.
9.3. Private Sector & 9.3.1. Preparation for Pilot. Deliver trainings for 2 mediators trained Cancelled WP1 Oct-15 According to the Law, the Civil Society mediators involved in pilot project implementation Sep-16 trained notaries will serve Organizations through engaging Tbilisi State University (TSU) as mediators. Strengthening Mediation Center. Contingent upon starting pilot project.
9.3.2. Preparation for Pilot. Conduct trainings to Community leaders Planned/ WP1 Oct-15 Postponed until launch of community leaders on effective public outreach trained Moved to Yr 3 Sep-16 Pilot. Awaiting during the implementation of the pilot project. Parliamentary approval. Contingent upon starting pilot project. 9.3.3. Pilot Implementation. Monitor land pilot Monitoring report Planned/Move WP1 Oct-15 Postponed until launch of project implementation and collection of lessons and lessons d to Yr 3 Sep-16 Pilot. Awaiting learned through engagement of NGO. Contingent learned Parliamentary approval. upon starting pilot project.
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9.3.4. Advocacy on the Land Registration 2-3 workshops Complete WP2 Oct-15 Reform. Conduct workshops and discussions to Sep-16 raise public awareness for land registration reform significance, with the intention of advocating for reform in case of GoG suspension.
Analysis of land Cancelled WP2 Oct-15 Cancelled due to MoJ registration impact Dec-16 interests. on economic sectors of Georgia (i.e. irrigation, hydro-power, agriculture) 10. State Procurement System Maturity: Implementation Lead: Tamuna Buadze Priority: High Impact: Educating stakeholders and the private sector will improve Counterparts: State Procurement transparency of the state procurement system and will increase Agency private sector participation resulting in increased quality. Donors: USAID, EU, WB, EBRD, ADB 10.1. Support Public 10.1.1. PPD on Procurement System. Facilitate 3 to 5 PPD Complete WP2 Oct-15 Private Dialogue PPD event on procurement system through the meetings Sep-16 involvement of business associations. 10.2. GoG Capacity 10.2.1. Strategy. Develop Strategy and Action Strategy and In Progress WP2 Apr-16 End date moved from Strengthening Plan to address issues identified by Business Action Plan Nov-16 Sep-16 to Nov-16 due to Survey on State Procurement. timing of survey results. Interviews, workshop, and SWOT analysis conducted. 10.3. Private Sector & 10.3.1. Business Survey on State Survey Complete WP2 Dec-15 Civil Society Procurement. Conduct comprehensive survey in Aug-16 Organizations Tbilisi and in the regions to identify reasons for Strengthening low number of business participation in state procurement.
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11. Pension Reform Maturity: Design Lead: Ilia Gogichaishvili Priority: High Impact: Effective public dialogue on anticipated pension reform is Counterparts: MoESD, MoF, crucial to its acceptance by the public. Parliament, Private Sector Donors: ADB, WB
11.1. Support Public 11.1.1. PPD on Pension. Facilitate PPD event 1 PPD Complete WP1 Jan-16 Private Dialogue on pension reform through the involvement of Sep-16 business associations subject to government’s necessity. 11.2. GoG Capacity 11.2.1. Public Outreach. Provide advisory Recommendations In Progress WP1 Jan-16 Interviews and gap Strengthening support in designing the public outreach to GoG on public Mar-17 assessment conducted. campaign for the reform. outreach campaign 11.3. Private Sector & 11.3.1. Pension Reform Awareness Raising. Offsite session with Complete WP2 Jan-16 Civil Society Raise awareness on Pension Reform among journalists Sep-16 Organizations journalists. Strengthening 12. Capital Market Reform Maturity: Design Lead: Ilia Gogichaishvili Priority: High Impact: Supporting the public and private sectors in preparation Counterparts: MoESD, MoF, NBG, for implementation of reforms will enable both to participate in the Georgian Stock Exchange, reformed market and raise confidence in the system. Parliament Donors: ADB, WB, EBRD
12.1. Support Public 12.1.1. PPD on Capital Market. PPD event Postponed WP2 Jan-16 Will be carried over to Private Dialogue Sep-16 Year 3 in the form of Advisory Board development PPDs. 12.2. GoG Capacity 12.2.1. Capital Market Reform Roadmap TBD Postponed WP2 Oct-15 Postponed to Year 3 due Strengthening Implementation. Provide technical assistance in Sep-16 to delays in finalization implementation of Capital Market Reform and approval of the Roadmap. capital market strategy. 12.2.2. Minority Shareholder Protection Draft law Complete WP2 Jan-16 Rights. Assist the GoG in drafting amendments QTR 2 Feb-16 to the Law on Securities Market and the Law on Entrepreneurs.
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12.3. Private Sector & 12.3.1. Capital Market Awareness Raising. Awareness Postponed WP2 Jan-16 Postponed to Year 3 due Civil Society Raise awareness of potential issuers of securities workshops May-16 to delays in finalization Organizations on capital market opportunities. and approval of the Strengthening capital market strategy.
13. Crop Insurance Maturity: Design Lead: Ilia Gogichaishvili Priority: High Impact: Immediate increase in access to finance for rural Counterparts: MoAg, Parliament businesses. Donors: KfW
13.1. Support Public 13.1.1. PPD on Crop Insurance. 1-3 PPDs Complete WP2 Oct-15 Private Dialogue Sep-16 13.2. GoG Capacity 13.2.1. Regulatory Impact Assessment. RIA Report Complete WP1 Sep-15 Strengthening Conduct RIA on crop insurance reform jointly Nov-15 implemented by a think-tank and MoAg.
13.2.2. Legal Drafting. Provide technical Draft legal Cancelled WP2 Oct-15 Cancelled due to RIA assistance in developing crop insurance legal framework Sep-16 results which reveal need framework. for additional datasets. 13.3. Private Sector & 13.3.1. No specific activities are planned. Civil Society Organizations Strengthening
14. Innovation and Technology/SME Policy Maturity: Implementation Lead: Malkhaz Nikolashvili Priority: High Impact: Immediate improvement on Innovation and Technology Counterparts: GITA, MoESD, EDA regime vital for SME development and access to finance for Donors: WB innovation. 14.1. Support Public 14.1.1. Legal Framework. Organize PPD events 2-4 PPD Complete WP2 Oct-15 Two PPDs conducted. Private Dialogue on Legal framework and awareness raising. consultancy events Sep-16 with private sector/CSOs 14.1.2. Awareness Raising. Organize Media 1 site visit Complete WP2 Oct-15 Tour on Innovation and technology. Sep-16 14.2. GoG Capacity 14.2.1. Regional Development. Develop Cluster Study Report Cancelled WP2 Oct-15 After recommendations Strengthening mapping - regional innovations development Sep-16 during US study tour, it research methodology (Pilot for 2-3 regions). was decided to cancel this activity. 14.2.2. Legal Framework. Provide Legal Consultations and Complete WP2 Oct-15 Consultancy, GITA long term strategy technical advice Sep-16
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assistance - G4G experts’ involvement in Draft Law on E- Complete WP2 Mar-16 Provided input for E- Working Groups. commerce. QTR2 Sept-16 commerce legislation drafting.
14.2.3. Innovation Ecosystem. Update Updated Business Complete WP2 Oct-15 Innovation Center Concept/Business Plan Plan template Sep-16 (developed by USAID EPI). NEW: 14.2.4. Innovation Policy Study Tour. Study Tour Complete WP2 Mar-16 Study tour conducted in Conduct study tour for GoG personnel for QTR 2 Mar-16 US. innovation law and policy development. 14.3. Private Sector & 14.3.1. Sector Study. Research Study In Progress WP2 Oct-15 With the decision to Civil Society a. Conduct research on global rankings (GII, May-17 make the study an Organizations Global Competitiveness Index, Network annual assessment, the Strengthening Readiness Index, etc.) and elaboration of action end date was moved plan to position Georgia on high rank; from Sep-16 to May-17. b. Develop Annual ICT sector research methodology development and implementation; c. Develop Innovations Directory.
14.3.2. Regional Development. a. Conduct 10 training events In Progress WP2 Oct-15 End date moved from trainings for youth in regions in Innovations for Mar-17 Sep-16 to Mar-17 due to raising awareness and building capacity. RFA re-announcement.
b. Organize regional competitions and events Regional In Progress WP2 Oct-15 In Year 3, will be merged (makeathons, hackathons, etc) for innovations. competitions and Mar-17 with the above output. workshops
15. Building Codes Maturity: Implementation Lead: Nino Chokheli Priority: High Impact: Effective outreach will raise awareness and preparedness Counterparts: MoESD, Tbilisi on new building regulations for sector stakeholders. Mayor’s Office Donors: EU, GiZ
15.1. Support Public 15.1.1. PPD on Building Code. 5-8 PPDs (See In Progress WP2 Oct-15 Phase I trainings and Private Dialogue section 15.3.1) Dec-16 ToT underway. 15.2. GoG Capacity No specific activities are planned. Strengthening
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15.3. Private Sector & 15.3.1. Building Code Awareness Raising. 5-8 PPDs In Progress WP2 Oct-15 Phase I trainings and Civil Society Conduct awareness rising events for engineers, Dec-16 ToT underway. Organizations architects, developers and other construction Strengthening sector representative on new Building Code.
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APPENDIX A: ANNUAL PMP INDICATOR RESULTS Indicator Year 2 Cumulative Results 2016 Cumulative Target Target
1.1 Number of public institutions or CSOs with an Trade Advisory Council; 1 3 established public engagement mechanism through PPD Platform In Parliament. G4G support. Year 2, 2 completed steps Short clarification: The indicator will count only public or CSOs institutions that have an institutionalized platform for permanent PPDs, including institutions related to the 3rd and 4th components.
1.2 Progress toward identification, drafting, approval Year 2, 76 completed steps 30 100 and implementation of reforms through a consultative process as a result of USAID assistance. (USAID Indicator)
Short clarification: The indicator will count completed steps of policy process related to the targeted reforms, including reforms related to the 3rd and 4th components.
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Analysis Crop Insurance Reform; RIA National Framework; Customs Post- N/A N/A clearance; Protection of Minority Shareholders Rights (amendments to the law on Entrepreneurs and law on Securities Market); Policy on Competition Agency Inspection Power; Regulation on Food Additives; Regulation on Food Labelling; E- commerce Law; State Procurement System; Water Resources Management Guidelines; Water Resource Management Law; Draft Amelioration Law; Draft Tariff Methodology; Amendments to Law on Electricity and Natural Gas; Distribution Grid Code; Amendments to Transmission Grid Code; Insolvency Reform Roadmap; ETM Customs Procedures; TFS Tariff Structure Analysis; Assessment of Production Natural Loses for the Tax Purposes; Draft Energy Strategy 2015-2016; Environmental Flow Methodology.
Year 2, 22 completed steps Stakeholder consultation/public debate Crop Insurance Reform; RIA National Formwork; Concept on N/A N/A Authorized Economic Operators; Protection of Minority Shareholders Rights (amendments to the law on Entrepreneurs and law on Securities Market); Policy on Competition Agency Inspection Power; Regulation on Food Additives; Regulation on Food Labelling; Insolvency Reform; State Procurement System; Insolvency Reform; Pension Reform; Land Registration Reform; CIT Reform; Water Resources Management Guidelines; Water Resource Management Law; Draft Amelioration Law; Draft Tariff Methodology; Amendments to Law on Electricity and Natural Gas; Distribution Grid Code; Amendments to Transmission Grid Code; Insolvency Reform Roadmap; Assessment of Production Natural Loses for the Tax Purposes; E-Commerce Law; Draft Energy Strategy 2015-2016; Environmental Flow Methodology.
Year 2, 25 completed steps
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Drafting or revision Law on E-commerce; Amendments to the Law on Electricity and N/A N/A Natural Gas; Food Labelling; Tax Payment Simplification; Protection of Minority Shareholders Rights (amendments to the law on Entrepreneurs and law on Securities Market); CIT Reform; Authorized Economic Operators (AEO); Land Registration Reform; Water Resources Management Guidelines; Water Resource Management Law; Draft Amelioration Law; Draft Tariff Methodology; Amendments to Law on Electricity and Natural Gas; Distribution Grid Code; Amendments to Transmission Grid Code; E-Commerce Law; GoG Decree on TFS; Draft Energy Strategy 2015-2016; Environmental Flow Methodology.
Year 2, 19 completed steps Approval (legislative or regulatory) Tax Payment Simplification; Protection of Minority Shareholders N/A N/A Rights (amendments to the law on Entrepreneurs and law on Securities Market); Distribution Grid Code; CIT Reform; Land Registration Reform; GoG Decree on TFS; Amendments to Law on Electricity and Natural Gas; Distribution Grid Code; Amendments to Transmission Grid Code.
Year 2, 9 completed steps Full and effective implementation Tax Payment Simplification N/A N/A
Year 2, 1 completed step
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1.3 Number of agricultural and nutritional enabling Year 2, 2 policies 2 6 environment policies completing the following processes/steps of development as a result of G4G assistance in each case (Stage 1/2/3/4/5). (USAID FTF Indicator)
Short clarification: The indicator will count policies that completed policy steps related to the targeted agricultural and nutritional enabling environment policies.
Analysis Crop Insurance Reform N/A N/A
Year 2, 1 completed step
Stakeholder consultation/public debate Crop Insurance Reform N/A N/A
Year 2, 1 completed step
Drafting or revision Year 2, no completed steps N/A N/A Approval (legislative or regulatory) Land Registration Reform N/A N/A
Year 2, 1 completed step
Full and effective implementation Year 2, no completed steps N/A N/A
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1.4 Number of policy areas on which PPD events were Crop Insurance Reform; RIA National Formwork; Concept on 14 50 initiated through G4G support or through G4G Authorized Economic Operators; Protection of Minority supported platforms. Shareholders Rights (amendments to the law on Entrepreneurs and law on Securities Market); Policy on Competition Agency Short clarification: The indicator will count the number Inspection Power; Regulation on Food Additives; Regulation on of policy areas on which PPDs were initiated through Food Labelling; Insolvency Reform; State Procurement System; G4G support or through using G4G supported Insolvency Reform; Pension Reform; Land Registration Reform; platforms, including reforms related to the 3rd and 4th CIT Reform; Water Resources Management Guidelines; Water components. Under PPDs we assume thematic Resource Management Law; Draft Amelioration Law; Draft Tariff meetings with the participation of all major Methodology; Amendments to Law on Electricity and Natural stakeholders, such as GoG, CSOs and private sector Gas; Distribution Grid Code; Amendments to Transmission Grid representatives. Code; Insolvency Reform Roadmap; Assessment of Production Natural Loses for the Tax Purposes; E-Commerce Law; Draft Energy Strategy 2015-2016; Environmental Flow Methodology.
Year 2, 25 policy areas
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1.5 Number of the PPD events conducted through G4G PPD on Water Resource Management Green Paper, October 12, 26 98 support.Short clarification: The indicator will count 2015. (in Mtskheta); PPD on Water Resource Management PPD events conducted through G4G support, including Green Paper, October 15, 2015. (in Dusheti); PPD on Water PPDs related to the 3rd and 4th components. Under Resource Management Green Paper, October 21, 2015; EPAC PPDs we assume thematic meetings with the meeting, October 20, 2015; PPD on Assessment of Collaborative participation of major stakeholders, such as GoG, Governance Gaps in Georgia, October 22, 2015; PPD on CSOs and private sector representatives. The indicator Assessment of Collaborative Governance Gaps in Georgia, will disaggregate the PPDs according to the regions October 26, 2015; PPD on Crop Insurance RIA, November 5, where the PPDs took place. 2015; Coffee and Conversation on Investment Council and Water Resource Management, October 31, 2015; PPD on Georgia's Energy Sector, Progressions towards EU & ETM, November 11, 2015; PPD on Major Opportunity for Debate on Competing Water Needs, November 12, 2015; PPD on Quality Tracking in Georgia, November 13, 2015; EPAC Working Group Meeting, December 2, 2015; PPD on Regulatory Impact Assessment (RIA) National Framework, December 4, 2015; PPD on Tax Payment Simplification, December 9, 2015; EPAC Meeting on State Procurement, January 6, 2016; PPD on Innovation Draft Law, January 20, 2016; EPAC Meeting on Land Registration, February 2, 2016; Competition Policy Discussion, February 3, 2016; TFS Steering Committee, February 9, 2016; PPD on Competition Law, February 11, 2016; PPD on Insolvency Reform, February 15, 2016; Empowering Women in Business, February 16, 2016; PPD on Mobilizing for Communication and Advocacy on Trade, March 3, 2016; PPD on Estonian Corporate Income Tax (CIT) Model, March 4, 2016; PPD on Technical Regulations and Standards According to DCFTA, March 11, 2016. (In Kakheti); PPD on Policy Paper on Food Additives, March 16, 2016; PPD on Mobilizing for Communication and Advocacy on Trade, March 3, 2016; PPD on Estonian Corporate Income Tax (CIT) Model, March 4, 2016;Youth Innovation Summit, March 11-12, 2016; PPD on State Procurement, April 15, 2016; PPD on Competition, April 19, 2016; First Meeting of First Trade Advisory Group (TAG), May 31, 2016; Pension Reform in Georgia, May 4, 2016; TFS Steering Committee Meeting, March 25, 2016; Georgia Cross Border Electricity Trading Summit, May 31, 2016; Market
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VS Planning Approach to Resolve Transmission Congestion, June 2, 2016; Workshop on Competition, June 8, 2016; Regulation of Electricity Market (In Bulachauri), June 11, 2016; PPD on RIA Institutionalization in Georgia, June 14, 2016; PPD on Market VS Planning Approach to Resolve Transmission Congestion, June 16, 2016; PPD on Youth Friendly Business, June 14, 2016; PPD on State Procurement Reform, June 29, 2016; EPAC Working Group Meeting on Tax Policy Issues, July 12, 2016; PPD on State Procurement Reform (In Batumi), July 12-13, 2016; EPAC Working Group Meeting on Access to Finance, July 18, 2016; Women and Youth Role in Economic Growth and Policy Development (In Akhaltsikhe), August 3, 2016; Women and Youth Role in Economic Growth and Policy Development (in Gori), August 3, 2016; Women and Youth Role in Economic Growth and Policy Development (In Kutaisi), August 4, 2016; Women and Youth Role in Economic Growth and Policy Development (In Batumi), August 5, 2016; PPD on Georgia's Energy Sector-Achievements Challenges and Outlook, August 5, 2016; PPD on Insolvency Reform, August 9, 2016; PPD on Insolvency Preliminary Reform Roadmap, August 29, 2016; PPD on Customs AEO, September 29, 2016; PPD on E-Commerce Law, September 30, 2016.
Year 2, 54 PPDs (among them 9 in regions)
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1.6 Percentage of business operators perceiving Year 2, N/A Baseline: 48% N/A 58% economic governance as fair and transparent. Short clarification: This perception indicator measures a business owner and /or business operator’s opinion on economic governance fairness and transparency. Business owner-operator is a person that owns and runs day-to-day operations. Owner operators are found in industries like commercial agriculture, tourism, logistics, maintenance, repair etc. Economic governance is related to property rights, regulatory functions, corruption, fiscal management, tax administration, or overall macroeconomic policy. 2.1 Number of Governmental institutions (including APMA (1 time through Crop Insurance RIA implementation); 20 80 Legal Entities of Public Law, State Owned Enterprises) MoF (1 time through Estonian CIT RIA implementation); receiving capacity building assistance through G4G GNERC (3 times through training activities); support to develop, implement, and enforce the ESCO (3 times through training activities); targeted reforms. MoE (3 times through training activities); Georgian Amelioration (1 time through RIA Implementation); Short clarification: The indicator will count each Georgian Amelioration (1 time through assistance on draft Hydro governmental institution that received capacity Amelioration Law); building assistance through G4G support to develop, PM Office (1 time through assistance on RIA National Framework implement, and enforce the targeted reforms. If the activity); institution received different types of assistance, each NFA (2 times through assistance on the policy papers); will be counted separately. The indicator also will Competition Agency (1 time through assistance on policy paper); capture governmental institutions classified under 3rd MENRP (2 times through training activities); and 4th components. National Environmental Agency (1 time through training activities); MoESD (1 time through training activity); MoESD (1 time through promoting the Trade Advisory Council); Parliament of Georgia (1 time through promoting the PPD Platform in the Parliament); RS (2 times through assistance on Post Clearance Audit and Authorized Economic Operators issues); RS (1 time through assistance on Customs Time Release Study); RS (1 time through assistance on draft regulation on Authorised Economic Operators);
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RS (1 time through assistance on Assessment on Production Natural Loses for the Tax Purposes); NAPR (1 time through assistance on Assessment on Law on Land Registration); GITA (1 time through assistance on Assessment on draft law on Innovation); MoESD (1 time through assistance on Assessment on draft law on E-Commerce); MoE (1 time through assistance on Draft Energy Strategy 2015- 2016).
Year 2, 32 Institutions
2.2 Number of the legal acts, policy documents, policy Crop Insurance Reform; RIA National Framework; Customs Post- 15 50 related documents, measures or programs provided or clearance; Protection of Minority Shareholders Rights substantially contributed by the targeted GoG (amendments to the law on Entrepreneurs and law on Securities institutions through G4G assistance.Short clarification: Market); Policy on Competition Agency Inspection Power; The indicator will count every legal act, policy Regulation on Food Additives; Regulation on Food Labelling; E- documents, policy related documents, measures or commerce Law; State Procurement System; Water Resources programs provided or substantially contributed to a Management Guidelines; Water Resource Management Law; GoG institution through G4G assistance. The indicator Draft Amelioration Law; Draft Tariff Methodology; Amendments to also will include the legal acts, policy documents, Law on Electricity and Natural Gas; Distribution Grid Code; policy related documents, measures or programs Amendments to Transmission Grid Code; Insolvency Reform related to the 3rd and 4th components. Roadmap; ETM Customs Procedures; TFS Tariff Structure Analysis; Assessment of Production Natural Loses for the Tax Purposes; Draft Energy Strategy 2015-2016; Environmental Flow Methodology.
Year 2, 22 policy documents.
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2.3 Number of participants in G4G supported trade and Media Offside Tour on Pension Reform (22 persons: 9 males, 13 300: 860: investment capacity building trainings. (USAID females), November 14, 2015; Transitioning Non-residential 150M, 430M, 430F Indicator)Short clarification: The indicator will count Electricity Consumers to the Competitive Market (12 persons: 7 150F every person from GoG, CSOs or private sector males, 5 females), November 17, 2015; Introduction of LEAP – receiving G4G supported trainings on trade and Long-range Energy Alternatives Planning System (10 persons: 7 investment capacity building. If one person receives males, 3 females), November 19, 2015; Workshop on RIA several trainings on different issues, each instance will National Framework (36 persons: 12 males, 24 females), be counted separately. The indicator also will include December 4, 2015; Capacity Building Workshop for EPAC corresponding trainings relevant to the 3rd and 4th Members (40 participants: 18 males, 22 females), December 9- components. The indicator data will be disaggregated 10, 2015; Workshop on importance of Non Profit Organizations in based on Gender. Georgia (24 participants: 6 males, 18 females), December 11, 2015; Open Lecture on Association Agreement (16 participants: 5 males, 11 females), December 15, 2015; Estonian CIT RIA (14 persons: 13 males, 1 female), December 21, 2015; Stakeholder Meeting on Water Framework Directive, Technical Guideline (25 persons: 13 males, 12 females), January 15, 2016; Empowering Women in Business (16 persons: 0 males, 16 females), January 21-23, 2016; Competition Law Discussion/Workshop for Women Entrepreneurs (12 persons: 1 male, 11 females), February 11, 2016; Market Players Workshop (31 persons: 20 males, 11 females), February 18, 2016; Students Career in Public Service (23 persons: 9 males, 14 females), February 22, 2016; Coffee and Conversation on Pension Reform (15 persons: 7 males, 8 females), March 4, 2016; Workshop on Environmental Flow Methodology (8 persons: 4 males, 4 female), March 8, 2016; Training of Trainers on Association Management (15 persons: 15 females), March 29-30, 2016; Coaching Session on Leadership and Advocacy (29 persons: 3 males, 26 females), April 1, 2016; Workshop on Pension Reform (25 persons: 11 males, 14 females), May 23, 2016; Training on RIA implementation (21 persons: 3 males, 18 females), June 17-20, 2016; Trainings in WEAP on introduction to WEAP, its features, data population, scenario development and use of WEAP in decision-making (34 persons: 21 female, 13 male), May 3, May 4, May 5, May 6, May 10, 2016; Georgia's Energy Sector-Achievements Challenges and Outlook (47 persons: 30 males, 17 females), August 5, 2016;
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Media Tour on Innovation and Technology (25 persons: 10 males, 15 females), September 9, 2016; First Phase of Training for Tbilisi Municipality (58 persons: 29 males, 29 females), September 19-24, 2016; ToT on Non-Structural Building Codes (13 persons: 3 males, 11 females), September 13, 2016; Coaching Session on Women Entrepreneurship and Access to Finance (15 persons: 15 females), September 28-29, 2016; Environmental Flow Methodology Training (17 persons: 9 males, 8 females), September 21, 2016; Workshop on Aragvi River Balance (10 persons: 7 males, 3 females), September 29, 2016.
Year 2, 587 persons: 334 males, 253 females
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2.4 Number of GoG staff receiving training through Transitioning Non-residential Electricity Consumers to the 75: 280: G4G support to develop, implement, and enforce Competitive Market (12 persons: 7 males, 5 females), November 38M, 141M, 139F targeted reforms. Short clarification: The indicator will 17, 2015;Introduction of LEAP – Long-range Energy Alternatives 37F count every person from the public sector receiving Planning System (10 persons: 7 males, 3 females), November G4G supported trainings to develop, implement, and 19, 2015;Workshop on RIA National Framework (26 persons: 8 enforce targeted reforms. If one person receives males, 18 females), December 4, 2015;Estonian CIT RIA (10 several trainings on different issues, each instance will persons: 10 males, 0 female), December 21, 2015;G4G/Georgian be counted separately. The indicator also will include Bar Association Joint Project Presentation for Youth (35 persons: corresponding trainings relevant to the 3rd and 4th 26 females, 9 males), December 24, 2015;Stakeholder Meeting components. The indicator data will be disaggregated on Water Framework Directive, Technical Guideline (25 persons: based on Gender. 13 males, 12 females), January 15, 2016;Market Players Workshop (1 person: 1 males, 0 female), February 18, 2016.Workshop on Environmental Flow Methodology (8 persons: 4 males, 4 female), March 8, 2016;Workshop on Pension Reform (25 persons: 11 males, 14 females), May 23, 2016;Training on RIA implementation (19 persons: 3 males, 16 females), June 17- 20, 2016; Georgia's Energy Sector-Achievements Challenges and Outlook (7 persons: 5 males, 2 females), August 5, 2016; First Phase of Training for Tbilisi Municipality (58 persons: 29 males, 29 females), September 19-24, 2016; ToT on Non- Structural Building Codes (9 persons: 7 males, 2 females), September 13, 2016; Environmental Flow Methodology Training (10 persons: 8 males, 2 females), September 21, 2016; Workshop on Aragvi River Balance (5 persons: 4 males, 1 female), September 29, 2016.
Year 2, 220 persons: 112 males, 108 females 3.1 Number of policy related documents or legal acts Water Resources Management Guidelines, initiated, February 2 5 agreed with or initiated for adoption by GoG 2016; Water Resource Management Law initiated, April, 2016; stakeholders on water resource management through Draft Amelioration Law, initiated, May, 2016; Draft Tariff G4G support.Short clarification: The indicator will Methodology, initiated, May, 2016; Environmental Flow count each policy related documents or legal acts Methodology was initiated in September, 2016. agreed with or initiated for adoption by GoG stakeholders on water resource management through Year 2, 5 completed results G4G support.
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3.2 Number of PPDs events conducted to advance PPD on Water Resource Management Green Paper, October 12, 5 12 water sector policies through G4G support. 2015. (in Mtskheta); PPD on Water Resource Management Green Paper, October 15, 2015. (in Dusheti); PPD on Water Short clarification: The indicator will count each PPD Resource Management Green Paper, October 21, 2015; Coffee event conducted to advance water sector policies and Conversation on Investment Council and Water Resource through G4G support. Under PPDs we assume Management, October 31, 2015; Roundtable on Planning Water thematic meetings with the participation of major Needs, November 12, 2015. stakeholders, such as GoG, CSOs and private sector representatives. Year 2, 5 PPDs
3.3 Number of people receiving G4G supported training Stakeholder Meeting on Water Framework Directive, Technical 50: 120: on natural resources management and/or biodiversity Guideline (25 persons: 13 males, 12 females), January 15, 2016; 25M, 60M, conservation. (USAID Indicator) Short clarification: The Workshop on Environmental Flow Methodology (8 persons: 4 25F 60F indicator will count each person from GoG, CSOs or males, 4 female), March 8, 2016; 5 Trainings in WEAP on private sector receiving USG supported trainings on introduction to WEAP, its features, data population, scenario natural resources management and/or biodiversity development and use of WEAP in decision-making (34 persons: conservation issues. If one person receives several 21 female, 13 male), May 3, May 4, May 5, May 6, May 10, 2016. trainings on different issues, each instance will be counted separately. The indicator data will be Year 2, 67 persons: 30 males, 37 females disaggregated based on Gender. 4.1 Number of legal acts agreed with or initiated for Amendments to Law on Electricity and Natural Gas were adopted 3 15 adoption by GoG stakeholders, according to GEMM in November, 2015; Distribution Grid Code was adopted in May, 2015 legal/regulatory framework through G4G support. 2016; Amendments to Transmit ion Grid Code was adopted in March, 2016; Draft Energy Strategy 2015-2016 was initiated in Short clarification: The indicator will count each legal August, 2016. act agreed with or initiated for adoption by GoG stakeholders, according to GEMM 2015 legal/regulatory Year 2, 4 legal acts framework through G4G support. 4.2 Number of PPDs conducted through G4G support PPD on Georgia's Energy Sector, Progressions towards EU & 5 23 to advance energy sector policies. ETM, November 11, 2015; PPD on Electricity Market, June 11, Short clarification: The indicator will count each PPD 2016; Georgia Cross Border Electricity Trading Summit, May 31, event conducted through G4G support to advance 2016; PPD on Market VS Planning Approach to Resolve energy sector policies. Under PPDs we assume Transmission Congestion, June 16, 2016; PPD on Georgia's thematic meetings with the participation of major Energy Sector-Achievements Challenges and Outlook, August 5, stakeholders, such as GoG, CSOs and private sector 2016. representatives.
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Year 2, 5 PPD events
4.3 Number of people receiving G4G supported Transitioning Non-residential Electricity Consumers to the 50: 180: trainings in energy related business management Competitive Market (12 persons: 7 males, 5 females), November 25M, 90M, system. (USAID Indicator) Short clarification: The 17, 2015;Market Players Workshop (31 persons: 20 males, 11 25F 90F indicator will count each person from GoG, CSOs or females), February 18, 2016; The Second Connection Workshop private sector receiving G4G supported training in for GNERC, March 24, 2016 (10 persons: 7 males, 3 females). energy related business management system issues. If one person receives several trainings on different issues, each instance will be counted separately. The Year 2, 53 persons: 34 males, 19 females indicator data will be disaggregated based on Gender. 4.4 Number of people receiving G4G supported training Introduction of LEAP – Long-range Energy Alternatives Planning 25: 110: in energy related policy and regulatory practices. System (10 persons: 7 males, 3 females), November 19, 2015; 13M, 55M, (USAID Indicator) Georgia's Energy Sector-Achievements Challenges and Outlook 12F 55F (47 persons: 30 males, 17 females), August 5, 2016. Short clarification: The indicator will count each person from GoG, CSOs or the private sector receiving G4G supported trainings in energy related policy and Year 2, 57 persons: 37 males, 20 females regulatory practice issues. If one person receives several trainings on different issues, each instance will be counted separately. The indicator data will be disaggregated based on Gender.
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4.5 Energy amount of cross-border electricity traded Year 2, 655 GWh 475 GWh 2430 GWh that is attributable to G4G assistance. (USAID Indicator) Short clarification: This indicator will measure the amount of cross border energy traded between Georgia and Turkey. The included target data is for the fiscal year (i.e., October 1 – September 30). The data source for measuring actual performance will come directly from the website of the Electricity System Commercial Operator (ESCO).
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5.1 Number of private and civil society organizations Students Carrier in Public Service (10 CSOs), November 11, 150 510 received capacity building assistance through G4G on 2015; Media Offside Tour on Pension Reform (10 CSOs), development, implementation, and enforcement of November 14, 2015; Workshop on RIA National Framework (6 targeted reforms. CSOs), December 4, 2015; Capacity Building Workshop for EPAC Members (15 CSOs), December 9-10, 2015; Workshop on Short clarification: The indicator will count each private importance of Non Profit Organizations in Georgia (1 CSO), and civil society organization that received capacity December 11, 2015; Workshop on importance of Non Profit building assistance through G4G support to develop, Organizations in Georgia (1 CSOs), December 11, 2015; Open implement, and enforce the targeted reforms. If the Lecture on Association Agreement (4 CSOs), December 15, organization receives different types of assistance, 2015; Estonian CIT RIA (2 CSOs), December 21, 2015; each will be counted separately. The indicator also will Stakeholder Meeting on Water Framework Directive, Technical capture organizations classified under 3rd and 4th Guideline (18 CSOs), January 15, 2016; Empowering Women in components. Business (5 businesses), January 21-23, 2016; Competition Law Discussion/Workshop for Women Entrepreneurs (10 businesses), February 11, 2016; Market Players Workshop (15 businesses), February 18, 2016; Coffee and Conversation on Pension Reform (8 businesses), March 4, 2016; Training of Trainers on Association Management (14 CSOs), March 29-30, 2016; Coaching Session on Leadership and Advocacy (17 CSOs), April 1, 2016.Workshop on Pension Reform (16 business organizations), May 23, 2016; Training on RIA implementation (1 CSO), June 17-20, 2016; Georgia's Energy Sector-Achievements Challenges and Outlook (8 CSOs), August 5, 2016; Media Tour on Innovation and Technology (10 businesses), September 9, 2016; 2016; ToT on Non-Structural Building Codes (3 businesses), September 13, 2016; Coaching Session on Women Entrepreneurship and Access to Finance (15 businesses), September 28-29, 2016; Environmental Flow Methodology Training (2 CSOs), September 21, 2016; Workshop on Aragvi River Balance (2 CSOs), September 29, 2016.
Year 2, 111 CSOs and 82 businesses (193 in total)
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5.2 Number of quality services/products provided by Training service; Advocacy service. 2 9 professional business associations & think tanks to their clients as a result of USG assistance. (USAID Year 2, 2 services Indicator) Short clarification: This indicator measures the number of quality of services such as research, policy advice in areas affecting industry, publication of polling data, policy papers, policy seminars, membership meetings, and advocacy activities that are available and used by private enterprises and individual, others. The indicator also will capture services/products provided relevant to the 3rd and 4th components.
5.3 Number of journalists trained through G4G support Water resource Management and investment council (9 persons: 100: 298: to provide credible and reliable reporting on issues 1 male, 8 females), October 31, 2015; Media Offside Tour on 50M, 149M, affecting Georgia’s business enabling environment. Pension Reform (19 persons: 6 males, 13 females), November 50F 149F Short clarification: The indicator will count each 14, 2015; Land Registration (9 persons: 2 males, 7 females) journalist receiving G4G supported training on relevant December 26,2015; Coffee and Conversation on Pension Reform subjects. If one person receives several trainings on (15 persons: 7 males, 8 females), April 3, 2016; Media offsite on different issues, each instance will be counted Regulation of Electricity Sector (16 persons: 4 male, 12 female) separately. The indicator data will be disaggregated June 11,2016; Grant: Assessment of the Constraints Journalists based on Gender. Face During Covering Economic Reforms (60 persons: 17 male, 43 females); Media Tour on Innovation and Technology (25 persons: 10 males, 15 females), September 9, 2016.
Year 2, 153 Journalists: 48 males, 105 females
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5.4 Number of persons from private and civil society Students Carrier in Public Service (20 persons: 8 males, 12 250: 750: organizations receiving training through G4G support females), November 11, 2015;Media Offside Tour on Pension 125M, 375M, on the development, implementation, and enforcement Reform (22 persons: 9 males, 13 females), November 14, 125F 375F of the targeted reforms.Short clarification: The 2015;Workshop on RIA National Framework (10 persons: 4 indicator will count each person from private and civil males, 6 females), December 4, 2015;Capacity Building society organizations receiving G4G supported Workshop for EPAC Members (40 participants: 18 males, 22 trainings to develop, implement, and enforce the females), December 9-10, 2015;Workshop on importance of Non targeted reforms. If one person receives several Profit Organizations in Georgia (24 participants: 6 males, 18 trainings on different issues, each instance will be females), December 11, 2015;Workshop on importance of Non counted separately. The indicator also will include Profit Organizations in Georgia (20 participants: 2 males, 18 corresponding trainings relevant to the 3rd and 4th females), December 11, 2015;Open Lecture on Association components. The indicator data will be disaggregated Agreement (16 participants: 5 males, 11 females), December 15, based on Gender. 2015;Estonian CIT RIA (4 participants: 3 males, 1 female), December 21, 2015;Stakeholder Meeting on Water Framework Directive, Technical Guideline (18 participants: 9 males, 9 females), January 15, 2016; Empowering Women in Business (16 participants: 0 male, 16 females), January 21-23, 2016;Competition Law Discussion/Workshop for Women Entrepreneurs (12 participants: 1 male, 11 females), February 11, 2016;Market Players Workshop (31 participants: 20 males, 11 females), February 18, 2016;Coffee and Conversation on Pension Reform (15 persons: 7 males, 8 females), March 4, 2016;Training of Trainers on Association Management (15 persons: 15 females), March 29-30, 2016;Coaching Session on Leadership and Advocacy (29 persons: 3 males, 26 females), April 1, 2016;Workshop on Pension Reform (25 persons: 11 males, 14 females), May 23, 2016; Georgia's Energy Sector- Achievements Challenges and Outlook (21 participants: 15 males, 6 females), August 5, 2016; Media Tour on Innovation and Technology (25 participants: 15 males, 10 females), September 9, 2016; 2016; ToT on Non-Structural Building Codes (3 participants: 3 males), September 13, 2016; Coaching Session on Women Entrepreneurship and Access to Finance (15 participants: 15 females), September 28-29, 2016; Environmental Flow Methodology Training (2 participants: 2 females), September 21, 2016; Workshop on Aragvi River Balance (2
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participants: 2 males), September 29, 2016.
Year 2, 385 persons: 157 males, 228 females
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6.1 Proportion of females who report increased self- Year 2, 100% of female participants who completed the forms 80% 78% efficacy at the conclusion of G4G supported reported on the increased self-efficiency trainings/programming. (USAID Indicator) Short clarification: The data on the indicator will be collected at the end of each training event based on the women participants’ survey. The proportion will be measured based on the 5 scale survey questionnaire.
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APPENDIX B: DONOR COORDINATION MATRIX
Contact G4G Supported Donor Donor Project Title Time Frame Contact Information Donor Funding Person/Role Reform
Urban Services Irakli Chkhonia, ADB Improvement 2013-2018 Senior Project [email protected] USD 100 K TBI Investment Project Officer
Georgia: Kathie Julian, Strengthening [email protected] Capital Market and ADB 2014-2016 Resident USD 500 K Domestic Resource Tel: +(995 32) 2250 619 Pension Reform Representative Mobilization Giorgi Kiziria, Road Corridor ADB 2011-2015 Deputy Team [email protected] USD 140 M TBI Investment Project Leader Pilot Project for Introduction of an George Information System Gaprindashvili, Czech for Data Leading Develop Development of Transferring and Specialist, [email protected] ment 2013-2015 CZK 12.63 M Water Resource Groundwater Head of Tel: +(995) 591 404 043 Agency Management plans Monitoring Network Projects and (CzDA) in Kvareli and Analytical Lagodekhi Department Municipalities Assistance to the Government of Georgia with David Development of EBRD 2016-2017 Managadze [email protected] EUR 175 K ETM Development Renewable Energy POC Investments: Electricity Trading Platform
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Overall Bruno Institutionalized Balvanera, Framework for Support Public Director EBRD 2015- 2018 [email protected] TBD Public Consultation Private Dialogue (Caucasus, and support on Moldova and G4G targeted Belarus) reform areas Georgia - Jvari - Nino Shanidze, EBRD, Khorga 2013- 2016 Senior Project [email protected] EUR 60 M ETM Development KfW Interconnection Coordinator
Christian East Invest 2 Gessl, Key Establishment of EU 2015-2018 [email protected] EUR 8.75 M Project Expert on PPD platform Policy Zurab Environmental Jincharadze, Development of Protection of zurab.jincharadze@blacksea- EU 2012-2017 River Basin EUR 7.5 M Water Resource International River riverbasins.net Management Management plans Basin Project Expert TA for Enguri / Muriel Lumbert, Muriel.Lambert-de- EU Vardnili HPP 2011-2016 Project EUR 4 M ETM Development [email protected] Rehabilitation Manager
EIB-03 Technical Assistance for the Alvaro Ortega Alvaro.ortega- Development of Water Infrastructure Aparicio, [email protected] EU 2010-2016 EUR 420 K Water Resource Modernization and Program [email protected] Management plans Development Manager Tel: (+995 32) 2943763 Project Eszter Süle Resident EU Twinning 2016-2017 Twinning [email protected] EUR 1.1 M ETM Development Advisor, E- Control Austria Legislative Impact Katerina Assessment, RIA National EU 2015- 2017 Velichkova, [email protected] EUR 1.5 M Drafting and Framework RIA Expert Representation
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Location
Christian East Invest 2 Gessl, Key Establishment of EU 2015-2018 [email protected] EUR 8.75 M Project Expert on PPD platform Policy Twinning Project - Strengthening Irakli Tax Reform (Tax Administrative Khmaladze, payment EU 2014-2015 [email protected] EUR 1.3 M Capacity of the Project simplification, Tax Georgia RS in Manager Code Review) Taxation Christian East Invest 2 Gessl, Key Establishment of EU 2015-2018 [email protected] EUR 8.75 M Project Expert on PPD platform Policy Legislative Impact Assessment, Katerina RIA National EU Drafting and 2015-2017 Velichkova, [email protected] EUR 1.5 M Framework Representation RIA Expert Location Nikos INOGATE Tsakalidis, EU 2012-2015 [email protected] EUR 16.6 M ETM Development (Regional Project) Deputy Team Leader Paata Europe Iakobashivli, an (from MDF) Development of Water Infrastructure Investm 2013-2018 Head of [email protected], [email protected] EUR 40 M Water Resource Modernization II ent Projects and Management plans Bank Analytical Department
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Anke Sahmland, German Head of Customs Federal Development of Foreign Enforcement; Custom Customs Post 2015-2017 [email protected] TBI Relations Customs Post s Clearance Audit Department at Clearance Audit Service German customs Tax Reform; Private Sector Customs Development Marieta Riedel, GIZ 2013-2016 [email protected] TBI Administration and Project in the South Expert Enforcement; RIA Caucasus National Framework Legal Approximation Dr. Jens Insolvency Reform; GIZ towards European 2013-2016 Deppe, Team [email protected] TBI Land Registration Standards in the Leader South Caucasus Tax Reform; Eka Avaliani, Customs Georgia Investment [email protected] IFC 2013- 2016 Operations USD 1.8 M Administration and Climate Project Tel: +(995) 599 560 229 Officer Enforcement, Tax Perception Survey IFC Bjorn Infra bjorn.brandtzaeg@cleanenergyinvest Clean Energy Invest 2012-2015 Brandizarg, USD 700 M ETM Development Venture .no Consultant s Rehabilitation of Nino Shanidze, Development of drinking, waste and KfW 2010-2015 Senior Project [email protected] EUR 101.8 M Water Resource rainwater systems Coordinator Management plans in Batumi Institutional Cooperation Norwegi Between Norwegian an Kjell Repp, Water Resources Ministry Head of Water Resource and Energy 2013-2016 [email protected] NOK 13.68 of International Management Directorate and Foreign Section Ministry of Energy Affairs and Natural Resources of
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Georgia
Norwegi an Energy Strategy Sustainable Endre Ottosen, Ministry Development; Hydropower 2012-2015 Project [email protected] TBI of Water Resource Development Coordinator Foreign Management Affairs Norwegi an SPARE- Society International School Madona for the Project for Pirvelashvili, [email protected] Energy Strategy 2012-2015 TBI Conser Application of Project [email protected] Development vation Resources and Coordinator of Energy Nature Overall Lasha Institutionalized Swiss Labadze, Framework for Cooper Inclusive Growth 2013-2014 Deputy Director [email protected] GEL 140 K Public Consultation ation Dialogues ISET Policy and support on Office Institute G4G targeted reform areas U.S. Treasur y Office Tax Reform; Davit of Revenue Advisor [email protected] Customs 2012-2017 Koguashvili, USD 1 M Technic Program Tel: +(995) 599 121 120 Administration and Consultant al Enforcement Assista nce U.S. South Caucasus Treasur Financial Sector Angela y Office Advisory Project, Prigozina, [email protected] 2014-2017 TBI Pension Reform of Capital Markets and Country Sector Tel.: +(995) 322 296 228 Technic Pension Reform Coordinator al Technical
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Assista Assistance nce
Climate Resilient Ivane Tsiklauri, Development of UNDP Flood and Flash 2012-2016 Project [email protected] USD 5.06 M Water Resource Flood Management Manager Management plans Enhancing Environmental Nino Gvazava Development of UNDP Monitoring and 2015-2018 Project [email protected] USD 1.28 M Water Resource Reporting in Manager Management Plans Georgia Nino Antadze, Development of UNDP/GEF Kura Energy and [email protected] UNDP 2009-2014 USD 2.9 M Water Resource Ara(k)s project Environment Tel.: (+995) 599 562 200 Management plans Team Leader Overall Advancing CSO Institutionalized Capacities and Framework for Tamar Engaging Society [email protected] Public Consultation USAID 2014-2019 Karosanidze, USD 5.5 M for Tel: +(995) 599 902 298 Collaboration on a COP Sustainability (ACC PPD under DCFTA ESS) awareness campaign Georgian Human GoG and CSOs and Institutional Roman capacity building in USAID Capacity 2015-2020 Tsutskiridze, [email protected] USD 7 M G4G targeted Development COP reform areas (HICD) 2020 Project Momavlis Taoba Marina [email protected] USAID (Future Generation) 2014-2017 Ushveridze, Tel: +(995) 322 990049 TBD Youth involvement Project COP Tel: +(995) 322 233338
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Enhancing Capacity Danna Kenney, for Low Emission [email protected] COP Inga Energy Strategy USAID Development 2013-2018 [email protected] USD 6 M Pkhaladze, Development Strategies (EC- Tel: +(995) 32 2 50 63 43 DCOP LEDS) Jargalan Jambaldorj, NARUC- Black Sea USAID 2006-2020 Senior [email protected] USD 200 K ETM Development Regulatory Initiative Program Officer AGT/Black Sea Will Polen, USAID Transmission 2011-2017 [email protected] USD 80 K ETM Development Senior Director Project
Implementation of Good Governance David Smith, [email protected] the RIA National USAID Initiative in Georgia 2015-2020 USD 11 M COP Tel: +(995) 598 24 77 47 Framework Draft (GGI) Water Law Overall Media for Institutionalized Transparent and Lika Framework for [email protected] USAID Accountable 2014-2019 Chakhunashvili USD 5.1 M Public Consultation Tel: +(995) 599 902 298 Governance (M- , COP and support on TAG) Program G4G targeted reform areas Zrda represents an opportunity to strengthen the skills, productivity, and networks of local actors – from Katy vulnerable The ZRDA activity USAID 2016-2021 Chumburidze, Tel: +995552413 USD 14.7 M households to in Georgia DCOP developed Micro, Small, and Medium Enterprises (MSMEs) – so they can contribute to broad-based economic growth
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and strengthened resilience in target communities.
Youth Entrepreneurial Private Sector and Skills for Advancing Civil Society Nino Lagvilava [email protected] USAID Employability and TBI TBI Capacity / Chief of Party Tel: +(995) 558 16 51 67 Income Generation Strengthening / in Georgia (YES – Youth Georgia) Private Sector and Civil Society Promoting Gender Mariam [email protected] Capacity USAID Equality in 2013-2016 Chitishvili / PR TBI Tel:(+995) 032 299 88 56 Strengthening / Employment Manager Women Empowerment Restoring Efficiency Luisa [email protected] USAID to Agricultural 2013-2018 Namicheishvili, USD 19.5 M Crop Insurance Tel: +(995) 595 030 353 Production (REAP) DCOP
Tax Reform; Davit Revenue Advisor [email protected] Customs USAID 2012-2017 Koguashvili, USD 1 M Program Tel: +(995) 599 121 120 Administration and Consultant Enforcement Overall Institutionalized New Economic Framework for Kirk Ramer, [email protected] USAID Opportunities 2014-2015 TBD Public Consultation COP Tel: +(995) 32 225 05 61 Initiative (NEO) and support on G4G targeted reform areas Overall Institutionalized Supporting Local Framework for Nino Lomjaria, [email protected] USAID Self-Governance 2014-2015 TBD Public Consultation COP Tel: +(995) 555 02 02 00 Reforms in Georgia and support on G4G targeted reform areas
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Momavlis Taoba Marina [email protected] USAID (Future Generation) 2014-2017 Ushveridze, Tel: +(995) 322 990049 TBD Youth involvement Project COP Tel.: +(995) 322 233338
Implementation of Good Governance David Smith, [email protected] the RIA National USAID Initiative in Georgia 2015-2020 USD 11 M COP Tel: +(995) 598 24 77 47 Framework Draft (GGI) Water Law Integrated Natural Marika Resources Development of Shotadze, USAID Management in 2012-2014 [email protected] USD 5 M Water Resource Program Watersheds of Management plans Director Georgia Michelle P. Youth Inclusion and Rebosio Social Calderon, [email protected] WB 2014-2016 USD 500 K TBI Accountability Social Tel: +(995) 322 907 484 Project Development Specialist Joseph Transmission Grid Melitauri, WB Strengthening 2014-2019 Senior [email protected] USD 61.88 M ETM Development Project Operations Officer South Caucasus Financial Sector Angela Advisory Project, Prigozina, [email protected] WB Capital Markets and 2014-2017 TBI Pension Reform Country Sector Tel: +(995) 322 296 228 Pension Reform Coordinator Technical Assistance Land registration Kathrine M. Irrigation and Land pilot project Kelm, Senior Market implementation WB 2014-2019 Land [email protected] USD 50 M Development Irrigation tariff Administration Project methodology Specialist development
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Thomas Edward Haven Georgia National / Team Leader Innovation Innovations and WB 2016-2021 Siddhartha [email protected] USD 40 M Ecosystem (GENIE) Technology Raja / (Senior Project ICT Policy Specialist John Gabriel Development Policy Goddard, Capital Market WB Operation (DPO) 2012-2015 [email protected] TBI Senior Reform Series Economist
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APPENDIX C: UTILIZATION OF USG PERSONNEL AND COLLABORATION WITH OTHER DONOR-FUNDED PROJECTS COLLABORATION WITH OTHER USG PERSONNEL
National Association of Regulatory Utility Commissioners (NARUC): G4G participated in the regulatory and technical review organized by NARUC in cooperation with GNERC. Experts from the Michigan Public Service Commission (PSC), Kentucky PSC and Midcontinent Independent System Operator (MISO) discussed electricity cross-border trading, transmission network connection and transmission capacity allocation. G4G held numerous coordination meetings with representatives of Black Sea Regulatory Initiative (BSRI). BSRI is supported by USAID and National Association of Regulatory Utility Commissions (NARUC), and aims to increase harmonization and coordination of cross-border electricity trading in the region. G4G provided updates on ETM status and development of the regional trading mechanism between Georgia and neighboring countries. Main topics of discussion included introduction of the ancillary service market in Georgia and involvement of neighboring counties in providing ancillary services on the regional level.
US Trade Representative (USTR): G4G also facilitated discussion between the RS, USTR and US Customs on potential collaboration in the area of AEO and post clearance control. Europe and Middle East Affairs Office - United States Trade Representative, Jason Buntin: In cooperation with G4G, joined efforts on developing issues related to SMEs, e-commerce legislation and digital trade. COLLABORATION WITH OTHER USAID PROJECTS
EC-LEDS Clean Energy Program: G4G collaborated with USAID EC-LEDS Clean Energy program implemented by Winrock International to develop the Business As Usual scenario for MARKAL Georgia Model for strategic planning.
Good Governance Initiative (GGI): G4G collaborated with Good Governance Initiative (GGI) in Georgia, a five-year activity funded by the USAID to implement RIA National Framework. G4G held several meetings with project representatives to coordinate activities for implementation of RIA National Framework.
HICD 2020: HICD 2020 is supporting ESCO to identify fundamental reasons of performance gaps and develop recommendations for improvement. Since ESCO plays an important role in reforming the electricity system and is one of the counterparts of G4G, it was agreed that G4G will participate in the working group meetings with the representatives of ESCO, HICD 2020 and other stakeholders. G4G has been collaborating with HICD 2020 on functional analysis and employee satisfaction survey of the RS. Crystal Fund: G4G is cooperating with Crystal Fund and PH International in the frames of the program "Youth Entrepreneurial Skills for Advancing Employability and Income Generation in Georgia" (YES – Georgia). G4G is coordinating the program for businesses and business support organizations interested in youth empowerment with the aim to increase employability among youth. Georgia Waste Management Technologies in Regions: G4G collaborated with Caucasus Environmental NGO Network's (CENN) project Waste Management Technologies in Regions (WMTR) funded by USAID to support attendance for the Water Panel Discussion held on November 12, 2015. COLLABORATION WITH OTHER DONOR-FUNDED PROJECTS
EU: G4G worked closely with the EU Delegation to Georgia on water resource management and the EU- Georgia AA. G4G worked with the EU project “East Invest 2” on business support organization and EPAC development.
EU “Legislative Impact Assessment, Drafting and Representation Location” Project: The Project has a separate RIA component. G4G held several meetings with project experts to coordinate activities related to institutionalizing the RIA mechanism across the GoG.
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ADB: G4G continued collaboration with ADB on Capital Market and Pension Reform.
IFC: G4G participated as a working group member on a second study of customs time release. G4G with IFC and other donors (GiZ, EBRD) have been collaborating on insolvency.
Federal Customs Service of Germany: G4G collaborated with the Federal Customs Service of Germany for implementation of the post-clearance audit action plan and study tour.
WCO: TFS is being integrated with a WCO supported risk analysis program (Cargo Targeting System).
EBRD: G4G actively participated in the EBRD Investment Council working group on minority shareholder rights and insolvency.
GiZ: G4G closely coordinates with GiZ on systemic land registration, bankruptcy and RIA national framework. World Bank (WB): G4G has collaborated with WB in preparation for the PPD event on pension during Quarter 3, and an AEO event in Quarter 4. G4G also works closely with WB on ETM software development and land registration. WB has also been collaborating with G4G on the AEO customs conference. UNDP: G4G began discussions with UNDP's Enhancing Environmental Monitoring and Reporting in Georgia to identify areas of possible cooperation with regards of data collection and processing related to water resource management.
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APPENDIX D: UTILIZATION OF INTERNS
N Name Internship Period G4G Supervisor & Component
1 Kristina Gvichiani 10/16/2015 - 12/16/2015 Michael Martley/Cross Cutting Component
2 Tatiana Daushvili 10/29/2015 - 1/29/2016 Tamar Kapianidze Public Private Dialogue Component
3 Salome Chkadua 12/2/2015 - 3/4/2016 Marika Bakhtadze/Water Resource Management
4 Ana Makatsaria 12/2/2015 - 5/6/2016 Marika Bakhtadze/Water Resource Management
Sophie Geladze/Private Sector and Civil Society Capacity 5 Vakhtang Kvirtia 12/21/2015 - 4/22/2016 Strengthening Component
6 Giorgi Kaladze 1/4/2016 - 5/6/2016 Giorgi Chikovani/Energy Trade Policy Improvement Component
Maya Eristavi/Private Sector and Civil Society Capacity 7 David Javakhidze 1/18/2016 - 4/21/2016 Strengthening Component
8 Goga Katsadze 2/8/2016 - 4/8/2016 Irina Iremashvili/Cross Cutting Component
9 Giorgi Kikvadze 3/21/2016 - 5/21/2016 Ketevan Skhireli/Water Resource Management
Giorgi Maya Eristavi/Private Sector and Civil Society Capacity 10 3/30/2016 - 5/30/3016 Murachashvili Strengthening Component
11 Barbare Danelia 5/20/2016 -7/20/2016 Michael Martley/Communication Component
12 Shalva Grdzelidze 6/30/2016 - 8/30/2016 Maia Daiauri/GOG Capacity Strengthening Component
Maya Eristavi/Private Sector and Civil Society Capacity 13 Anna Rusitashvili 7/5/2016 - 10/5/2016 Strengthening Component
Maya Eristavi/Private Sector and Civil Society Capacity 14 Tamta Jgarkava 7/6/2016 - 10/6/2016 Strengthening Component
Salome Maya Eristavi/Private Sector and Civil Society Capacity 15 9/8/2016 - 11/8/2016 Sulakvelidze Strengthening Component
Tamari Maya Eristavi/Private Sector and Civil Society Capacity 16 9/7/2016 - 10/7/2016 Karbelashvili Strengthening Component
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APPENDIX E: G4G ADVISORS UTILIZED IN GOG INSTITUTIONS
N (#) Name Area(s) of Focus GoG Institution
Ministry of Environment Water Resource 1 Georg Petersen and Natural Resources Management Protection
Electricity Trading 2 Jake Delphia Ministry of Energy Mechanism
Ministry of Energy, Electricity Trading Georgian Energy and 3 John Swinscoe Mechanism Water Supply Regulatory Commission
Ministry of Economy and Regulatory Impact 4 Roman Ladus Sustainable Assessment Development
Trade Facilitation 5 Thomas Beck Data Exchange Agency System
Electricity Trading 6 Zoran Vujasinovic Revenue Service Mechanism/Customs
Electricity Trading 7 Dean Stojcevski Revenue Service Mechanism/Customs
Ministry of Economy and 8 Rafal Szymczak Pension Sustainable Development
9 Rainer Neppl Customs Revenue Service
10 Karl Sporny Customs Revenue Service
11 Ivo Vanasaun Corporate Income Tax Ministry of Finance
12 Risto Kaarna Corporate Income Tax Ministry of Finance
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APPENDIX F: UTILIZATION OF PRIVATE SECTOR AND CIVIL SOCIETY ORGANIZATIONS
N (#) Name of Organization Area(s) of Focus Utilization Tax Enforcement and 1 AmCham Administration, CSO Capacity Collaboration Building, EPAC Member 2 Analysis & Consulting Team Business Perception Survey Collaboration Art International Women 3 EPAC Member Collaboration Association Association of Banks of Civil Society Capacity 4 Collaboration Georgia Building, EPAC Member Association of Business Tax Enforcement and 5 Consulting Organizations of Administration, EPAC Collaboration Georgia Member Tax Enforcement and Association of Law Firms of 6 Administration/Insolvency, Collaboration Georgia EPAC Member Association of Pharmaceutical 7 Companies Representatives in EPAC Member Collaboration Georgia Youth engagement in PPD, Association of Young EPAC Member, Tax 8 Collaboration Economists of Georgia Enforcement and Administration, RIA Tax Enforcement and Consultations 9 ATA partners Administration Outreach 10 Atlantic Council of Georgia EPAC Member Collaboration Batumi International Container Trade Facilitation and 11 Collaboration Terminal Customs British Georgian Chamber of 12 EPAC Member Collaboration Commerce Support National PPD, Youth Business and Economic 13 engagement in PPD, EPAC Collaboration Centre Member Business Association “Women 14 Youth Engagement in PPD Outreach for Tomorrow” Tax Enforcement and Business Association of Administration, Civil Society 15 Consultations Georgia Capacity Building, Customs and Trade Business Professionals 16 EPAC Member Collaboration Network Caucasus Environmental NGO EPAC Member, Water Collaboration, 17 Network Resource Management Consultations Water Resource 18 Caucasus University Management, EPAC Outreach Youth Engagement in PPD 19 Center for Business Advocacy EPAC Member Collaboration
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Civil Society Capacity 20 Center for Competition Building, EPAC Member, Collaboration Competition Policy Center for Competition Law EPAC Member, Competition 21 Collaboration and Consumer Protection Policy Center for Innovative 22 EPAC Member Collaboration Development of Enterprises 23 Center for Social Sciences EPAC Member Collaboration Center for Training and 24 EPAC Capacity Building Collaboration Consultancy Chamber de Commerce 25 Energy, EPAC Member Consultations France Georgia 26 Clean Energy Energy Collaboration Collaboration 27 Co-Investment Fund Energy Consultations 28 Construction Inspection EPAC Member, Building Code Collaboration Consumer Rights Protection 29 EPAC Member Collaboration and Control Center 30 Crystal Fund Youth Engagement in PPD Outreach 31 Dechert LLC Competition Collaboration Energy,Capital Markets, Outreach 32 Eastern Power Corporation Innovation Collaboration Civil Society Capacity Economic Policy Research 33 Building, EPAC Member, Collaboration Center Youth engagement in PPD 34 Energo Aragvi Energy Collaboration Energy, Youth engagement in Collaboration 35 Energy Academy of Georgia PPD Outreach Civil Society Capacity Building Energy, 36 Energy Efficiency Centre Trade Facilitation and Collaboration Customs Water Resource 37 Energy Solutions Management, Collaboration Energy 38 Environmental Development Water Resource Management Collaboration 39 Europe Foundation EPAC Capacity Building Collaboration European Union-Georgian 40 EPAC Member Collaboration Business Council 41 Export Development Agency EPAC Member Collaboration Youth Engagement in PPD Freight Forwarders Association Outreach 42 Trade Facilitation and of Georgia Collaboration Customs Tax Enforcement and 43 GAMMA Administration Consultations Water Resource Management Consultations 44 Georgia Hydro Energy Collaboration 45 Georgia Urban Enerji Energy Collaboration Consultations, 46 Georgian American University Youth Engagement in PPD Outreach
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EPAC Member Collaboration Georgian Association “Women 47 Women engagement in PPD, Outreach in Business” Civil Society Capacity Building Consultations Georgian Association of 48 Customs and Trade Outreach Expeditors Georgian Association of 49 EPAC Member Collaboration Guides 50 Georgian Bar Association EPAC Member Collaboration
51 Georgian Business Chamber EPAC Member Collaboration
Georgian Chamber of Tax Enforcement and 52 Consultations Commerce and Industry Administration, Energy Georgian Distribution 53 EPAC Member Collaboration Association Georgian Ecotourism 54 EPAC Member Collaboration Association Georgian Energy Development 55 Energy Collaboration Fund Georgian Environmental 56 Water Resource Management Collaboration Outlook Civil Society Capacity Building, EPAC Member Collaboration 57 Georgian Farmers Association Water Resource Consultations Management, CSO Capacity Building, EPAC Member Georgian Hazelnut Producers 58 EPAC Member Collaboration and Exporters Association
Georgian Hotel and Restaurant 59 Collaboration Federation EPAC Member
Consultations 60 Georgian Hydro Power Energy Collaboration Georgian Incoming Tour- Trade Facilitation and 61 Consultations Operators Association Customs, EPAC Member Georgian Insurance CSO Capacity Building, Crop 62 Consultations Association Insurance Georgian International Energy 63 Energy Collaboration Corporation Georgian International Road Collaboration 64 Customs and Trade Carriers Association Consultations Georgian Investment Group 65 Energy Collaboration Energy Georgian Law and Policy 66 Youth engagement in PPD Collaboration Research Centre
Georgian Lawyers for Youth engagement in PPD, 67 Collaboration Independent Profession EPAC Member
Georgian Lawyers National Youth engagement in PPD, 68 Collaboration Association EPAC Member
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Civil Society Capacity Building, EPAC Member Collaboration 69 Georgian Logistics Association Trade Facilitation and Consultations Customs Women engagement in PPD, Georgian Microfinance 70 Civil Society Capacity Collaboration Association Building, EPAC Member Georgian Oil and Gas 71 Energy Collaboration Corporation 72 Georgian Pistachio Association EPAC Member Collaboration Youth engagement in PPD, Outreach Georgian Small and Medium Tax Enforcement and 73 Consultations Enterprise Association Administration, CSO capacity Collaboration Building, EPAC Member Georgian Society of Women engagement in PPD, 74 Accountants, Auditors and Civil Society Capacity Collaboration Consultants Building, EPAC Member Georgian Society of 75 EPAC Member Collaboration Investment Professionals
Civil Society Capacity Building, Crop Insurance, 76 Georgian Technical University Collaboration Energy, Youth engagement in PPD
77 Georgian Tourism Association EPAC Member Collaboration 78 Georgian Wine Association EPAC Member Collaboration Innovation and Technology Georgian Women Business Women Engagement in PPD, 79 Collaboration Association Civil Society Capacity Building, EPAC Member Youth Engagement in Georgian Young Lawyer’s PPD, CSO Capacity 80 Collaboration Association Building, EPAC Member, Land Registration Georgian-Ukrainian Business 81 EPAC Member Collaboration Club Tax Enforcement and 82 German Business Association Administration, CSO capacity Collaboration Building, EPAC Member 83 Hydrolea LTD Energy Collaboration Information and Energy Collaboration 84 Communications Technology Innovation and Technology Consultations Business Council EPAC Member Infrastructure Construction 85 EPAC Member, Building Code Collaboration Companies Association Institute for Development for Media engagement in PPD, 86 Collaboration Freedom of Information EPAC Member
Institutional and Capacity Water Resource 87 Outreach Building Development Center Management, EPAC Member
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Int’l School of Economics at Energy, Youth engagement in 88 Tbilisi State University-Policy PPD, CSO Capacity Collaboration Institute Building, EPAC Member, RIA International Black Sea 89 Youth Engagement Collaboration University International Business and 90 EPAC Member Collaboration Economic Development Center Youth engagement in PPD, CSO Capacity Building, International Chamber of Collaboration 91 Energy Commerce-Georgia Consultations Tax Enforcement and Administration International Investors 92 EPAC Member Collaboration Association 93 JS EnergoPro Energy Collaboration Consultations 94 JS Telasi Energy Collaboration Junior Chamber International 95 EPAC Member Collaboration Georgia Tax Enforcement and 96 Justice Development Center Administration, CSO capacity Consultations Building, EPAC Member Tax Enforcement and Administration, CSO capacity Consultations 97 KG Energy Building Collaboration Energy Knowledge and Experience Water Resource 98 Collaboration Transfer Management, Tax Reform Media Holding “Palitra” (Palitra 99 Media Engagement in PPD Collaboration TV, IPN, BPN) National Association of Local Media Engagement in PPD 100 Collaboration Authorities of Georgia Water Resource Management 101 National Broadcaster Media Engagement in PPD Collaboration 102 New Economic School Water Resource Management Outreach Energy 103 News Agency “Agenda.ge” Collaboration Media Engagement in PPD 104 Newspaper “Georgia Today” Media Engagement in PPD Collaboration 105 Newspaper “Messenger” Media Engagement in PPD Collaboration 106 Newspaper “Rezonansi” Media Engagement in PPD Collaboration Online and Printed Journal 107 Media Engagement in PPD Collaboration “Liberali” Collaboration 108 Partnership Fund Energy Consultations 109 PH International Media Engagement in PPD Collaboration 110 PMC Research EPAC Member Collaboration Media engagement in PPD, Energy Policy Mangement Consulting Collaboration, 111 Tax Enforcement and Group Consultations Administration, CSO Capacity Building
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Youth Engagement in Consultations 112 Poti APM Terminals Trade Facilitation Collaboration Consultations 113 Radio “Commersanti” Media Engagement in PPD Collaboration 114 Radio “Tavisupleba” Media Engagement in PPD Collaboration 115 REC Caucasus Water Resource Management Collaboration Regional Management and 116 EPAC Member Collaboration Economic Development Center 117 San Diego State University Youth Engagement in PPD Collaboration Schulze Global Investments 118 Energy Collaboration LTD 119 Strong Society EPAC Member Collaboration 120 Tax Payers Union EPAC Member Collaboration Transparency International Land Registration Reform, 121 Collaboration Georgia EPAC Member 122 TV Channel “Imedi” Media Engagement in PPD Collaboration 123 TV Channel “Maestro” Media Engagement in PPD Collaboration 124 TV Channel “Rustavi2” Media Engagement in PPD Collaboration 125 TV Channel “Tabula” Media Engagement in PPD Collaboration Waste Management Youth Engagement, Internship 126 Collaboration Association Program, EPAC Member Business Perception Survey, 127 Wine Tourism Association Collaboration EPAC Member 128 Women for Tomorrow EPAC Member Collaboration Trade Advisory Group 129 World Experience for Georgia Collaboration Establishment, Energy Youth Engagement in PPD Young Entrepreneur Consultations 130 Trade Advisory Group Association Collaboration Establishment, EPAC Member
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APPENDIX G: SUMMARY OF GRANT ACTIVITIES Reform Project Title Number of Number Implementing Grants in USD Region of Type of Project Applications of Entity Awarded/Penging Implementation Beneficiaries Status Reviewed Grants Awarded Institutionalized Assessment on Collaborative Economic Tbilisi, Regions: Central Completed Framework for Governance Gaps Policy East and West Government 2 1 25,955 Public Research Georgia and Private Consultation Center (EPRC) Sector Reform Assessment on Constraints GMCG LLC Tbilisi, Regions: Media, Public Completed Journalists Face in Covering 1 1 14,915 Kakheti, Adjara and Private Reforms Sector Georgian Reform Progress ISET Policy Tbilisi Central Grant Tracking System (GRPTS) Institute Government, Award 3 1 94,641 Public and signed - Private Sector Ongoing PPD Quality Tracking IDFI Tbilisi Central Grant Mechanism Government Award 3 1 94,700 signed - Ongoing Empowering Women in Association of Tbilisi, Regions: Women Completed Business Young Kakheti, organizations, 8 1 Economists of 24,795 Mtskheta- Women Georgia Mtianeti and entrepreneurs (AYEG) Shida Kartli Regulatory Impact Assessment ISET Policy Tbilisi, Regions Central Completed (RIA) on Irrigation Tariff Institute Government, 3 1 39,445 Methodology Public and Private Sector Establishing PPD Platform in Business and Tbilisi Central Completed Parliament Economic Government, 2 1 29,956 Centre (BEC) Public and Private Sector Business Perception Survey ACT Tbilisi, Regions Central Grant on Policy Reforms Government, Award 3 1 37,779 Public and signed - Private Sector Ongoing Energy Strategy Energy and Water World Tbilisi, Regions Central Completed Reform Consumption End-Use Survey experience for Government In Commercial and Industrial 3 1 Georgia 46,576 Sectors (WEG)
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Water Resource Develop Water Resource Georgia's Region: Georgia Local and Completed Management Management Guidance Environmental Central Reform Documents Applicable for 1 1 Outlook (GEO) 34,365 Government, Georgia Public and Private Sector Green Paper on “Water Regional Region: Local and Completed Allocation Plan Framework – Environmental Mtskheta- Central Challenges for 1 1 Centre for the 34,963 Mtianeti Region Government, Implementation” Caucasus Public and (RECC) Private Sector Computer Models for Water Environment Region: Georgia Private Sector, Completed Resource Management and CSOs 1 1 34,125 Planning Development (ED) Innovative technoloies for Georgia's Region: Local and Grant Water Re-use and Wastwater Environmental Georgia, Central Award Treatment Outlook (GEO) Mtskheta- Government, signed - 1 1 34,450 Mtianeti Region Public and Ongoing Private Sector, CSOs E.F. Methodology Testing Georgia's Region: Georgia Local and Grant Environmental Central Award Outlook (GEO) Government, signed - 1 1 69,900 Public and Ongoing Private Sector, CSOs Water Demand Forecast Regional Region: Local and Grant Environmental Mtskheta- Central Award Centre for the Mtianeti Region Government, signed - 1 1 34,323 Caucasus Public and Ongoing (RECC) Private Sector, CSOs RIA on Law on Water TBD Region: Georgia Central RFA Resources Management Government, Issued 40,000 Public and Private Sector Piloting water allocation TBD Region: Local and RFA modeling using WEAP in the Mtskheta- Central Issued Aragvi River Basin Mtianeti Region Government, 75,000 Public and Private Sector, CSOs
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Tax Enforcement Capacity Building Training for Knowledge Tbilisi Private Sector Completed and Small Business Associations and 2 1 19,500 Administration and SME’s on Tax Code Experience Reform Advocacy Transfer RIA on the Estonian Corporate Association of Tbilisi Central Completed Income Tax (CIT) Model Young Government Implementation in Georgia 2 1 Economists of 27,650 Georgia (AYEG) Tax Perception Survey CRRC Tbilisi, Regions Public and Completed 3 1 20,000 Private Sector
Existing Best Practice of Knowledge Tbilisi Public and Grant Calculation of Natural and and Private Sector Award 1 1 22,350 Production Losses for Tax Experience signed - Purposes Transfer Ongoing Tax Audit Practice Survey and AmCham Tbilisi Central Grant Assessment Government, Award 8 1 30,310 Public and signed - Private Sector Ongoing Crop Insurance RIA on Crop Insurance ISET Policy Tbilisi Central Completed Reform Institute Government, 3 1 29,900 Public and Private Sector State Comprehensive Survey on CRRC Tbilisi, Regions Government, Completed Procurement State Procurement 3 1 39,010 Public and Reform Private Sector Insolvency Insolvency Reform Advocacy Association of Tbilisi Central Completed Reform Campaign Law firms of Government, 2 1 37,249 Georgia Public and (ALFG) Private Sector Building Code Support in Implementation of Georgian Tbilisi, Regions Central Grant Non-Structural Building Code Institute of Government, Award 1 1 89,378 Building (GIB) Public and signed - Private Sector Ongoing Innovations and Regional Youth Innovation Elva Regions Youth and Grant Technology Events Community youth Award 2 1 58,766 Engagement organizations signed - Ongoing Pension Reform RIA on Pension Reform ISET Policy Tbilisi, Regions Central Grant Institute Government, Award 3 1 44,875 Public and signed - Private Sector Ongoing
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Customs and Trade Facilitation System Association of Tbilisi, Regions Central Grant Trade Reform (TFS) Public Awareness and Freight- Government, Award 1 1 31,175 Training Forwarders of Public and signed - Georgia (AFG) Private Sector Ongoing Competitiveness Analysis of TBD Tbilisi, Regions Central RFA the Caucasus Transit Corridor Government, Issued 35,000 (CTC) Public and Private Sector
Total 65 27 1,251,050
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APPENDIX H: G4G ORGANIZATIONAL CHART
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USAID Governing for Growth (G4G) in Georgia Deloitte Consulting Overseas Projects LLP Address: 85 Z. Paliashvili Street, Tbilisi Phone: +995 322 240115 / 16 USAID | GOVERNING FOR GROWTH (G4G)E-mail: IN GEORGIA [email protected] ANNUAL REPORT YEAR 2 117