Local Economic Development Plan 2020-2021 Zugdidi Municipality Georgia December 2019 1. Executive Summary The present Local Economic Development Plan (LED) has been prepared within the framework of Initiative “Mayors for Economic Growth” (M4EG). In the process of elaboration of the plan, a working group was set up with the involvement of local authorities, business sector, non-governmental organizations Due to its favorable geographical location, which implies the presence of the Black Sea coast, the prospect of the construction of Anaklia deep-sea port, in the vicinity of Zemo- Svaneti region, Zugdidi provides the opportunity to establish itself as a transit-logistics center of regional importance and a so-called "hobby" for managing mountain and seaside resorts. The purpose of the present plan is to define tasks that will support the long term improvement of the municipality and plan particular actions with simultaneous analysis of the current situation. The document reflects the economic analysis of the situation in the municipality, as well as challenges, strengths and weaknesses, opportunities and threats, vision and goals of the municipality development. To achieve economic growth, it is important to overcome weaknesses such as: insufficient investment volume and lack of effective mechanisms for attracting them, limited access to finance, underdeveloped labor training systems, lack of qualified staff, insufficient awareness of tourism potential and promotion. This is due to the low awareness of the population about advanced technologies, weak advertising support and marketing of the products produced in the municipality. The vision of Zugdidi Municipality is to become one of the fastest growing municipalities in the region with its stable economy, strong transport sector, dynamically developing tourism and agriculture, processing and small business sectors, an attractive investment climate and infrastructure, which is important increase ad revenue, as a precursor to a significant improvement in living standards and the long-term well-being. The aim of the municipality is to improve the investment environment, increase tourist attractiveness and support the development of small and medium businesses. To achieve these goals, the local economic plan includes measures such as: developing investment packages, improving tourism infrastructure, enhancing entrepreneurial knowledge, helping to find financial resources, organizing exhibitions and festivals to promote local production and awareness. Zugdidi Municipality is ready to finance major part of the activities envisaged by the plan from its own local budget. As for SME development, donor recruitment is planned. 2. Table of Contents Preface by the Mayor 1. Executive Summary 2. Table of Contents 3. List of Tables and Figures and Abbreviations 4. Introduction to Plan 5. Process of Local Economic Development Plan Development 6. Local Economic Analysis 6.1. Analysis of Local Economic Structure 6.2. Local Cooperation and Networking 6.3. Business-friendly, Transparent and Corruption-free Administration 6.4. Access to Finance 6.5. Land and Infrastructure 6.6. Regulatory and Institutional Framework 6.7. Skills and Human Capital, Inclusivity 6.8. External Positioning and Marketing 7. Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis 8. Vision and Objectives 9. Action Plan 2020-2021 10. Financing Scheme 11. Monitoring Indicators and Mechanisms Annexes Annex A. Process of Local Economic Development Plan Development Annex B. Mayor’s Order on creation of working group on Local Economic Development; Annex C. LEDP Protocols and registration sheets of meeting and working group meetings with private sector in the process of development; Annex D. Members of Local Partnership; Annex E. Statistical information about Zugdidi Municipality 3. List of Tables & Abbreviations List of Tables Table 1. SWOT Analysis Table 2. Action Plan Table 3. Financing Scheme Table 4. Monitoring indicators and mechanisms Abbreviations M4EG - Mayors for Economic Growth LED - Local Economic Development IDFI - Institute for Development of Freedom of Information CTC - Counseling and Training Center MSDC - Management Systems Development Center ADB - Asian Development Bank SWOT - Strengths, Weaknesses, Opportunities, Threats DMO - Destination Management Organization 4. Introduction to the plan In May 2018 Zugdidi City Hall joined the EU initiative “Mayors for Economic Growth” under the signature of the Mayor . Zugdidi municipality is located in the central part of western Georgia (area - 682.1 sq. Km). Zugdidi borders with the center of the region (Samegrelo Zemo Svaneti). It is cultivated on the Odishi plain, on the bank of the Chkhoushia River, 110 m above sea level. The administrative center of the municipality is Zugdidi, which is located 339 kilometers (5 hours) away from capital of Georgia. The nearest airport (Kutaisi International Airport) is 90 km away and 70 km from Poti port. The construction of Anaklia Deep Sea Port has already begun on the territory of Zugdidi Municipality and Zugdidi will become a port municipality in the nearest future. As of January 1, 2019 the number of population is 101.8 thousand, and according to the 2002 census it was 150.2 thousand. The population has declined by 48.4 thousand, or 32.2%, over the last 17 years. If we compare the population decrease throughout the country (population in 2002 decreased from 3991.3 thousand as of January 1, 2019 to 3723.5 thousand, ie 6.7%), the population decrease is particularly high. According to the 2014 census, 42 998 (40.8%) live in the administrative center of the municipality, and 62 511 in rural areas (59.2%). Population distribution by sex is as follows: 50 306 (47, 7%) - male, 55 203 (52.3%) - female. The median age for the municipality is 40 years, 38.4 for men and 43.1 for women. The share of the working population is 67%. In recent years the migration tendency has been growing. It especially concerns young, qualified and capable of work people, who move to work to urban settlements of Georgia and more developed countries due to good employment opportunities. The EU initiative "Mayors for Economic Growth" is a real opportunity to achieve sustainable local economic development of the municipality. The present economic development plan was developed for the purpose the initiative “Mayors for Economic Growth”, which was created based on a close dialogue with private and public sector focused on the development . During the development of the plan, the Partnership members were actively involved, their recommendations and opinions were reflected in the final document. The Local Economic Development Plan has been prepared as part of the EU's "Mayors for Economic Growth" initiative and cannot be considered as a substitute for other similar plans. The plan was developed in cooperation with the private sector and civil society, according to the standards of the initiative “Mayors for economic growth", in line with the methodology submitted by the Secretariat of the initiative. The purpose of the municipality is to ensure the involvement of all stakeholders, both at the planning and implementation stages. This plan is in line with national and regional strategies - Georgian Agriculture Development Strategy 2015-2020, Georgian Tourism Strategy 2025, Samegrelo-Zemo Svaneti Region Development Strategy 2014-2021 and will facilitate their implementation. Major part of the activities will be funded from Zugdidi Municipal budget and will be reflected in the local budget in the form of programs and the rest will seek external resources. 5. Process of Local Economic Development Plan Development In order to develop the Local Economic Development Plan (LED) of the Municipality of Zugdidi, a working group was set up to work on the development of the document, whose task was to gather and analyze information. The composition of working group was as follows: one representative from the private sector, one from the civil sector and three from the local government. (Giorgi Shengelia-Zugdidi Municipality Mayor; Irakli Pipia - Local Economic Development Officer, Marika Khasia - Head of Investment Projects and Donor Relations, Founder of Gia Shelia-LLC "Novation 2009" (Business Sector), Merab Danelia - "Regional Development" Association (RDA) (Non-Sector) Working Group). A Local Economic Development Partnership also has been established in order to be actively involved local stakeholders in the development of the plan. The partnership is comprised of three representatives from the private and non-governmental sectors and one from the education sector, three of whom are women and four men. Key decisions were made by a majority of votes ,most of which decided upon by way of consensus. The average intensity of meetings was one meeting per month. During the development of the plan, meetings were held with representatives of the banking and tourism sectors, farmers and NGOs. Attendees were asked to fill out questionnaires in accordance with the methodology provided by the M4EG Secretariat and email them. Send by mail to LED officer. A meeting was held with City Hall officials to coordinate the process of developing the LED plan. 6. Local Economic Analysis 6.1. Analysis of local Economic Structure: The local economy of Zugdidi municipality is mainly represented by agriculture, processing industry, construction, tourism, services and trade. The most promising and developing directions are agricultural, tourism and processing industries. According to the