Private sector and human-resource development in Georgia

Ministry of Economy, Industry and Trade

Improvement of linkage between policy, resource constraints and budgets

Develop a more realistic medium-term budget framework

Public Expenditure Reviews, PRSC in High Case

IMF

DFID

Budget execution closer to planned

                            Initiate the process to convert a portion of government debt liabilities into long-term debt instruments


National Bank

Assistance to the MoF develop long-term debt instruments, e.g. government bond market

MoF starts to use medium to long-term government bonds to replace the rolling of short-term debt instruments

Financial Sector Advisory Program

IMF

1-10 year government bond market in place

                            Improvement of the management of international reserves of the NBG

National Bank

Advise to National Bank on management of reserves

Increased import coverage

Financial Sector Advisory Program

IMF

Gross foreign reserves to reach over 2 months of imports

                            Completion of tax and customs administration reform

Ministry of Finance, State Tax and Customs Departments

Development of a business-friendly tax environment

Increased collection of excise taxes and improved VAT administration

Public Expenditure Reviews, Business Environment Study, PRSC in High Case

IMF USAID EU

Collection of excise taxes to reach over 2 percent of GDP

                            Implementation of treasury reform, centralization of treasury service; development and introduction of commitment accounting and control system; development and introduction of expenditure control system


Ministry of Finance

Assistance to the MOF to improve its cash and debt management capacity and skills



Consolidation of effective control system, and adoption of a single treasury account

CPAR Updates, Public Expenditure Reviews, PRSC in High Case

IMF

Improved cash management and debt management capacity

                            Improve government procurement system and expand scope of its coverage

State Procurement Department, Ministry of Economy, Industry and Trade

Establishment of a transparent state procurement system; decentralization of State procurement functions to line agencies

Greater efficiency and competition within the system; reduced delays and corruption in procurement process

CPAR, Public Expenditure Reviews, PRSC, project lending (e.g. Secondary Roads and Trade and Transport Facilitation)


Recommendations of Country Portfolio Assessment Report implemented

                            Gradual increase of the share of targeted programs in the state budget

Ministry of Finance, Ministry of Economy, Industry and Trade

Develop program-based budgeting

Improve consistency between medium-term indicative plan and the budget

Public Expenditure Reviews, Public Sector Management Credit, PRSC in High Case

DFID

Public Expenditure Reviews assessment of better targeting of programs in the budget

                            Inventory of budgetary arrears

Ministry of Finance

Establish accurate estimates of past government liabilities

Better information on, and reduction in, arrears

CFAA Updates, Public Expenditure Reviews

IMF

Reduced arrears

                            Increase the number of participants in treasury bill market and improve bidding mechanisms to increase maturity and reduce the discount rate through market

Ministry of Finance, National Bank, National Commission of Securities

More competitive and efficient T-bill market

Short term: more participants for competitive bidding, and for non-competitive quota; medium term: cash management, coordination between MOF & NBG on T-bills/open market operations; long term: independent debt management office

Financial Sector Advisory Program, PRSC in High Case

USAID

FIRST



Lower T-bill yield

                            Develop legislation promoting the activities of investment funds in order to introduce best corporate management practice in enterprises and develop stock market

Ministry of Finance, National Commission of Securities

Help build legal environment for investment funds; provide information/advice

Establishment of legal environment for investment funds

Financial Sector Advisory Program


Regulation of investment funds in place; NCS has capacity to supervise those funds

                            Prepare and adopt bill on Personification and Registration of Insurance Contributions to Social Insurance System required for regularizing first (distributive) pillar of pension system and development of pensioners personified registration system

Ministry of Labor, Health and Social Protection

Support to Ministry of Labor, Health and Social Protection on legal reforms and their implementation

Law adopted successfully

Social Protection Reform Project


Regularization of 1st pillar of pension system; better links between pensions and contributions

                            For private pension funds, adopt statutory normative acts in accordance with the laws on Non-Government Pension Funds and on Securities Market

National Securities Commission, Ministry of Labor, Health and Social Protection

Support to National Securities Commission and Ministry of Labor, Health and Social Protection on legal reforms and their implementation

Normative acts developed and adopted

Social Protection Reform Project


Improved regulatory environment in the area of private pensions

                            Prepare amendments to the Tax Code and investment rules of pension assets to promote the development of non-banking financial sector, including nongovernmental voluntary insurance system

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