2017-05-23
The US has been existential for keeping Georgia going in the right direction, Georgian Prime Minister Giorgi Kvirikashvili stated in his speech at the America-Georgia Business Council conference dedicated to the organization's 20th anniversary.
The Head of Government emphasized the council's special role in the deepening of both economic and political relations between the two countries, and thanked the America-Georgia Business Council, and Mamuka Tzereteli personally, for their enormous contributions to promoting Georgia-US partnership.
"This year marks the 25th anniversary of US-Georgia diplomatic relations. The US was one of the first to recognize Georgia's independence after the collapse of the Soviet Union. The United States has been existential for keeping Georgia going in the right direction. We are very grateful for the US consistent position on supporting Georgia's foreign policy aspirations, territorial integrity and sovereignty.
The past 25 years have been important to bring the country from ravages of the civil war to the state where we are today, and we consider ourselves not a post-Soviet country, without any offense to any other country, of course, but we would like to bring a new perception of this country as an Eastern European country," the Prime Minister said.
According to Giorgi Kvirikashvili, Georgia is an Eastern European country according to many objective criteria, such as democratic development, economic dynamism, and consistency of the country going in the right direction.
"We did transform ourselves from a country which was, according to many indicators, very typical with high corruption rates, with low grades of doing business rankings, and also with many other criteria as a typical post-Soviet country. Today we can pride ourselves on having very good indicators; we are a country with one of the easiest doing business ratings. But I would like to highlight something more important. With its problems of territorial integrity violation with occupation and security issues, Georgia tries to present itself with different optics as a country of opportunities. Of course, challenges are there; they remain to be there and we need to cope with all those challenges. At the same time we need to strike the right balance between presenting a country, which still needs intensive help from our strategic partner, but also the country which presents opportunities for regional expansion for US companies, a country which is a connection between East and West, but not a simple liaison between East and West, but a country, a partner of Western world, which is ready to present itself as a gateway for access to the Eastern world," the Prime Minister stated.
While discussing relevant initiatives, Giorgi Kvirikashvili emphasized the creation of the New Silk Road under the One Belt-One Road initiative. According to the Prime Minister, numerous projects are related to this initiative, including infrastructural reconstruction, construction of new ports and reconstruction of old ones, etc.
"Therefore, we would like to cultivate more and more this perception of stable Georgia, reliable Georgia, legible Georgia, a country which is a partner for the business community, and which is a predictable and reliable partner," Giorgi Kvirikashvili underlined.
The Prime Minister described in detail the Government's four-point reform agenda that will advance Georgia to a qualitatively new level of development.
"In four years-it is already year one since we started-this project, the reform plan, is designed to bring transformational impact in strategic areas, such as overhauling the education sector, getting rid of the Soviet legacy in higher education, no longer producing unemployed people by educational institutions, making more emphasis on professional education to create a strong link between employment and education. Introducing German-Swiss-Austrian dual education model to work and study together in partnership with the private sector. Also, introducing new technologies in secondary education, such as distant learning methods for secondary schools in distant parts of the country. For that, we are building fiber-optic network throughout the country, and in 1.5 years from now, more than 2,000 villages and small towns will be equipped by fiber-optic high-speed internet, which will give us a chance to bring best quality teachers to the distant villages of the country," the Prime Minister said.
According to Giorgi Kvirikashvili, governance is one of the central directions of the four-point reform agenda, which involves development in two directions. The first involves service-oriented services using the one-stop principle not only when serving individuals, which has already been introduced by Georgia's Public Service Halls, but also when providing services for legal entities.
"Any legal entity will be able to obtain any service rendered by government institutions in one physical space and under one e-governance platform. For that we are not only creating representative office of all government offices, but we are removing front offices from all government entities, which are currently rendering any services to business entities, and we are locating them under one roof and, again, under one e-governance platform. This is a revolutionary reform, which also entails a lot of optimization, improving the efficiency of government, decreasing any further chances for corruption, which is already very low in the country, but changing the quality of services to business community. Another direction of the governance reform is inclusive governance. With the help of EBRD, we have already started, initiative the Investor Council where we have all major international financial institutions. We have leading local business associations, the Chamber of Commerce, and also several ministers representing the economic block of the Cabinet. We are discussing all the important changes in legislation and regulations, and any hot issues upfront in order to avoid negative surprises for the business community, to make the business environment more predictable. We are creating also a similar platform for civil society and NGOs. I already had several meetings with the leaders of leading NGOs, and we formalized this format. We have already created a similar format for academia and innovations, and now we are in the process to assemble a similar format for political parties, which is probably the most difficult part of it, but we will do that," Giorgi Kvirikashvili stated.
The Prime Minister also spoke of stepping up economic growth as an important part of the four-point reform agenda. According to the Head of Government, profit taxes were abolished in January, with only distributed dividends to be taxed.
"We initiated a startup financing institution together with the Partnership Fund of Georgia. We invited international leaders with relevant expertise. We had around 12 leading Silicon Valley CEOs here in Georgia. There were here for a month, teaching and training local startup entrepreneurs. This was the very successful start for this very important program, not only to finance dozens of startups in Georgia-we already have 60 startup enterprises-but also, which is more important, to promote entrepreneurial spirit in young generation. As part of the economic reforms, we are already starting pension system reform. In the third quarter of the next year, we will launch the pillar to pension system, compulsory savings-based pension system which, on one hand, will ensure the decent living standards for pensioners in the future, but as an immediate spillover impact, it will generate hundreds of millions of long-term local currency investable resources available for long-term investments. In order to absorb these resources, we are also launching capital market reform. In one year from now, local stock exchange will have a link to one of the European platforms. It will be either Warsaw stock exchange, Vienna or London stock exchange. We are discussing all options. In order to make Georgian securities visible and clearable in global custodian networks by European and global investors, and vice versa. This is a fundamental reform that will bring Georgia in a qualitatively new stage, as I said, where Georgia will have viable stock market. Georgia will have local long-term currency resources for investments. Of course, as a major impact of this reform, it will shift the financial burden of pensioners from the sovereign balance to the private sector," Giorgi Kvirikashvili stated.
According to the Prime Minister, the fourth, but financially equally important, reform involves spatial planning in the country that seeks to modernize the country's infrastructure.
"This year, we have already increased infrastructure spending by around 30%. We are doubling infrastructure spending for the next year. We launched many reforms at once. They are in the stage of feasibility, design right now, and from the February-March next year, we will be in a position to launch a significant number of infrastructural projects. Of course, this will have a tremendous positive impact on the pace of economic growth. It also encompasses the modernization and further development of irrigation network, electric transmission network, and, of course, public-private partnerships for co-investments to develop tourist destinations. We have several public-private partnerships. These reforms are truly revolutionary. They are designed for increase the pace of economic growth. They are designed to bring more dynamism and international presence here in Georgia, and first of all, of course, US presence in Georgia. Georgia's ports are key for the development of Georgia, Georgia's economy, its transit function. Of course, we are very proud that, in the process of structuring, the project that has a strategic millennium impact on Georgia's development-this is the Anaklia Port project. It will bring American investors. We already have principal investor, New Jersey-based engineering company called Conti Group. We have the largest banking group in Georgia participating as a principal investor, TBC Group. We are very glad to hear the news about ongoing negotiations to bring large-scale flagship American company as a port operator for this strategic project. Of course, we are open for partnerships from other countries regionally, but we are very glad to have this successful development of this project. Hopefully, we will hear in the nearest future about the closing of these important negotiations for port operator, but we also have existing ports in Batumi and Poti, which are also very important. They will be complementary to develop Georgia's port capacity and transit function," the Prime Minister said.
According to Giorgi Kvirikashvili, Georgia lies at the intersection of the strategic interests of the United States. Accordingly, the Government of Georgia welcomes greater presence of US companies in Georgia. As the Prime Minister pointed out, the America-Georgia Business Council is especially important in terms of attracting to Georgia greater numbers of American corporations and SMEs, so that Georgia's visibility in America may grow, and more American companies may launch their activities at the crossroads between the East and the West, the North and the South.
"This very important strategically. It can bring more jobs, more security, and more connections. I welcome this very important celebration of the 20th anniversary. Now it is time to take this partnership to a qualitatively new level, and make Georgia-America relations enduring pillar of regional security, stability, economic development, and democratization of this wonderful country. Thank you very much for being good friends of Georgia, for keeping Georgia going in the right direction, and thank you very much for supporting Georgia in most difficult times. Georgia remembers that. Not only the government, but the population of Georgia is aware of that, and we cherish this very valuable friendship and strategic partnership," the Prime Minister of Georgia addressed the participants of the anniversary meeting of the America-Georgia Business Council.
Prime Minister's Press Office