Country Overview
Country Facts
Overview of U.S. Government Assistance
In FY 2005, the USG allocated an estimated $149.11 million in assistance to Georgia (including $0.99 million in FY 2004 FREEDOM Support Act funds), including:
In FY 2005, a total of 440 Georgians traveled to the United States on USG-funded exchange programs.
FY 2005 Assistance Overview
Georgia's success is crucial to U.S. efforts to spread democracy in Eurasia. It is literally on the "frontier of freedom" in the post-Soviet sphere. Georgia's 2003 "Rose Revolution" ushered into power a young, energetic and democratic opposition determined to wipe out the corruption characteristic of the Soviet period. Georgia is also a regional leader and a co-founder of the Community of Democratic Choice, a group of democracies from former Warsaw Pact countries. Finally, as the largest per capita contributor to the Coalition in Iraq (second only to the U.S.), Georgia is a strong ally to the U.S. in the Global War on Terrorism. Georgia has 134 soldiers deployed in Kosovo and 858 in Iraq.
The U.S. Government's priorities in Georgia are to promote democratic reform, resolve regional conflicts, foster energy independence, and assist economic development. Since the Rose Revolution, the Government of Georgia (GOG) has undergone a massive and historic set of democratic reforms in almost every sector of government. The process of consolidating democracy continues with major U.S. Government (USG) assistance. The GOG is actively trying to resolve the separatist conflicts of South Ossetia and Abkhazia. The USG lends significant diplomatic support to these efforts and intends to expand its assistance to these areas. With USG assistance, Georgia is working to free itself from near total energy dependence on Russian sources of energy.
The U.S. has recognized the strategic importance of Georgia as well as its progress to date in implementing an ambitious reform agenda. In 2005, the Millennium Challenge Corporation (MCC) signed a compact for Georgia worth $295 million to alleviate poverty by fostering economic development.
KEY ISSUES
In the two years since the Rose Revolution, Georgia has made tremendous progress, although serious challenges remain. To address one of the most serious problems, corruption, the GOG launched a sweeping anti-corruption campaign. In that time the police has been transformed from one of the least trusted to one of the most trusted public institutions. The GOG accomplished this by firing 12,000 officers and re-training, re-hiring and re-equipping a new force that now enjoys the public's trust, and by unveiling an Anti-Corruption Action Plan that calls for income disclosure for high-level officials in each of its ministries. The GOG also undertook a successful educational reform initiative that introduced nationwide standardized exams to create a transparent system of access to higher education.
Among other achievements, the GOG successfully rolled-out a peace plan for South Ossetia which included three phases: demilitarization, economic development and status discussions. This plan was welcomed in a statement on Georgia by all 55 member states of the Organization for Security and Cooperation in Europe (OSCE) at the Ministerial in Ljubljana on December 6, 2005. Since then, the South Ossetis presented their own plan which was welcomed by the GOG.
With regard to Abkhazia, the GOG continues to press for a peaceful resolution of the conflict by participating in a UN-led dialogue with the Abkhaz on issues of security guarantees and the return of internally displaced persons (IDPs). This dialogue is supported by the Friends of the Secretary General's Special Representative to Georgia, and includes the U.S., U.K., France, Germany and Russia.
Georgia is working diligently to implement requirements of the North Atlantic Treaty Organization (NATO) Individual Partnership Action Plan to give momentum to their desire for an invitation to join NATO in 2008. Talks with the European Union about the European Neighborhood Policy, after being delayed for reasons not related to Georgia, began in 2005.
Within the economic sphere, Georgia's Gross Domestic Product (GDP) grew from 6.4 percent in 2004 to 9 percent in 2005. Inflation is stable at 2.9 percent. Tax revenues increased, allowing pensions to double. Following the adoption of the new tax code, the GOG reduced income taxes from 20 percent to a 12 percent flat rate, social taxes from 33 percent to 20 percent and VAT from 20 percent to 18 percent. In 2005 alone, the GOG eliminated 750 regulations.
Still, despite Georgia's tremendous progress, serious challenges remain. Georgia needs substantial assistance in continuing to consolidate its reforms. This specifically includes: the institutionalization of good governance; the reduction of the incidence of corruption and development human capacity to deliver public services; the decentralization of authority to local institutions and strengthening of local democratic processes; the creation of an independent judiciary that fairly and consistently applies the law; the resolution of the separatist conflicts of Abkhazia and South Ossetia; and the diversification of Georgia's energy sector and development of its economy.
COUNTRY PERFORMANCE MEASURES
Georgian Democratic Reform
The "radar" or "spider web" graphs below illustrate Georgia's democratic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark lines indicate how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and, (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country_progress/.
The graph shows
*Actual 2005 not yet available.
The graph shows
*Actual 2005 scores not yet available.
Georgian Economic Reform
The "radar" or "spider web" graphs below illustrate Georgia's economic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark line indicates how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country progress/.
The graph shows
*Actual 2005 scores not yet available.
The graph shows
*Actual 2005 scores not yet available.
FY 2005 Country Program Performance
Democratic Reform
Two years after the Rose Revolution, President Saakashvili's administration has demonstrated a firm commitment to governance reform. The GOG has reduced the number of ministries from 28 to 13, adopted legislation establishing the Civil Service Council on Public Service, and instituted reforms to the Parliamentary Rules of Procedure. Additionally, the GOG undertook a major structural reform of the courts, initiated civil registration reform, and drafted a comprehensive package of decentralization legislation. Despite remarkable progress, however, a democratic deficit persists.
Since 2004, constitutional amendments have centralized power in the hands of the executive and the presidency. Judicial independence requires more work and the disruption caused by the rapid turnover of high level government officials continues. Public administration reform, while well intentioned, remains somewhat adrift, with individual ministries and entities pursuing uncoordinated efforts. Challenges persist concerning parliamentary oversight of the executive and the dominance of the ruling party. Recent violence in separatist regions has again highlighted Georgia's potential for conflict.
U.S. ASSISTANCE PRIORITIES
To sustain momentum and assure the long-term viability of Georgia's democratic transition, USG assistance priorities in FY 2005 were to: address corruption and improve public sector transparency and accountability at both the national and local levels; advance the rule of law; foster broader public participation in political life; and promote national integration of Georgia's ethnic minorities and confidence building measures between the GOG and the separatist regions of South Ossetia and Abkhazia.
PROGRAM PERFORMANCE
USG assistance trained the staff of the Offices of the President and Prime Minister in communications and outreach, provided IT equipment, and made recommendations to improve inter-ministerial coordination. The program also launched a Civil Registry Reform project. Working in parliament, USG assistance trained 150 MPs on faction management and constituency outreach, and 380 staff members on legislative drafting. Roundtable discussions on eight different legislative drafts involved more than 1,400 citizens and 60 MPs. USG assistance supported the creation of the Speaker's Advisory Board, the Parliamentary Women's Gender Equity Council, and the Parliamentary Internship Program. Over 15 mid-level staffers in the executive branch received travel and training on NATO and security issues to increase human capacity for meeting necessary reforms in defense and military programs.
USG assistance contributed to the implementation of a multi-year budget framework to improve the budget process and tax revenue collection. The first-ever budget policy and procedures manual for Ministry of Finance budget staff was developed to document and improve the budget development process. Training for over 40 budget staff was conducted—covering over 1,000 staff training hours—in the area of budget formulation, and the format and content of the budget law was revised to increase budget comprehensiveness and transparency. In the area of taxation, collections laws and procedures were developed to simplify the collections process and assistance to the Large Taxpayer Unit resulted in increased tax revenue. Audit training was conducted to increase the skills and capacity of Tax Department staff and a performance management system was instituted. USG assistance strengthened the taxpayer registration database to enhance taxpayer compliance.
Local assistance programs promoted passage of a property transfer law and development of six other draft laws, including a local budget law, to increase the autonomy of local government. These programs helped more than 20 municipalities across Georgia to strengthen their management capacity, and over 600 citizens attended public hearings prior to the passage of program budgets in 14 cities.
Assistance programs helped key Georgian stakeholders develop a framework for judicial reform, conduct judicial qualification examinations, establish a vetted unit of money laundering investigators and prosecutors, and increase public awareness of corruption and pressure on judges. USG assistance also supported the creation of pilot, state-run legal aid bureaus, provided anti-trafficking legal aid to victims, and launched an anti-trafficking in persons public awareness campaign.
The GOG is committed to reforming its current Soviet style criminal procedure system. Parliament recently passed amendments that had long been advocated by the USG, including provisions authorizing plea-bargaining and the use at trial of audio/video tapes taken by investigative journalists. A comprehensive Criminal Procedure Code, created with the support of USG assistance, will be presented to parliament in early 2006. This draft Code will streamline the investigative process, implement rules preferring probation over pre-trial detention, and launch the use of jury trials in controversial cases where judicial independence would otherwise be sorely tested.
As a result of USG assistance, four of the strongest opposition political parties (Labor, New Conservatives, Freedom Party, and Conservators) formed an alliance to conduct a primary system to field a unified candidate against the ruling United National Movement's candidates in the October 1, 2005 bi-elections. The program provided reliable opinion poll survey data to all major political parties and under the youth and women component, worked with two leading Georgian youth NGOs to train domestic election observers for the 2005 parliamentary by-elections.
USG assistance in the form of American Corners, Library Development Grants, International Information Programs (IIP) print resources and Internet Access and Training Program (IATP) support provided over 15 semi-rural populations with information resources. This provided scarce education and research capability at local libraries, NGOs, and educational institutions. As a result, key regional populations had better access to educational exchange programs, English resources, local laws and information on U.S. democratic institutions.
Supporting independent media, USG assistance emphasized the development of a stronger advertising market, provided management training and business support for 23 TV stations and 20 newspapers, supported the organizational development of three major industry associations, and continued journalist training through the Caucasus School for Journalism and Media Management. In the area of civil society development, USG assistance enabled eight coalitions comprised of 37 civil society organizations to pursue successful issue-based advocacy campaigns in education, water and sanitation, elections, and human rights protection. A visiting speaker specialist improved the quality and effectiveness of news reporting at Ajara's two television stations. Travel and training for local journalists and correspondent greater professionalism led to more civic-minded programming at leading national stations.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how USG assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Democratic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of USG assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.
Performance Indicator: Governance Index. This indicator measures the stability of the governmental system, authority of the legislative bodies; decentralization of power; responsibilities, election and management of local governmental bodies, and legislative and executive transparency. (7-point scale: 1 indicates good governance, 7 indicates poor governance) The 2005 rank is based on 2004 data. Source: Freedom House, Nations in Transit 2005. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2002 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
5.0 |
5.75 |
5.25 |
5.0* |
*Refers to newly-formed "National Democratic Governance Index."
USG assistance contributed to this improvement by strengthening the administration of targeted high level Executive Branch institutions, including the Offices of the President and Prime Minister, and the Government of the Autonomous Republic of Ajara; improving budget and financial management processes consistent with Public Expenditure and Financial Accountability (PEFA) performance standards; strengthening parliamentary operations and oversight; assisting central authorities, the parliament, and local government associations to promote decentralization of legal reform; and assisting more than 20 municipalities across Georgia to strengthen their management capacity and to provide quality services.
Performance Indicator: Independent Media Rating. This indicator addresses the current state of press freedom, including libel laws, harassment of journalists, editorial independence, the emergence of a financially viable private press, and Internet access for private citizens. (7=lowest, 1=highest) The data are based on previous calendar year. Source: Freedom House Nations in Transit 2005. The 2005 rank is based on 2004 data. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2002 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
3.75 |
4.0 |
3.75 |
4.25 |
USG assistance helped to develop professional and self-sustaining independent media in Georgia that provided citizens with balanced and objective news and information. These efforts worked to limit the impact of a decrease in pluralism as well as an environment of self-censorship, factors which led to a decline in the Freedom House rating.
Economic Reform
Georgia still faces gaps for several economic performance indices. Over 50 percent of the population is below the poverty line and of that amount, 50 percent are in extreme poverty. Extensive layoffs in the public sector helped create leaner, more efficient government, but this contributed to a rise in the unemployment rate. By some estimates, the shadow economy continues to make up almost 70 percent of the Gross Domestic Product (GDP), and many people survive on subsistence agriculture. The share of employment in small and medium enterprises remains low, and non-bank financial reform is still in its infancy. Major sectors of employment, such as agriculture, have failed to build capacity to compete in export markets, while badly managed state-owned enterprises dominate rail transportation, ports, and other key sectors.
A number of programs for enterprise finance have been established, and access to medium- and long-term finance has improved somewhat, but greater improvement is needed. In addition, entrepreneurs lack market-oriented business skills. Foreign direct investment per capita remains low because of territorial conflicts, corruption, non-transparent administration of taxes and customs procedures, poor and deteriorating infrastructure, and a broad array of administrative barriers. USG assistance in these areas is beginning to have an impact. The greatest challenge to growth is Georgia's difficulty in transferring reforms on paper to reforms in real life. Georgia has implemented many laws that, in theory, will help economic growth and development and increase tax revenues, but the GOG has run into difficulty developing procedures to implement those laws. Political willpower to push through difficult reforms will be crucial.
The current GOG administration's greatest accomplishments include sustained increases in tax revenues, a reinvigorated privatization process, and improved business environment reform. GDP per capita rose higher than expected to $1,300 in the first half of 2005. Privatization proceeds and tax receipts increased the GOG's ability to finance needed public investment and social sector expenditures. Georgia's commitment to reform has elicited strong international support, including a restructuring of debt to the Paris Club, and large inflows of bilateral and multilateral loans and grants. The banking sector continues to grow through greater transparency and access to capital by the rising middle class, and it is one of the shining stars in Georgia's steps to full economic reform.
Due largely to the GOG's commitment to democratic and economic reforms, Georgia and the U.S. signed a Millennium Challenge Compact for more than $295 million in September 2005. In FY 2006, funds will begin to be disbursed, targeting a reduction of poverty as well as a stimulation of economic growth in the regions outside of Georgia's capital, Tbilisi, where more than 50 percent of rural households live below the poverty line. By focusing on rehabilitating regional infrastructure and promoting private sector development, the program will directly benefit approximately a half-million Georgians.
U.S. ASSISTANCE PRIORITIES
USG assistance seeks to help Georgia advance along the road to energy independence; foster private-sector growth; cultivate an open and favorable investment climate and resist protectionist demands; reduce poverty by spreading the benefits of sustained economic growth, job creation, and reform to all Georgians; eliminate rampant corruption; and increase revenues to finance government services, in part by reforming the tax and customs services. USG programs are concentrated on improving the fiscal policy and economic performance, especially in the energy sector, and speeding the transition to a market economy.
PROGRAM PERFORMANCE
Georgia saw progress in policy areas affecting the private sector. USG-funded advisors worked closely with the GOG to develop key legislation necessary to improve the business environment. As a result, Georgia enacted a simplified tax code, which eliminated 9 of 21 taxes and improved tax administration. Tax revenues increased by 26 percent in the first half of 2005 compared to the same period the previous year. A new licensing law cut the number of steps needed to license a firm from over 900 to just over 150. The time needed to register property fell by 75 percent, and related costs fell by 70 percent, largely due to these accomplishments, a World Bank/International Finance Corporation study ranked Georgia as the runner-up reformer among 155 countries.
The GOG is committed to privatizing all but its most nationally strategic energy infrastructure. To ensure impartiality and transparency of the privatization process, USG assistance helped the Ministry of Economic Development create a website that serves as a main source of privatization information and assisted with the development of a law to enable the privatization of over 900,000 acres of state-owned arable land. USG assistance also worked with local farmers to facilitate the export of over $7 million worth of agricultural products.
Georgia's energy sector made improvements in FY 2005, but energy infrastructure still requires a great degree of attention if Georgia is to become energy independent. USG advisors helped the GOG strategically plan and budget for the greater than $600 million in government and donor resources now targeted to the energy sector. At a major state-owned electricity distribution company under USG-funded management, monthly revenue collections doubled to over $3.5 million this year, with annual collections compared to the value of purchased electricity reaching almost 54 percent, an increase of greater than 25 percent over last year. This achievement is principally attributable to increased control over distributed power, aided mainly by the USG-funded installation of over 9,000 communal meters and 12,000 individual meters. This gave the energy company the ability to bill over 560,000 new customers based on their actual consumption rates. These efforts not only have increased revenues to the company, but have also resulted in reduced consumption throughout the network. The energy company is slated for privatization in 2006 and USG assistance to the Ministry of Energy has outlined the changes to policy, law, and regulation necessary for a successful privatization. However, the process managed by the Ministry of Economic Development does not allow ample time for serious investors—those who will invest in the sector, operate commercially, and provide good customer service—to conduct due diligence. The USG is beginning to engage on this issue.
The USG has two resident advisors and two intermittent advisors who provide assistance to the Ministry of Finance and National Bank in the areas of tax, budget, debt, and financial intelligence. As a result: The work of the Financial Monitoring Service (FMS) has placed two commercial banks under scrutiny of the General Prosecutor's Office for involvement in international money laundering schemes. USG assistance continues to encourage the GOG to bolster the supervision of non-banking businesses, such as casinos, to insure they are complying with the reporting law. The State Tax Department has identified criteria and measures to evaluate their top managers. Currently the only criterion is meeting monthly revenue targets. A more diverse and balanced set of goals will eventually lead to increased overall revenue and the reduction of taxpayer abuse. The GOG Tax Department still needs to develop a good taxpayer database to identify the taxpayer universe and ensure compliance. The Ministry of Finance's Budget Department has improved the orderliness, transparency, and quality of the state budget process by strengthening budget development policies and procedures, providing training to the budget staff within the Ministry of Finance, and revising the format of the annual budget law. Georgia received its first-ever sovereign credit rating from Standard & Poor's: B short-term, and B+ long-term.
USG technical assistance activities introduced economic and business concepts based on a free-market system to Georgian agricultural students. With USG support through the Distance Education Program, Texas A&M and the Caucasus School of Business launched an MBA agribusiness program. USG assistance programs improved agribusiness by providing equipment for meat processing facilities, milk collection and cooling equipment for the dairy industry, started a village-based honey bottling company, and graduated 23 Georgians and Armenians at the USG-supported teaching center in Yerevan.
The USG International Visitor Program helped improve Georgia's tourism potential and promote economic development by teaching modern techniques of museum governance, museum and cultural center development, historic site management, urban planning, zoning, and development. The Ambassador's Fund for Cultural Preservation preserved and prevented a 7th century early Christian monument from being destroyed. The Community Connections program provided training for orchard farmers, arts managers, tourism managers, and a variety of small business owners that will improve the overall management and profitability of their businesses. The program also provided continued outreach and a small grants program for the program's alumni.
USG assistance contributed to an economic assessment which recommended the creation of a small business that could employ people with disabilities. Another USG-funded project developed policy recommendations for the National Security Council (NSC) of Georgia to support Georgia's efforts to focus on economic security issues in its privatization policies. The project concluded that the GOG lacks an overall economic strategy, and that the current privatization policies are falling short of expectations and in some ways promoting the need for other economic projects. The project recommended that Georgia look at the entire economic security issue in Georgia.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how USG assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Economic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of USG assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.
Performance Indicator: Economic Reform Index. Scores range from 1 to 4, with 4 being most advanced. This indicator includes components on small-scale and large-scale privatization; trade liberalization; price liberalization; corporate governance; competition policy; banking; and non-banking financial reforms. The 2005 rank is based on 2004 data. Source: European Bank of Reconstruction and Development. Found online: www.esdb.cdie.org/cgibin2/broker.exe?prgram=programs.meta_src_1.sas&_service=default
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
2.96 |
3.0 |
3.1 |
3.3 |
Georgia exceeded its CY 2005 target due to improvements in two of the component indices in 2005: enterprise reform (corporate governance) and large-scale privatization have increased from 2.0 and 3.3 to 2.3 and 3.7, respectively. Further improvement may be seen once year-end data have been incorporated. These improvements are related to work of USG assistance to the Ministry of Economic Development during its privatization campaign. Further, USG programs to reform the business climate, including the revision of the tax code, improved private sector participation in policy making, anti-corruption programs, property and land registration reform, improved access to credit and microfinance, and customs and border control reform contributed to the increase in the index of economic reform.
Performance Indicator: Agriculture, value added (as a percentage of GDP). This indicator measures the net output of the cultivation of crops and livestock production, as well as the forestry, hunting, and fishing sectors, as a percentage of GDP. Source: World Bank World Development Indicators 2005. Found online: www.worldbank.org.
|
CY 2002 Baseline |
CY 2003 Rank |
CY 2004 Target |
CY 2004 Rank |
|
21 percent |
20 percent |
20 percent |
16 percent |
Performance Indicator: Gap Between Energy Production Costs And Payments For Power (Million GEL). This indicator measures the gap between the costs of producing energy by Georgian producers and exporters and the amount paid by direct customers (industry and electricity distribution companies). As incentives to commercial operation and monitoring of the sector improve and disincentives are removed, payments for power will increase. As a result, Georgia will have greater options for purchasing power and will reduce its dependence on one supplier. Source: Georgia Wholesale Electricity Market (GWEM) forecast for 2005. Data used to calculate this indicator is available online: www.gwem.org.ge/financial.htm.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
58 M GEL |
55.9 |
28 |
28 |
The main users of energy in Georgia are the United Energy Distribution Company (UEDC), Telasi, Abkhazia, and large industry. The improvement reflected by the above data is largely due to the improved performance of UEDC, which was directly supported by the USG. In addition, the GOG Ministry of Energy encouraged the commercial practices of private companies through its re-negotiation of the ownership agreement with Telasi.
Note: Though the 2003 baseline and 2004 Rank included Abkhazia usage, this usage was not included in the target reported here, or in the rank, for 2005. Abkhazia's usage is greater than that of Tbilisi, and continues to increase, despite the fact that the region has only 15 percent of the capital's population. A politically-motivated decision by the GOG has resulted in Abkhazia's power usage being uncontrolled and unpaid-for.
Social Reform and Humanitarian Assistance
In FY 2005, the GOG Ministry of Health worked with the USG and other development partners to develop integrated polices for the health and social sectors. Although progress was made, major challenges remain and institutions and systems in these sectors are weak and deteriorated. Although GOG spending in these sectors is expected to rise in 2006, budgets are still too low to provide adequate health and social services to the population. A high mortality rate of children under the age of five and declining secondary school enrollments reflect major gaps in Georgia's health and social sectors. The poverty rate remains high as well and increased job opportunities and incomes, particularly in rural areas, are needed to sustain economic growth. Provision of adequate housing for internally displaced persons (IDPs) remains a problem in Georgia, as over 245,000 people have been displaced from their homes in Abkhazia and South Ossetia, with nearly 45 percent now living in poorly-adapted collective centers.
In the education sector, the Ministry of Education is reforming the basic, vocational, and higher education systems, responding to the needs of the labor market, and bringing higher quality and more relevant education to the country's youth. Despite this improvement, significant work remains. Improvements in the quality of education, particularly at the secondary level, are needed, and schools outside regional capitals remain poorly equipped with have low-paid, unmotivated teachers. Access to information technology is very limited outside of the capital, and regional libraries are in a state of disrepair with antiquated collections and no Internet access. Georgia's social disunity is exacerbated by the social and economic isolation of minority groups caused by a lack of access to education.
U.S. ASSISTANCE PRIORITIES
In the health sector, USG assistance priorities include: reduction in the transmission and impact of HIV/AIDS; prevention and control of infectious diseases of major importance; expansion and improvement in access to health services in maternal and child health; and family planning to increase healthy reproductive behavior. Education-related USG assistance targets the solidification of a national college entrance examination, restructuring of academic institutions, and decentralization of management, programming, and financing services to regions. USG programs also aim to mobilize communities, improve job and business opportunities in rural areas and assist in the integration of minority populations—ethnic Azeri, Armenian, and Islamic groups—and separatist regions, specifically targeting youth. The USG will continue to work with NGOs and donors to provide housing for refugees and IDPs.
PROGRAM PERFORMANCE
In the health sector, USG assistance assisted the Ministry of Health in creating a national health account system that will serve as the basis for policy development and establishing an organizational and policy framework for reproductive health and infectious diseases. USG assistance helped to increase the Contraceptive Prevalence Rate to 47 percent a significant improvement over the 1999 rate of 40.5 percent. Strides were also made to introduce, adapt, and implement international approaches to control infectious diseases; improve mother and child health, including reproductive health/family planning (RH/FP) services; and strengthen health support systems. With access to better data, the result of USG assistance, the Ministry of Health was able to determine that, for the principal measure for immunization coverage, for diphtheria, pertusis and tetanus, there was a small rate increase from 2004 to 2005. USG assistance supported a drop in vaccine wastage by 10 percent. Additionally, USG-supported National Health Accounts (NHA) data facilitated an increase and more effective allocation of GOG health care funding for 2006.
As Georgia has a low HIV/AIDS prevalence rate, USG assistance focused on surveillance and prevention, providing educational messages to approximately 800,000 people. In addressing interventions to bring about Sexually Transmitted Infection (STI)/HIV behavior change, USG assistance outreach and peer-led activities directly benefited over 12,600 individuals from high-risk groups. According to the 2005 Behavioral Surveillance Survey (BSS), use of shared injecting equipment decreased significantly from about 79 percent in 2002 to just below 43 percent in 2005. Over this same period, the use of condoms among prostitutes increased from 86.7 percent to 94.4 percent.
The United States continued as a key GOG partner to support routine and supplemental immunizations in an effort to prevent the spread of infectious diseases. This relationship, combined with close donor coordination, resulted in adequate vaccine supplies, and strengthened institutional and human capacity. Georgia's immunization coverage rate was sustained at 80.9 percent in 2005, a slight improvement over the previous year. USG assistance contributed to a decline in vaccine-preventable diseases and retention of the Georgia's polio-free status. The GOG significantly increased co-financing for vaccines to 40 percent in 2005, up from 20 percent in 2002. USG assistance in tuberculosis control resulted in a treatment success rate increase from 60 percent to 71 percent over a two-year period ending in 2005.
During FY 2005, over 80,000 patients were served in USG-supported Primary Health Care (PHC) centers. Additionally, two partner hospitals lowered operational costs, expanded revenues, and offered new services. The opening of a modern emergency room at the Lashvili Children's Central Hospital resulted in an increase in patient admissions from 5,000 to 15,000. The implementation of clinical practice guidelines resulted in a decreased average length of stay from 13 to seven days, and the hospital mortality rate has decreased to 2.3 percent, down from 6 percent in 1999. Such improved capacity increased the quality and standards of other medical centers throughout Georgia. In total, 363 health care professionals were trained under partnerships with U.S. hospitals in FY 2005.
In the education sector, USG assistance supported an improvement of quality and an increase in access to education services. USG advisors worked with the Ministry of Education to draft legislation, subsequently passed by the Georgian parliament, to reform general and higher education. The USG became a partner with the GOG in carrying out education reforms, leading the GOG to successfully implement and test a nationwide admission examination to professional school. USG assistance supported travel and training for 12 policy makers and university rectors to increase their understanding of education management and accreditation practices. Two visiting American speaker specialists provided training to Georgian colleagues on inclusive education and higher education administration. USG-sponsored Senior English Language Fellows (SELF) trained 120 secondary and university instructors in teaching English as a foreign language. U.S. volunteers taught at schools piloting educational reform and trained teachers on new teaching methodologies. American Corners provided information resources to three regional libraries, supported skill building through essay writing, and facilitated over 50 presentations by native speakers, providing guidance on such subjects as writing personal statements and the importance of vaccinations. USG library development grants and the distribution of publications on democracy, civil society, good governance, and human rights augmented aging book collections at over 20 libraries, universities, and NGOs.
USG assistance to the Georgian Institute for Public Affairs educated 200 future government officials, civic leaders, and journalists in Western-style management practices, democratic reform, and professional journalism. The USG-sponsored American Academy, an English-language liberal studies secondary school, educated 250 students. The Academy's 30 faculty conducted professional development workshops for 340 secondary educators throughout Georgia in order to improve teaching practices. Five U.S. Fulbright grantees provided courses at Georgian Universities while five Georgian Fulbright grantees conducted research in the United States. USG exchange programs sent 50 Georgian high school students, 16 Georgian undergraduate students and 19 Georgian graduate students to the United States for extended study of U.S. systems, advanced English-language acquisition, and degrees.
To support the development of civil society, USG assistance trained a cadre of citizens and mobilized communities to implement small projects to address immediate needs and create jobs in FY 2005, focusing on the regions of Samtskhe-Javakheti and Kvemo-Kartli because of their large ethnic minority populations. A total of 193 communities were trained and mobilized and approximately 194,000 Georgians benefited as a result. Over 8,000 person-days of labor were generated and over 530 jobs were created or sustained. USG volunteers worked with NGOs on organizational capacity building, social outreach, and networking with other components of Georgian and international civil society. In order to bolster efforts to integrate minorities, six Democracy Commission Grants were issued to local NGOs which target ethnic integration, Georgian language instruction or conflict resolution. USG-supported NGOs worked with over 400 young people throughout Georgia's regions. USG assistance also highlighted diversity with a visiting speaker and a book on Georgia's Islamic art heritage, distributing 500 copies to 20 cultural institutions.
In 2005, the USG launched a pilot housing voucher program to address IDPs living in critical needs collective centers. The pilot targeted 126 families living in a wing of a functioning Tuberculosis hospital, all of whom have received housing vouchers and are currently looking for housing. One family has purchased a house.
In FY 2005, USG Humanitarian Transport programs delivered and distributed approximately $24 million in donated humanitarian commodities to Georgia's most vulnerable. Commodities provided included medicines, medical supplies, bulk food, three ambulances for the city of Kutaisi, and a small amount of sports equipment to help NBA player and Georgian native Zaza Pachulia run a basketball camp for underprivileged youth in Tbilisi. In addition to humanitarian deliveries, the USG completed several small reconstruction projects in various regions of Georgia designed to improve the living conditions of small groups of the most needy elderly, orphans and other populations. Further assistance, largely in the form of excess defense articles and construction projects, helped to reinforce security and stability by bolstering the GOG's capability to respond to natural and man-made disasters.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how USG assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Social Reform and Humanitarian Assistance. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of USG assistance programs. The "Rank" or "Number" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.
Performance Indicator: The Rate of Immunization. Sources: United Nations Children's Fund (UNICEF) and the GOG.
|
FY 1997 Baseline |
FY 2004 |
FY 2005 Target |
FY 2005 |
|
85 percent |
80.5 percent |
88 percent |
80.9 percent |
Georgia's immunization rate improved from 2004 to 2005. This is not reflected in the above figures because improved data collection revealed a lower true baseline rate of immunization within the country than seen in previous estimates. As a result, the improvement is expected to be seen in 2006 data. The USG infectious disease program—including assistance targeting increased immunization rates, women's health issues, and health care reform—contributed directly to improvement in Georgia's immunization rate.
Performance Indicator: Education Spending as a Percentage of Public Expenditure. Source: the GOG.
|
FY 202 Baseline |
FY 2004 |
FY 2005 Target |
FY 2005 percent |
|
5.1 percent |
3.7 percent |
5.0 percent |
2.5 percent |
Since the November 2003 Rose Revolution, the GOG has spent a smaller percentage of its budget in the education sector in order to fund initiatives in other sectors, particularly those which consolidate democratic reform, increase government capacity to provide services, and move Georgia toward greater energy independence. USG assistance programs leverage GOG investment by supporting decentralization and accreditation.
Security, Regional Stability and Law Enforcement
Georgia continues to face threats to its security due to separatist conflicts, insecure borders, smuggling, organized crime, and trafficking in weapons, narcotics, and persons. Efforts made by the GOG after the Rose Revolution to eliminate corruption within the police force, improve border security, and professionalize Georgia's army and Procuracy have led to important advancements, but additional reform is necessary. Despite the engagement of the USG and other members of the international community, the separatist conflicts in Abkhazia and South Ossetia remain unresolved.
U.S. ASSISTANCE PRIORITIES
USG assistance priorities in security, regional stability, and law enforcement are focused on bringing relevant Georgian institutions in line with Western, democratic standards to ensure regional stability, fight terrorism and transnational crime, and prevent the spread of biological weapons and pathogens. Consequently, the USG is helping Georgia train its military to bring it up to NATO standards. Additionally, the USG supports border security programs that decrease smuggling and increase customs revenue, build the professionalization of the Georgian police, and assists in the reform the Procuracy and Criminal Procedure Code. USG-provided equipment and training enhance the GOG's ability to prevent the proliferation of biological weapons, pathogens, and expertise.
PROGRAM PERFORMANCE
The USG continued support for the transformation of the Georgian military to a NATO-interoperable force, particularly through the Georgia Security and Sustainment Operations Program (SSOP), scheduled to continue through July 2006. This program trains and equips the Second Infantry Brigade of the Georgian Armed Forces (GAF) from the Company level through the Brigade Staff level and the combat support units of the 1st Brigade. As a result, Georgia contributed two battalions of personnel to the Coalition effort in Iraq. Through International Military Education and Training (IMET), the USG sent 43 officers and non-commissioned officers from the GAF to various schools in the U.S. The USG maintains military advisors at the Ministry of Defense General Staff level, assisting in operational and strategic issues as well as in Georgia's strategic defense review. The UH-1 helicopter unit has received support from a full-time program manager, support personnel, and quarterly assistance visits from the U.S. State of Georgia National Guard. USG-sponsored Mobile Training Teams (MTTs) trained aviation mechanics and conducted pilot training in the UH-1 squadron, managed an English language program for military personnel, and trained instructors in Aero-Evacuation medicine. MTTs also assisted the GAF to establish a Captains Career Course and Basic Combat Training Course which to date have trained approximately 2,000 enlisted soldiers. These personnel sustain the battalions that were created and trained under the Georgia Train and Equip Program (GTEP) and SSOP. The U.S. State of Georgia's National Guard provided quarterly support to the Georgian National Guard, assisting them with the ongoing development of a reserve system of 20 battalions.
At higher levels, the GOG has yet to show the level of commitment to border security and management necessary to strengthen the entries, exits, and unpopulated border regions of Georgia. The Customs Service has successfully increased its revenue-collection capacity, but still lacks the legislation, authority and will to address the illicit movement of dual use materials, WMD, narcotics, or other non-revenue producing tasks. A new Customs Code has been drafted, along with a body of secondary legislation, and it is anticipated that this package will be adopted in early 2006. The State Border Department, including Land Border and Coast Guard Services, have not yet received high level attention for reform, and a closer relationship between this Department and the Ministry is necessary to bring government attention to the borders. USG border security assistance supported the restructuring of Georgian border agencies, with a goal of creating a border management system capable of deterring terrorism, controlling migration, detecting contraband, facilitating trade, and collecting revenue. Programs improved the capability, proficiency, and professionalism of GOG border security agencies by providing advisory services, training, equipment, and technical assistance; delivering and installing aircraft vessels, vehicles, navigation and communication equipment, and radar sites; and renovating and constructing border facilities.
The battle against corruption within law enforcement has taken important steps for reform. The GOG continues to improve the law enforcement capabilities of the police community. The populace has welcomed the new Patrol Police and is fully supportive of its efforts. The USG, together with the OSCE and the EU, has actively supported this law enforcement reform. With the aid of a USG adviser, the Georgian Police Academy has undergone a major review of its curriculum and teaching methods, and a major renovation program will commence in 2006. USG advisors support the GOG in its effort to improve and strengthen the forensic abilities of the Forensic Bureau of Georgia, with a USG-funded renovation project to commence in 2006. As the capacity of the laboratory continues to improve, its credibility will grow, supporting efforts to reach international standards. The Ministry of Internal Affairs has also undertaken programs to establish a centralized criminal information database that will be accessible remotely by individual officers and units in the field. The USG has contracted with a local Georgian company for a pilot project to design software, build a server, and install computers in patrol cars. In line with this improvement, communication links and interoperability of police and other law enforcement radios have been assessed and a new countrywide system is being developed for installation.
The country's commitment to reform is evidenced by the firing of over a third of Georgia's Prosecutors and the GOG's request for USG assistance to establish a human resource system and Inspector General's office to track, monitor, and evaluate its personnel. Georgia continues, however, to face the challenge of a complex, transnational crime in the form of money laundering and other financial crimes. To specifically address these crimes, the USG provided technical assistance to the GOG to pass a Financial Action Task Force-compliant money laundering law, set up a Financial Information Unit at the National Bank, and establish specialized, vetted investigative/prosecutorial units in the Ministry of Internal Affairs and Procuracy. All three of these units are now working in harmony, and several multi-million dollar cases are under active investigation. One case, involving the laundering of a billion dollars from Russia through Georgia's Gamma Bank to Russian organized crime figures living in the United States, is currently in trial in Georgian court. USG assistance helped Georgia enact U.S.-style plea-bargaining and asset forfeiture laws, both of which have been used successfully to secure cooperation from bank employees against the upper echelon members of the Gamma Bank conspiracy. A parallel investigation is currently underway by the U.S. Department of Justice with an unprecedented level of cooperation and access being given by the Georgian money-laundering units.
In FY 2005, the USG provided GOG officials with equipment, training, and research grants that enhance their ability to prevent the proliferation of biological weapons, pathogens and expertise. This assistance gives Georgia the ability to better respond to external WMD threats, secure sources of WMD materials and transition former weapons researchers to civilian employment. These capabilities help to detect and prevent the spread of avian influenza. The USG has also begun negotiations to dismantle facilities within Georgia that could be used for WMD production.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how USG assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Security, Regional Stability and Law Enforcement. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of USG assistance programs. The "Rank" figure is the resulting measurement. "CY" stands for "calendar year," or January 1 to December 31, while "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 to September 30 of the following year.
Performance Indicator: Constitutional, Legislative, and Judicial Framework Rating. This indicator highlights constitutional reform, human rights protections, Criminal Code reform, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. (7-point scale: 1 is the highest, 7 is the lowest). The data upon which this ranking is based comes from the previous calendar year. Source: Freedom House, Nations in Transit 2005. Found online: www.freedomhouse.org/research/nattransit.htm.
|
CY 2002 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
4.25 |
4.50 |
4.25 |
5.00* |
*Renamed Judicial Framework and Independence in 2005.
USG assistance supported an improvement in the Procuracy's internal structures and its ability to handle investigations and prosecutions of crimes, and the implementation of Criminal Code Reform, which established the procedural codes necessary to investigate and prosecute domestic and transnational crime effectively while preserving and protecting fundamental rights. The Freedom House rating worsened due to violations of due process by the prosecutor's office and a decrease in the independence of the judiciary. USG programs lessened the impact of these factors.
Performance Indicator: Global Trafficking in Persons Report Country Rankings. Tier 1 countries are those whose governments fully comply with the minimum standards of the Trafficking Victims Protection Act of 2000. Tier 2 countries are those whose governments do not fully comply with the Act's minimum standards but are making significant efforts to bring themselves into compliance with those standards. Tier 3 countries are those countries whose governments do not fully comply with the minimum standards and are not making significant efforts to do so. The 2005 rank is based on 2004 data. Source: U.S. State Department Global Trafficking in Persons Annual Report. Found online: www.state.gov/j/tip/rls/tiprpt/.
|
CY 2002 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
2 |
2 |
2 |
2 |
The indicator shows no change from the CY 2004 rank. Assistance programs will continue to be carried out by the USG legal advisor to improve awareness and protection of human rights including gender issues and trafficking in persons, and to assist in the implementation of new laws and amendments that create a comprehensive anti-trafficking in persons (TIP) regime that is compliant with the victim-centered approach to TIP mandated by the United Nations Convention against Transnational Organized Crime TIP Protocol.
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