Business environment for 22.05.2012-en
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Business environment for 22.05.2012-en

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Business environment for 22.05.2012-en Business environment for 22.05.2012-en Presentation Transcript

  • Condition of business environment and the concept for its improvement Main directions YOUR LOGOGeben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.1. Incomplete list of the problems The essential segment of GDP growth is from state sector and it is supported by 1 foreign credits. The share of real sector in GDP (agriculture, industry, construction) is permanently 2 decreasing. Share of the capital formed by private sector compared with GDP is decreasing in 3 recent years. Turnover of bussiness sector and a volum of production sicne 2007 is falling down in 4 the real figures. Share of small and medium enterprises (production turnover) in the economy is very 5 insignificant. Despite nominal growth of GDP the emplyment indicators in the country are the 6 same. 7 The problems in accesability of bank credits hinders business development. Tax administration and banckruopcy sistem problems deteriorate investment 8 environment. Problems in protecting property rights as well as court sistem considerebly worsen 9 business environment. YOUR LOGO Free trade and competition in theSie hier Ihre Fußzeile ein Geben country is ignored. Monopolies and oligopolies exist 10 in the market.
  • 2.1. Depth of existing problems 2.1.2. Condition of real sectors Dynamic of real sector (agriculture, industry, construction) and its share in GDPMillion GEL Share, % Source: www.geostat.ge YOUR LOGO Geben Sie hier Ihre Fußzeile ein View slide
  • 2.1. Depth of existing problems 2.1.3. Business sector turnover and production Real turnover of business sector and a volume of production output (deflator corrected) Source : www.geostat.ge YOUR LOGO Geben Sie hier Ihre Fußzeile ein View slide
  • 2.1. Depth of existing problems 2.1.4. Capital formed by private sector GDP and VAT VAT and Share of capital formed by private sector in comparison with GDP (deflator corrected) Source: www.geostat.ge YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.5. Business sectors employment indicators GDP growth and the quantity of employed in business sector (small, medium and large business) Employment dynamics Rate of GDP growth YOUR LOGO Geben Sie hier Ihre Fußzeile einSource: www.geostat.ge
  • 2.1. Depth of existing problems 2.1.6. Low level of development of small and medium business The number of employed in 2010 in the SME, its turnover and the volume of production Small SmallMedium Medium Small Medium Large Large Large Source: www.geostat.ge Example: In the EU 27 countries turnover of small and medium size businesses in 2010 was 58% of the total turnover, while the production was 59%. 67% of total employed persons are employed in the small and medium size businesses. YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.7. The indicators for small and medium size businessesin EU Indicators for small and medium size businesses in EU 27 countries The turnover The volume of production The number of employed Source: www.eurostat.com YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.8. Problems in protecting property rights Georgia holds 120th position among 142 countries in regards of protecting property rights. YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.9. Problems in protecting property rights According to Heritage Foundation 2011 Economic Freedom Index data by property rights protection indicators Georgia stands next to Kazakhstan, Shr-ilanka, Pakistan, Nepal, Cambodia etc. (with 40 points). YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.10. Credit accessibility problems YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.11. problems of bankruptcy and closing down acompany Problem of bankruptcy and closing down a company is a difficult issue in Georgia, because: Bankruptcy and closing down (liquidation) a company takes approximately 3.3 year; There are official state fees - GEL 5,000. For your information, in eastern European countries bankruptcy process takes approximately 2.7 years and in OECD countries- 1.7 year. Bankruptcy completion period Eastern European Georgia OECD countries countriesTime/years 3.3 2.7 1.7Source: Doing Business, 2011. YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.1. Depth of existing problems 2.1.12. The most problematic factors in businessThe most problematic factors while conducting business are clear-cut fixed by theWorld Economic Forum. Availability of finances Inadequate education of manpower Inflation Low ethics of manpower Taxation regulations Unstable politics Inadequate infrastructure Tax rates Instability of the government Ineffective state bureaucracy Poor public healthcare Corruption Limited labor regulation Foreign currency regulation Crime and theft YOUR LOGO Geben Sie hier Ihre Fußzeile ein Source: The Global Competitiveness Report 2011-2012, World Economic Forum, www.weforum.org
  • 2.1. Depth of existing problems 2.1.13. The problems existing in key componentsIn Global Competetivness Report Georgia does not have desirable position in the key component indicators, oftenthere is negative dinamics (the indicators show the rating of the country worldwide). 2005 2006 2007 2008 2009 2010 2011 Court independence 94 110 112 112 117 104 91 Effectiveness of legislation for dispute 91 89 82 resolutions 2005 2006 2007 2008 2009 2010 2011 Property right 86 99 117 109 109 120 120 Small shareholders’ rights 93 114 123 123 117 122 119 2005 2006 2007 2008 2009 2010 2011 Effectiveness of state regulation 102 98 92 appeals Local market competition 91 92 115 114 115 124 128 102 101 108 95 98 113 112 Quality of domineering on local market Effectiveness of antimonopoly 85 82 94 111 125 135 135 regulation 106 107 Diversity of financial services Accessibility of financial services. 108 96 Availability of deceiving finances in 108 108 111 107 125 125 122 local market 2005 2006 2007 2008 2009 2010 2011 Quality of education system 96 96 93 83 97 119 116 Quality of management schools 104 103 114 110 106 116 115 Potential of innovation 85 92 100 97 119 112 103 Simple procedures of hiring and 24 14 14 5 7 9 10 dismissing Availability of scientist and engineers 44 64 93 84 96 122 120 “Brain gain” 96 100 89 76 YOUR 88 104 LOGO 102 Companies equipped withGeben highhier Ihre Fußzeile ein Sie technology 103 107 109 108 115 125 115
  • 2.1. Depth of existing problems 2.1.14. Low level of investments caused by the problems Recently investments’ volume into Georgia is decreasing in absolute figures as well as in comparison with GDP. Decrease of investments’ volume are mainly caused by the existing problems in business environment. YOUR LOGO Geben Sie hier Ihre Fußzeile einSource: www.geostat.ge
  • 2.2. Goals to be achieved and target indicators 2.2.1. General objectives Improving of business environment through Investment climate achieving the following goals: Improving the •Improving of legislation and Open financial legislation and rule guarantee of rule of law; markets and of law credit Business environment: •Political stability; accessibility 1. Political and legislative •Development of labor force ; frame; •Creation of fair and effective labor 2. Administrative stimulation; Qualification market; Fair and and 3. Diversified communication development ofeffective labor network; administrative •Formation of economical market resources prognosis; 4. Sectoral stimulation; •Arranging infrastructure; 5. Nation wide, regional and local stimulus. •Formation of open financial Economic Political stability forecasting markets and accessibility of credits. Infrastructure YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.2. Goals to be achieved and target indicators 2.2.3. Precise goals and target indicators YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.3. Steps to be implemented until and of the current year Precisely diagnosing business environment: - Identification a goal and tasks in details; - Identifying main beneficiaries and the parties involved; - Analysis for limitations and barriers; - Analysis of the capacity of the state bodies which should be activated during the first stage of the reform; - Valid accumulation of basic data; - Attracting funds. Preparing packages draft legislation amendments:- Law on Entrepreneurs;- Georgian Tax Code and appropriate acts;- Bankruptcy legislation. PR and informative campaigning :- Carrying out PR activities for informing business sector and the society about the forthcoming reforms- Highlighting importance of reform in regards of increasing public welfare. YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.4. Short term tasks of the prime necessity 1 Formation of models for creating efficient public institution 2 Certification and traning on aproproate public servants 3 Accessibility of market information and availability of transparent state information 4 Harmonization of Labor Code to the European legislation 5 Caring out activities for facilitating free trade and competition 6 PR campaign for reporting the process and completion of the above-mentioned tasks 7 Perfection of the procedures of carrying out reforms based on feedback of beneficiaries YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • 2.5. Medium term tasks as a second step 1 Simplification of the tax administration 2 Decrease of interest rates and improving the accessibility of bank credits 3 Guaranteeing legislative protection of the investors 4 Perfection of competition policy 5 Increasing business education level in the country 6 Reporting of the implemented reforms in 2016 7 Evaluating the impact of reforms on business environment YOUR LOGO Geben Sie hier Ihre Fußzeile ein
  • Thank you for your attention!E-mail: davit.narmania@ciesr.orgTel.: (+995 32) 272 90 21 (+995 599) 11 66 33 YOUR LOGO Geben Sie hier Ihre Fußzeile ein