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Georgia

Background

Image courtesy World Bank/Nicholas Van Praag

Mikhail Saakashvili, came to power in late 2003 in a landslide victory in presidential elections following the 'Rose Revolution', has strong support and a clear mandate, but faces enormous challenges.

The change in leadership in 2003 has presented a new opportunity for donors to engage in a more harmonised and efficient way to reduce poverty.

Georgia was one of the first countries to qualify for funds from the US Millennium Challenge Account (MCA). Georgia’s growing economy has led to it becoming a Lower Middle Income Country in the latest classification exercise by Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) published on 1 January 2006.

For more information about the political and economic situation in Georgia please see the Foreign and Commonwealth Office (FCO) Georgia site.

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DFID in Georgia

DFID will close its bilateral programme to Georgia in December 2008 but the UK will remain engaged in Georgia through its contributions to multilaterals.

DFID’s work to date has included

• Support to the Ministry of Finance on activity-based budgeting (as part of the World Bank Structural Adjustment Credit);
• Support for work with a range of other partners on health, statistics, sustainable livelihoods, strengthening civil society and competitive grant schemes (focusing on support for small and micro credit enterprises and livelihoods support).

Since independence, Georgia has suffered from unresolved internal conflicts in Abkhazia and South Ossetia. DFID has supported work to seek peaceful resolution of these conflicts through the Global Conflict Prevention Pool (GCPP).

DFID assistance to the end of 2008 will focus on a stronger emphasis on improving governance by supporting financial discipline, and anti-corruption and institutional reform. DFID is also concerned with assisting the government coordinate and manage donor aid, facilitating better-targeted and focused programmes by donors.

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Other Donors

Given DFID's small budget in relation to other key donors in Georgia, and the concentration of donor activity in the country, the majority of DFID's activity is done jointly with multilateral organisations and other bilateral donors.

DFID works closely with the European Commission (EC). The EC is currently developing new instruments for delivering assistance to the region for the 2007-13 period. These instruments aim to deliver targeted assistance that supports the strategic priorities of the region in line with the principles of aid effectiveness as agreed by the Development Assistance Committee (DAC) members. For more information see European Neighbourhood and Partnership Instrument.

The World Bank and the International Monetary Fund (IMF) together with bilateral donors have supported the reform process in Georgia. The World Bank has a wide range of sectoral loans, and implementation has generally been good.
The European Bank for Reconstruction and Development (EBRD) has supported financial sector restructuring and development, agribusiness, and small and medium-sized enterprises (SMEs).

The European Union (EU) TACIS programme was launched in 1991, and provides grant-financed technical assistance.  In Georgia it focuses on infrastructure, energy, private sector and human resources. The TACIS Programme will provide €28 million to Georgia during 2004-2006.

The UK, through DFID, contributes a significant amount of the EU's aid resources overall, approximately 18%. Georgia also receives large amounts of assistance from United States Agency for International Development (USAID), particularly in the financial sector.

The Global Conflict Prevention Pool (GCPP), which was established in March 2001, funds high impact initiatives in Central Asia to support peace building and conflict prevention activities. Priorities include working with others to tackle unresolved or potential conflict in Georgia, Armenia, Azerbaijan and Moldova, reducing tensions in Central Asia and helping the Russian government develop a foreign policy of constructive engagement on matters of common concern.

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Links

• Georgia's Poverty Reduction Strategy Paper
• Organization for Security and Co-operation in Europe (OSCE) and Georgia
• The British Embassy in Georgia
• United Nations Development Programme (UNDP) and Georgia
• UNDP Millennium Development Goals Georgia

Last updated: 25 June 2007

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