Economic Management and Competitiveness Development Policy Operation

closed

Closed

This program document describes a loan to Georgia to support the Economic Management and Competitiveness Development Policy Operation (DPO). The DPO would support a core set of reforms of the Government of Georgia (GOG) to sustain rapid growth, and ensure greater inclusion, job creation, and resilience by: i) strengthening economic management through improving the efficiency of public resource use; and ii) enhancing competitiveness through introducing evidence-based policy making; promoting more competitive markets; diversifying the financial sector; improving teacher deployment and remuneration with a view toward ensuring a more qualified workforce over the long term; and strengthening investment promotion. The proposed loan, in the amount of euro 45 million, is a single-tranche standalone DPO. The economy also needs to be more resilient, which in turn requires steps to address remaining economic vulnerabilities and mitigate the threats of climate change to livelihoods and key economic sectors. The DPO thus aims to support the Government’s efforts to strengthen economic management and enhance competitiveness to address some of the identified challenges. The reform program supported by the DPO aims to sustain growth, while increasing inclusion, job creation and resilience and rests on two pillars. The first pillar, with a focus on economic management, would support government efforts to improve efficiency of public resource use through strengthened public financial management (PFM) arrangements at the local level, stronger public investment management, and more effective public procurement. The operation has provided a useful platform that allowed the World Bank to engage on and influence the design and implementation of a core set of structural and economic management reforms. It has also paved the way for future engagement in important “second-generation reform” areas such as education, competition and digitalization. The deep cross-sectoral support provided by the DPO has emboldened the reform proponents within the GOG and helped catalyze stronger coordination of the reform efforts across a diverse set of institutional actors. Furthermore, the DPO financing will help strengthen Georgia’s external buffers and signal confidence in the credibility of the macroeconomic framework and the reform program in an environment of heightened external uncertainty.

World Bank Group

Project

Government, Education