Private Sector Competitiveness DPO1

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The project development objective for the First Programmatic Private Sector Competitiveness Development Policy Operation for Georgia is to increase private sector competitiveness through second generation business environment reforms, financial sector deepening and diversification, and increasing firms’ capacity to innovate and to export. This is the first of three programmatic DPOs that will support the reforms addressed in the Socio-economic Development Strategy (SDS) in the two pillars on private sector competitiveness and access to finance. This program is comprised of three pillars. The first pillar will support second generation business environment reforms as a way to stimulate private sector-led growth. Reforms are needed to make the economy more innovative and competitive. Pillar 1 will support measures in the following key areas: enhancing public-private dialogue (PPD) to generate consensus for reforms; eliminating market barriers for entrepreneurship and small and medium enterprises (SME) growth; and strengthening the public procurement system. Pillar 2 will support financial sector development, which is essential for increasing savings and mobilizing the investment needed to enhance competitiveness and promote inclusive growth. Pillar 2 will focus on supply and demand-side constraints faced by the financial sector; in particular, by strengthening financial safety nets, implementing a comprehensive pension reform, and developing more effective capital and insurance markets. Pillar 3 will support measures to improve the absorptive capacity of domestic firms, so they are better equipped to innovate and export, including through the upgrading of broadband internet services in Georgia.