Aid for Trade Needs Assessment

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Aid for Trade Needs Assessment Georgia
United Nations Development Programme
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Main findings

• Impact of economic reforms on human development
• Ambitious institutional and business reforms
  started in 2004 simplified business regulations
  boosting the countries competitiveness and
  facilitating foreign trade
• Economic reforms reduced bureaucratic obstacles,
  hence making it possible for businesses to expand
  their operations, create new jobs and increase
  employment and output
• Business reforms were accompanied by significant
  capital inflows and GDP growth, conditioning
  resilience after the Russia-Georgian conflict in
  2008 and maintaining continued growth during the
  global financial crisis

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• Growth in Georgia has mainly been macroeconomic,
  and was associated with an excess absorption and
  credit expansion, and foreign investment mainly
  in non-tradable sectors
• Economic growth was not related to innovations
  and investment in high-technology industries, to
  increase employment and equity in income
  distribution
• Trade liberalization efforts stimulated exports,
  but in fact, exporters havent been able to make
  use of the international trade preferences

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Main obstacles to trade

• Business climate reforms were implemented but
  SMEs and sensitive sectors have only marginally
  been effected by this
• Forced diversification in the Georgian economy
  have highlighted a lack of expert knowledge,
  infrastructure and logistics
• The agriculture sector represents the biggest
  employer but lacks commercialization,
  productivity, export capacities, compliancy with
  international standards and has weak market
  channels
• The wine sector one of the main exporting
  sector witnessed the loss of access to
  traditional markets. In addition, there remain
  issues with compliancy to consumers preferences
  and standards on alternative markets, branding
  and marketing

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• There is the need to restructure the agricultural
  sector in order to increase export capacities and
  improve its competitiveness
• Lack of human resource competencies and adequate
  scientific knowledge
• Improving educational capacities (including for
  existing specialists)
• Supporting scientific and research activities
• Establishing market information and intelligence
  systems
• Raising Georgian brands awareness

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Main recommendations

• Business reforms need to be adequately
  transformed facilitating growth which positively
  affects human development
• In order to ensure maximum HD impact, strategies
  need to target labor intensive sectors, increase
  labor efficiency and investments for the
  development of the labor force
• In connection to the Governments programme of
  TBT (Technical Barriers for Trade) and Georgia EU
  FTA negotiations it is necessary to improve trade
  service institutions both on a legislative and
  practical level

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• Further support to SMEs and entrepreneurship in
  key sectors should be considered by policy makers
• Enhancement of trade competitiveness should be
  promoted through
• enhancing institutional mechanisms by the
  government,
• partnership relationships and joined efforts of
  private companies
• To ensure long term economic development, and
  stable growth rates, the social impact of growth
  must be improved alongside the elimination of
  barriers for producers that want to produce for
  export

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• Improve trade promotion services
• Improved access to market information
• Improved access to finance (credits), trade
  guarantee schemes, harvest collateral schemes
• Development of certification infrastructure (SPS
  standards) in line with international standards
• Improvement of transportation and logistics
• Maximization and integration of the agriculture
  sector within the international trade system
  through
• Access to trade promotion services
• Application of advanced technology and inputs
• Enhancing S PS standards in agriculture
• Identify new trade channels and niches for
  Georgian goods
• Increase resources for agricultural and agro-
  food research
• Develop agricultural and extension services
  vocational education in agriculture and
  processing/manufacturing

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• Introducing a special support programmes in
• mechanization, use of fertilizers and irrigation,
  agriculture management practices, organization,
  providing quality and safety controls to enhance
  efficiency and improve trade capacity in the
  agricultural sector
• Identification of priority sectors that will
  present the basis for industrial development with
  a special focus on new technologies and knowledge
• Promote Georgian wine export - establishing and
  promoting Brand Georgian Wine at global markets