Concerns over 2m GEL Tbilisi Entrepreneurship Support Center - საერთაშორისო გამჭვირვალობა - საქართველო

Concerns over 2m GEL Tbilisi Entrepreneurship Support Center

16 March, 2015


Tbilisi Mayor Davit Narmania announced the establishment of the Tbilisi Entrepreneurship Support Center in the first half of March 2015, to be headed by Tbilisi former Vice Mayor in Davit Narmania’s administration, Aleksandre Margishvili. As reported by various City Hall representatives, the Center's budget will be two million laris. According to the Mayor, the new Center's functions will include boosting investor activities and assisting in making capital investments and developing entrepreneurial skills.

Transparency International Georgia believes there is no need to set up such an agency, because: (1) quite a number of other agencies across the country are already tasked with supporting entrepreneurship with significant funds already allocated for the ; (2) generous funding from Tbilisi budget was announced for this new agency, which is around four times more than the appropriation for the Business Ombudsman's office.

This initiative of the City Hall raises the following concerns:

1. The Tbilisi Entrepreneurship Support Center may duplicate functions of other agencies responsible for the same matters

There are a number of state agencies tasked with developing entrepreneurship. The Economic Policy City Service operates in the Tbilisi City Hall itself; its functions include investment promotion and investor support. As such, it is unclear what special need there is for Tbilisi City Hall to set up this new agency. Agencies exist within the ( Ministry of Economy and Sustainable Development, Ministry of Finances, National Investment Agency, Business Ombudsman's office), to support investment and investors. Overall annual funding of these agencies is approximately GEL225 million .

2. Extra unjustified costs put on the state budget

Given the "austerity" policy announced by the Government, rationale behind setting up the Tbilisi Entrepreneurship Support Center is unclear.

3. Encouraging the practice of non-transparent appointments in the civil service

Mr. Margishvili was appointed head of this agency. The appointment was not competitive.What criteria were used to make this selection are unclear. This is especially of interest, considering that the reasons behind Mr. Margishvili resignation as Vice Mayor are also unclear. Questions remain about whether the recent corruption scandal at City Hall which involved many employees there caused his resignation.

4. Huge funding

The basis for determining the budget of this new agency is unclear. The two million laris provided for the agency exceeds the funding for the Business Ombudsman's office (approximately half a million GEL) and almost equals funding of the Georgian National Investment Agency (2.5 million GEL).

Author: TI Georgia