GEO

The Georgian Partnership Fund

16 November, 2011

The Georgian Government recently presented the 10-point Strategic Development Plan to the public. The Plan refers, among other things, to JSC Partnership Fund which, according to the Plan, is to perform an important role. Transparency International Georgia commented on the establishment of the Fund in April 2011, when Georgian Parliament started discussions on the relevant law. We suggested that the draft law needed to be clearer regarding the mechanisms of using privatization revenues and dividends from the state-owned companies for financing the Fund. We welcome the fact that the subsequent amendment to the law (10.11.2011, N5099) addressed the aforementioned concern and privatization revenues and dividends from state-owned companies were removed from the list of the fund’s financing sources. Generally, the Partnership Fund can play an important role in terms of enhancing Georgia’s export potential and promoting employment. Similar practice is used in other countries (including Estonia and Israel) and has been very successful in some cases. It is clear that the private sector cannot implement certain investment projects without the government’s participation because of the initial conditions and the risks that these projects involve. It will be interesting to see how successful the fund proves to be in Georgia. As the Partnership Fund has not participated in any large-scale investment projects yet, Transparency International Georgia cannot comment on the efficiency of the fund’s resource management and activities at this point.

Author: Natia Kutivadze