Document Type: Other

More than 70 percent of labor-intensive agricultural products that are consumed by the population in large quantities on a daily basis – potato, fruit, vegetable, milk, and meat – are produced by individual homesteads (4,700,000 IH) and farms (42,400 farms). Many can be classified as subsistence units, farming on land plots less than a hectare and producing primarily for their own needs. Others, producing on larger land plots from one to five hectares or growing fresh vegetables under covered surfaces of at least 2,000 m2 are marginally commercial but need access to credit and formal product market facilities to develop long-term financial viability. A recent study of small-grower fresh produce marketing in Lviv indicated that on average, village level growers consume 22% of total vegetables produced, sell 28%, but lose 50% because of wastage caused by poor postharvest handling technologies. By reducing wastage, it was estimated that each 1% increase in marketable product sales could add some 11 UAH million to village incomes. In addition to producers with limited land under cultivation, the AgroInvest target population includes SMP growers of fresh fruits and vegetables, field crops including grains and oilseeds, milk and livestock with annual gross sales of $500,000 or less. The larger-scale growers face product quality and market access problems similar to those faced by smaller growers but on a larger scale.

To address fresh fruit and vegetable grower product quality constraints caused by poor harvest and postharvest techniques, and improving incomes by increasing marketable sales – the GOU is implementing a national program to construct a network of “Wholesale Markets of Agricultural Products” (WMAP) that includes construction of storage and produce packing facilities in production areas and at the new regional wholesale markets. The role of this program in expanding market access of small-scale fresh produce growers is addressed in the Component 3.2 Market Infrastructure Strategy discussion. The MAPF supported grain warehouse receipts program addresses similar constraints faced by field crop growers. In both cases, by organizing SMP growers into viable Producer Organizations – including service cooperatives or producer marketing associations – they are able to access product markets by adopting bulk marketing strategies, foster production of competitive products, mitigate market price fluctuation risks, and access new markets.

A second constraint limiting commercial viability of SMP growers of all agricultural products is lack of access to short, medium, and long-term credit sources. As clearly shown by the AgroInvest credit constraints analysis, the overriding constraint faced by most SMP growers is the lack of a documented historical cash flow records to substantiate credit payback ability to loan review officials. Again, Producer Organizations provide a mechanism through which individual growers can improve their accounting and overall record keeping skills needed to develop such records, reduce input costs through group purchases and gain access to credit sources that are not available if applications are made at an individual level.

The Component 3.1 PO Strategy builds on lessons learned from some 15 years of experience in forming Grower Service Cooperatives in Ukraine and from more recent experience with use of legal input and marketing associations that directly link SMP growers to input suppliers, including bank and non-bank lending organizations, and to various product market outlets.

Attracting investment is one of Georgia’s key priorities to promote sustainable economic development. The Government of Georgia (GoG) has carried out significant reforms to improve the investment environment, as reflected in Georgia’s extraordinarily high ranking, 12th out of 183 countries, in the World Bank’s Doing Business Index for 2011 (World Bank and International Finance Corporation, 2010). Some recent reforms have sought to further improve the investment environment. A working group at the Parliamentary Sector Economy and Economic Policy Committee has recently been established to streamline and update Georgia’s investment legislation. A new Draft Law of Georgia on Investment Activities has been developed by the Committee, combining the essential provisions of the three above laws. The Committee recognizes that draft law needs careful examination and has sought feedback from stakeholders. Further efforts are required to refine this draft legislation to bring it into line with international best practices, including bringing the language on investment protections and guarantees in line with international standard language and aligning the structure and functions of the Georgia National Investment Agency (GNIA) with its evolving mandate and functions related to investment promotion.

The complexity of the treasury code and tax payment system of Georgia has been recognized as highly bureaucratic, time-consuming, and costly, creating the basis for errors and mistakes that adversely affect tax compliance and contribute to administrative and enforcement costs. The Revenue Service (RS) has to sort through excessive number of noncompliance cases and, unless one is willing to punish honest taxpayers, the RS must invest significant resources on distinguishing between mischief and error. Beyond the direct costs of noncompliance that can be measured quantitatively (e.g., time and revenue losses), these complexities have created a tremendous source of frustration for Georgia taxpayers. Furthermore, they reduce the system’s transparency and undermine the trust in its fair application.

While direct costs have been recognized as important, these complexities have also impeded opportunities for successful tax planning and analysis for the government, which results in an uncoordinated, ineffective, and inefficient allocation of resources. Moreover, they create distortions and confusion amongst taxpayers, and enforcement becomes increasingly more difficult, more costly, and less successful.

The objective of the proposed regulation encompasses an overall simplification and reengineering of the current tax system, designed to achieve clear, streamlined, fair, and efficient operations within the RS. The forecast results for the RS include improved taxpayer compliance, higher revenues, and sufficient and timely internal operations.

The technical team’s analysis demonstrates clear and measurable costs and benefits that the Georgian government can use to compare the given options. Specifically, the team analyzed two options of possible action, and the related potential opportunities and requirements:

• Option 1: Doing nothing. This option covers “as-Is” state of current regulation, and outlines the challenges related to present legislation and practices.
• Option 2: Analyzes the introduction of a single treasury code payment process for taxpayers, with an emphasis on the potential benefits and costs related to the reform.

The paper puts forth the recommendation to proceed in moving trade facilitation in Georgia to the next level, which is the development of the Georgian Trade Exchange (GTX). This will bring together all of the players — small, medium, and large — involved in trade into one central system of information sharing and processing. It is the logical next step for the government of Georgia to pursue, because the overall feeling is this has been a long time in coming, and will have a very positive impact on trade facilitation.

The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) defines a Single Window (SW) as “a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.” It is a one-stop service portal providing an integrated electronic gateway that enables trade-related information and documents to be submitted by exporters, importers, customs brokers, freight forwarders, shipping agents, and other players in the international trade chain only once at a single entry point. This information and documents are then transmitted to customs, quarantine, licensing, port, and other government authorities, as well as to insurance companies, banks, and all other private agencies involved in international trade. An SW can also facilitate the payment of duties, taxes, fees, and commercial invoices and the use of various value-adding services, such as e-training and e-marketing.

As specified in UN/CEFACT Recommendation No. 33, the SW concept refers to a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.

The building blocks are in place, and some of the industries have or are in the process of becoming mature enough to utilize the functionality of an SW. The SW will be a set of interface specifications for the interaction between various government and private trade systems. These interface specifications should be open and public, and competition among suppliers of different solutions will be encouraged, which further drives down the costs for the ultimate users. There will be no need to impose single system architecture on Trade — any style of system and distribution of operations should be acceptable as long as it complies with the data definitions and other protocol specifications set by the lead government agency.

The successful introduction and implementation of an SW concept depends to a considerable extent on certain preconditions and success factors that vary from country to country and from project to project. Some of these conditions are as follows:

• Political Will
• Strong Lead Agency
• Partnership Between Government and Trade
• Establishment of Clear Project Boundaries and Objectives
• International Standards and Recommendations
• Communications Strategy
• Identification of Possible Obstacles

As mentioned previously, many of these conditions are part of the mindset in Georgia; more specifically, the first three are very positive conditions as they relate to Georgia. These three are the main conditions that, if negative, can impede any project of this size and scope to begin at all. Many of the others are typical of a large project and will need to be addressed when and if they occur at all. But with the first three conditions being positive, any negative conditions can be addressed with a solution.

In order to develop the GTX, there needs to be a sponsor who is a nonparticipant, preferably a government agency. There is a government group that is willing to be the sponsor or lead organization in Georgia, and this is the Data Exchange Agency (DEA). They are setting the standards involved in the processing of the data and also in the developing of the infrastructure to process the data.

Implementation of the GTX requires process change and process improvement. Implementing software solutions without first reviewing and improving the processes performed is not the correct way to proceed. Software solutions by their own are not the solution, and many times it makes things worst. This is a union between process improvement and technology implementation. Together, they are a powerful combination that can assist any business or industry get to the next level. It does not always mean that high-tech solutions ICT be applied in order to achieve global standards in trade facilitation.

One other point is that the implementation should be gradual and progressive, where early benefits can be demonstrated and thereby grow the appetite both in the trade and government for continued development. One needs to show progress and, more importantly, a commitment to the concept of the GTX. Phase I in any major project like this one is the most important phase. It is important that Phase I address any concerns related
to the concept of the Trade Exchange (TX). But it also has to provide functionality that can be used in the daily processing of cargo because not providing any type of functionality will lead to the same problem as providing technology that does not work.

In designing the Economic Prosperity Initiative (EPI), USAID recognized that to enhance competitiveness at all levels in the Georgian economy, the country must improve the degree to which universities and industry collaborate. USAID recognized internships as a simple, easy form of collaboration and included in the EPI contract the requirement for periodic reporting on the number of internships utilized by the project. EPI took the larger view that it would be beneficial to support a more comprehensive understanding of and implementation approach to the creation and expansion of successful internship programs in Georgia beyond those few interns that EPI might utilize.

On 25th May 2011, an article appeared in The Financial entitled “Internships Wanted” that detailed the difficulties that Georgian universities were having in placing their students in meaningful internships. In response to that article, and as part of the on-going development of its more comprehensive Business4Business business development services program in Georgia, EPI launched a series of brainstorming sessions to more fully understand the expectations, challenges, and potential solutions related to internships. The brainstorming targeted three internship stakeholder groups and several sub-groups as follows:

• Management representatives from Georgian universities
• Students from Georgian universities
• Internship Providers
  • Donors/Projects/NGOs
  • Private Firms
  • Government Agencies

The methodology EPI employed is one that has been adapted to a wide range of business brainstorming worldwide. It was employed in this instance for three reasons:

• To use the methodology to better understand internship issues in Georgia;
• To explore its workability in Georgia; and
• To train EPI staff on the structured facilitation approached facilitation methods.

The brainstorming sessions provided participant views on the expectations and challenges related to internships, and revealed much about current status, concepts, and perceptions of current internship practices in Georgia.

A Public Private Dialogue (PPD) took place among representatives of Georgia’s apparel companies, the National Bank of Georgia, Tbilisi City Hall, the Ministry of Economy and Sustainable Development, and Georgian National Investment Agency. The purpose of the meeting was to identify major challenges and issues that inhibit successful operation of the apparel industry, as well as ensure a comprehensive understanding of trends, challenges, and solutions.

Participants shared their experience, knowledge, views and concerns, and jointly elaborated recommendations, the successful enactment of which requires support from the Government of Georgia, financial institutions, media and other relevant parties.

The Public Private Dialogue (PPD) pinpointed major challenges in the construction sector that prevent successful development and implementation of modern techniques.

Useful recommendations can be summarized as follows:

• Government support through the introduction of a legal framework regulating compliance with necessary standards aimed at ensuring high quality construction.
• Support from financial institutions by offering reasonable interest rates.
• Support from donor organizations in terms of facilitating the enactment of a legal framework.
• Increased awareness of technical characteristics and effective use of basalt fiber and perlite construction materials.
• Support for training and laboratory testing.
• Support and promotion of energy-efficient construction through tax incentives.
• Enhanced workforce capacity through relevant retraining, to increase the competitiveness of local staff.

A Public Private Dialogue (PPD) took place among representatives of Georgia’s apparel companies, the National Bank of Georgia, Tbilisi City Hall, the Ministry of Economy and Sustainable Development, and Georgian National Investment Agency. The purpose of the meeting was to identify major challenges and issues that inhibit successful operation of the apparel industry, as well as ensure a comprehensive understanding of trends, challenges, and solutions.

Participants shared their experience, knowledge, views and concerns, and jointly elaborated recommendations, the successful enactment of which requires support from the Government of Georgia, financial institutions, media and other relevant parties.

The public private dialogue (PPD) pinpointed the apparel sector’s major challenges preventing success. The presence of public sector representatives at the meeting was essential in terms of their contribution to finding solutions. The National Bank of Georgia has agreed to disseminate relevant information arising from the meeting to appropriate bodies.

Important recommendations were proposed at the meeting. Recommendations can be summarized as follows:

• Encourage local apparel companies to participate in different exhibitions to increase their awareness and exposure to international markets, experience, and knowledge;
• Facilitate the formation of a healthy business environment, a pre-condition of which needs to be full support from the government, financial institutions, media and other relevant parties;
• Introduce major changes to the tax system through tax code liberalization and incentives to benefit business development;
• Establish an association to serve as a bridge between companies and the authorities; accountable for ensuring effective communication and timely delivery of key messages such as changes to the tax system, information on export markets, and other relevant topics;
• Enhance the workforce through relevant retraining to increase the competitiveness of local staff, and enable them to operate effectively, not only locally, but also at the international level;
• Facilitate the local companies’ access to raw materials to reduce dependence on imports, and boost performance efficiency;
• Ministry of Economy and Sustainable Development to support local business development by identifying and attracting markets.

One of the major activities of the United States Agency for International Development (USAID) Strengthening Urban Resilience for Growth with Equity (SURGE) Project is the Conference on Sustainable Land Governance that was held on February 8-9, 2017 at the Diamond Hotel Manila, Philippines. Through the Cities Development Initiative (CDI), USAID partners with the local institutions to bolster the role of secondary and tertiary cities as engines of inclusive, environmentally sustainable, and resilient growth. Land is a key asset that can drive economic development, food security, women’s empowerment, natural resource management, and sustainable urbanization.

The conference gathered 60 international and local speakers, moderators and more than 300 participants from the national and local governments, international experts, development partners and from various stakeholders from the academe, the private sector, non-government organizations and students. The United States Ambassador to the Philippines, the US Agency for International Aid (USAID) Mission Director, the Secretary of the Department of Finance, the Program Director of the International City/County Management Association (ICMA) other officials from USAID, and other key government officials were also present.

The event promoted the sharing of good practices and new sustainable approaches to urban land administration. It facilitated multidisciplinary discussions on practical solutions to challenges in land governance in the Philippines among key partners. It was co-sponsored by the United Nations Human Settlements Programme (UN-Habitat) and the World Bank.

Other conference partners were: Department of the Interior and Local Government (DILG), the National Competitiveness Council of the Philippines (NCCP); the Bureau of Local Government Finance (BLGF), the Land Registration Authority (LRA); the Geodetic Engineers of the Philippines (GEP) and the League of Cities of the Philippines.

The SURGE Project employed the services of a sub-contractor, the Asia Society for Social Improvement and Sustainable Transformation (ASSIST) as the event organizer.

The discussions during the conference focused on 12 interactive streams of topics: (1) land administration and management and the challenges of urbanization; (2) land sector reforms in the Philippines; (3) alternative land dispute resolutions; (4) urban land constrictions; (5) asset management for local government units; (6) policy frameworks for land administration and management; (7) experiences in implementing land sector reforms; (8) technology solutions in land administration; (9) improving access to land records/information; (10) gender and social inclusion in property rights; (11) resilience land management; and (12) managing commercial pressures on land markets.

Launch of the Sustainable Urban Land Coalition and Call to Action

The launch of the Sustainable Urban Land Coalition with representatives of various agencies, institutions and organizations was considered as the highlight of the conference. The coalition called for the adoption of a sustainable land governance to address the country’s land sector development concerns.

Signed on February 9, 2017, the conference produced a Call To Action urging “responsible institutions take the lead in improving, streamlining, and making accessible national and local government land programs and services to fast track the development and adoption of policy and institutional reforms”, such as:

• streamline and rationalize the mandates of land related agencies;
• prioritize and direct the implementation of a massive national titling program involving all land related agencies;
• provide equal opportunities to women and men to acquire properties;
• issue a policy to link and harmonize land records and systems for a comprehensive, gender sensitive and cost efficient land-related database;
• strictly enforce compliance of local government units on property valuation regulations;
• issue a policy for the adoption of new technologies for surveying, mapping, adjudication and titling;
• address a responsive national land use policy;
• pass amendments to land laws to remove antiquated restrictions to land ownership;
• expedite resolution of land-related cases (e.g., conflicting land claims/titles, etc.); and
• support and advocate for the reforms in land administration and management.

In his speech, Jonas George Soriano, Deputy Executive Director for the Performance and Projects Management Office of the Cabinet Secretary of the Philippine Government lauded the newly-formed coalition and assured that the administration of Philippine President Rodrigo Duterte supports the Call to Action. In fact, he announced at the conference that President Duterte will sign into law the Philippine Development Plan (PDP) and the National Security Policy which will be the basis of all plans and reforms in the government.

Undersecretary for Regional Development of the National Economic and Development Authority (NEDA) Adoracion Navarro, on the other hand, said NEDA has reactivated the national land use committee which is responsible for tackling land governance issues in the country. Navarro encouraged the newly-formed coalition to aggressively work with the government to address land issues in the Philippines.

Based on the observations and result of the post-conference survey, the conference raised awareness on improving sustainable land governance both at the national and local levels. The knowledge-sharing, networking and partnerships during the conference were valuable in advancing urban land administration and reform in the Philippines.

For instance, conference participants realized the importance of asset management as a new systematic approach to increase the effective use of real property, owned or operated by a local government. Asset management involves a comprehensive inventory of all assets and an evaluation of each property to determine the best use for a local government. By addressing other property management issues, this multidisciplinary approach to managing assets results in improving local finances, service delivery and facilitates local economic development. SURGE Project Chief of Party Maris Mikelsons stressed that the project will assist CDI cities in implementing asset management with the League of Cities as the main partner and driver of institutionalizing it in the Philippines. An important task for this is the preparation of an Asset Management Manual for distribution to all local governments.