REGIONAL DEVELOPMENT

POLICY IN GEORGIA
 GEORGIA – Background Information
and Administrative Division

• Area – 69,700 sq. km

• Population - 3.7 mln
• million
National GDP - GEL 41,077.5

• GDP Real Growth Rate - 4.7%

• GDP per Capita - USD 4,345.5
• Inflation rate - 4.9%
• Unemployment rate – 12.7%
• 190
Ease of Doing Business - #6 out of 9 Regions – 2 Autonomous Regions (+ Former Autonomous
District of South Ossetia) – 69 Municipalities (incl. 5 occupied)
• Index
180
of Economic Freedom #16 out of
 ANALYSIS of REGIONAL DISPARITIES
Population Density

• Georgia is clearly polycentric

• There is only one major polycentric urban
area around the Capital City being at the
same time the largest growth pole in the
country
• The rest of the territory features much
smaller towns and mountainous or
peripheral settlements and rural areas
• Underrepresentation of large and medium-
sized cities determines and further
exacerbates inequalities in the level of
socio-economic development
 Gross Domestic Product (2017)
Tbilisi is the biggest contributor to national GDP (50%)
GDP per capita in current prices in Tbilisi is almost twice higher when
Samegrelo-
compared to second AR Adjara
Mtskheta- Zemo Samtskhe-
Mtianeti
1.8%
Svaneti Javakheti Tbilisi’s GDP share increased from 47% in 2006 to 50%, The figures in
6.5% 3.0% Kvemo Kartli
8.2% Adjara grew from 6% to 9%
Shida Kartli Tbilisi
3.5% 50.0%
Kakheti
5.7%

2013-2016

Racha-
Lechkhumi and
KS
0.5%

Imereti
10.0%
Guria Adjara
2.0% 8.9%
 Gross Value Added (2017)
Tbilisi is the biggest contributor to national GVA (67%)
In the last 11 years 4 regions – Guria (763%), Kakheti (713%), Samtskhe-Javakheti (687%) and Imereti (661%) had the highest
growth, while the lowest growth rate was in Racha-Lechkhumi-Kvemo Svaneti (125%), Shida Kartli (234%) and Mtskheta-Mtianeti
(273%) 2013-2016

Samtskhe-J
Samegrelo-ZS Mtskheta-Mt 2.0% Kvemo Kartli 264.1
4.8% 1.5% Kvemo Kartli 6.3% Shida Kartli 1.4%
Samtskhe-Javakheti 1199.3
Racha- 383.3
Lechkhumi Samegrelo-Zemo Svaneti
0.2% Mtskheta-Mtianeti 919.3
Shida Kartli 31.8
Kakheti 2.5% Kakheti 283.2
Racha-Lechkhumi and KS 468.4
Imereti 5.3%
Imereti 1014.1
Guria 162.2
Guria 0.9% 1509.7
Adjara
Tbilisi 12731.2

2017 2016 2015

Adjara 8.0%
Tbilisi 67.1%
 Production of Goods and Services &
Employment
Racha- Samegrel Samt- Shida Kartli
Lechkhu o-ZS skhe-J Kvemo Kartli
Mt- 7.8% 2.2%
skheta- mi 4.5% 1.9%
Mt 0.1%
2.0%

Kakheti
2.4%

Imereti
5.9%

Guria
0.9%
Tbilisi
64.1%

• 64%
Adjara
8.3%
of all goods and services are produced
in Tbilisi
• Guria, Racha-Lechkhumi-Kvemo Svaneti
and Samtskhe-Javakheti are the least
industrialised
 Foreign Direct Investments
(By Registration) (2016-2017)

Kvemo Kartli Guria Imereti Shida Kartli

Samtskhe-J 3.71% 0.04% 2.23% 0.43%
2.35% Mtskheta-Mtianeti
0.15%
Samegrelo-ZS Racha-Lechkhumi
1.60% 0.06%
Kakheti
0.12%

Adjara
8.07%
Tbilisi
81.25%

 Guria, Racha-Lechkhumi-Kvemo Svaneti received the least

FDI, with 0.04% and 0.06%
 Regional Development Programme

 Medium-term governmental planning document:

• Defines main tasks, priorities and objectives of the regional development policy of Georgia
• Creates a solid strategic framework for a balanced and sustainable socio-economic
development
 The Programme is based on, and largely in line with, the EU Cohesion Policy experience of
recent decades (aimed at the reduction of disparities between regions).
 Major step forward towards a very complex and a higher standard planning of local and
regional development and approximating such practices to the similar experiences of the EU

RDP 2015 – 2017 RDP 2018 – 2021

Development Strategies
of 9 Regions
RDP 2018-2021 Structure
Integrated Regional Programmes for
Focus Regions
 PIRDP Objectives
Overall Objective:
 Contribute to Increasing overall national and regional competitiveness, balanced socio-economic
development and the improvement of living conditions across the country, reducing regional
disparities and increasing territorial cohesion
Specific Objectives:
 1. Promoting fast economic growth, systematically exploiting Georgia’s comparative
advantages in the dynamic international context, utilization of the potential of the territorial units
on different level of governance through elimination of development barriers.
 2. Sustainable development, the rehabilitation and expansion of infrastructure, energy and
communication networks and public utilities through safe ways.
 3. Promoting social and territorial cohesion – creating equal opportunities for all citizens,
irrespective of their social background and place of residence.
 PIRDP Finances
Co-financing required
The overall indicative budget of PIRDP is estimated at around 67.23 million Euro to
National budget
from grant recipients be spent between 2020 and 2022 (3 years)
EU
Total
funds
The sources of financing:
Technic involve  Minimum 10 million EURO, from the state budget
Name of the priority
Name of the
al and
Expert
d in the
realisati
 Estimated 1.28 million Euro from municipalities will be allocated from
Measure/sub measure Georgian
EU budget Support Compan on of municipalities
Governme
nt (M
Support ) (M Municipali
ties
ies and
individu
PIRDP  53.75 million EURO from the EU budget out of which:
EURO) - M
EURO)
(M EURO)
als EURO  40.5 million Euro will be directed to the state budget within the Budget
Support Scheme
 13.25 million Euro directly managed by the EUD and financing some
1 2 3 4 5 6 7
measures including technical assistance for the implementation of
PIRDP
 Estimated 2.2 million EURO from private sources for co-financing projects
1. Urban renewal - integrated
actions in urban areas
3,00 16,00 2,50 0,57 0,00 22.07 realised by companies and individuals

2. Unique tourism potential 1,00 5,00 1,00 0,18 0,00 7,18

1. Urban renewal - integrated

3. Improvement of
actions in urban areas
competitiveness and support 3,00 7,00 0,00 0,00 1,60 11,60 4.75; 7%
to innovations of SMEs
2. Unique tourism potential
21.5; 34%
3. Improvement of competi-
20.5; 32% tiveness and support to in-
4. Integrated local
development
3,00 12,50 5,00 0,53 0,6 21,63 novations of SMEs

7; 11% 4. Integrated local devel-

5. Technical support and 10; 16% opment
capacity building of central 0,00 0,00 4,75 0,00 0,00 4,75
and local administration 5. Technical support and capac-
ity building of central and local
administration
Total 10,00 40,50 13,25 1,28 2,20 67,23
 Integrated Regional Programmes for
Focus Regions
Defined Policy Areas for Action:
1. Enhance the process of development of cities as economic and social engines of growth, structural
change and sustainable employment by:
1. Strengthening socio-economic role of regional urban centers
2. Regeneration of post-industrial urban areas
2. Development of regional tourism potential and improving of quality of tourism services
3. Improvement of conditions for growth of SMEs and development of regional innovation eco-systems,
including specific support to enterprises operating in identified regionally competitive sectors;
4. Preservation of traditional local products, development of local infrastructure and increase quality of
local services to stimulate new economic activities;
5. Increasing human capital, strengthen capacity of the public administration and development partners in
conducting modern regional policy

Coordination on strategic
decisions (Government of
Georgia, ministries, State
Trustees of pilot regions)
Institutional Setup of PIRDP
Decision on projects of
strategic importance
(over 1mln GEL)
Governmental Commission on Pilot
Region Development (GCPRD) Managing authority
Expert and Secretariat of

Technical Assistance. Support to Project

appraisal

Design/preparation of documentation
group commission, Project
list compliance check
Decision on

Organization of calls,
sectoral projects
(SMEs, MRDI,
signature of grant
agreements with
Innovation)
Technical Coordination Unit of Decision on the
projects of
grant recipients the commission regional
importance

State Agencies Secretariat of RC

Expert
Regional Consultative Council (RCC) (administration of State Trustees)
appraisal Expert
appraisal
and Expert appraisal group
group
group
Project
Proposals
Decision of the
Government/gra
nt agreement

Private Munici stakehol Grant

CSO
sector palities ders recipients
 Decision Making on Project Financing

• Decision on project ideas and financing of final projects is done by:

• a) The Governmental Commission - under specific measures for which:
• 1) competition is organised at national level
• 2) projects of strategic importance;
• b)competition
Regional Consultative Councils under measures for which
is organised at regional level;
• c)knowledge
Implementing bodies for projects and project ideas requiring specific
like SMEs support, innovation and R&D
• Consultations with the Regional Consultative Councils are compulsory
• All projects are subject to final compliance check by the Managing Authority
(Technical Coordination Unit of the Commission) and MRDI
 Coordination and Management

Integrated Place Based Approach

 based on potential, territorial needs, goals and aspirations of local communities

Decentralisation, Partnership and Multi-level system of Governance

 Governmental Commission, MRDI, Line Ministries, Regional Consultative Councils,

Municipalities, State Trustees, private and social development stakeholders
Concentration
 taking into account limited number of resources and implementation time (3 years)
PIRDP will tackle only limited number of identified, region-specific needs and
potentials with the highest value added for increasing growth
 DECENTRALISATION STRATEGY 2019-
2025
Strategic Objectives

Increasing role of local self-governments in resolving significant part of public issues

Providing local self-government with appropriate material and financial resources

Establishing reliable, accountable, transparent and result-oriented local self-

government
 Smart Specialisation and NUTS
Platforms in Georgia
• TAKEWAYS of High Level meeting (Brussels, 21 November, 2018)

• “Scientific support to smart specialisation: European Commission’s Joint Research Centre will provide
institutional capacity building assistance and support for the adoption of smart specialisation principles in
Georgia”.

• includes launching of mapping of economic, innovative and scientific potential, Entrepreneurial Discovery
Process and stakeholders’ discussions to identify smart specialisation domains

• Georgian National Team for Smart Specialisation was composed – Introductory meeting in Ispra (Sep 2019)

• Imereti Region is identified as the first pilot area

• Further steps and processes to be planned with JRC and key stakeholders

• EU Nomenclature of Territorial Units for Statistics (NUTS): Technical support will be provided to analyse the
introduction of NUTS in Georgia, aligning with EU practices.”

– stakeholder meetings and workshop conducted; Working Group for NUTS is composed (April 2019)

– Involving EC, EUROSTAT, Portuguese and Croatian experts

– Inception research/study of situation in Georgia to be conducted (from Sep/Oct 2019)

Interagency coordination is to be ensured by MRDI

Smart Specialisation and NUTS agendas are addressed via EU-

Georgia AA Committee
 THANK YOU!
Ministry of Regional Development and Infrastructure of
GEORGIA
Ms. Mzia Giorgobiani
Deputy Minister
m.giorgobiani@mrdi.gov.ge

Mr. Giorgi Kezherashvili

Head of Division of Regional Development
g.Kezherashvili@mrdi.gov.ge