Georgia’s investment climate leap
In the past 15 years Georgia has transformed from a near-failed state in 2003, invaded in 2007, to being ranked the 6th easiest country in the world in which to do business, leading to a nearly 6 times increase in FDI.¹
Starting in 2008, the Georgian government began an aggressive reform agenda to simplify administrative procedures related to businesses, including setting up one stop shops (for business registration and construction permits) and repealing many unnecessary requirements (such as the paid-in minimum capital requirement and company seal for business registration and notarization for starting a business and registering property).²
Figure 1: Georgia's reform program led the country to leap from being one of the worst countries to among the best in the Ease of Doing Business Index in a short time
Digital ID card sets Georgia apart from other digital reformers.
Though the Data Exchange Agency (DEA) had been established several years early to establish a new e-government agenda, Georgia’s 2011 implementation of a unified online collateral registry, really began the country’s broad transition towards e-government, becoming an early leader in the footsteps of countries such as Estonia.¹ ² This began a stream of similar digital reforms which continue to be implemented to this day, including an e-filing system for tax payment, online case management system for contract disputes, e-Procurement, and online registries for business and property.
An important feature that sets Georgia apart from many digital reformers, is the digital ID card, which contains the essential information of its owner for easy use with government procedures. This avoids issues of verification and any need for notarization. ³ The Citizen’s Portal, accessed by a digital ID card, is a related innovation, which allows Georgian citizens to easily access a wide array of e-government services.⁴
Despite its high-ranking Georgia still has room for further improvement, especially in the areas of e-government. Low levels of internet access (just over 55% in 2017) mean many basic procedures cannot immediately be moved 100% online. However, Georgia demonstrates how even a country with limited infrastructure and access can successfully implement aggressive investment climate reforms and leap to the top of the Doing Business rankings over a very short period.⁵ Georgia represents a model for other countries which wish to improve their investment climate. Despite high rankings in Doing Business, Georgia has not slowed down its reform agenda and continues to a top reformer, recently releasing a new agenda further investment climate reform. ⁶
¹ A. N. Luzgina. “International Experience of the E-Government System Development,” Journal of the Belarusian State University, Economics, 2017. No. 1. P. 76 – 83. View→
² Doing Business. “Business Reforms: Georgia,” Accessed December 17, 2018.
³ A. N. Luzgina. “International Experience of the E-Government System Development,” Journal of the Belarusian State University, Economics, 2017. No. 1. P. 76 – 83.
⁴ Irakli Gvenetadze. “Georgia’s successful journey to e-government,” Accessed December 19, 2018.
⁵ A. N. Luzgina. “International Experience of the E-Government System Development,” Journal of the Belarusian State University, Economics, 2017. No. 1. P. 76 – 83.
⁶ Emerging Europe. “Georgian Economic Reform Given World Bank Endorsement,” May 23, 2018.