ISET

The ISET Policy Institute presented to stakeholders the Regulatory Impact Assessment of the Draft Law of Georgia on Entrepreneurs at ISET on May 2. The project was prepared by the ISET Policy Institute with the support of GIZ and PROLoG/USAID.

In 2013, as a follow-up on public consultations on improving the acting company laws in Georgia, a working group was established to elaborate a new Draft Law of Georgia on Entrepreneurs. The working group was created under the Private Law Reform Council of the Ministry of Justice of Georgia, and the USAID-funded Judicial Independence and Legal Empowerment Project, which was succeeded by the Promoting Rule of Law in Georgia (PROLoG) Activity. Both projects were implemented by the East-West Management Institute (EWMI), which also served as a cooperating partner. The group was comprised of Georgian academics and legal practitioners, with international experts providing consultations.

On March 12 2018, the implementation of a capital market development strategy was evaluated during the second phase of ReforMeter.

Archil Mestvirishvili, Vice President of National Bank of Georgia, Nikoloz Gagua, Deputy Minister of Finance, Bruno Balvanera, Regional Director of EBRD, Francois Painchaud, Resident Representative of IMF in Georgia as well as stakeholders from private and financial sectors attended the discussion.

As Government research revealed, at this stage, 67.7% of the reforms have been implemented. In Phase I, this indicator was 51%.

The greatest progress was achieved in the development of legislative frameworks. Last year, together with other important activities, the German ranking agency Scope was added to the list of agencies (Moodys, S&P and Fitch) recognized by the National Bank of Georgia, which implies that the NBG will consider reliable rankings given by this body to the securities offered as collateral to the NBG. Also, the tax advantage for the so-called free-float was changed in the Tax Code and was replaced with wider advantages that are more convenient to investors. According to this advantage, capital gains are exempt from tax.

On February 12, the Private Sector Development Research Center (PSDRC) at ISET-PI organized a certificate award ceremony for Competition Agency staff who attended an advanced STATA training course provided by the center.

Sophiko Skhirtladze, the head of the PSDRC, who led the training course, together with Eric Livny, President of ISET and ISET-PI, and Nodar Khaduri, Chairman of the Competition Agency of Goergia, greeted the participants and awarded them their well-deserved certificates.

The two-week training course took place between January 29 and February 9, and was organized within a “Competition Agency Support” project, financed by the EU and conducted by ISET-PI staff.

On February 19, Sandro Shelegia, an Associate Professor of Pompeu Fabra University, presented to the ISET community a study by Joshua Sherman and himself entitled “Bargaining at Retail Stores: Evidence from Vienna”.

The Associate Professor discussed the step-by-step procedures researchers had to follow to collect reliable data, and the theoretical bases upon which the truthfulness of the analyses strongly depended. The former stage posed major challenge for Shelegia and Sherman as the data they needed — such as the name, scale, and profile of the shop, the price range of the goods sold, etc. — was not available (in a structured form) in any of the existing databases. To tackle the problem, the researchers trained 12 RAs, and identified nearly 300 different retail shops throughout Vienna, Austria, and constructed the valuable database themselves.

The second phase assessment of the SME/Innovations Development reforms were conducted within the ReforMeter over the course of February.

According to a government survey, at this stage, 39.2% of the reforms that are planned to be finalized by 2020 have been implemented. In the first phase (which concluded six months ago) this indicator was 24.7%. It is notable that the rate of progress is similar in the spheres of institutional organization, capacity building and infrastructure: in these areas 40% of the reforms have been implemented. It should be considered that target indicators set by the strategy for 2020 were already achieved in 2016.

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