A public discussion on the SME development in Georgia was held under the auspice of the UNDP and the Global Compact Initiative

The UNDP and the Global Compact Initiative, in the course of their series of events on the issues relevant to inclusive development of Georgia, have launched a public dialogue to address the issues related to private sector and its development in the country. In the scope of these events, UNDP has commissioned a series of discussion papers by Georgian and international experts, to serve as the basis for dialogue, help jointly define priority actions, and determine what the next steps should be.

One of the articles of the series, devoted to the Development of SME sector in Georgia, written by Dr. Mikheil Tokmazishvili, was discussed at a public dialogue event on July 15, at Tbilisi Marriot Hotel (Georgian and English versions of the paper are attached).

The discussion panel was represented by the author of the paper, Mikheil Tokmazishvili, Professor of Economics at the Tbilisi Sate University, Dan Berkshire, USAID Chief of Party for SME Support Project, Giorgi Nanobashvili, UNDP Economic Team Leader, Kakha Kokhreidze, Chairman of the Board of the Public Movement "Solidarity”, and Heidi Eterovic, UNDP Global Compact Initiative Project Manager.

Participants of the meeting included international and non-governmental organizations, business associations and private sector representatives. EUGBC was represented at the meeting by Tamar Khuntsaria, the Council’s Representative in Georgia.

Following presentation of the paper, the panelist and participants of the meeting discussed the barriers and opportunities associated with SME development sector in Georgia. Among other issues, role and importance of business associations, along with other bodies, in talking the existing barriers to small and medium business development was discussed. Importance of business associations in supporting SME development is also stressed in Dr. Tokmazishvili’s paper:

"In tackling the existing barriers to small and medium business development, an important part should be played by business associations, which need to be created and built up. Other structures, to help entrepreneurs in education, information provision as well as other services and exchanges, also have a role. Studies have shown that representatives of small and medium business rarely seek advice from business associations. The need for business associations is clear, however entrepreneurs see no reason to join them, as the existing associations do not offer their members the help they are looking for, or the quality of their service is low, or their fees too high. However, with the support of a business association, an SME can get relevant help in improving its competitive strengths, as well as in conducting lobbying campaigns to seek a better environment. In addition, business associations can facilitate the process of enterprise creation. We can see that it is crucial to bolster and improve business associations and providing help to these associations should be a priority for donors, for international organizations and for the government.”

In the light of the above listed concerns and views, Tamar Khuntsaria emphasized that SME development is one of the priorities of EUGBC. The audience was briefed on the Council’s work on SME growth and development (trade seminars, series of publications, SME committee). It was stated that the Council is keen to cooperate with other business associations as well as international and donor organizations (such as UNDP, ASAID) in order to address SME issues more efficiently. In addition, it was suggested that while valuing increased efforts of individual organizations and government authorities, it is essential that stakeholders coordinate activities and establish a forum for joint initiatives. UNDP and participants expressed readiness on such cooperation.