position. At the Cabinet meeting on 27 October 2016, the Prime Minister of Georgia, Giorgi Kvirikashvili, talked about this change, pointing out: “Today, Georgia is among the top ten reformer countries out of the 190 countries in the ratings and it is also a top reformer country in the region.”
FactCheckstudied the reasons for the changes in Georgia’s positions in the Ease of Doing Business study.
The World Bank Group publishes annual ratings describing the business environments of various countries around the world and indicates those countries where it is the easiest to conduct business. Georgia held the 9th place in the ratings in 2012 and moved up to the 8th in 2013 (the ratings described the situation in 2012-2013). The methodology for compiling the ratings changed in the years following. Due to the changes in the methodology, Georgia occupied the 15th place in 2014, moving back to the 23rd place in 2015. FactCheck wrote about this earlier. It is hard to speculate about which positions Georgia would have held in 2014 and 2015 if the study’s methodology had not been changed. However, given the fact that only one reform (according to the World Bank reports) was undertaken in 2013, none in 2014 and two in 2015, Georgia would have been hard pressed to maintain the 9thposition.
Table 1:
Number of Reforms Facilitating the Ease of Doing Business in Georgia
| Year | Number of Reforms |
| 2007 | 6 |
| 2008 | 4 |
| 2009 | 2 |
| 2010 | 4 |
| 2011 | 4 |
| 2012 | 6 |
| 2013 | 1 |
| 2014 | 0 |
| 2015 | 2 |
| 2016 | 5 |
According to the Doing Business 2017 study (describing the situation in 2015 and 2016), Georgia undertook five business-facilitating reforms (Table 2) and held the 7th
position among the 190 countries in the ratings. In terms of business-friendly reforms, only Kazakhstan managed to outperform Georgia in the region by undertaking eight reforms in total (Europe and Central Asia).
Table 2:Reforms Facilitating the Ease of Doing Business in Georgia
| Index Criteria | Reforms Undertaken |
| Getting Electricity | Informing consumers about planned electricity outages has become compulsory. Should the average annual outage statistics worsen, the supplier is liable to fines |
| Registering Property | The quality of the land fund’s administration has improved by extending the practice of mapping |
| Protecting Minority Investors | The level of protection for minority investors has improved by increasing the rights of stakeholders in general |
| Paying Taxes | The documentation necessary for returning income tax and VAT has improved, including the improvement of electronic systems |
| Trading across Borders | An electronic system for the filing of import and export documentation has been implemented |
As a result of the reforms, Georgia managed to gain the most positions (moved up by 23 positions) in the ‘Getting Electricity’ criterion. ‘Protecting Minority Investors’ and ‘Paying Taxes’ come next with 15 and 13 positions gained, respectively. Georgia moved down by five positions in only one criterion – ‘Resolving Insolvencies.’
Table 3:
Changes in Georgia’s Position According to Index Criteria
| Year | 2015 | 2016 | Change |
| Georgia’s Rating | 23 | 16 | +7 |
| Starting Business | 10 | 8 | +2 |
| Dealing with Construction Permits | 9 | 8 | +1 |
| Getting Electricity | 65 | 39 | +26 |
| Registering Property | 3 | 3 | - |
| Getting Credit | 7 | 7 | - |
| Protecting Minority Investors | 22 | 7 | +15 |
| Paying Taxes | 35 | 22 | +13 |
| Trading across Borders | 62 | 54 | +8 |
| Enforcing Contracts | 17 | 16 | +1 |
| Resolving Insolvency | 106 | 101 | -5 |
Cabinet members pay close attention to the improvements in the ratings and the importance of the ratings in general. Ministers pointed out that this indicates that the Georgian economy is headed in the right direction and that the government is effective; however, they had an absolutely different approach to this issue several years ago (when Georgia occupied the 9th position during the office of the previous government) believing that the ratings did not accurately describe the reality and were, therefore, not to be trusted. FactCheck wrote
about this issue earlier as well.
Conclusion According to the Doing Business 2017 study, Georgia undertook five business-friendly reforms for the past year and occupied the 7th place among 190 countries by the number of these reforms which is definitely a good result. Following these reforms, Georgia’s position changed from the 23rd to the 16th in the world ratings whilst the country holds the 3rd
position in the region after Macedonia and Latvia.
Georgia held better positions in these ratings in 2012 and 2013 (the 9th and 8thpositions, respectively); however, the study’s methodology subsequently changed and so we cannot say which position Georgia would have held if not for the changes.
FactCheck concludes that Giorgi Kvirikashvili’s statement is TRUE.
