IFC Helps Georgia's Businesses Save Time and Money

No more long lines, no chaos and uncertainly, just half an hour and your business gets a green light – that is how life has changed for over 4,000 businesses in Georgia in less than a year. In cutting the red ribbon to open a Public Service Center in Tbilisi, IFC Vice-President Jyrki Koskello also helped cut red tape and ease business operations for thousands of Georgian entrepreneurs.

“I am really pleased with the great services at this center,” said Professor Alexander Tvalchrelidze, a Georgian mining specialist. “It took me less than an hour to finish all the paperwork that used to take several days.”

After spending several years abroad, Tvalchrelidze decided to come back to Georgia to help run Eurasian Minerals, Inc., and visited the Public Service Center to apply for a non-ferrous metals mining license for the firm.

For small business owners, time is money, and now by saving time, Georgian entrepreneurs save a lot of money too. An IFC survey found that the simplified procedures at the Center helped businesses save around $7.2 million. This amounts to an average $1,800 per enterprise, including small and medium ones, which represents approximately 3.25 percent of the average annual profit of a business in Georgia. The customer satisfaction rate with the Center is 99 percent, according to business owners surveyed.

Gvtisavar Martashvili is director of IHCC-Georgia, which re-exports pharmaceutical goods in the Caucasus. He is a frequent visitor to the Center as it provides the Certificate of Origin required by the company’s foreign partners.

IFC helped the government of Georgia develop the concept for the Public Service Center, trained Center staff, and promoted the Center’s services to business owners. IFC Georgia Investment Climate Project and the government of Georgia launched the Public Service Center to improve the business environment for local entrepreneurs.The success of the Center confirmed that there is room for improvement even in a country ranked first among 183 economies in the IFC/World Bank Doing Business Report 2011.

“The opening of this Center has had a positive impact on our operations,” said Martashvili. “The process has been simplified and the delivery of services is well-managed. As a result, I save a lot of time. All the importers welcome the creation of the Center.”

“Small entrepreneurs now spend much less time and money on paperwork and can focus on business,” said Thomas Lubeck, IFC Regional Head, Caucasus. “The center is an important step in our strategy to help improve Georgia’s business environment.”

The Center is located at the Ministry of Economic Development. It is a one-stop-shop for services that used to be scattered among various departments of the Ministry. This approach has simplified the license and permit application and issuance process for mineral extraction and construction sectors. It has also simplified privatization procedures, state-owned property management, investment, and tourism-related issues.

The launch of the Public Service Center is just one of the achievements of IFC Georgia Investment Climate Project. While implementing IFC’s regional strategy in ECA to improve the business enabling environment for small and medium enterprises, the project helped the Georgian government to implement reforms that simplified licensing procedures and reduced time for tax appeals. In total, IFC helped Georgian businesses achieve a cost savings of $11.9 million due to reduced or simplified administrative procedures.

The IFC Georgia Investment Climate Project was supported with funds from BP and its oil and gas partners, as well as the Canadian International Development Agency.