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GEORGIA’S DEMOCRATIC TRANSFORMATION

GEORGIA’S DEMOCRATIC TRANSFORMATION. Office of the State Minister on European and Euro-Atlantic Integration Tbilisi, August 2006. Tel: +(995 32) 932867. www.eu-nato.gov.ge office@eu-nato.gov.ge. Fax +(995 32) 995467. STRATEGIC GOALS. Building a strong, united & stable Democracy

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GEORGIA’S DEMOCRATIC TRANSFORMATION

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  1. GEORGIA’S DEMOCRATIC TRANSFORMATION Office of the State Minister on European and Euro-Atlantic Integration Tbilisi, August 2006 Tel: +(995 32) 932867 www.eu-nato.gov.ge office@eu-nato.gov.ge Fax +(995 32) 995467

  2. STRATEGIC GOALS • Building a strong, united & stable Democracy • Euro-Atlantic Integration • short term – NATO membership • long term – Increased Cooperation with EU

  3. OBJECTIVES • Peaceful Conflict Resolution • Human Rights, Rule of Law and Good Governance • Economic Development • Security Sector Reform

  4. MECHANISMS • Government Action Plan of Reforms 2006-2009 • Individual Partnership Action Plan with NATO, 2004-2006 • European Neighborhood Policy Action Plan, to be signed in October 2006

  5. State Commission National Security Council Secretary of National Security Council Ministry of Justice Minister of Environmental Protection And Natural Resources Ministry of Economic Development Prime Minister Chairman Chairman of European Integration Committee of Parliament Chairman of Foreign Relations Committee of Parliament State Minister on European and Euro-Atlantic Integration Deputy Chairman Chief of General Staff Armed Forces Chairman of Defence and Security Committee of Parliament Minister of Foreign Affairs Minister of Finance State Minister on Reforms Co-ordination Minister of Education and Science Minister of Interior Minister of Defence IPAP IMPLEMENTATION COORDINATION MECHANISM Administrative, Protective Security and Resource Issues Working Group #6 Deputy Minister (WG Leader) Political Issues Working Group #1 Deputy Minister (WG Leader) Economic Development and Fight Against Corruption Working Group #2 Deputy Minister (WG Leader) Science Co-operation Issues Working Group #5 Deputy Minister (WG Leader) Defense, Security and Military Issues Working Group #3 Combating Terrorism and Civil Emergency Planning Working Group #4 Deputy Minister (WG Leader) Deputy Minister (WG Leader)

  6. EU Integration Machinery Governmental Commission on EUIntegration EU Support Minister of Agriculture Minister of Justice GEPLAC Minister of Environmental Protection And Natural Resources Minister of Economic Development Prime Minister Chairman Head of Mission to European Communities Minister of Health, Labor and Social Protection Ministry of Foreign Affairs Deputy Chairman State Minister on Conflict Resolution Invited Representatives from the Parliament State Minister on European and Euro-Atlantic Integration Deputy Chairman (Secretariat of the Commission) Minister of Culture Minister of Finance State Minister on Reforms Co-ordination Minister of Education and Science Minister of Interior Minister of Energy Inter-Agency Working Group Deputy Ministers from Respective Line Ministries Sub-working group on Customs Issues Sub-working group on Insurance Issues Sub-working group on Competition Issues Sub-working group on Education Issues Sub-working group on Environmental Issues Sub-working group on Consumer Rights Issues Sub-working group on Energy Issues Sub-working group on Agriculture Issues Sub-working group on Taxi Issues Sub-working group on Intellectual Issues Sub-working group on Standardization Issues Sub-working group on Transport Issues Sub-working group on Corporate Law Issues Sub-working group on Labor Law Issues Sub-working group on Banking Issues Sub-working group on Securities Issues

  7. PEACEFUL CONFLICT RESOLUTION Ajara, Georgia: • Rule of law and central government jurisdiction re-established in Ajara Region of Georgia after peaceful uprising against corrupt and authoritarian local leader in May 2004 • Revival: • All pension and wage arrears (GEL 4,6 ml) paid out in 2004 • 23% growth of regional budget revenues in 2005 • Transfers from central government increased by GEL 4,6 ml • Investment growth by GEL 5 ml in 2003-2006 • 87% growth of number of tourists in 2004-2005

  8. PEACEFUL CONFLICT RESOLUTION South Ossetia/Tskhinvali Region, Georgia: • January 2005 – Georgia’s President’s Peace Initiative on Tskhinvali Region/South Ossetia • July 2005 - Georgia’s Peace Plan for resolution of Tskhinvali Region/South Ossetia conflict– unanimous approval by OSCE (Ljubljana Ministerial December 2005) • Demilitarization • Social and Economic Rehabilitation /Confidence Building • Renewing of Political Negotiations on Conflict Resolution

  9. PEACEFUL CONFLICT RESOLUTION • February 2006 - Georgia’s unilateral peaceful measures: • Demilitarization of the conflict zone • Law on Rehabilitation and Restitution of property of victims of the Conflict approved by the parliament • June 2006 - 12 Million Euros will be allocated by the EU member countries and the US in joint Georgian-Ossetian project for the social and economic rehabilitation of the region. Equivalent amount will be allocated by the Georgian government

  10. PEACEFUL CONFLICT RESOLUTION Abkhazia, Georgia: • October 2005 - Parliament of Georgia requested the government to present a Peace Plan for the resolution of the conflict in Abkhazia, Georgia • July 2006 – After successful Police Operation in Upper Abkhazia (Kodori Gorge) law and order was reestablished in this part of Abkhazia, Georgia

  11. PEACEFUL CONFLICT RESOLUTION • July 2006 – As part of the efforts to Internationalise the Peace Keeping in the Conflict Regions, Parliament of Georgia passed a Resolution on the withdrawal of CIS Peacekeepers from both South Ossetia/Tskhinvali and Abkhazia Conflict Regions of Georgia • Georgia seeks good neighborly relations with Russia, as both countries have common objective interest in fighting aggressive separatism. Role of the EU is decisive in the engaging Russia positively in the Peace Process

  12. HUMAN RIGHTS • UN Convention Against Torture ratified in July 2005 • Public Defender entrusted with monitoring of the penitentiary establishments • Drastic decrease of cases of ill-treatment and abuse of prisoners’ rights • New international standard prisons built

  13. HUMAN RIGHTS • Framework Convention on National Minorities ratified by the Parliament, October 2005 • Comprehensive Concept on the State Policy on Protection and Integration of Minorities elaborated by the Parliament, September 2005 • The Parliament of Georgia adopted a legislative package on Human Trafficking, April 2006 • Freedom of Speech is guaranteed by one of the most liberal Media legislations in Europe. Latest law adopted in June 2004 provides even greater protection to journalists • Amendments to the Civil Code enable Religious Organizations to register as legal entities, April 2005

  14. RULE OF LAWJudiciary Reform Free and Fair Courts of Law: • Prosecutor General no longer has a seat in Justice Council and additional seats are provided for judges, who now have a majority in the Council • New Criminal Procedure Code elaborated - open and free court system that guarantees equality before law • The court is given a mechanism of control over the breach of privacy of citizens from the side of the authorities • Appearance before judge within 24 hours, instead of 48 hours, after arrest • Witnesses will not need to testify before the trial starts

  15. RULE OF LAWJudiciary Reform Effective Administration of Justice: Reorganization of Court System 2005-2007 • Introduction of sequential order of Court Instances (District Court, Court of Appeals, Supreme Court) • Establishment of 18 larger district (city) courts • Introduction of 48 specialized Magistrate Judges in criminal , civil and administrative cases

  16. RULE OF LAWJudiciary Reform Effective Administration of Justice: • In accordance with the recommendations of international experts Higher Justice School for training and re-qualification of judges has been established • Revision of the verdict when new evidence is found will be made by the court of appeals • Creation of integrated virtual network that will provide integral document circulation, case management, and establishment of common judiciary practice • Substantial rise in the salaries of the judges • Total refurbishment of court buildings

  17. RULE OF LAWJudiciary Reform Transparency of the Courts: • Introduction of Speaker Judges is an important mechanism relationship between the Court and the public • Facilities have been installed in all Court session halls for video and audio recording of trials, and preparation of quality electronic material from media and public

  18. Anti-Corruption Strategy of Georgia (June 2005) RULE OF LAWAnti-Corruption Efforts

  19. RULE OF LAWAnti-Corruption Efforts • Number of high level officials arrested as a part of anti-corruption campaign • Reform in the police is a success – from one of the most corrupt agencies, police now enjoys overwhelming (75%) public trust • Significant increase of salaries of public servants

  20. RULE OF LAWAnti-Corruption Efforts International Evaluation • According to 2006 World Bank report “Anticorruption in Transition 3” Georgia saw the largest reduction in corruption among all transition countries from 2002-2005 • In EBRD Transition Report 2005 Georgia is Second (after Slovak Republic) among the Countries with Transition Economies in terms of improvements related to corruption • According to EBRD, the rate for Georgia in the Bribe Tax was reduced from 2.7 to 0,5 (Mature Market economies)

  21. GOOD GOVERNANCE Structural Reforms in the Government: • Number of ministries reduced from 18 to 13 • Number of government agencies reduced from 52 to 3 • Introduction of new, objective and universal professional selection criteria for Public Service

  22. GOOD GOVERNANCE Strengthening Local Self-Governance: • European Charter on Local Self-Governance ratified in October 2004 • 2005-2006 Parliament adopted series of laws on Local Self-Governance • New legislation decentralizes administrative, budgetary and property management powers to the local self-government entities • Local Government Elections will be held on 5 October 2006 • Voters’ Lists are being reviewed by the Election Commission • Majority of Venice Commission recommendations on the amendments to the Election Code accepted

  23. GOOD GOVERNANCE International Evaluation In 2006 State of World Liberty Index data Georgia holds the 58th position among the 166 countries. (The ranking is based on three criteria: individual freedom, economic freedom and government size and taxation)

  24. ECONOMIC DEVELOPMENT Liberalization • Deregulation of economy and intensive privatization • New Liberal Tax Code introduced: • number of taxes reduced from 21 to 7. • VAT reduced from 20% to 18%, • Income tax reduced from 20% to 12 % • Social Tax reduced from 33 to 20% • New Law on Customs Duties adopted, July 2006 • Draft Custom Code presented to the Parliament

  25. ECONOMIC DEVELOPMENT Liberalization • Modernization and simplification of the system of business licensing • “One stop shop” for businesses • “One stop shop” for custom procedures

  26. ECONOMIC DEVELOPMENT Trade Policy • Low import tariff system to be introduced in September 2006, with 0% rate on majority of import goods, 5% and 12% rates on few variety of goods • Reduction of the Number of Export/Import Licenses from 14 to 8 • Recognition of OECD and European Council Technical Regulation in Trade

  27. ECONOMIC DEVELOPMENT Trade Regimes • Most Favored Nation Tariffs with WTO Members • GSP + scheme granted by the EU (Georgia being one of two beneficiaries of the scheme in CIS) • GSP scheme granted by the USA, Canada, Switzerland and Japan • Free Trade Agreement with 8 CIS members

  28. ECONOMIC DEVELOPMENT Real GDP Growth

  29. ForeignTrade Growth (million USD) 34.3% 3358 54.3% 2500 1620 ECONOMIC DEVELOPMENT

  30. ECONOMIC DEVELOPMENT Increase in Foreign Direct Investments (million USD)

  31. ECONOMIC DEVELOPMENT Increase in the State Budget Revenues (million GEL) 3428 3256 3068 2842 2283 1926 1154 1239 1216 1049

  32. ECONOMIC DEVELOPMENT Social Policy • State budget surplus GEL 471 ml in 2006 • 8 times increase in financing education and 3 times increase in healthcare as well as social programmes in the 2006 budget as compared to the 2003 budget • 1.6 times increase in the average salary of public employees from 2003 to 2005 • 2.4 times increase in pensions • Pension and wage arrears, accumulated over a period of 6 years, paid up. Pensions to grow 30 % by September 2006 • Improvement in infrastructure throughout the country

  33. ECONOMIC DEVELOPMENT International Evaluation • According to the World Bank, Georgia ranks 1st in the world for the intensity of reforms in 2006, moving from the 2nd position in 2005 • According to the World Bank’s Doing BusinessEconomic Ranking Georgia ranks 37th in 2006 in terms of business environment, moving from the 100th position in 2005 • EBRD Transition Report 2005 ranks Georgia as a best performing economy in terms of its success in improving Tax Administration • Described as “mostly free”, Georgia’s Economy was ranked 68th among 161 countries of the world by the Heritage Foundation/Wall Street Journal Index of Economic Freedom, following those of Czech Republic, Israel, Spain and Greece • The WB, IMF and other international financial organizations assess Georgian Financial Indicators for 2005 as successful

  34. SECURITY SECTOR REFORMLaw Enforcement Border Management: • EU Special Representative’s Office in Georgia successful cooperation in process of Border Management reform • Border Guard was transformed from a paramilitary force into a police type agency • Significant increase of Border Police budget (from 21 ml in 2005 to 34 ml 2006) • Budget of the Border Police has been decentralized to the level of regional units • Joint Technical Scheme of Border and Customs Management has been elaborated • Border Police Faculty has been established in the Police Academy

  35. SECURITY SECTOR REFORMLaw Enforcement Illegal Migration/Human Trafficking: • New Law on Human Trafficking adopted by the Parliament, April 2006 • Government Action Plan on fight against Human Trafficking 2005-2006 under implementation • Database of victims of human trafficking and of traffickers has been created, March 2006 • Draft Programme of Psychological and Medical Support to the Victims of Human Trafficking has been elaborated

  36. SECURITY SECTOR REFORMDefence Process of SDR development is in advanced stage All necessary conceptual documents are in place: • National Military Strategy • Threat Assessment • Visions of the Minister of Defence and of the Chief of the General Staff • Priorities of Defence Policy in 2006 Structural changes have been conducted: • Responsibilities between the Ministry of Defence and General Staff have been clearly divided

  37. SECURITY SECTOR REFORMDefence • In 2004-06 defence budget increased significantly • Social conditions of the personnel have improved • Since 2003 salaries increased by 113% • All major infrastructure has been renovated or rebuilt • Reformation of all defence structures and management systems according to the NATO recommendations is ongoing

  38. SECURITY SECTOR REFORMDefence • Significant progress has been achieved in improving the human resource management, logistics and military education systems • Interoperability with NATO and partner countries units increased significantly • Appropriate legislation and structures to ensure democratic control over the armed forces are in place • Defence budget is transparent and open to the public

  39. SECURITY SECTOR REFORMDefence • Land Forces Command has been created • Education Command has been formed • General Staff in process of transformation into the Joint Staff • Language training system was updated based on NATO recommendations • New law on Defence Planning to be approved • Planning, Programming and Budgeting System (PPBS) is under development with support of the Ministries of Defence of Netherlands and Romania

  40. SECURITY SECTOR REFORMDefence Growth of Defence Expenditure (Million GEL) 614 315 181

  41. PRIORITIES • Implementation of Peace Plan/Continuation of Unilateral Efforts • Judiciary Reform • Defence Reform • Open, Free and Fair Local Elections in December 2006

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