Georgia wins $1 bln aid pledge for reforms

Georgia wins $1 bln aid pledge for reforms
By Patrick Lannin

06/16/04 13:17 ET

BRUSSELS (Reuters) – Georgia won pledges of aid on Wednesday worth
around $1 billion over the next two years to help with economic
reforms and fight poverty, months after a new leadership was voted
into power after a bloodless revolution.

The pledges from the United States, World Bank, European Commission,
the European Bank for Reconstruction and Development, or EBRD,
as well as individual European states at an international donors’
conference were double what was expected by Georgia.

“Even the most optimistic expectations were far exceeded by the
overall sum of the pledges,” Prime Minister Zurab Zhvania told a
news conference.

“This is indeed a very important sign for Georgia that the processes,
the reforms, which are under way in our country are recognized and
supported by our partners.”

He told the donors’ conference that the government aimed to fight
poverty, overhaul the legal system, boost development outside the
capital, Tbilisi, and attract foreign investment.

President Mikhail Saakashvili was voted into power in January after
the popular revolt against veteran leader Eduard Shevardnadze.

He and his government have already started some reforms. One of the key
goals is to stamp out rampant corruption in Georgia, once prosperous,
but plunged into widespread poverty since the 1991 collapse of
Soviet rule.

“This assistance will allow us to build Georgia as a sustainable
democracy, a country which will become, through this assistance, much
less dependent on international assistance in the following years,”
Zhvania added at the news conference.

The World Bank said it backed the changes already launched. “We are
convinced that it is not just words, but that the actions that have
already been launched convince us there will be follow through,”
said Bank Deputy President Shigeo Katsu.


The European Union has been steadily strengthening relations
with Georgia, seen as a key route for Caspian Sea oil to the west.
Along with Caucasus neighbors Armenia and Azerbaijan, it was included
this week in the EU’s program for boosting relations with a ring of
neighbors from Morocco to Russia.

Zhvania told Reuters that his government was also expecting the
domestic economy to pick up in the years ahead and grow by double
digits, although inflation would stay relatively subdued.

European External Relations Commissioner Chris Patten said the
government had to make good on its commitment to reform.

“The stakes are high and the challenges ahead formidable,” he told
the conference.

Zhvania said reforms would include improving infrastructure like
energy plants and roads and institutional change like cutting the
size of government and the police.

Other priorities were to spread development outside Tbilisi,
particularly to the west of the country.

The reintegration of the former rebel region of Adzhara would also
boost the rest of the country, he said. The government reasserted
control over the area in May.