We, under the Good Governance Initiative (GGI) program, recently started a new project, aiming to strengthen the public financial management (PFM) capacity of two Georgian municipalities, namely Rustavi and Zugdidi. This program will cover the implementation of program budgeting methodology in practice, enhance the budgeting process, and improve two important principles of the budgeting system – transparency and accountability - in these municipalities.

On June 7, together with the Parliament of Georgia, under the USAID Georgia Economic Security Program, a public private dialogue entitled “Shared Intellectual Services Sector in Georgia: Development Perspectives and Best International Practice” was held, during which legislators, executive representatives, industry experts, and representatives of the private sector as well as international organizations discussed key challenges in the shared intellectual services sector and the ways to address them.

Under EU Framework Contract Lot 5, in a consortium led by ADE, we recently launched a final evaluation of the EU-funded program entitled the “Khyber Pakhtunkhwa District Governance and Community Development Programme” (KP-CDLD). The program was designed to build the responsiveness and effectiveness of the administration of the 13 districts of this province of Pakistan to restore citizen trust, to stimulate employment and livelihood opportunities, and to ensure delivery of basic services.

We are working with the United Water Supply Company of Georgia (UWSCG) to introduce environmentally-friendly communal infrastructure in Stepantsminda Municipality (Mtskheta-Mtianeti region of Georgia), under the KfW Development Bank project entitled “Elaboration of Concept and Feasibility Studies for Communal Infrastructure for Environmental and Tourism Improvement,” led by P2M Berlin together with IDOM.

According to this survey of Georgian economists, the economic climate in the country in the second quarter of 2021 is better than the first quarter of the same year. Georgian economists’ assessment of the current situation has improved, compared to the previous quarter and corresponding quarter of 2020, but nevertheless remained negative. The economists’ predictions for Georgia’s economic situation for the next six months were also negative. Their expectations for this period improved though, compared to their predictions in the first quarter of 2021, and were considerably more optimistic than the forecasts they made at the same time last year.

In Georgia, the average cost of a room in a 3-star hotel was 132 GEL per night in May 2021, while the average cost of a room in a 4-star hotel in Georgia was 246 GEL per night and the average cost of a room in a guesthouse was 82 GEL per night. The average cost of a room in a 5-star hotel in Georgia in May 2021 was 402 GEL per night. In Guria, the average price was 600 GEL, followed by Tbilisi - 509 GEL, Kakheti - 432 GEL and Adjara – 391 GEL.

The research objectives are to examine the challenges that exist in the civil servants’ professional development system, in general, explore barriers specifically associated with the shift to online learning, assess the readiness of civil servants for online training, and develop recommendations to increase the effectiveness of remote teaching.The research methodology is based on a mixed-method design and combines qualitative and quantitative approaches: analysis of the existing documents, interviews with key informants, focus group discussions, and a computer-assisted telephone survey that is representative for professional civil servants working in the councils and town halls across the country. In order to provide in-depth analysis of the issue, the research draws on the perspectives of multiple stakeholders, including civil servants as well as representatives of the Civil Service Bureau, international organizations, and training centers.

International rankings and indicators help us to understand and assess how countries are performing in different areas. In this bulletin, Ukraine’s positions in international rankings and the dynamics therein will be reviewed based on recent data. The positions will also be compared with other Eastern Partnership (EaP) countries (Armenia, Azerbaijan, Moldova, Georgia, and Belarus).

The number of international travelers increased by 141.6% in April 2021 compared to the same period of 2020, and declined by 86.8% compared to the same period in 2019. Meanwhile, the number of international visitors increased by 140.4% (2021/2020) and declined by 85.0% (2021/2019), and the number of international tourists increased by 182.2% (2021/2020) and declined by 78.2% (2021/2019); Visitors from the United States and Israel stand out as high-spenders and long-stayers in Georgia, while visitors from Turkey, the Gulf States, Iran, and Armenia have been categorized as high-spenders but short-stayers. Visitors from Russia and Azerbaijan fall into the low-spend, short-stay category; Israel and the Gulf States accounted for the highest estimated revenue loss in 2020 due to the COVID-19, apart from immediate neighbors. Now, Israel and the United Arab Emirates have one of the highest percentage of vaccinated population, so visitors from the two countries could be worth targeting; For 2021, it is recommended to channel marketing campaigns toward high-spenders and short-stayers, along with high-spenders and long-stayers; Due to the abnormal impact of the pandemic on 2020 prices, we use 2019 as the comparison year for the Hotel Price Index for the rest of 2021.

In Georgia, the average cost of a room in a 3-star hotel was 133 GEL per night in April 2021, while the average cost of a room in a 4-star hotel in Georgia was 225 GEL per night and the average cost of a room in a guesthouse was 77 GEL per night. The average cost of a room in a 5-star hotel in Georgia in April 2021 was 380 GEL per night. In Guria, the average price was 606 GEL, followed by Tbilisi - 512 GEL, Kakheti - 425 GEL and Adjara – 329 GEL.

In this bulletin, a snapshot of remittance inflows into Ukraine pre-COVID is discussed, followed by its developments in 2020. According to the World Bank, global remittances will decline by 14% by the end of 20212, compared to the pre-pandemic level of 2019; In 2020, remittance inflows into Ukraine declined just by 0.3%, compared to 2019; Remittance inflows in Ukraine have been growing at an annual average of 8.2% over the past decade; The contribution of remittances to GDP in Ukraine amounted to 7.7% in 2020; The top senders of remittances to Ukraine in 2020 were Poland (26%), the United States (10%), and the United Kingdom (9%). In 2016-2019, the top senders were Poland (30%), Russia (12%), and the United States (8%); Remittances from Russia declined the most in 2020 (-20%), compared to 2019, while the United Kingdom recorded the strongest growth (69%) over the same period.

PMC Research has launched a new periodic publication entitled Sector Snapshots. Each issue focuses on a specific sector of the Georgian economy, observing developments with respect to key indicators of the given sector as a whole, the sector’s dynamics, its role in the overall economy, and, finally, financial indicators of companies within that sector.   The publication will produce valuable insights for businesses engaged in the covered sectors, as it lays out the trajectory of development for each sector and its possible financial bottlenecks, thereby contributing to more informed and efficient decision-making.  In the first issue of our new publication, we focus on Georgia’s microfinance sector.  In 2017-2019 new regulations on microfinance institutions (MFIs) entered into force, which significantly altered the landscape of the industry; Between Q1 2017 and Q4 2020, the number of MFIs and employees in the sector fell, with the former dropping to 40 and the latter to 4145 by Q4 2020 (52% and 16% decrease, respectively) In Q4 2020, MFIs in Georgia held 1.48 bln GEL of assets and 0.98 bln GEL of liabilities. In this period, the consolidated assets and liabilities of MFIs increased, compared to Q4 2019 with a growth of 7% and 9%, respectively. Compared to Q1 of 2017, figures increased by 6% and decreased by 1%, respectively; In 2020, gross income (revenue) of MFIs decreased, compared to 2019, and dropped by 10% to 332.6 mln GEL, while net income increased to 44.8 mln GEL. Moreover, the net income margin increased by 14 percentage points and reached 14%; By the end of 2020, portfolio of loans issued by MFIs amounted to 1.18 bln GEL, while number of loans in portfolio amounted to 0.66 mln loans, which represented 8% increase and 16% decrease, respectively, compared to the figures by the end of 2018.

The number of international travelers declined by 75.3% in March compared to the same period of 2020, and by 90.7% compared to the same period in 2019. Meanwhile, the number of international visitors fell by 73.4% (2021/2020) and by 89.0% (2021/2019), and the number of international tourists fell by 64.4% (2021/2020) and by 84.4% (2021/2019); Saudi Arabia, the United States, Qatar, United Arab Emirates (UAE), and the United Kingdom rank as the top five countries of origin when it comes to highest average expenditure per visit; Turkey, Saudi Arabia, Qatar, UAE, and Armenia rank as the top five countries of origin when it comes to average expenditure per day; Targeting visitors from Turkey, via both air and land routes, could be an effective marketing strategy, at least in the short term; Due to the abnormal impact of the pandemic on 2020 prices, we use 2019 as the comparison year for the Hotel Price Index for the rest of 2021.