MANILA, PHILIPPINES (10 November 2022) — The Asian Development Bank (ADB) has approved a $100 million policy-based loan to deepen Georgia’s reforms to fiscal management, capital markets, and its pension system.
The second subprogram of the Fiscal Resilience and Social Protection Support Program builds on the accomplishments of the first subprogram approved in 2020, which helped to improve Georgia’s macroeconomic resilience during the COVID-19 pandemic.
“Georgia’s sound policy response to the COVID-19 crisis has led to a robust economic recovery, but geopolitical uncertainties may still dampen the economic outlook,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “With this subprogram, ADB helps Georgia complete reforms that were earlier initiated to further strengthen the government’s capacity to manage fiscal risks, deepen capital markets, and enhance the sustainability of social protection programs.”
ADB’s second subprogram supports policies aimed at improving institutional capacity to manage fiscal risks stemming from disasters triggered by natural hazards and climate change, and weak corporate governance in state-owned enterprises. It will strengthen macroeconomic resilience to shocks by reducing exposure to currency and refinancing risks associated with high external debt. It also supports measures to promote regular contribution payments among pension participants as well as the adoption of a framework that incentivizes additional voluntary savings.
“Reforming the pension system is critical to safeguard the well-being of Georgia’s aging population in a fiscally sustainable manner,” said ADB Public Finance Specialist Rogério de Almeida Vieira de Sá. “ADB’s program will help Georgia sustain inclusive economic recovery underpinned by macroeconomic stability.”
Georgia joined ADB in 2007, and the bank has since become one of the country’s largest multilateral development partners, with committed loans amounting to $3.92 billion and technical assistance projects worth $28.9 million. ADB’s development priorities in Georgia include expanding trade, creating jobs, and combating poverty by developing economic corridors.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.