Poverty Reduction Blog Tag: Georgia
Hospitality, Friendship and Results
Posted on April 8, 2011 by Patrick Fine, Vice President of Compact Operations
During the last week of March, MCC Board member Alan Patricof and I visited Georgia to mark the completion of the 5-year Georgia Compact, which officially completes on April 7th.
After three days of travelling throughout Georgia to see the work financed by MCC and meet with farmers, entrepreneurs, NGOs and religious leaders, and our government counterparts, I have no doubt that the Georgia compact will be remembered for its remarkable achievements, and for how it has demonstrated that the United States and Georgia are not only strong allies, but good business partners.
On our first day in country we drove for several hours down the newly rehabilitated Samtskhe-Javakheti road that links the previously isolated southern part of the country to the rest of Georgia. This investment opens up trade with Armenia and Turkey, and offers the prospect of revitalizing an area that was ignored during the Soviet era. We stopped at a new grocery shop that recently opened along the road. I hope it is a portent of the business development that will spring up along this strategic route.
We also visited the ancient Jvari monastery and the cathedral at Mtskheta, marvelous legacies of Western civilization from Georgia’s medieval past. As we travelled the road, crumbling fortresses crowned the peaks of mountains – harkening back to the time when the famed Silk Road passed through Georgia. I thought of President Saakashvili’s comment that “Georgia is not just a European country, but one of the most ancient European countries,” and of the country’s development strategy to revive its role as a crossroads between Asia and Europe.
Our second day was spent in the Kakheti region, where MCC financed dozens of small projects as part of an activity designed to develop the country’s huge agricultural and agribusiness potential. It is a point of great satisfaction that MCC financing helped 280 agribusinesses expand, resulting in the creation of over 2,800 jobs. At the 6th-century Alaverdi monastery, nestled on a rich plain at the foot of the soaring Caucasus Mountains, we saw a modern wine-making operation using traditional methods, and sampled the fruits of their honey-making and horticulture enterprises. It was impossible not to think of the tremendous potential for tourism in this scenic and historic setting. Before long I bet we’ll hear about people traveling to Georgia for tours of its historic wine country. When they do, they will have the pleasure of discovering the warmth and hospitality of the Georgian people.
We concluded a very productive visit with a well-attended public ceremony in Tbilisi to officially close the compact. With a great sense of satisfaction, we were able to toast a U.S.-Georgian partnership that has built essential infrastructure and created new opportunities that are generating jobs and raising incomes.
A Model That Works
Posted on April 8, 2011 by Alan Patricof, Board Member
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I met a farmer who sells cucumbers and tomatoes and is benefiting from the Agribusiness Development Activity. A total of 280 agribusiness and farm production projects have been funded, resulting in over 2,800 jobs.
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I visited a chicken hatching facility that received funds from the Georgia Regional Development Fund project.
Even for those of us involved in global development, it’s easy to wonder sometimes whether your work is making a difference.
Last week, I got my answer. I traveled to Georgia to attend compact closeout ceremonies and get a first-hand look at MCC’s investments in this region. I’m happy to report that the MCC model is working.
I spent three days in Georgia, and I wanted to see as much of MCC’s work as possible. So I met with beneficiaries. I drove the newly rehabilitated Samtskhe-Javakheti road. I heard at all levels about the struggles, the challenges, and the enthusiasm behind the MCC-funded work in Georgia. After all of that, I am impressed.
The Samtskhe-Javakheti road rehabilitation is the project that, at first glance, will yield the most immediate and tangible impacts on commerce and tourism around the country. Businesses are transporting their goods and tour operators are creating new routes that make use of this road, accessing the lakes and caves that are found along the way.
The less tangible but potentially more impactful investments, in my opinion, will be the MCC-funded credit and grants programs. I met young entrepreneurs who are eager to expand and excited to take advantage of the opportunities that this source of capital provides. People are benefiting throughout Georgia and the impact will be felt for years to come.
I saw accountability, country ownership and tangible results at work. U.S. Ambassador Bass said it best: “MCC has made us think differently about how the USG partners with countries.”
This compact could have been disrupted by any number of events in Georgia – a war in 2008 and implementation challenges not least among them. Instead, the compact was completed successfully and the results are easy to spot.
I can now say with certainty: MCC works.
Agri-Food Expo Highlights How MCC Investments Are Creating Jobs in Georgia
Posted on December 17, 2010 by Jim McNicholas, Resident Country Director, Georgia
On November 29, 2010, Millennium Challenge Georgia (MCG) hosted a closing ceremony and exhibition for its agribusiness development program. To celebrate this milestone, 60 of the program’s 283 agribusiness projects showcased their products at an Agri-Food Expo, with Georgian government officials as well as bankers and supermarket chains in attendance.
Since 2006, MCG and its implementing partner, CNFA, a U.S. non-profit, have co-financed 182 primary producers, 43 businesses projects that provide services to farmers, and 58 businesses that enable value-added and value-chain production. MCG has invested $15.9 million in this program and, according to CNFA, Georgian citizens have invested $20 million more. As of early autumn 2010, MCG reported that 2,613 jobs had been created as a result of agribusiness development program activities.
At the Agri-Food Expo, Mamuka Tskioridze and Malkhaz Gabunia displayed their orange persimmons neatly packed in wooden boxes, alongside fresh salad greens and herbs. With their company’s 1:1 matching investment and MCG’s $149,000 co-financing, these entrepreneurs have expanded their greens export business both in terms of volume and the types of products being offered to Belarus, Moldova and Ukraine. “In the past, every product we bought from farmers we had to pack and ship that day because if not we would lose the product,” said Mr. Tskioridze. “With the cold storage warehouse [which was also co-financed by MCG] we now have time to collect more products from our farmers and export using fewer trips.”
One of the most successful projects to emerge from MCG’s agribusiness program was the establishment of 33 for-profit, privately owned, Farm Service Centers throughout Georgia. Before the centers were opened, farmers had to get their supplies from stalls in various local markets. These decentralized transactions made it difficult for farmers and their suppliers to build relationships and communicate with each other. Now, one-stop Farm Service Centers have been established in every region in Georgia and have generated 100,000 transactions. In addition to serving as a commercial exchange, the centers also provide opportunities for the exchange of information — knowledge warehouses where the Ministry of Agriculture, various Community Based Organizations, and individual farmers can showcase new farming techniques and relay important announcements.
Georgia’s Prime Minister, Nika Gilauri, closed the Agri-Food Expo by noting several program results, “More than 2,600 jobs have been created and these jobs are not just short-term jobs; they have long-term perspectives and provide long term opportunities… Millennium Challenge Georgia proved that investments can be made in this sector and be successful.”
Trip Log: MCC Partnerships for Economic Growth in Moldova and Georgia
Posted on November 4, 2010 by Daniel W. Yohannes, Chief Executive Officer
Late last month, I surveyed progress in two MCC partner countries: Moldova, which is just beginning the implementation of its compact, and Georgia, which is on track to bring its compact to a successful close in the next six months.
In Moldova, I was impressed with the farmers I met in Slobozia-Dusca, a village not far from the capital of Chisinau. These farmers will benefit from MCC-funded irrigation projects and are already talking about the impact a centralized irrigation system will have on their livelihoods, as it will lower operating costs and allow them to diversify into high-value crop production and increase their yields. I was particularly moved by my conversation with Iurie Stahi. He told me he was grateful for America’s assistance from the bottom of his heart, and he explained that, as a result of MCC’s planned investments in the agriculture sector, he intends to plant apple orchards and sell his apples during the winter when they command a higher price, as well as during the summer and autumn seasons. I’m looking forward to following Iurie’s progress as the Moldova compact ramps up implementation.
In Georgia, I was deeply impressed with the transformative power of a road. I traveled the Samtske-Javakheti road, which Georgia is rehabilitating with MCC compact funds, from Tbilisi to where it nears Georgia’s border with Turkey and Armenia. What I saw and whom I met along the way showed me exactly how paving a reliable road is essential for generating economic opportunities.
I first witnessed this when I met Valodia Mestvirishvili at his trout farm in Algeti, just off the Samtske-Javakheti road. The agricultural development activity of Georgia’s compact supplied hatchery equipment, oxygen tanks, a transportation vehicle, and veterinary supplies to his farm to raise the trout, and the road rehabilitation funded by the compact provides him much-needed access to markets to sell his product to Georgian retailers and consumers. Valodia shared with me that his annual trout yield has skyrocketed from 5 to 12 tons. I am proud of the fact that MCC funding has provided this hardworking entrepreneur the tools he needs to succeed.
From Left to Right: MCG CEO George Abdushelishvili, MCC CEO Daniel W. Yohannes, MCC Resident Country Director Jim McNicholas, US Ambassador to Georgia John Bass
My road trip took me past Georgia’s Lake Sagamo, a place of serene natural beauty. Against a mountainous backdrop, as the sun was setting and the moon was rising, I planted trees along the Samtske-Javakheti road. These trees are critical; they provide proper landscaping and better wind protection and they help advance the sustainability of the MCC-funded road. Tree planting also reaffirms that sound environmental stewardship protecting natural resources goes hand-in-hand with economic development.
From Left to Right: Georgian Minister of Finance Kakha Baindurashvili, MCG CEO George Abdushelishvili, MCC CEO Daniel W. Yohannes, US Ambassador to Georgia John Bass
I was particularly pleased to see that MCC’s funding of the Samtske-Javakheti road has enhanced the Georgian people’s accessibility of Vardzia. Vardzia is home to a cave monastery, an unforgettable historic treasure of great cultural and religious significance dating back to the 12th century. I learned that, for too long, this part of Georgia was lost to outsiders; the trip to reach Vardzia was treacherous and the roads were literally impassible in some sections. Buses risked overturning on the dangerously unpaved roads. Now, the rehabilitated Samtske-Javakheti road is reconnecting Georgians with Vardzia and their heritage, and opening up this area to tourists. Boosting tourism in this otherwise underdeveloped area is generating economic development and growth vital to the prosperity of Georgians.
The MCC-funded Samtske-Javakheti road also nears Georgia’s border with Armenia and Turkey in the town of Akhalkalaki. This once quiet outpost is now bustling with activity, which will increase as a bridge, currently under construction, is completed. New shops are already opening, and the prospects for increased trade and commerce create further opportunities for Georgians to prosper.
In all these ways, Georgia proves that the MCC model is working well. Our partnership is creating conditions for sustainable economic growth that are increasing incomes. As the compact moves toward completion, I am looking forward to the independent evaluations that will assess the impact of our investment. True to President Obama’s new vision for U.S. global development, what I saw in both Georgia and Moldova already reaffirms for me that MCC practices the principles essential for long-term impact: investing in economic growth, promoting country-led development, demanding accountability and transparency, and delivering sustainable results that matter in the lives of the poor.
MCC and USAID Bring Mechanization to Georgian Farmers
Posted on January 11, 2010 by Chelsea Coakley, Program Analyst, Department of Compact Implementation
MCG
The MCC/MCG-funded Farm Service Center in the town of Kvareli has created nine new jobs and provided agricultural goods and services to 4,000 local farmers
Investments in agricultural development are integral to MCC’s commitment to sustainable poverty reduction in rural Georgia. The Millennium Challenge Georgia Fund (MCG), implementing Georgia’s $395 million MCC compact, is nearing completion of the Agribusiness Development Activity (ADA), a $20 million program designed to strengthen commercial linkages among agricultural service providers, producers, processors, wholesalers/distributors, and markets. The 287 targeted matching grants already awarded to Georgian agribusinesses and farmers are supporting sustainable, long-term growth.
In addition to providing grants focused on enterprise and value chain development, MCG responded to a request from the Georgian Ministry of Agriculture to support the introduction of new agricultural machinery into the country by developing a new ADA component. The inability of small farmers to access machinery has been cited as a major constraint to agricultural development in Georgia. To meet the needs of Georgian farmers for increased mechanization of their agricultural techniques, MCG is providing grants up to $150,000 to a number of farm service centers. Over the past 4.5 years, ADA has focused, in part, on the creation of a privately-owned retail network of farm service centers to provide a complete range of agricultural goods and services for Georgian farmers.
USAID has also responded to the need for new agricultural machinery in Georgia. In early December 2009, USAID launched the Access to Mechanization Program, a $5.1 million program that will provide similar grants, in combination with a number of other funding mechanisms, to establish 25 to 30 machinery service centers throughout the country. The MCC and USAID programs complement each other and maximize impact by promoting a commercially-sustainable model of agribusiness that benefits farmers as well as the owners and employees of farm service centers and machinery service centers throughout Georgia.
As a result of MCC-funded farm machinery grants and USAID’s newly-launched Access to Mechanization Program, beneficiary farmers will now be able to plant, cultivate, and harvest their crops far more efficiently. Georgian farmers are motivated to move toward greater mechanization, as they expect the effect to be transformative. By increasing productivity and improving the quality of their existing crops, farmers will be able to generate greater income and secure necessary capital for upcoming seasons.
Eyewitness to Change in Georgia: Lessons of a Greenhouse and a Pipeline
Posted on August 25, 2009 by Chelsea Coakley, Program Analyst, Department of Compact Implementation
Millennium Challenge Georgia Fund
On July 30, a new large-scale commercial greenhouse complex Herbia opened in Tskaltubo, Imereti Region.
Upon landing in Tbilisi, Georgia, I had over an hour to prepare for our teams departure for the opening of a new greenhouse complex, so far the largest grantee of MCC’s Agribusiness Development Activity (ADA) in Georgia, which provides grants for small- to medium-sized farmers to access modern farming supplies and increase agricultural productivity. We drove four hours into west-central Georgia to participate in the opening ceremony with Georgian government representatives, municipal authorities, and staff from Millennium Challenge Georgia Fund (MCG). The event was as welcoming as the project was innovative, and I felt honored to be part of this much-anticipated day.
Mr. Zurab Janelidze, who invested more than $450,000 to match $299,736 in MCG grant funding, developed his vision for Herbia LLC, a comprehensive system for greenhouse production and distribution of fresh herbs and vegetables. Herbia was established on two hectares of land in the rural Georgian town of Tskaltubo and is linked to an existing cold storage facility one of the few in rural Georgia - that also has the capacity to pack, store, export, and cater to local demand. Mr. Janelidzes strategy will serve as an example for high-value agricultural production in Georgia, while earning substantial revenues from the export of fresh culinary herbs and greenhouse tomato production, which will be sold domestically. The enterprise will also purchase fresh herbs from small farmers in the area to augment its own production, packing, and exporting. Upon touring Herbia LLC, its potential to make a positive impact in the Imereti region was evident as I walked through several greenhouses and saw many local workers picking produce.
I also visited multiple phases of the MCC-funded Energy Infrastructure Rehabilitation Project in the Mtskheta Tianeti region. This project is rehabilitating an essential source of energy for the people of Georgia, which, at over 2,200 meters at times, is one of the worlds top three highest-elevation pipelines, making rehabilitation efforts not only challenging but also absolutely critical due to the remote nature of these repairs.
The Energy Infrastructure Rehabilitation Project is an exemplary case of true country-led development, as all phases of this project have been implemented by a Georgian company. The Georgian Oil and Gas Company currently operates the pipeline on the governments behalf and has been responsible for the design and supervision of the entire project. Improved management of the pipeline, together with MCC investments for repairs, have already resulted in a decline in gas leakage, which means increasingly reliable access to natural gas for Georgian citizens and their enterprises.
Distance creates a clearer perspective on experiences. Now back in Washington, I am able to reflect on my recent trip to the field and can say I feel privileged to have observed these transformative projects in person. It was truly exciting to witness the focused energy and enthusiasm of the Georgians at work on a daily basis. It is clear that MCCs partnership with the Government of Georgia is highly valued and will continue generating positive results.
A Shared Commitment to Georgia’s Economic Growth
Posted on July 24, 2009 by Jim McNicholas, Deputy Resident Country Director, Georgia
MCC Deputy Resident Country Director Jim McNicholas with Vice President Joe Biden, during his visit to Georgia. The Vice President re-affirmed the U.S. commitment to support the Georgian people.
Vice President Joe Biden visited Tbilisi, Georgia this week, meeting with Georgian President Mikhael Saahkashvili, members of Parliament, leaders of the opposition parties, and business leaders. One of the highlights of the visit for the Georgian media was the Vice Presidents visit with children at a center for families displaced by the August war. At each stop on his visit, the Vice President spoke of a U.S.-Georgia partnership based on the ideals of democracy and re-affirmed the U.S. commitment to support the Georgian people as they continue to build the institutions and economy of their country. I especially today call upon the young people of Georgia, Mr. Biden said on the floor of the Parliament, the next generation of Georgian leaders, to continue to contribute their ideas, their voices, and their energy to help create a peaceful, stable, democratic, and economically prosperous Georgia.
As part of the U.S.-Georgia partnership, the Millennium Challenge Georgia Compact, a five year program totaling $395 million in grant funds, has been providing necessary resources for Georgians to invest in their economy and reduce poverty. Georgia is committed to the core MCC philosophy of country ownership and accountability. It has created a strong management team and government oversight board to ensure that U.S. funds are spent efficiently and achieve results for the Georgian people.
Now in its fourth year of implementation, Georgia is beginning to see tangible results. Under MCC funding, the municipal water supply network for Poti, Georgia’s largest port, has been rehabilitated, improving the water supply for the city’s population of 50,000. Georgia’s energy security has been strengthened by the completion of two rounds of priority repairs on the main natural gas pipeline. The pipeline, operated by the Georgian Oil and Gas Corporation, transports gas from Azerbaijan to Georgia for residential heating and to operate Georgia’s only electricity power plant.
Pictured is the Gadabani Pipeline rehab site where MCC is funding the replacement of corroded pipes, reducing the chances of gas leaks. Georgia is committed to the core MCC philosophy of country ownership and accountability.
Additional infrastructure improvements are on the way. Another four municipalities are undergoing water system rehabilitations. Construction on the Samstkhe-Javakheti road, connecting Tbilisi with Armenia and Turkey, is currently underway. Georgia also chose to invest in agriculture and to assist the growing number of small and medium size enterprises in Georgia. The Enterprise Development Project has already invested over $25 million in the Georgian economy through a combination of grants and equity investments for farmers and businesses. Much of this total has been mobilized since the August war and since the economic crisis has negatively impacted the Georgian economy.
Millennium Challenge Georgia Fund CEO George Abdushelishvili recognizes that he, his team, and partners have a lot of work ahead to deliver on the promise of the MCC grant. When Georgia has a good partner, and especially when we hear Vice President Biden highlight our countries partnership here in Tbilisi, it makes me want to do more, he says.
Helping Georgia Achieve Long-Term Growth
Posted on September 9, 2008 by Rodney Bent, Deputy Chief Executive Officer
After last month’s conflict between the Republic of Georgia and Russia, Under Secretary of State Reuben Jeffery led an interagency delegation to Tbilisi, Georgia, from August 25 to 27, to assess that country’s economic and reconstruction needs. MCC signed a $295 million compact with Georgia in September 2005 to help the government there reduce poverty, and I was glad to be a part of the U.S. assessment team.
The delegation arrived in Tbilisi aboard a U.S. Air Force C-17 bringing relief supplies such as tents and humanitarian daily rations. From the moment we landed, the delegation spent three days in intense discussions with officials from the U.S. Embassy, the Government of Georgia, businessmen, civil society, and ordinary citizens.
Georgia is a small country, smaller than South Carolina, with about 4.6 million citizens. The Prime Minister, Lado Gurgenidze, heads a team that is energetically confronting the challenges of the conflict: a new influx of internally displaced persons, disruption of transportation networks, and general uncertainty about the future. Before August, the Georgian economy had been growing at about 10 percent a year.
What we saw was sobering. Areas of Georgia that were already in need of assistance to replace aging or inadequate infrastructure are now more in need than ever. I met with Georgians who made it clear that, given the proper roads and other resources, they could resume their plans for economic growth.
MCCs existing projects [see map] were not directly affected by the conflict. The MCC model—in which the partner country selects and implements projects—is one that the Georgian government would like to replicate more broadly, both with other donors and for other sectors of the economy. The Georgian government has proposed a Phoenix Fund for a broad array of possible infrastructure projects, from roads to railroad rolling stock to natural gas projects to water and sanitation.
MCC, as part of the package of assistance announced by the Administration after the assessment team returned to the U.S., is considering a $100 million compact amendment for Georgia. The new funds would enable Millennium Challenge Georgia to finish some projects for which preliminary design and feasibility studies had already been completed, but could not fit within the compact’s original $295 million total. Such an amendment would first need to be approved by MCC’s Board of Directors. Many of the projects under consideration were previously included in the original compact but were later scaled back as a result of external pressures such as dollar depreciation and increased international construction costs.
MCCs indicator assessment of Georgia for fiscal year 2008 was markedly positive in that Georgia passed 15 of the 17 indicators, including every indicator in Ruling Justly and Economic Freedom. Our new set of indicators for Georgia, and other candidate countries, will be released by early November.
Click here for more details regarding ongoing MCC projects in Georgia and information about how additional resources will help Georgia reduce poverty and achieve long-term economic growth.