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 You are in: Under Secretary for Political Affairs > Bureau of European and Eurasian Affairs > Bureau of European and Eurasian Affairs Releases > Bureau of European and Eurasian Affairs Reports > U.S. Government Assistance to and Cooperative Activities with Eurasia > FY 2003 U.S. Assistance to Eurasia 
U.S. Government Assistance to and Cooperative Activities with Eurasia   -FY 2003
Released by the Bureau of European and Eurasian Affairs
January 2004

II. Country Assessments and Performance Measures - Georgia

Map of GeorgiaArea: approx. 43,300 sq. miles, slightly smaller than South Carolina
Population: 4,934,413 (2003 est.)
Annual Inflation: 5.2% (2002 est.)

Population Growth Rate:
-0.52% (2003 est.)
Gross Domestic Product (GDP): $16.05 billion (purchasing power parity, 2002 est.)
Life Expectancy: male – 61.33 years, female – 68.36 years (2003 est.)
GDP Per Capita: $3,200 (purchasing power parity, 2002 est.)

Infant Mortality:
51.24 deaths/1,000 live births (2003 est.)
Real Annual GDP Growth: 5.4% (2002 est.)

U.S. STRATEGIC INTERESTS

The U.S. Government’s (USG) priorities in Georgia are to promote democratic reform, bolster regional stability, and foster the transition to a stable, market-based economy. Georgia’s November 2003 "Revolution of Roses" represented an enormous advance in the country’s democratic transition, and it provides an unprecedented opportunity to address the endemic problems that have hampered economic growth and led to social instability: public corruption, an outdated criminal procedure code, and inefficient Soviet-style management. The USG has offered its help to Georgia’s new leadership in advancing their declared agenda, which includes far-reaching political and economic reform and an aggressive anti-corruption campaign.

OVERVIEW OF U.S. GOVERNMENT ASSISTANCE

In FY 2003, the U.S. Government provided an estimated $141.16 million* in assistance to Georgia:

  • $21.06 million in democratic reform programs (including Public Diplomacy exchange programs)
  • $26.10 million in economic and social-sector reform programs;
  • $43.63 million in security, regional stability and law enforcement programs;
  • $27.30 million in humanitarian programs;
  • $7.45 million in cross-sectoral and other programs; and
  • privately donated and U.S. Defense Department excess humanitarian commodities valued at $15.63 million.

(*This total includes $690,000 in FY 2002 FREEDOM Support Act (FSA) funds allocated during 2003.)

In FY 2003, some 350 Georgian citizens traveled to the United States on USG-funded training and exchange programs implemented by USAID and the U.S. Departments of Agriculture, Commerce and State, bringing the cumulative number of Georgian participants to over 3,800.

U.S. ASSISTANCE PRIORITIES

Democratic Reform Programs: In FY 2003, USG assistance to Georgia focused on preparations for the November 2003 parliamentary elections. Programs were also aimed at improving local governance, strengthening the independent media and the rule of law, and helping civil society become better advocates for citizen interests. Georgia’s numerous and active non-governmental organizations (NGOs), many of which have benefited from USG-funded assistance, played a critical role in providing an independent assessment of the November parliamentary elections and exposing falsified results released by the Georgian Government. Georgia’s independent media are among the strongest in Eurasia. In FY 2003, the USG continued to work with the judiciary in an effort to help increase its independence.

Economic and Social-Sector Reform Programs: The agricultural sector remains a key sector in the economy, generating roughly 23% of GDP. To foster greater productivity in this sector, the USG continued a land-titling program in FY 2003 that has facilitated the titling of 2.4 million small land parcels, thereby securing farmers’ land ownership. The USG also launched a quality improvement initiative to assist Georgian agribusinesses in increasing domestic sales. Macroeconomic technical assistance to the Georgian Government was focused on tax, budget and debt management. In close cooperation with other donors, technical assistance to the energy sector continued, with a stronger emphasis on improving electricity distribution outside of Tbilisi and increasing collections to help place the system on an efficient, market-oriented basis.

Security, Regional Stability and Law Enforcement Programs: In FY 2003, USG security and law enforcement programs focused on countering proliferation of weapons of mass destruction (WMD) and related expertise, strengthening border security, military training and professionalism, and judicial reform. USG assistance to the Georgian Coast Guard and Border Service helped to strengthen their capacity to combat smuggling and increase revenue collections, although problems in this area persisted. The USG’s Georgia Train and Equip Program completed training for three of four battalions, and Georgian authorities have thus far met their commitments regarding salaries and continued training under this program. Advances in judicial reform included the USG-assisted draft of a new criminal procedure code, currently pending before Parliament, which would improve basic human rights protections.

SECTORAL ASSESSMENTS

Democratic Reform

The Georgian Government’s inability to conduct free and fair parliamentary elections led to the downfall of the Shevardnadze administration in the subsequent "Revolution of Roses." Georgia’s NGO sector remained vibrant throughout FY 2003, and media were able to express a broad range of political views. In November 2003, independent NGOs played a critical role in exposing falsified election results, which contributed to President Shevardnadze’s resignation and the peaceful transfer of power that followed. The independent media also played a critical role in this transition. Two new independent television stations have opened in Tbilisi, and one of the most popular non-state-owned stations is now broadcasting to larger audiences throughout Georgia. However, media outlets tended to be biased in favor of particular political factions, rather than providing nonpartisan reporting.

The USG devoted considerable resources to election reform efforts in advance of the November 2003 parliamentary elections, and several of these proved valuable in helping identify and detect fraud during and after the election. The USG funded the creation of computerized voter lists throughout Georgia and also helped train nearly 2,500 domestic monitors, whose nationwide reporting convinced the Supreme Court to invalidate a portion of the election. Civil society activists, including many who had received USG-funded advocacy-skills training, pressed for needed reforms. In two specific instances, regressive legislation was never brought to Parliament for a vote after NGOs effectively voiced their opposition to the bills. One of these cases involved an attempt by Parliament to criminalize libel, which would have had a chilling effect on freedom of the press and speech. Another USG-assisted NGO coalition helped defeat draft laws that would have taxed donor grants and NGO income, levied customs duties on imported humanitarian goods, held NGOs responsible for statements made by members not authorized to speak on their behalf, and unnecessarily complicated their registration and reporting requirements.

A continuing difficulty in Georgia in FY 2003 was the highly centralized nature of the state. The local government officials elected in June 2002 had little ability to make decisions, since resources remained controlled by the central government. Extensive layers of politically appointed and centrally controlled bureaucracies continued to stifle the development of democracy at the local level.

The USG has been working to ensure that key elements of Georgia’s new administrative code are implemented and available for public and media use to help them access government information. USG programs helped local governments establish procedures for public meetings, including public budget hearings. In other cases, media and NGOs have requested information under provisions of the administrative code from government bodies in their efforts to play a watchdog role. NGOs across Georgia reported they were successful in ensuring that local governments complied with open meeting and budgeting laws contained in the administrative code, thereby giving citizens the opportunity to analyze budget expenditures. As a result, several local governments were forced to reallocate budget funds in accordance with public demands and to take public steps against corruption. Nonetheless, corruption continues to plague the country, is a drag on the economy, and undermines people’s faith in the government. Although NGOs are joining efforts to launch watchdog initiatives on government abuses, endemic corruption remains a serious problem in Georgia.

The USG investment in exchange programs to promote democratic values and the rule of law is paying off in Georgia. Newly elected President Saakashvili earned an LL.M. at Columbia University in 1994 while on a Muskie/FSA Graduate fellowship. President Saakashvili also participated in a 1999 International Visitors program on judicial reform. Additional newly appointed high-level Georgian officials and parliamentarians have also participated in USG exchange programs, including the new Minister of Economy Iraklii Rekhviashvili, who participated in the first year of the FSA Undergraduate Exchange Program in 1993-94.

In FY 2003, the State Department funded exchange programs for over 300 Georgians in education, business administration, journalism and mass communication, environmental management, economics, political science, American Studies, sociology, international affairs, religious tolerance, and public policy. An alumnus of a FY 2003 program on religious tolerance in the United States was appointed to a new position as the Head of Department of Education and Humanitarian Safety of the National Security Council, and as a result of the trip, she began to establish a new religious tolerance curriculum for secondary and higher education institutions in Georgia. The first Future Farmers of America in Georgia was created as a result of a FY 2003 USG exchange program, and this organization will work to increase yields and profits for private farmers in East Georgia while giving students valuable experience in establishing small businesses.

In the wake of the November 2003 change of government, the USG will provide assistance for the presidential and parliamentary elections, including assistance for independent monitoring efforts, in FY 2004. Engagement with NGOs, whose "watchdog" function is critical to combating corruption, also will remain a key priority.

Economic and Social-Sector Reform

The Georgian economy continues to struggle, hamstrung by widespread corruption, low revenue collection, and a crippling gap between government budget expenditures and actual revenues. Georgia has a substantial "shadow economy," whose estimated contribution to the country’s GDP is between 60 and 70%. Living standards have declined sharply in Georgia since 1992, and 2003 was no exception. Despite GDP increasing by 5.3 % in 2002 and an estimated 8.3% in 2003, this overall growth has not translated into an increase in the standard of living for the overwhelming majority of Georgians.

Agriculture accounts for approximately 23% of Georgia’s GDP. Key exports include scrap metal, wine, sugar, aircraft, gold, ferrous metals, copper ores and concentrates, bottled mineral water and agricultural products. The Georgian Government’s monetary policy continued to be tight, and the exchange rate for Georgia’s national currency, the lari, remained stable. Georgia experienced a growing fiscal deficit, as revenue collection continued to be poor. Actual state revenues, including foreign grants, fell 17% below target, or roughly 87.6 million lari short.

FY 2003 was a difficult fiscal year for Georgia, with revenue and custom collections repeatedly failing to achieve targets. The economic picture was also clouded by the suspension of the International Monetary Fund’s (IMF) program and the prospect of a Paris Club default. In order to assist the Georgian Government with its macroeconomic challenges, the USG provided technical assistance in tax, budget, and debt management. Through effective debt management, the Georgian Government was able to avoid a potential series of failed T-bill auctions and/or internal defaults. USG advice on tax administration helped Georgia to improve its efforts to collect past due payments, thereby providing some needed receipts to the cash-strapped central budget. The USG continued to assist the Ministry of Finance’s nascent inspector general function and to press for passage of proper legislation authorizing this function. The USG also provided technical assistance to improve cash management and to draft a new budget law.

USG-funded private enterprise development programs aim to create the conditions necessary to foster business growth in Georgia. These programs include support for land privatization, rural credit, banking supervision reform, assistance to farmers and agribusinesses, and providing restructuring and policy advice to the Ministry of Agriculture and Food. With the help of USG assistance, approximately 2.4 million small land parcels in Georgia had been titled by the end of FY 2003. A new law has been drafted to support the privatization of 75% of the agricultural land remaining in state ownership. All of these privatization efforts will support expanded economically viable farming activities. A USG-supported NGO assisted farmers through legal consultation, private arbitration services, and support for rural community initiatives.

Banking sector reform continued in FY 2003 with notable progress. USG technical assistance provided input into Georgia’s newly adopted law on Facilitating the Prevention of Illicit Income Legalization (anti-money laundering) and approval of a "fit and proper" regulation for bank administrators and owners. USG-funded assistance continued to help commercial banks implement International Financial Reporting Standards and strengthen their internal audit function. Although still minimal, bank deposits grew. More importantly, there were no bank failures that caused depositors to lose their money. Two banks were liquidated, and one bank was taken over through a purchase and assumption agreement. A new regulation on commercial bank insolvency and bankruptcy was approved.

Georgian agribusinesses continue to face severe problems in marketing, credit, processing and grower support. USG assistance aims to increase Georgia’s institutional capacity in all of these areas. USG programs helped identify markets for Georgian value-added products, working through the market chain to help mitigate critical constraints. This is enabling Georgians to produce, process and sell these products more effectively. The USG also provided assistance to the Ministry of Agriculture and Food in the area of food quality and safety standards. USG has helped the Ministry to collect and disseminate statistical data, develop a sustainable capacity to conduct agricultural policy analysis, and to reorganize and downsize the Ministry.

It is estimated that Georgian products could replace 85% of imports of processed agricultural products if compliance with Western standards in sanitation, packaging and quality control is achieved. To help Georgian agribusinesses replace imports with local products, the USG initiated a quality improvement initiative for the agricultural sector. A combination of "right-sized" farming systems, technical assistance, and small grants (specifically in conjunction with commercial banks) were used to facilitate these projects. In FY 2004 this program will be expanded with education components at the high school, undergraduate and graduate levels and with extension outreach through rural high schools. Western-style slaughterhouses, hard cheese factories, beef feedlots, protein production, sanitation programs, seed credit clubs, and the introduction of new crops are also planned for FY 2004.

A USG rural credit program saw steady growth in its loan portfolio in FY 2003, with over 1,700 active borrowers and $2.8 million in loans outstanding at the end of the fiscal year. This program provided financing for approximately 21,500 hectares of wheat production, as well as livestock, fruit growing, and vineyards.

Georgia’s difficult economic condition and crumbling health care and education systems have bred many social problems. The "frozen" conflicts in Abkhazia and South Ossetia continue to cause tension. In FY 2003, USG social-sector assistance focused on community development and health partnerships. USG health care reform programs addressed infectious disease control and prevention, women’s health, re-training of physicians and nurses, and creation of more efficient and effective client-centered health care services that better meet the needs of the Georgian population, particularly women and children. In FY 2003, approximately 9,000 patients were served in USG-funded health centers. These health activities focused initially on pilot projects at the regional level, in anticipation of an eventual national rollout of the program.

USG-funded efforts also focused on conflict management and expanded programs into potentially volatile regions populated by national minorities (ethnic Armenians and Azeris) and into the Georgian villages surrounding the tense Pankisi Gorge area. These activities addressed legitimate humanitarian needs, while also helping to defuse more radical demands for separatism or autonomy. Youth programs focused on increasing contact and cooperation among approximately 12,000 young people (both Abkhaz and ethnic Georgian) affected by the conflict in Abkhazia. Young leaders participated in various training, including conflict resolution and mediation.

Security, Regional Stability, and Law Enforcement

One of Georgia’s greatest security threats is the lack of control over its borders, which provides rampant opportunities for smuggling of all sorts, from wheat to weapons to trafficked persons. In FY 2003, the USG continued a number of programs to help Georgia build its capacity to combat smuggling. The Georgian Border Security and Law Enforcement (GBSLE) Assistance Program trained the Georgian Coast Guard and the Border Service. Customs collections have improved, although corruption and other constraints persist. As a result, the Coast Guard has conducted a number of unprecedented seizures and is implementing an ambitious reorganization to target its resources better. A USG-funded forensics laboratory project neared completion in FY 2003, and will provide law enforcement bodies with access to state-of-the-art forensics capabilities.

To help the Georgian Government rationalize and reduce duplicative security and law enforcement structures, the USG initiated a program in FY 2003 to assist in restructuring the Georgian National Security Council. Six junior NSC fellows were trained and began to work with the existing NSC team to help develop a coherent national security strategy.

Georgia’s judicial system continues to be plagued with corruption. Based on a December 2001 decree issued by President Shevardnadze, the Power Ministry Reform Commission was established and chaired by Supreme Court Chairman Lado Chanturia. The goal of the Commission was to develop a new concept through which the government ministries involved in law enforcement could investigate and prosecute criminal activity. The USG worked closely with the Commission in FY 2003 to address the problems of corruption, fraud and mismanagement that exist within the justice system. In its concept paper, the Commission developed recommendations not only to change the Criminal Procedure Code but also to reform the entire criminal justice system. The USG assisted with the drafting of the new Code, which awaits Parliamentary approval.

Key issues facing the Georgian Ministry of Defense (MoD) are the rooting-out of corruption; right-sizing of force levels; sustaining professional, contract troops in the Georgia Train and Equip Program (GTEP) battalions; and contributing to the Global War on Terrorism. USG programs have responded to these issues and targeted FY 2003 assistance toward these areas.

The USG-funded GTEP continued in FY 2003, and is scheduled to conclude in May 2004 with the graduation of the fourth and final battalion. GTEP focused on the creation of four light infantry battalions and a mechanized/armor company team that the MoD and Georgian Government can utilize in its contribution to the Global War on Terrorism, both in Georgia and abroad. The MoD has already mobilized and trained three GTEP battalions, or approximately 1,700 troops. The MoD deployed Georgian soldiers to Iraq in August 2003, intends to rotate troops to Iraq in February 2004, and plans to rotate an entire battalion to Iraq in summer 2004. Georgian troops have also deployed to Kosovo, and have been assigned for internal peacekeeping to South Ossetia. As of the end of FY 2003, Georgia had met its commitments to the program, including three-year contracts for trained soldiers and minimum monthly pay, which has directly contributed to the effectiveness of the program.

Foreign Military Financing (FMF) complimented GTEP assistance by training the staff of the Eleventh Brigade (the GTEP-trained units’ higher command) to further enhance the Georgian military’s command and control capabilities. USG-funded training was also provided to logistics and personnel management units, thus enhancing their capabilities.

The International Military and Education Training (IMET) Program provided U.S.-based English-language training to officers that now serve in the GTEP units and the Eleventh Brigade, giving them interoperability with U.S. and NATO forces. Peacekeeping Operations (PKO) funding outfitted a Georgian peacekeeping unit that is currently serving in Iraq alongside American units in Operation Iraqi Freedom. In FY 2004, these security programs will continue to strengthen Georgia’s ability to combat terrorism, participate in international coalition operations, and protect Georgia’s territorial integrity.

Major challenges remain in acknowledging, identifying, and rooting out corruption; drastic downsizing/rightsizing of the Georgian Armed Forces, especially with respect to living within their meager budget; providing even the most minimal quality of life support to GTEP troops; and providing necessary funding to sustain GTEP-trained units. The Georgian Government must also ensure that the MoD budget is administered in an honest and transparent manner. The MoD’s failure to initiate an anti-corruption campaign was a significant disappointment.

The USG continued to help Georgia secure, destroy and dismantle Soviet-era WMD. USG assistance was focus on bio-chemical weapons threats and sought to divert former weapons experts from these fields to sustainable research with commercial and/or public health applications. The Department of Defense (DoD) concluded an implementing agreement with Georgia that will allow DoD to work on biological weapons proliferation prevention through emergency detection and response workshops, infrastructure elimination, biosecurity/biosafety upgrades at targeted facilities, and collaborative research. The USG collaborated with former Georgian biological weapons experts on issues such as HIV/AIDS, tuberculosis and hepatitis, and animal epidemiology research.

For FY 2004, priorities for USG-funded security and law enforcement assistance to Georgia include support for its transition to a civilian Minister of Defense, transfer of the UH-1 helicopter program from the Air Force to the Rapid Reaction Force, the restructuring of the country’s security forces, and sustaining the GTEP program. The USG will also provide assistance to strengthen Georgia’s law enforcement capabilities, reduce corruption, and strengthen the rule of law.

Humanitarian Assistance

In FY 2003, the USG funded 10 airlifts of critical medicines and medical supplies and 67 containers of surface-shipped medical equipment and supplies, clothing, food, and emergency shelter items. These programs served the most needy and vulnerable populations, including internally displaced persons (IDPs), in regions throughout Georgia.

Other humanitarian assistance in FY 2003 included a food kitchen program that continued to meet daily caloric needs of approximately 4,500 of the most vulnerable pensioners in Georgia. Debt relief was provided to over 25,000 vulnerable households, 107 socially critical institutions and 427 IDP centers. In addition, over 136,000 vulnerable households, 568 socially critical institutions and 445 IDP centers received significant energy subsidies.

The USG also provided $280,000 to build two structures in the Digomi Orphanage complex. Kerosene heaters were provided to schools and clinics, and two excess vehicles were donated to the orphanages.

COUNTRY PERFORMANCE MEASURES

Corruption, low revenue collections and a crippling gap between government expenditures and revenues overshadowed GDP growth in Georgia in FY 2003. A vibrant civil society and the independent media exposed government manipulation of elections and led to the peaceful downfall of the Shevardnadze administration. Georgia’s new leadership has expressed a commitment to advancing economic and political reform.

Economic Policy Reforms and Democratic Reforms in Georgia, 1991-2002 Economic Policy Reforms and Democratic Reforms in Georgia, 1991-2002

Democratic Reforms

Ratings of democratic freedoms are from Freedom House, Nations in Transit 2003 (2003) and cover events through December 2002. Economic policy reform ratings are from EBRD, Transition Report 2002 (November 2002), and cover events through September 2002. Economic policy reforms include price liberalization, trade and foreign exchange, privatization, legal, banking and capital markets, enterprise restructuring (credit and subsidy policy), and infrastructure reforms. Democratic freedoms include political rights (free and fair elections; openness of the political system to competing political parties and to minority group representation; governance and public administration) and civil liberties (free media and judiciary; freedom to develop NGOs and trade unions; equality of opportunity and freedom from corruption). Ratings are based on a scale of 1 to 5, with 5 representing the most advanced.

Corruption and inadequate government revenue collection continued to retard economic reform and erode gains made by growth in GDP. Poverty remained pervasive, with development of the agricultural sector constrained by lack of access to credit and poor standards for marketing and processing.

Economic Structure and Human Development in Georgia, 1991-2002
Economic Structure and Human Development in Georgia, 1991-2002

Human Capital Index

The Human Capital Index is based on an average rating of four variables scored on a 1 to 10 scale: per capita income, secondary school enrollment, health, as measured by life expectancy and under 5 mortality, and public policy, as measured by public expenditure on health and education as % of GDP. World Bank, World Development Indicators 2003 (2003); and UNICEF, Social Monitor 2003 (2003). Economic Structure is based on an average rating of three variables scored on a 1 to 10 scale: private sector share of GDP, export share of GDP, and SME employment as % of total employment. EBRD, Transition Report Update (May 2003), World Bank, World Development Indicators 2003 (2003), and Ayyagari, Beck, and Demirguc-Kunt, Small and Medium Enterprises across the Globe: A New Database, World Bank Policy Research Working Paper 3127, (August 2003).

SECTORAL PERFORMANCE MEASURES

DEMOCRATIC REFORM

Performance Indicator: Freedom House Nations in Transit 2003 Electoral Process rating
(1 = highest, 7 = lowest; data based on previous calendar year)

FY 2002 Baseline
FY 2003 Target
FY 2003 Actual
5.00
N/A
5.25

FY 2003 Results: Georgia's new electoral code contained numerous positive revisions and included many anti-fraud mechanisms. For example, the amendments to code increased rights for domestic observers, instituted transparent ballot boxes, envelopes for ballot papers and a system for correcting voter registry problems. While the changes were a distinct improvement, political will and the implementation of the key provisions of the new code fell far short of what was necessary to conduct free, fair and transparent elections.

Performance Indicator: Freedom House Nations in Transit 2003 Civil Society rating
(1 = highest, 7 = lowest; data based on previous calendar year)

FY 2002 Baseline
FY 2003 Target
FY 2003 Actual
4.0
N/A
4.0

FY 2003 Results: In comparison to other Eurasian countries, Georgia's NGO sector is a relative success story. Georgia's NGOs are more vibrant, diverse, influential and aggressive in pushing for democratic reforms, serve as effective watchdogs over government bodies and effectively lobby for important reform legislation. However, a significant problem that continues to plague Georgian NGOs is overdependence on foreign assistance. Very few NGO received their funding from membership dues, domestic contributions or fees for services provided. This aspect continues to hamper Georgian NGOs’ efforts to become self-sustaining after foreign assistance ends.

ECONOMIC AND SOCIAL REFORM

Performance Indicator: Percentage of population above the poverty line in the Imereti Region
(Source: State Department of Statistics of Georgia, November 2003)

FY 2002 Baseline
FY 2003 Target
FY 2003 Actual
42.2%
43.0%
59.6%

FY 2003 Results: In Imereti, a region with a high concentration of USG programming, the percentage has increased from 43.3% in 1999 to 59.6% as of 2002.

Performance Indicator: Infant Mortality Rate in Sagarejo (Source: Georgia Safe Motherhood Initiative Project Completion Report, Management Sciences for Health, 2003 - per 1,000 live births)

FY 2002 Baseline
FY 2003 Target
FY 2003 Actual
43.3
N/A
11.9

FY 2003 Results: In Sagarejo, an area targeted by USG assistance, the rate was reduced to 11.9 per 1000.

Performance Indicator: Economic Reform Index (Source: EBRD) Economic reforms consist of eight components: small-scale & large-scale privatization; trade liberalization; price liberalization; corporate governance; competition policy; banking; and non-banking financial reforms. Scores range from 1 to 5, with 5 being the most advanced.

CY 2001 Baseline
CY 2002 Target
CY 2002 Actual
2.96
N/A
2.96

FY 2003 Results: FY 2003 was a difficult fiscal year for Georgia, with revenue and custom collections repeatedly failing to achieve targets. The economic picture was also clouded by the suspension of the IMF program and prospects of a Paris Club default. In order to assist the Georgian Government with these macroeconomic issues, the USG provided technical assistance to the government in tax, budget, and debt management. Through effective debt management advice, the Government was able to avoid a potential series of failed T-bill auctions and/or internal defaults. Tax advice helped Georgia to improve its efforts to collect past due payments and provided some needed receipts to the cash-strapped central budget. The USG continued to assist the Ministry of Finance’s nascent inspector general function and to press for passage of proper legislation authorizing this function. The USG provided technical assistance to improve cash management and to draft a new budget law. USG private enterprise development programs aim to create the conditions necessary to foster business growth in Georgia. These programs include support for land privatization, rural credit, banking supervision reform, assistance to farmers and agribusinesses, and providing restructuring and policy advice to the Ministry of Agriculture and Food. Approximately 2.4 million small "reform" land parcels in Georgia had been titled by the end of FY 2003.

SECURITY, REGIONAL STABILITY, AND LAW ENFORCEMENT

Performance Indicator: Governmental support, measured in terms of the percentage of the national budget request approved for border security.

FY 2002 Baseline
FY 2003 Target
FY 2003 Actual
66
N/A
58

FY 2003 FUNDS BUDGETED FOR U.S. GOVERNMENT ASSISTANCE TO GEORGIA

TOTAL USG FUNDS BUDGETED: $124.84
VALUE OF DONATED HUMANITARIAN COMMODITIES: $15.63
TOTAL FY 2003 USG ASSISTANCE: $140.47

(IN MILLIONS, AS OF 12/31/03)

FSA FUNDS BUDGETED: $84.06

USAID - Democratic Reform - $9.85
USAID - Energy-Sector Reform - $8.75
USAID - Humanitarian Assistance - $9.95
USAID - Parking Fine Withholding - $0.01
USAID - Private-Sector Initiatives - $13.20
USAID - Special/Cross Cutting Initiatives - $5.87
USAID - x Eurasia Foundation - $1.99
USAID TOTAL - $49.62

Dept. of Agriculture (USDA) - Agr. Marketing Asst. Project (MAP) - $2.00
Dept. of Agriculture (USDA) - Cochran Fellowship Program - $0.10
DEPT. OF AGRICULTURE (USDA) TOTAL - $2.10

Dept. of Commerce - BISNIS Business Info. Service - $0.11
Dept. of Commerce - SABIT Business Internships/Training - $0.15
DEPT. OF COMMERCE TOTAL - $0.26

Dept. of State - ECA Public Diplomacy Exchanges - $7.76
Dept. of State - EUR Democracy Programs (incl.Dem.Comms.& NED) - $0.19
Dept. of State - EUR/ACE Humanitarian Transport - $1.10
Dept. of State - INL Law Enforcement - $2.90
DEPT. OF STATE TOTAL - $11.95

Dept. of the Treasury - Technical Advisors - $1.79
DEPT. OF THE TREASURY TOTAL - $1.79

DHS Customs/Border Protection - Export Control & Border Security - $17.00
DHS CUSTOMS/BORDER PROTECTION TOTAL - $17.00

NSF - Civilian R&D Foundation (CRDF) - $1.34

OTHER FUNDS BUDGETED: - $40.78

USAID - P.L. 480, Title II Food Assistance - $3.01
USAID TOTAL - $3.01

Dept. of Agriculture (USDA) - P.L. 480 Govt.-to-Govt. Food Aid - $11.89
DEPT. OF AGRICULTURE (USDA) TOTAL - $11.89

Dept. of State - Anti-Terrorism Assistance (ATA) - $5.00
Dept. of State - ECA Public Diplomacy Exchanges - $0.58
Dept. of State - Foreign Military Financing (FMF) - $6.90
Dept. of State - International Information Programs (IIP) - $0.02
Dept. of State - Internatl. Military Educ. & Training (IMET) - $1.18
Dept. of State - NADR - Demining - $1.10
Dept. of State - Peacekeeping Operations - $2.80
Dept. of State - PRM Humanitarian Assistance - $0.25
Dept. of State - Science Centers - $1.00
DEPT. OF STATE TOTAL - $18.83

Dept. of Defense - Destruction and Dismantlement - $3.50
DEPT. OF DEFENSE TOTAL
- $3.50

Dept. of Energy - Materials Protection, Control & Acct. (MPC&A) - $1.00
DEPT. OF ENERGY TOTAL - $1.00

Dept. of Education - Fulbright-Hays Exchange Programs - $0.03
Dept. of Health & Human Services (HHS) - Bio-Chem Redirect - $1.00
Peace Corps - Volunteers - $1.52

FY 2003

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