Georgia in World Bank top 10 in terms of bribery cases and freedom from bribery pressure
By Natalia Kochiashvili
Thursday, August 27
Georgia is in the top 10 in the world in terms of the number of bribery cases and freedom from the pressure of bribery. The World Bank Enterprise Survey focuses on many aspects of the business environment that play a major role in the growth and development of the private sector and, consequently, the economy as a whole.
Enterprise surveys are conducted every 4 years. The research aims to evaluate the business environment. The survey was last conducted in Georgia from March 2019 to January 2020. During this period, 581 company owners and high-ranking managers were interviewed in Georgia.
The questions in the study cover exactly the factors that are important for the business environment and the economy: infrastructure, foreign trade, finance, regulations, taxes and business licensing, corruption, crime and the informal economy, access to finance, innovation, labor, barriers to the business environment.
The Enterprise Survey is conducted by the World Bank Group in partnership with partners (EBRD, EIB, DFID). The study covers all geographical regions of the world and hundreds of thousands of small, medium, and large private companies.
In terms of freedom from corruption, Georgia deserved the best rating in the world. In particular, Georgia is among the top 10 countries among 144 countries in terms of the number of bribery cases. It also ranked among the top 10 countries in terms of freedom from bribery pressure.
The number of private sector businesses in Georgia, which at least once, in practice, solved the case of bribery, is only 1.3 %of the surveyed companies. While this indicator is 10% in the countries of Europe and Central Asia and 12 % in high-income countries.
Also, the best rate is in those government instances where, in general, the fact of requesting/offering bribes is most likely to be observed (construction permits, government contracts, and meetings with tax officers). In Georgia, the demand for gifts/informal payments from private companies is only 1-1.4 %, while this figure reaches 9-15% in the countries of Europe and Central Asia, and 10-19% in high-income countries.
0 points (percentage) the facts of gift-giving by private entities to obtain operating licenses were observed (world average - 13 percent). Consequently, the value of the gift that companies have to pay to maintain a government contract is equal to 0. “According to these 2 indicators, Georgia occupies the best place in the world among all the surveyed countries,” the Ministry of Finance said in a statement.
Sebastian Molineus, World Bank Regional Director for the South Caucasus, says the Enterprise Survey is a very important survey that assesses the health of the country's private sector and is one of the few surveys that is truly global in its coverage.
He noted that entrepreneurs, directors of firms here in Georgia spend much less time due to the burden of regulation on tax rates and administrative issues. “Obtaining permits is much faster than in other countries, and in general, the business environment is much more favorable than in many other, similar countries,” Molineus stressed.
He also spoke of the problems that still need to be solved, mainly with infrastructure, as well as obtaining construction permits (compared to other similar countries), access to funding, and finally, labor resources with an adequate education.
According to the data available for 2012, Georgia's rates of bribery (9.84 percent) and freedom from bribery (8.72 percent) were 8-15 times lower than in 2019, respectively. In 2012, the data was from the 2008 survey.
The situation began to improve significantly in 2013 when the number of bribery cases and the indicators of freedom from bribery pressure improved dramatically (1.43% and 0.94%, respectively). The best results were in the 2019-2020 survey, where bribery rates improved to 1.3% (the rate at which firms had at least one bribery claim) and bribery rates fell to 0.6% (rates of public transactions where bribes and informal transactions penalty was requested).
