Bloomberg News

Georgian Measures Destroy Corruption Myth, World Bank Says

January 31, 2012

(Adds comment from Georgian president starting in seventh paragraph.)

Feb. 1 (Bloomberg) -- Georgia’s “unique success” in tackling graft “destroys the myth” that corruption is cultural, the World Bank said, urging the Black Sea nation to bolster institutions such as the courts and the media.

Georgia’s ranking in the bank’s global Doing Business survey has jumped to 16th in 2012 from 112th in 2005, an improvement that may help lure foreign investment. The government is striving to recapture the 10 percent or more economic growth rates it achieved before losing a five-day war with Russia in 2008.

“Since 2003, Georgia has had unique success in fighting corruption in public services,” the World Bank said in a report published today. The country “has proven that success can be achieved in a relatively short period of time given strong political will and concerted action by the government.”

Among the government’s achievements, the Washington-based lender cited steps to create a new police force, improve tax collection and the customs service, cut regulation and increase the reliability of the power supply, adding that “much remains to be done.”

Reported crime fell more than half between 2006 and 2010, while trust was restored in the police and corruption in the education system was rooted out, the bank said.

Economy Expanded

Georgia’s $11.6 billion economy expanded 8.7 percent last year, the statistics office said last month, citing preliminary data. Standard & Poor’s raised its credit rating one level last month to BB-, three short of investment grade, citing “improving public finances.” Fitch followed suit Dec. 15.

Georgian President Mikheil Saakashvili told reporters in Washington on Jan. 31 that he expects faster growth this year “provided that the world economy doesn’t collapse.”

Saakashvili, who spoke at the World Bank a day after meeting President Barack Obama, said the two men discussed Georgia’s self-defense capacity. Georgia will soon have 1,800 troops serving with coalition forces fighting in Afghanistan, he said, almost double the current number.

Asked about his political future after he completes his second and final term in 2013, Saakashvili, declined to answer.

“These next two years we are moving to another political system,” he told reporters, adding that he didn’t want to “turn myself into a lame duck by speculating about my own future.”

--Editors: Gail DeGeorge, Paul Badertscher

To contact the reporter on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net Sandrine Rastello in Washington at srastello@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net To contact the editors responsible for thi Christopher Wellisz at cwellisz@bloomberg.net


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