SECO’s projects in Georgia are complementary to those of the Swiss Agency for Development and Cooperation (SDC) and of the Federal Department of Foreign Affairs’ Peace and Human Rights Division (PHRD), under the joint Swiss Cooperation Strategy for the South Caucasus. The focus of Swiss engagement for the South-Caucasus, and thus for Georgia, is on promoting inclusive governance, sustainable economic growth, peace and resilience, and a conducive, environmentally friendly business environment. Swiss engagement aims also to encourage climate action and sustainable resource management. In partnership with the Georgian Government and private stakeholders, SECO contributes to the development of a more diversified private sector, to sound macroeconomic conditions and to strengthening the capacity of local self-government.

Georgia has demonstrated strong development, supported by prudent economic management in the last decade. However, important structural problems remain, including low productivity and the need for creating quality jobs. Many Georgians continue to work in low-productivity rural agriculture. Missing opportunities for quality learning and weak linkages between education and the needs of the business sector (employability) contribute to the human capital remaining below its economic potential. 

five people are packaging cheese in one of the cheese factories in the Kakheti region
SECO promotes economic diversification and an enabling environment for SMEs.

Vulnerability to external and global shocks

In addition, Georgia is sensitive to external and global shocks due to its openness to trade and its dependence on tourism-related revenues. Risks are further amplified by a high dollarization and an unshakeable reliance on foreign savings. Georgia's trade, tourism and remittances will all suffer due to the Russia’s military aggression against Ukraine. Commodity price increases are also having an impact on Georgia; the uncertainty and disrupted commodity supplies from Russia and Ukraine are responsible for the dramatic rise in oil and food prices since the military aggression against Ukraine started. A slower rate of GDP, higher inflation, and broader external balances will result from these effects. Georgia, though, is in an excellent position to handle the war's economic effects. The macro-financial structure remains reliable and the banking sector is entering the crisis in relatively strong shape. Over the past ten years, fiscal restraint has been upheld, albeit the anticipated post-COVID consolidation may slow down due to the weakening economy. Government deposits are substantial, though, and debt is likely still sustainable.

What are SECO’s objectives?

SECO,  SDC and PHRD jointly define and implement the Swiss cooperation programme 2022-2025 for the South Caucasus. As an overall goal, Switzerland aims for the people of the region to benefit from sustainable and inclusive economic and social development, democratic public institutions, human security, peace, and increased climate change resilience, achieved through regional dialogue and cooperation. In this framework, SECO focuses on fostering effective, inclusive and accountable public institutions at national and local levels as well as aiming a conducive business environment for SME’s, including:

  • Effective Public finance management (PFM)
    SECO aims to contribute to an effective, predictable and sustainable PFM whilst increasing transparency and accountability in the budget process, strengthening debt management, and stabilizing the financial sector.
  • Innovation-friendly business investment
    SECO fosters economic diversification and digitalization, along with the creation of a conducive business environment where SMEs have improved access to markets and finance as well as better vocational education and training to improve job skills.

Climate change and environmental protection, good governance, gender equality and social inclusion are integrated in a transversal manner in all the interventions.

From 2022 to 2025, a total of some CHF 80.2 million is foreseen for Swiss transition cooperation in South Caucasus, of which around CHF 12 million is from SECO.

Last modification 19.04.2023

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