UNECE Study on Impact of Covid-19 on Trade and Structural Transformation in Georgia

United Nations Economic Commission for Europe (UNECE) conducted a study in May-July of this year and prepared the relevant report - The Impact of Covid-19 on Trade and Structural Transformation in Georgia. The study positively assesses the measures implemented by the Government of Georgia to eliminate the effects of the pandemic. “The study notes that Georgia is at a leading position among the trade reformers in the region, and the assessment showed that “Georgian Government has outperformed itself in its efforts to cushion the impact of supply chain disruptions. It limited trade restrictions to the minimum; was quick to expand the suite of trade facilitation measures available to enterprises; and, launched sweeping relief measures, such as credit schemes, tax deferrals and one-time cash injections, for supporting the vulnerable segments of the population, particularly in the rural areas, and hardest hit sectors”.

The report provides recommendation to the Government and highlights the increased role of the trade in development of the strong and sustainable economic in post-COVID-19 pandemic period. 

The report highlights that the Government used NTMs for achieving the twin objective of containing the spread of the pandemic and generating efficiency gains throughout international supply chains. With that objective, the Government limited restrictive NTMs to the minimum and upscaled trade facilitation measures as follows:

  • Transparency in trade continued to be ensured through online publication of new regulatory and procedural measures, including health protection measures with direct bearing on trade activities, and the Revenue Service 24/7 call centre.
  • Trade documents continued to be issued online though the national paperless trading system. 
  • State agencies issue paper-based documents stepped up efforts to ensure prompt response to requests from supply chain actors such as agencies and companies involved in inspection, certification, clearance and similar processes.
  • At the border control continued to proceed within the context of the well-established integrated border management system and was risk-based
  • Physical inspection of cargo was reallocated from the Customs Clearance Points to the Customs Clearance Zones to pre-empt congestion at border crossing points.
  • Customs and tax payments continued to be made online through the Revenue Customs Service Platform and were further streamlined through the introduction of simplified procedures for tax refunds.
  • Transit traffic continued to be facilitated by cooperation arrangements anchored in regional agreements, UNECE international transport conventions and protocols, and electronic data exchange with neighbouring countries.

The report also gives positive evaluation if the Georgian Government’s relief and support measures highlighting that the MSME might face much worse crises without the Government’s large-scale supportive measures which included the following:

  • Co-financing Mechanism for Small, Medium & Family Hotel Industry for supporting family-owned hotels and Deferral of property and income taxes for enterprises engaged in the tourism industry;
  • Caring for Villages, Agriculture, Regional development;
  • Value-added tax (VAT) refunds;
  • State subsidies for every retained job;
  • VAT exemptions for imports of medical goods;
  • Financial assistance (1200 GEL in overall assistance for a period of six months - 200 GEL per month) for employees who have lost their jobs or were put on unpaid leave;
  • Social Program- (delay the loan service payments for individual customers, utility payments and advance payment of pensions);
  • Credit guarantee scheme for businesses.

The assessment draws on a survey of 330 MSMEs from across the Georgia, including 226 manufacturing enterprises and 104 farmers involved in on-farm food processing, harvesting and husbandry activities. 

The United Nations Economic Commission for Europe (ECE) is one of the five regional commissions under the jurisdiction of the United Nations Economic and Social Council. It was established in order to promote economic cooperation and integrations among its Member States. The Commission is composed of 56 Member States, most of which are based in Europe, as well as a few outside of Europe.

Ministry of Economy and Sustainable Development of Georgia. 2017 ©