On March 12, 2018, the implementation of a capital market development strategy was evaluated during the second phase of ReforMeter.

Archil Mestvirishvili, Vice President of National Bank of Georgia, Nikoloz Gagua, Deputy Minister of Finance, Bruno Balvanera, Regional Director of EBRD, Francois Painchaud, Resident Representative of IMF in Georgia as well as stakeholders from private and financial sectors attended the discussion.

As Government research revealed, at this stage, 67.7% of the reforms have been implemented. In Phase I, this indicator was 51%.

The greatest progress was achieved in the development of legislative frameworks. Last year, together with other important activities, the German ranking agency Scope was added to the list of agencies (Moodys, S&P, and Fitch) recognized by the National Bank of Georgia, which implies that the NBG will consider reliable rankings given by this body to the securities offered as collateral to the NBG. Also, the tax advantage for the so-called free-float was changed in the Tax Code and was replaced with wider advantages that are more convenient to investors. According to this advantage, capital gains are exempt from tax.

With help from IMF experts, a set of tax reforms were developed which imply taxing various financial instruments according to the best international practices. In addition, taxation instruments such instruments as derivatives, repo, and securities lending will be determined. Pension reform is also a part of the capital market development plan; the legislative package for pension reform is already prepared.

The stakeholder group evaluated the reforms with a score of 5.00 out of 10. This evaluation is higher than that of the previous phase, in which the reform implementation received a score of 3.85.

Together with stakeholders, Deputy Minister of Finance Nikoloz Gagua and representatives of the National Bank of Georgia participated in a discussion wherein several important issues regarding the implementation of the reforms were voiced.

For further details, please see the Capital Market Development report on the ReforMeter website.

ReforMeter is implemented by ISET Policy Institute and supported by USAID G4G. Our goal is to generate reform progress analysis for policymaking and public dialogue, and thereby promote informed debate about reform priorities and policy decisions, improve accountability and help build trust between the government, the private sector, and the general public. Five reforms are currently being evaluated by the ReforMeter: Agricultural Development, SME and Innovation Development, Capital Market Development, Pension Reform Vocational Education and Training Reform.