GD Economy Minister Levan Davitashvili declares that if Georgian government is not interested in the IMF new program’s conditions, then the government will not sign the new one.
The three-year $289 million Stand-By Arrangement (SBA), agreed June 2022, has been on hold since June 2023 after a push to amend legislation to change the management structure at the central bank raised questions over its independence. SBAs provide short-term financial assistance to countries facing balance of payments problems.
As of Reuters, Georgia is aiming for a new programme with the International Monetary Fund and hopes to meet with the lender in February.
According to Levan Davitashvili, the government will agree to the Fund's conditions only if these terms are acceptable to the government. The statement of GD Economy Minister indicates that the government does not show willingness to live up to past commitments, including the consideration of IMF-suggested reforms in the law on state-owned enterprises, which was provided by the IMF’s previous program.
“The program is mutually beneficial for both parties. If this is not interesting to us, then, of course, we will continue our activities without the program. We are open to this dialogue. The old program is not a separate topic. We take it with maximum responsibility, if we agree on a new program with the IMF, it must be in line with our economic interests. We are open and ready, and we are interested. We will have meetings in February and it will be decided whether they will come or we will work remotely. We will share the results with you depending on how the project turns out," Levan Davitashvili said in response to a question from BMG.
The IMF-supported program originally included a three-year stand-by arrangement with a loan of $289 million. After the completion of the first tranche of $40 million, Georgia was due to receive the second tranche in 2023, but the IMF postponed the submission and Board approval of the second review of Georgia’s Stand-by Arrangement /SBA, stating that the delay in Board approval was “partly due to disagreement over a change in the NBG’s management structure”.
As for the change in NBG’s management structure, the changes went through after Parliament expedited the adoption of draft amendments to the Organic Law on the National Bank of Georgia on February 9, 2023. However, President Salome Zourabichvili vetoed the amendments on February 23, citing concerns that they might undermine the Bank’s independence. On June 20, the Parliament overrode the President’s veto and approved the amendments. Consequently, Natia Turnava was elected the First Vice-President of the National Bank of Georgia (NBG) by the NBG’s Board of Directors on June 22, 2023.
