On 28 September 2016, at the session of the Government of Georgia, the Prime Minister, Giorgi Kvirikashvili, spoke about new, 2016-2017 report of Global Competitiveness and noted that Georgia’s standing was improved by seven positions and we were 59^th

out of 138 countries.

FactCheck

verified the accuracy of the Prime Minister’s statement.

Swiss organization – World Economic Forum (WEF) works on the issue of global competitiveness among the countries. Since 1979, that organization has been publishing an annual report, which offers the analysis of competitiveness and business environment of the countries. Every year, the organization makes a ranking, which depicts the Countries’ positions in the world in terms of competitiveness. Each report is prepared on the basis of indicators of the past year. For instance, 2016-2017 report is based on 2015 assessment. The methodology of this organization employs 119 criteria to assess each country. Part of those criteria is based on official statistical information provided by the Government of Georgia. For criteria such as independence of judiciary, criminal and education level, the source of information is surveying the small, medium and large enterprises. Approximately 200 enterprises from Georgia participate in the survey.

World Economic Forum published 2016-2017 Global Competitiveness Report in September this year. Competitiveness of 139 countries is studied in the report. According to the new report, Georgia is 59^th position indeed, whilst last year it was at 66^th

place.

If we take a look at the criteria (Table 1) employed by the index, Georgia has the best position (40^th place) in terms of macroeconomic environment. We hold 43-44^th places in terms of institutional development and labour market efficiency. Georgia has the worst position in terms of innovations (116^th place) and business sophistication (102^nd

place).

Table 1:

 Positions of Georgia in terms of Criteria

Criteria according to groups	Position in the World	Points (maximum 7)
Basic Demands	46	4.9
Institutions	43	4.4
Infrastructure	65	4.1
Macroeconomic environment	40	5.2
Health and primary education	64	5.9
Incentives for Efficiency	69	4.1
Higher Education and training	89	4.1
Goods market efficiency	46	4.6
Labour Market efficiency	43	4.5
Financial market development	58	4.2
Technological readiness	65	4.2
Market Size	101	3.0
Innovations and Sophistication factors	113	3.2
Business sophistication	102	3.6
Innovations	116	2.8

We also studied what were the significant changes in the components of the index which affected Georgia’s ranking. Points for property right protection increased from 4.3 to 4.4 which caused Georgia’s progress from 58^th to 43^rd place. In terms of investors’ protection, country’s position got improved by 22 place. Amongst the macroeconomic criteria, significant improvement were registered in budget deficit (21 positions) and total national savings (38 position) components. Georgia’s position in terms of loan affordability got improved by 57 position. Additionally, from 121^st place we moved to 105^th

place in terms of innovation opportunities.

Georgia’s performance in some of the criteria, however, got significantly worse. The country moved down from 56^th to 63^rd place in terms of independence of judiciary. From 31^st we were downgraded to 43^rd place in terms of transparency of the policy of government. Indicators related to criminal also got worsened: business costs of crime and violence, organized crime and trust toward the police. Georgia moved from 28^th to 40^th

position in terms of trust toward the police. In terms of quality of infrastructure Georgia moved 14 positions downward. Georgia moved 27 positions below in terms of inflation as well. State debt indicator got worsened too.

Conclusion According to the 2016-2017 Global Competitiveness Report, Georgia’s ranking has indeed been improved by seven positions and stands now at 59^th

position. The improvement was a result of positive changes in the following criteria:  property rights, investors’ protection, macroeconomic environment, loan affordability and innovation opportunities. In some, important criteria, however, Georgia’s performance got worsened:  independence of judiciary, transparency of the government’s policy, criminal and trust toward the police, quality of infrastructure, inflation and state debt.

FactCheck concludes that Giorgi Kvirikashvili’s statement “Georgia’s ranking has been improved by seven positions in the Global Competitiveness Index” is TRUE.