Strategies of the Development of Entrepreneurship and SME

- training of specialists (improvement of activity of vocational training schools, training ofstudents in foreign institutes using the state financial budget, training of managers in EUcompanies, etc.).4. With the purpose of improvement of SMEs financial supply:- to increase the volume of financial contribution from the state budget to the NationalFund for Support to Entrepreneurship;- to stimulate the commercial banks to make their financial recourses available for SMEs;- Stimulation of leasing activity;- Development of stock exchange.5. With the purpose of development of state - entrepreneur relations and improvement ofprotection mechanism of entrepreneurs’ rights:- prevention of state officials from engaging with the entrepreneurial activity;- protection of entrepreneurs’ rights at courts.6. With the purpose of strengthening the foreign economic activity of entrepreneurs:- to guarantee the transparency in export–import operations;- to increase the efforts for acception to WTO.5.4 DEVELOPMENT OF THE SME SECTOR IN GEORGIA 37Georgia has passed the first and the hardest stage of its economic reforms – legaldismantling of large part of state property and privatization. State property was privatized;financial, monetary and banking systems were changed. Amendments made influence on everyeconomic and social institute.Georgia's economic performance continues to be strong, but signs of overheating arebeginning to emerge. Economic growth during the first six months of 2007 was 12.5 percent,which is impressive given the external shocks associated with Russia's economic embargoalong with higher energy and food prices. Growth for 2007 as a whole will likely be in the rangeof 12-13 percent. It seems likely that private capital inflows will exceed USD 2 billion in 2007,although recent political developments add considerable uncertainty to the projected volume ofinflows for the remainder of this year and 2008. 38In spite of the high interest for foreign direct investment and international race amongcapital investors to getting in, the Georgian Government still neglects the SME sector, whichresulted in growing unemployment, poverty and corruption.The USAID estimates the shadow economy in the country between 26-35 percent. 395.4.1. SME sector developmentSME sector has an important role in creating and functioning of market economy inGeorgia. This sector is one of the priorities in the state economic policy. Great efforts havebeen done to promote institutional base of SME sector, increase the efficiency of SME supportsystem and improve investment friendly environment as well.37 Prepared by Dr. Antal SZABÓ, UN ret. Regional Adviser on Entrepreneurship and SMEs, Scientific Director ofERENET38IMF Press Release No. 07/258 as of 14 November 2007.39 Georgia Enterprise Growth Initiative. SME Environment Assessment, 14 February 2005.111