Institutional challenges of local economic development in Georgia and ways of mitigation (ადგილობრივი ეკონომიკური განვითარების დაგეგმვის ინსტიტუციური გამოწვევები საქართველოში და მათი დაძლევის გზები)

Abstract

In the resent word balanced territorial development is on the top of the political agenda, that is based on the model of the local economic development (LED). This Method is used in the European Union within its development programs as one of the instruments for reduction of territorial disparities, the Georgia – EU Association agreement stipulate specific commitments taken by the government of Georgia in the field of regional development. The concept of LED is based on citizen participation and multilevel governance and projects municipalities an driving force of local economic development. LED concept was not developed within the academic circles but from the practitioners who worked at the community level on the development planning. there are three basic preconditions to any successful LED projects: a) existence of strong and capable local authorities, b) mobilized local civil society that has strong self-identification with the community and c) capable local business that can unite for protection of local interests and d) existence of competitive advantages and unique resource that can be used for local development. Experience of Croatia, Poland and Lithuania show that LED process is a complex and varies from country to country, it is based on intermunicipal cooperation in Croatia while municipalities play more active role in LED planning and implementation, Regional Development Councils play critical role in local development in Lithuania and there are well institutionalized consultations between central government and local authorities. LED is relatively new concept for Georgia, some LED activities have already been organized by international organizations however these activities are fragmented and less efficient as there are no string and financially viable local authorities in Georgia, mechanisms for coordination among the levels of public administration are simply missing and citizen participation is extremely low especially in remote settlements. Resent initiatives of the government of Georgia on sharing of the Value Added Tax with municipalities does not provide financial sustainability to municipalities and Political decision makers face a dilemma to be concentrated on solving of ongoing issues or work for achievement of long-term development objectives.