A separate sub-section is allocated to state owned enterprises in the 2018-2021 fiscal analysis document that accompanies Georgia’s law on the 2019 state budget. The document, which was prepared by the ministry of finance, states that “Georgia is in the process of strengthening the oversight and management of state-owned enterprises, which highlights the assessment of the future fiscal risks and risk management of the mentioned enterprises.” According to the ministry, the state owned enterprise database has been developed based on information provided by governmental entities, the National Statistics Office of Georgia, and other administrative sources.
The database includes enterprises established either wholly or partially by the central or local government that are classified as important enterprises for fiscal risk analysis. The number of critical enterprises important for fiscal risks is 286, which includes the range of 50 subsidiary companies. Therefore, as a result of the consolidated financial data, the analysis is based on 236 state enterprise data; 50 subsidiary companies are presented as additional information. Out of 236 enterprises, 159 are owned by the central government and 77 are owned by local governments.
Out of those 159 enterprises under the ownership of the central government, the government has 100% of shares in 100 of them, 50% - 100% shares in 29 of them, and 50% or less shares in 30 enterprises” states the fiscal analysis document. In addition, the oversight of the mentioned 159 enterprises is divided as follows:
111 enterprises are under the oversight of the Ministry of Economy and Sustainable Development of Georgia.
26 enterprises receive oversight from a percentage participation of the Partnership Fund
3 enterprises are under the oversight of the Ministry of Regional Development and Infrastructure of Georgia.
5 enterprises are under the oversight of the management of the Ministry of Defense of Georgia
7 enterprises are under the oversight of the management of the Ministry of Environmental Protection and Agriculture of Georgia;
2 enterprises are managed by the Ministry of Education, Science, Culture and Sport;
1 enterprise is managed by the Ministry of IDPs from the Occupied Territories, and the Ministry of Labor, Health and Social Affairs;
1 enterprise is managed by the Ministry of Justice;
3 enterprises are managed by legal entities.
With regard to the enterprises under the ownership of the municipal governments, 32 of them are under the ownership of the Tbilisi and Batumi municipalities and their share of revenues makes up 94 percent of the overall enterprises under the management of municipal governments. According to the business registry compiled by the national statistics office, state enterprises are working in 12 different sectors. Over half of them are in the field of health and social benefits, utilities, social and private services, and real estate, lease, and customer services. 31.4 percent of the turnover of enterprises are coming from transport and communications sectors, 40.6 percent come from electricity, gas and water production and distribution, and 18 percent of the turnover are coming from trade transactions.
Author: Telara Gelantia
