Former President of the National Bank of Georgia Koba Gvenetadze

Ambassador of SDG 8: Decent Work and Economic Growth 

How can decent working conditions and economic growth be achieved in Georgia?

Sustainable Development Goal 8 became especially important during the Covid pandemic when many companies stopped operating, and many people lost their jobs. This was a heavy burden on the population and a global challenge for Georgia and other countries. Unfortunately, when we started to return to normal, the situation worsened again due to the Russian invasion of Ukraine. An increase in poverty, unemployment, and inequality is an unfortunate side-effect of these developments; tremendous efforts are needed to improve and restore the situation, at least to the pre-conflict conditions.

When we talk about fulfilling this important goal, we should prioritize the various sectors of the economy in creating more jobs in the country.

Another significant direction is education at almost all levels. Unfortunately, vocational education in Georgia is not valued sufficiently, and the level of unemployment among young people is relatively high. The increased awareness of this issue would significantly contribute to eliminating the existing gap, and unemployment among the VET professions would be reduced.

Which challenge would you single out as most pressing, and what role do the financial sector and the National Bank of Georgia play in the fight against this challenge?

Let me start with the financial sector, which plays a vital role in developing the country’s economy. The mobilized resources are redistributed through the financial industry, and how efficiently these resources are redistributed depends on the functioning of the financial sector.

Financial stability is absolutely essential for the development of the economy. When challenges emerge, including, for example, during the pandemic, how the sector manages to handle them is of great importance.

If the financial sector had not managed this challenge, even more companies would have abandoned business, and more people would have lost their jobs. Therefore, this direction is of the utmost importance.

Furthermore, we are facing new challenges related to sustainable development, so it is important to have a sustainable financing framework to deal with them. To support sustainable development and ensure financial stability, it is necessary to include environmental, social, and sustainability issues in the policies of the central banks. That is why the National Bank of Georgia started working in this direction in 2017. This framework involves considering environmental, social, and governance (ESG) issues in the financial decision-making process by the financial sector participants, as well as managing the risks related to ESG issues and channeling financial flows to green and sustainable projects.

In 2019, the National Bank of Georgia approved the guidelines on sustainable financing, which define the main directions and action plan. Since then, the National Bank has taken several necessary steps and continues active work to develop a sustainable financing framework.

One of the challenges in Georgia is gender inequality, including in the workplace. According to “GeoStat” statistics for 2021, the average monthly salary for a man was 1537 GEL, while the monthly average wage for a woman was 1055 GEL. SDG 8 also implies promoting and achieving gender equality and women’s economic empowerment. How can we respond to this challenge in Georgia, and what is the National Bank of Georgia doing in this regard?

Yes, this challenge exists. This is also a global challenge, and it is necessary to increase the role of girls and women in the economy. As proved by various research studies, it is a fact that the participation of women in business, in multiple directions, brings better results. Therefore, we decided to take steps in this direction, and as a regulating body of the financial sector, we requested the commercial banks to have at least 20% women on the boards, and they fulfilled this request. Recently we have gone further in this direction, and the existing 20% quota was increased to 40%. Thus, this can be assessed as our contribution to empowering women and girls in the financial sector.

Why is it important to develop cooperation between international and local financial institutions, banks, non-governmental organizations, and donors to achieve SDG 8?

You mentioned international organizations and asked why it is important to cooperate with them. It is because they have the global data on what works, what doesn’t, and the possible solutions to existing challenges. There should be an exchange of knowledge and experience accumulated in different countries on the existing needs and respective possible solutions. It is impossible to solve existing problems without involving the public or private sector and non-governmental organizations. As for the outcomes, the UN should play a coordinating role in this, and, as far as I know, there are some indicators to measure progress.

What would you advise companies and financial institutions in achieving SDG 8 by 2030? How can businesses contribute to this process?

When discussing these goals, the question of when sustainability will pay off is often asked. If the project is green, it can be quite expensive, and do we need such a project? This is precisely the argument we should respond to. For example, if we are talking about a green project, more money may be spent on the energy efficiency of a building. Still, in the future, this building will require less energy to heat and cool it, and the additional money spent on the energy efficiency of the building will pay off. The process will be more impactful when the environmental, social, and governance aspects are considered. Although additional costs may be needed for sustainable practices at the initial stage of a project or later on, we must remember that this investment will be paid off.