At the post-war donors conference approximately USD 3 billion of the USD 4.8 billion (at current exchange rates) total pledge took the form of loans. Half of the loan was pledged to the government and the other half was allocated to help support private companies. This policy paper provides a general overview of loan component of the pledge and in so doing examines the following questions:
How much of the pledged money is committed?
How much of the pledged loan would have come to Georgia if the war had not happened?
Which sectors does the loan prioritize and how does that compare to the priorities of the Joint Needs Assessment?
What is the overall impact of the increase in government loans on the economy?
The paper concludes that most of the money will be allocated (though not spent) by the end of year. It is generally being spent on a basket of projects that one would consider 'economic stimulus' spending and is largely consistent with the needs of the JNA.
However, most of the USD 3 billion committed at the donors conference was not new money and would been allocated to Georgia even if the war had not happened. While there was a dramatic increase in loans between 2007 and 2008, this was more reflective of the general improvements in the Georgian economy, business environment and the Ministry of Finance, than it was the result of the war.