05.12.2007 - Source: Civil Georgia

Georgian government has launched internship program giving unemployed opportunity of paid work in private businesses; rush on registration offices has seen one woman die while standing in line ("State-Funded Internship Program Launched") [ID 21852]

Document(s): Open document

27.11.2007 - Source: Civil Georgia

National Bank of Georgia takes control over Patarkatsishvili-owned Standard Bank under pretext of 'liquidity concerns" ("Patarkatsishvili’s Assets Targeted") [ID 21774]

Document(s): Open document

31.07.2007 - Source: Civil Georgia

Georgia warns foreigners against purchasing assets in breakaway regions: Foreign investors involved in such transactions will be subject to civil and possibly criminal liability, Foreign Ministry says ("Tbilisi Warns Against Buying Assets in Breakaway Regions") [ID 20720]

Document(s): Open document

30.07.2007 - Source: Civil Georgia

Tbilisi: Municipality alleges that about 50 plots of land were privatised illegally in 1994-1999, decides to probe into legality of privatisations; this decision is illegal, human rights lawyers say ("Municipal Probe into Privatization of Land in Tbilisi") [ID 20719]

Document(s): Open document

05.01.2006 - Source: Council of Europe - Parliamentary Assembly

Country economy and its impact on poverty ("Implementation of Resolution 1415 (2005) on the honouring of obligations and commitments by Georgia [Doc. 10779]") [#41527], [ID 4619]

"7. Indeed, in the course of 2005 the authorities have pursued or initiated reforms in all the main spheres of public life. Economic growth has been strong (8.5% for 2004 according to data provided by the World Bank Group) and the GDP per capita for 2005.[…] The government is planning the construction of two big highways, as well as a new airport which should become a regional transport hub.

8. Poverty is still a major problem and inflation continues to be high, around 7% for 2005. However, even if it is too early for the average citizens to feel a significant increase of their living standards, most arrears have been paid back and pensions and salaries are now being paid regularly. All the salaries of civil servants have been significantly increased in 2004. According to the President, about one billion USD will soon be invested in Georgia's tourism sector. On the other hand, Georgia is still struggling to find alternative energy sources, as Russia is raising the prices of its gas supplies to world market rates, a move that Georgia has qualified as political. Georgia will not benefit from the Baku-Tbilisi-Ceyan pipeline except by perceiving a transit fee, which will amount to around 50 to 60 million USD per year but it is hoped that this oil pipeline will be doubled in the foreseeable future by a gas pipeline."

Document(s): Open document

09.2005 - Source: US Department of State

Background Note - Economy ("Background Note: Georgia") [#33443], [ID 4620]

"GDP: $3.6 billion.
GDP per capita: $744.
GDP growth: 5.3%.
Inflation rate: 3.4%.
Natural resources: Forests, hydropower, nonferrous metals, manganese, iron ore, copper, citrus fruits, tea, wine.
Industry: Types--steel, aircraft, machine tools, foundry equipment (automobiles, trucks, and tractors), tower cranes, electric welding equipment, fuel re-exports, machinery for food packing, electric motors, textiles, shoes, chemicals, wood products, bottled water, and wine.
Trade (2001): Exports--$354 million. Partners--Russia, Turkey, Azerbaijan, Armenia. Imports--$737 million. Partners--Russia, Turkey, Azerbaijan, Germany, Ukraine, United Kingdom, Turkmenistan, United States.
Work force (1.72 million in 2000): Agriculture--52.1%; trade--10.0%; education--6.5%; public administration--6.0%; manufacturing--5.9%; health and social work--4.9%; transport and communications--4.1%; unemployment (2002--12.3% official - State Statistical Department)."

Document(s): Open document

16.08.2005 - Source: ReliefWeb

US Millennium Challenge Corporation approves 5-year, 295.3 million dollar agreement to reduce poverty and stimulate economic growth in the regions outside of Tbilisi ("Georgia to receive over $295 million in millennium aid funding") [ID 15428]

Document(s): Open document

15.05.2005 - Source: UK Home Office

Basic Economic Facts ("Georgia bulletin 5/2005") [#37885], [ID 4621]

"GDP: US$ 4.0bn
GDP per head: $930 (calculated)
Annual Growth: 8.6%
Inflation: 4.8%
Major Industries: steel, aircraft, machine tools, electric locomotives, trucks, tractors, textiles, shoes, chemicals, wood products, wine, financial services
Major Trading Partners: Russia, UK, Turkey, Other EU countries, Azerbaijan, Ukraine, Armenia
Exchange Rate: US$1.83 and UK£3.40 (April 2005)

Georgia was hit badly by the Russian financial crisis of August 1998 and it took the country a long time to start recovering. The recovery has largely been export led, although the start of Baku-Tbilisi-Ceyhan oil pipeline construction in 2003 is responsible for considerable increase in GDP compared to previous years. Neighbouring Turkey and Russia are the main export markets, followed by former Soviet State of Turkmenistan. Agriculture is the largest sector of economy, accounting for 21% of total GDP, although several other industries have high growth rate, including construction (33%), financial services (20%), communication (19%), hotels & restaurants (17%) etc."

Document(s): Open document

02.05.2005 - Source:

02.05.2005 - CIA World Factbook 2005: Economy overview ("02.05.2005 - CIA World Factbook 2005") [ID 4622]

"Georgia's main economic activities include the cultivation of agricultural products such as citrus fruits, tea, hazelnuts, and grapes; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower. Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of the IMF and World Bank, has made substantial economic gains since 1995, achieving positive GDP growth and curtailing inflation. However, the Georgian Government has suffered from limited resources due to a chronic failure to collect tax revenues. Georgia's new government is making progress in reforming the tax code, enforcing taxes, and cracking down on corruption. Georgia also suffers from energy shortages; it privatized the T'bilisi electricity distribution network in 1998, but payment collection rates remain low, both in T'bilisi and throughout the regions. The country is pinning its hopes for long-term growth on its role as a transit state for pipelines and trade. The construction on the Baku-T'bilisi-Ceyhan oil pipeline and the Baku-T'bilisi-Erzerum gas pipeline have brought much-needed investment and job opportunities."

Document(s): 02.05.2005 - CIA World Factbook 2005

02.2005 - Source: European Centre for Minority Issues

Economy in Kvemo Kartli Region of Georgia ("Obstacles Impeding the Regional Integration of the Kvemo Kartli Region of Georgia, ECMI Working Paper #23") [#33309], [ID 4623]

"Vegetable-growing is the main economic activity and potatoes are the main crop. [...] Fruit and grain (mainly wheat and maize) production is also significant, particularly in the Gardabani and Marneuli rayons. Livestock-breeding also plays an important role in the local economy, especially in the mountainous regions where hayfields make up a large proportion of agricultural land.
A major problem involves the distribution of land that previously belonged to collective farms (kolkhozy and sovkhozy). According to a 1992 decree, which stipulated how kolkhoz and sovkhozland was to be distributed, the strip of land within 21 km of the Georgian border could not be allotted to private individuals. This strip included much of the Gardabani, Marneuli, Bolnisi and Dmanisi rayons. Moreover, according to the 1996 “Law on Ownership of Agricultural Land,” the government reserved the right to retain control of land resources within that border zone and therefore much of the land close to the border with Armenia and Azerbaijan remained in the hands of various government agencies.
[...]
For the most part, sovkhoz and kolkhoz land that was not privatised was leased out in a nontransparent manner. Very often the bulk of this land was rented by “local notables,” often former sovkhoz directors or individuals with close personal links to members of the local administration. Most of these individuals were ethnic Georgians, since many Azeri directors of collective farms were replaced by Georgians (often “resettlers” from Svaneti) during the wave of nationalist mobilisation in 1989-91.
[...]
As in most rural areas of Georgia, Kvemo Kartli suffers from serious infrastructure problems. The supply of electricity and water is highly irregular, particularly in the more remote highland areas far from Tbilisi. In most rural zones villagers have to rely on natural sources, such as well and springs, in order to obtain drinking water – often with deleterious effects on their health. In most areas, the roads are in a state of disrepair; this is particularly true of the more mountainous regions.
[...]
Another major feature of the local infrastructure is the BTC oil pipeline, which will pass through Gardabani, Marneuli and Tsalka rayons. However, despite the fanfare, the pipeline has provided few benefits for the inhabitants of these districts, except for those whose villages lie in the direct path of the pipeline"

Document(s): Open document

21.04.2004 - Source: Central Asia-Caucasus Institute

Article on economical consequences of the escalating crisis in Ajaria for the entire Caspian region ("The Political Economy Of The Ajarian Crisis") [#21766], [ID 4624]

"The escalating conflict between the central government in Georgia and leadership of Autonomous Republic of Ajara is creating a major challenge for the economy of the entire Caspian region. Georgia suffers substantial losses in tariffs, and subsequently budget revenues. Armenia looses additional supply routes, and producers of oil and oil products in the Caspian have to look elsewhere for substitute export routes. This development seriously affects U.S. interests in the region, since the beneficiaries of the situation are Iran and Russia."

Document(s): Open document

14.08.2003 - Source: Human Rights Center

Strategy adopted to fight poverty ("Monthly Bulletin 6-7 (52-53), July 2003") [#15071], [ID 4625]

"On 25 June at the Wednesday sitting, the Georgian government approved the draft strategy for fighting poverty and supporting economic growth. The 12 year plan aims at steady economic and social development of Georgia. The programme will be funded from the State budget and with support of international financial organisations and donors.
Temur Basilia, assistant of the president of Georgia in economic issues, presented the document. According to Mr Basilia, economic growth could be reached at the expense of economic and structural reforms and the
reduction of the corruption index. Tourism, transport, communications, energy and agriculture are fixed into the strategy at priority economic branches.
The document envisages the preparation of mechanisms for the improvement of the effectiveness of Georgia’s international economic relations. The development of democracy, establishments of principles of freedom of person, improvement of security, restoration of territorial integrity and integration in Euro-Atlantic structure are very important from that viewpoint. The strategy itself can be changed after the establishment
of new realities in the geo-strategic and geopolitical fields."

Document(s): Open document

08.2003 - Source: Human Rights Center

Statistics Economic Growth ("Monthly Bulletin No 8 (54), August 2003") [#15124], [ID 4626]

"According to the data from the State Statistics Department, Georgia is experiencing an economic revivals illustrated by the economic data going back to the statistics of 1992.

According to the Statistics Department, the first half of 2003 shows the country’s GDP totaling GEL 3 943 000. The rate of the current GDP growth is the highest since 1997 in Georgia increasing by 8.6% over last year’s growth; however this growth is lower than that of other CIS countries.

The economists attribute the acceleration of economic growth to the Baku-Tbilisi-Ceyhan pipeline construc-tion. According to these sources, GEL 143.4 million has already been invested in non-financial assets for the pipeline project in Georgia.

The number of unemployed registered in Georgia reached 47 000 by 1 July 2003, 20.4% above the January figures. As for foreign trade, imports continue to significantly exceed exports. As for exports, the ferrous metal scrap is the leading export."

Document(s): Open document

09.05.2003 - Source: Institute for War and Peace Reporting

Fraudulent job agencies take advantage of the numerous unemployed in the country ("Bogus Agencies Prey on Jobless") [#13343], [ID 4627]

Document(s): Open document

13.02.2003 - Source:

CIA World Factbook 2002: Economic situation ("CIA World Factbook 2002: Economic Situation") [ID 4631]

"Georgia's main economic activities include the cultivation of agricultural products such as citrus fruits, tea, hazelnuts, and grapes; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower. Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of the IMF and World Bank, has made substantial economic gains since 1995, achieving positive GDP growth and curtailing inflation. However, the Georgian government suffers from limited resources due to a chronic failure to collect tax revenues. Georgia also suffers from energy shortages; it privatized the T'bilisi distribution network in 1998, but collection rates are low, making the venture unprofitable. The country is pinning its hopes for long-term recovery on its role as a transit state for pipelines and trade. The start of construction on the Baku-T'bilisi-Ceyhan pipeline in summer 2002 will bring much-needed investment and job opportunities to the country."

Document(s): CIA World Factbook 2002: Economic Situation

05.03.2002 - Source: Schweizerische Flüchtlingshilfe

SFH: Economic developments ("Lageanalyse Februar 2002") [#8057], [ID 4628]

"Die aus der Sowjetzeit geerbte Wirtschaftsstruktur lastet auf den Staaten der Kaukasus-
Region als schwere Hypothek. Die Staaten Kaukasiens stellten Halbfertigwaren aus zentral
zugeleiteten Rohstoffen her und lieferten Agrarprodukte und Erdöl. Mit dem Zusammenbruch
der Sowjetunion und damit auch deren ökonomischem System, gingen den neuen
Staaten die Kunden verloren. Sie konnten keine Rohstoffe für ihre Industrie einkaufen, ihre
bisherigen Partner hingegen kauften nun auf dem Weltmarkt günstiger ein. Die bewaffneten
Konflikte verhinderten den dringend benötigen Aufbau von neuen Strukturen und schreckten
ausländische InvestorInnen ab. In kurzer Zeit ging das Bruttoinlandprodukt in allen
kaukasischen Ländern auf ein Drittel des Wertes von 1989, in Georgien zeitweilig sogar
unter die 20-Prozent-Marke zurück.
Die georgische Wirtschaft kreiste traditionell um den Tourismus am Schwarzen Meer, Anbau
von Zitrusfrüchten, Tee und Wein, Mangan- und Kupferabbau und Produkte der kleinen
Industrie wie Metalle, Maschinen, Chemie und Textilien. Das Land musste den grössten Teil
seines Energiebedarfes inkl. Öl- und Gasprodukte durch Importe abdecken. Der einzige im
Land vorhandene Energielieferant ist die Wasserkraft.
Zur Sowjetzeit kamen jährlich etwa 1.5 Mio. Besucher nach Georgien. 1999 wurden nur
noch 384'000 Touristen registriert. Die Einnahmen aus dem Tourismus betrugen in diesem
Jahr 400 Mio. US-Dollar.
Die landwirtschaftliche Nutzfläche beträgt 15.4 Prozent, von der Anbaufläche werden
43.8 Prozent bewässert. Neben dem traditionellen Anbau (siehe oben) ist auch die Viehzucht
(Schafe und Ziegen) von Bedeutung.
Die Industrie stellt mit total veralteten Anlagen hauptsächlich Nahrungsmittel und Maschinen
her. Im Bergbau werden Mangan, Baryt, Kohle, Kupfer, Zink, Gold und Silber gewonnen.
In beschränktem Rahmen findet auch eine gewisse Öl- und Gasförderung statt.
Hauptabnehmer der georgischen Produkte sind Russland (30.4 Prozent), die Türkei
(22.6 Prozent) und Armenien (12.2 Prozent). Die meisten Importe (davon über 50 Prozent
aus dem Bergbau) stammen aus der Türkei (21.2 Prozent), aus Russland (13 Prozent) und
Aserbaidschan (11.4 Prozent). Der Zerfall von Industrie und Landwirtschaft führte zu einem massiven Rückgang des Lebensstandards.
(In der Sowjetunion hatte Georgien – hinter den Baltischen Staaten – den
vierthöchsten Lebensstandard). Der Anteil der Landwirtschaft am BSP beträgt gegenwärtig
38.8 Prozent, derjenige der Industrie 12 Prozent, der Dienstleitungen und des Handels
39.1 Prozent. Die durchschnittliche Arbeitslosigkeit in Georgien beträgt 22-25 Prozent, in
den städtischen Agglomerationen 35 Prozent. Die Inflation erreichte zeitweise schwindelerregende
Höhen (Georgien 1994, 20'000 Prozent!).
Georgien verfügt über das tiefste pro-Kopf-Einkommen unter den GUS-Staaten. Bei gleichzeitig
steigenden Preisen erlitten die Haushalte in der 1990er Jahren einen Einkommensverlust
von ca. 40 Prozent. Ihre Kaufkraft fiel auf 60 Prozent zurück. Ein grosser Teil der
Leute lebt von Tauschwirtschaft und davon, was der eigene Garten oder das eigene Feld
hergibt oder aus dem Erlös vom Verkauf ihrer Habe, die ihnen entbehrlich scheint. Glück
hat, wer bei ausländischen Firmen oder Organisationen angestellt ist, dann wird das Gehalt
regelmässig in bar und vor allem in US-Dollar ausgezahlt. Das Strassennetz zerfällt, Strom
gibt es nur an zwei bis sechs Stunden pro Tag.
Viele Menschen sehen die Emigration als einzigen Ausweg aus ihrer verzweifelten Lage. Im
November 2000 warnten die Vereinten Nationen sogar vor einer Hungerkatastrophe. Knapp
59 Prozent der Bevölkerung Georgiens lebten unter der Armutsgrenze, fast 15 Prozent der
EinwohnerInnen hatten so gut wie keine Nahrung. Präsident Schewardnadse ersuchte im
Herbst 2000 die internationale Gemeinschaft (FAO und WFP) um Lebensmittelhilfe. Der
Staat versucht die Folgen dieser Entwicklung auch mit Hilfe eines so genannte "Programms
der Sozialen Wohlfahrt" zu mildern und insbesondere Alten, Behinderten und intern vertriebenen
Personen zu helfen, ohne aber ein wirksames Sozialnetz aufbauen zu können.
Steigende Kriminalität und Korruption erschweren eine positive Entwicklung. Präsident
Schewardnadse gab in einem Radiointerview im Juni 2001 zu, dass im Vorjahr mehr als
55 Prozent des Wirtschaftseinkommens nicht registriert und 70-80 Prozent des Treibstoffes
geschmuggelt war. Wegen der Korruption der Autobahnpolizei weicht der Verkehr auf die
übrigen Strassen aus. Das Staatsbudget weist ein chronisches Defizit auf. Steuereinnahmen
aus den Importen (80-85 Prozent der Konsumgüter werden vom Ausland bezogen),
Transitgebühren und auch die ausländischen Hilfsgelder werden von kriminellen Banden
und korrupten Politikern "verwaltet" und aufgeteilt."

Document(s): Open document

2002 - Source: Public Defender of Georgia

Public Defender of Georgia: 60 percent of the population lives below the level of poverty ("Report of the Public Defender of Georgia: On the Situation of Protection of Human Rights and Freedoms in Georgia") [#10578], [ID 4629]

"The question of overcoming poverty became the most important one for the Government of Georgia in recent years. Despite the efforts and number of positive steps made in this direction, the situation is still grave in Georgia. According to the latest data, the 60% of the population is below the level of poverty, the majority of which are chronically poor. The economic activity is still slowing down and investments in the country have been decreased by 4.5 %, compared to 1998. It’s true that the social policy of the government of Georgia remains the most important component of country’s development, but any step forward in the direction of achievement the goal for improving the social life of people is still hardly visible. As for the results, the activities in various economic infrastructures may be considered not effective. The same can be referred to the creation of new working places, improvement of investment
environment, growth of entrepreneurship in the country, the government assistance to the private sector and the legalization of illegal business.
The chronic deficits in the budget since 1998 have caused serious problems in wages of people in the state enterprises, paying pensions and financial assistance to the forcefully displaced persons. The Public Defender’s Office faces the same problem. The existing level of poverty is more engraved by unemployment. Starting from the 1990s the number of employed people reduced by 37.2 %. The highest level of more than 29 % of unemployment is in the capital. According to the recent data, the young people of 20- 25 and 25-29 years of age are mostly unemployed, that constitutes more than a half of entire unemployed population. And this is the most productive age. It must be noted, that unfortunately, the official statistical data does not reflect this reality created in the country. The so-called, self-employed people do constitute the majority of the employed population. Moreover, many unemployed are not registered, as the temporary unemployment allowance is very small and there is no hope for finding a job. The national employment program is already worked out, but it is based on statistical data of empiric and expert character, still considering the study of this problem as a main factor of the problem.
Because of a high level of unemployment and low level of economic development, the incomes of employed people are still very low, despite the quality and amount of work done. Though there is a sight increase in minimal wages, this fact cannot be considered as an adequate social guarantee that is necessary for satisfying the minimal needs of a person. To overcome the difficulties connected to the extreme poverty of people in the context of Human Rights, it is not only enough to study in details the reasons of its existence in the
society, but its direct influence on Human Rights and Fundamental freedoms. Poverty is a lack of things or their complete non-existence that are necessary for living, as well as enjoying the fundamental freedoms and rights and taking the major responsibilities. The chronic poverty makes simultaneously direct influence on different aspects of human life."

Document(s): publicdefender-geo.pdf

07.2001 - Source: Caucasus Institute for Peace, Democracy and Development

Caucasian Institute for Peace, Democracy and Development: High rate of shadow economy; social security system collapsed ("Georgia's Membership in the Council of Europe, Achievements and Failures") [#10549], [ID 4632]

"Rates of economic growth in the last years dropped to 1-3% from 8-10% in 1995-97 (for instance, in
the first quarter of 2001, the economic growth was estimated at 1.9%). However, Georgia is notable for
extremely high rate of shadow economy, and this makes it especially difficult to assess the real situation of its
economy. According to different estimations, 30-70% of the economic activities is unaccounted for, and this
may be the highest rate among post-communist countries. Respectively, only 9-11% of the GNP is raised in
taxes, which is an extremely low indicator. This means that public servants are poorly paid (which creates strong
incentives for corruption) while social security system has all but collapsed. Pensions for the elderly, for
instance, are defined at a flat amount of 14 GEL (about 7%) and even that miniscule amount is held back for
months due to lack of public funds."

Document(s): cipdd-geo.pdf

12.2000 - Source: UN Development Programme

UNDP: Employment ("Human Development Report 2000") [#10556], [ID 4633]

"The social and economic changes that Georgian society has experienced in the last decade has entirely altered the employment structure (Fig. 2.6). Before the
collapse of the USSR, the economically active segment of Georgian society represented an inseparable part of the Soviet state and, as such, comprised
employees (remarkably, though ironically, this category included the Nomeklatura, which, according to Lenin's definition, was officially considered to be the
"people's servants") and peasants working in kolkhozs, not working housewives, retired persons and students. The number of self-employed and unemployed
people was low. Over the course of economic reforms, this has changed. [...]
The fall in formal employment opportunities that followed the collapse of the economy in early 1990 was brutal, particularly in the economy’s main industrial
branches.[...]
The sharp plunge of employment possibilities in the main industrial branches of the economy was accompanied by a similar trend in the non-industrial sectors. [...]
The squeeze in employment possibilities forced scores of Georgians to seek alternative ways of survival and many joined the ranks of the so-called
self-employed. [...]
To a large extent, the agricultural sector acts as a buffer against the negative consequences of reduced employment possibilities in other sectors of the economy.
People tend to return to the family plot when employment in other sectors, particularly those with monetary remuneration, becomes unavailable. It shows the
Georgian population’s notable degree of flexibility and its ability to move and change jobs as favorable/unfavorable economic conditions emerge.
While agriculture has provided a lifeline to many that would otherwise have gone hungry, it is also a difficult and often unrewarding activity. Self-employment in
agriculture covers people who predominantly work their own land plots and, as a rule, who receive only a small monetary income (from selling produce in open
markets). For many, agricultural activities in Georgia traditionally had an auxiliary character, because most of the urban population owned small land plots that
provided a non-monetary income. Agriculture’s overwhelming contribution to the number of self-employed merely reflects the crisis in other sectors of the
economy and the inherent difficulties of finding employment. Finally, the absence of monetary income for a large group of self-employed people contributes to the
perpetuation of non-monetary economic relations in rural areas, areas in which a significant volume of goods and services are paid for with agricultural products.
This feature prevents the capitalization of individuals’ businesses and limits the range of goods and services available to farmers.
The importance of agriculture as a relief valve is also observed in the differences in unemployment levels between Tbilisi and the regions (Table 2.10).
Unemployment has hit the most educated sectors of Georgian society particularly hard, as scores of physicists, engineers, biologists, doctors, and artists have
painfully experienced."

Document(s): Open document

12.2000 - Source: UN Development Programme

UNDP: Shadow economy ("Human Development Report 2000") [#10556], [ID 4634]

For detailed information on Georgia's shadow economy please consult chapter 5

Document(s): Open document

04.2000 - Source: International Institute for Democracy and Electoral Assistance

Democracy Forum 2000: Significant difference between urban and rural poverty ("Poverty and Democracy in Georgia: The Role of External Actors") [#10582], [ID 4630]

"Poverty continues to be one of the main sources of human misery and at the same time a serious obstacle for democratic development in Georgia. The great section of the population (more than 11 percent ) live on the margin of, or below, the poverty line, many owing their survival not to state safety net but to the system of informal benevolence of their extended family, friends or neighbours, even though Georgia appears from the outside to be relatively well-doing country of the South Caucasus. Most, but certainly not all, of the problems of the vulnerable groups in Georgia stem from the economic and political crises that followed the disintegration of the Soviet Union. Such events as the collapse of the social security system, unemployment, inflation, declines in production and trade, ethno-territorial conflicts, etc., were further aggravated by natural disasters or factors such as the heritage of Soviet managerial or economic practice patterns that used to serve effectively in previous times but now tend to hinder development. The problems that existed due to low quality of social and medical services and labour protection in the Soviet period were also exacerbated in the post-Soviet period, when additional deficiencies and the failure of the whole infrastructure made the situation much worse and its problems more visible. [...]
Effects of the rapid social changes are diverse. Although there is a slight improvement in the distribution of incomes, the richest 10% still have well over 40% of incomes. Not surprisingly, inequality of the population according to the owned property is also very noticeable, and due to gaps in incomes and value of stored property, the process of developing some specific, almost independent subcultures for families with different incomes is under way, and the difference is apparent not only in the quantity and quality of the commodities but also in the ways and manner of consumption. It should be noted that the Gini index for consumption is somewhat lower, by the end of 1997 constituting around 0.36 per person (or 0.39 par household), which nevertheless shows very high inequality.
There is significant difference between rural and urban poverty. Urban poverty is much more severe (12% against 10% according to the WB estimates) and much deeper (3.9 to 2.8, respectively), however at the same time the situation in major urban centres is much more dynamic, indicating to future reversal of the picture. At the same time rural poverty is highly sensitive towards seasonality and climatic fluctuations, as well as depends on availability of seasonal credits and supplies. Another important variability is from region to region, so that incidence of poverty in Imereti may be 3 times higher than in Ajara or Samegrelo."

Document(s): Open document