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Business Profile
Economy: Like all the former Soviet republics, Georgia experienced considerable economic difficulties during the 1990s. Disruption of the centrally organised Soviet trade and supply networks, plus civil war and political instability produced hyper-inflation and a slump in production. Major structural reforms, centring on the transfer of almost all small-scale enterprises to private ownership and a parallel reduction in the economic role of the state, were instituted. The measures have since contributed to strong annual growth for most of the post-Soviet period (it is currently six per cent) and a manageable rate of inflation. Unemployment, however, remains high. A new national currency, the Lari, was introduced in 1995.
The agricultural sector, which accounts for about one-third of total output, produces fruit, tobacco, grain and sugar beet; sheep and goats are widely farmed. There is some heavy industry, notably shipbuilding, but most of Georgia’s industry is light and engaged in food processing and production of fertiliser. Coal and manganese are mined in commercial quantities. The Government aims to establish the main ports of Poti and Batumi as regional transport and re-export hubs, which will also be able to handle oil refining and transhipment. (Part of this plan involves the controversial laying of an oil pipeline across the Black Sea). Further reforms, including the privatisation of major industries such as energy, are planned. In 1992, Georgia joined the IMF, which has been centrally involved in the economic reform programme, the World Bank and the European Bank for Reconstruction and Development as a ‘Country of Operation’. It has also acquired membership of the World Trade Organisation. Turkey is now Georgia’s principal trading partner, followed by Russia, Turkmenistan and Azerbaijan.
Commercial Information: The following organisation can offer advice: Chamber of Commerce and Industry of Georgia, Prospekt Chavchavadze 11, 380079 Tbilisi (tel: (32) 293 375; fax: (32) 235 760; e-mail: ktm@ean.kheta.ge; website: www.gcci.org.ge).
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