ECONOMY: GENERAL INFORMATION
The main economic resource of the country until the end of the Second World War was traditional agriculture: corn and wheat, citrus fruits, fruit trees, tobacco, cotton, tea and vines; this was subsequently joined by industrial production which mainly concerned the mechanical, aeronautical, electronic, chemical, and, later, also metallurgical, textile and food sectors. Strongly intertwined with the economic life of the other countries of the Soviet area and, dependent on the market needs expressed by the Russian giant, the Georgian economy had for a long time the only trading ground constituted by the members of the USSR as an area of import-export. Shaken by a violent phase of transition following the collapse of the empire and characterized by severe internal political instability, caused by the secessionist pressures of the provinces of Abkhazia and South Ossetia and the arrival of over 200,000 Georgian refugees from these areas, since 1994 the country has seen industrial production drop to a tenth of national capacity and has seen the exponential growth in inflation, which has reached record limits (22,000%). The economic interventions envisaged for the necessary reorganization of the country concerned, in the first place, a more restrictive monetary policy and an increase in the tax burden, in an attempt to reduce the public deficit; secondly, the introduction of a national currency, the lari, for the stabilization of consumer prices (1995); thirdly, the launch of a privatization process for small and medium-sized enterprises, International Monetary Fund. The difficulty in controlling large portions of the territory such as those affected by the secessionist movements and widespread internal corruption, however, hindered the recovery in the following decades. Two, in particular, the measures envisaged by the Georgian government to accelerate the exit from the economic impasse of the country and start a stable growth: the coverage of state expenditure through a further increase in tax revenues and extensive structural reforms of the economic system in order to favor private entrepreneurship. One of the leading sectors on which the country’s greatest expectations are concentrated is that linked to the extraction of oil, in turn connected to the construction of oil pipelines for the transport of black gold from Caucasian reserves to the West. ideal terminal of that ancient Silk Road which, through the Georgian ports on the Black Sea, would reactivate trade links between Europe and the Far East Asian states. In 2008, the country’s GDP reached US $ 12,870 million and GDP per capita the US $ 2,925, with an increase in all sectors. Among the main factors of growth in recent years (2002-2006), the construction of the Baku -T’bilisi-Ceyhan oil pipeline has certainly had a marked impact, both for the stimuli provided to the construction sector and for those relating to the growth of internal demand, in turn dependent on the increase in the income available to the population.
ECONOMY: AGRICULTURE AND LIVESTOCK
According to smber, the agricultural sector continues to play a considerable role in the formation of national GDP. Not only that: the primary sector employs more than half of the local workforce and extends, at the level of cultivated area, on about two fifths of the total territory. As already mentioned, during the 1990s, most of the farms in the sector were privatized; after the dissolution of the USSR owing to the change in international structures and the volumes of trade between the countries of the Caucasian area, the share of agricultural production destined for domestic consumption has undergone a considerable increase. Among the main crops, apart from cereals, the vine (also intended for the production of local spirits) and tobacco, a prized product of the coasts of Abkhazia, emerge. Livestock farming, on the other hand, despite the presence of large areas occupied by pastures, is not particularly important for the country’s economy, especially due to the scarcity of forage.
ECONOMY: INDUSTRY AND MINERAL RESOURCES
The subsoil is rich in minerals and well exploited: manganese is extracted from the Čiat’ura deposit, one of the richest in the world; coal in Tkvarčeli and Tkibuli; there are also good quantities of barite, lead, zinc, bentonite, copper and lignite. The industries (steel, chemical, petrochemical, food, wood, mechanical), whose development has been favored by the availability of hydroelectric energy, are located in the capital and in the cities of Kutaisi, Zestafoni, Chinvali, Poti, Rust’avi and Bat’umi. Also important are the oil and natural gas fields, at the origin of the projects for the construction of gas pipelines on the Georgian territory, in particular the one along the Shah-Deniz route. Another growing sector is that represented by industries linked to the bottling of mineral waters, favored by the presence of over 2000 natural springs in the area.