Country Economic Memorandum
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Publication
Georgia : Seizing the Opportunity to Prosper
(Washington, DC, 2014-12)Georgia: Seizing the Opportunity to Prosper suggests a path towards sustainable and shared growth. Georgia s story is associated with three stylized facts: high growth with persistent unemployment currently at nearly 15 percent after 10 years of annual growth that averaged above 5.5 percent; a doing business rank of 8 out of 189 countries achieved without recovery to 1990 levels of per capita income suggesting a relatively difficult transition experience in spite of noteworthy success with several governance and business environment reforms; and obstinate socio-economic vulnerabilities reflected in Georgia s status as one of the poorest countries in the Europe and Central Asia (ECA) region of the World Bank with a relatively weak performance on reducing poverty and inequality. Georgia is well positioned to achieve its development objectives. The main challenge is persistent joblessness, which must be addressed to establish a sustainable basis for the pro-poor development model outlined in the Government s Socio-Economic Strategy 2020. This report, which is anchored in the Government s Socio-economic Development Strategy 2020, explores the potential for improved export competitiveness to strengthen employment growth in Georgia and is intended to inform a policy agenda mainly focused on the demand side of the labor market. -
Publication
Georgia Rising : Sustaining Rapid Economic Growth
(Washington, DC, 2013-07)Economic growth in Georgia was strong at 6.1 percent per year during 2004-12 as structural reforms and a favorable global economy led to large foreign direct investment (FDI) inflows and expansion in the services sectors. However, the current account deficit has remained large and economic expansion has been driven primarily by the nontradable sectors, thus raising concerns about the sustainability of growth. This country economic memorandum (CEM) report shows that sustaining strong growth in Georgia going forward will require new policies that help support both high investment financed increasingly from domestic sources as well as sustained rapid productivity growth in the export and tradable sectors. The report presents an array of policy options to raise national saving, boost firm productivity, better deploy labor resources, and enhance export competitiveness. Raising national saving will require a shift in the fiscal framework to control growth of current expenditures and bolstering private saving through macro-prudential regulations and a package of measures to support saving for retirement. Stimulating firm productivity will require addressing a range of constraints, including streamlining the complexity of closing a business, reducing high borrowing costs, and improving the electricity pricing mechanism. Boosting job creation and more productively deploying labor resources will require upgrading overall education quality, strengthening vocational education systems, and developing job matching services to alleviate skills mismatches and reduce search costs. Enhancing competitiveness of exports will require addressing any overvaluation of the exchange rate, pursuing trade-related reforms to enhance access to European Union and international markets, and upgrading logistics and internal infrastructure. -
Publication
Georgia Sustaining Rapid Economic Growth : Country Economic Memorandum
(Washington, DC, 2013-07)Sustaining rapid economic growth for reduced poverty and shared prosperity over the next decade and beyond in Georgia is an important goal and a key challenge for the authorities. While the record of growth over the last decade has been strong, the forces that drove this growth are unlikely to be sustained in the coming years. Sustaining strong growth in Georgia going forward will require new policies that help support both high investment financed increasingly from domestic sources as well as sustained rapid productivity growth in the tradable sectors. Ensuring a more sustainable source of financing for investment and accumulation will require raising low rates of national savings in Georgia. Sustaining rapid productivity growth of tradables will require reforms to address firm level constraints to improved allocative efficiency and productivity over the firm lifecycle. Supporting productivity growth will also require improved skills and deployment of workers that will also support employment generation and more inclusive growth going forward. Expanding productivity and growth of exports will require ensuring price competitiveness, enhancing market access, and improving logistics infrastructure. This report is structured in five chapters. Chapter one looks at the sources and prospects for growth, the record on national savings, and the prospects for raising savings. Chapter two is a diagnostic of the dynamics of firm-level productivity growth and the policies that may be constraining improved allocative efficiency and lifecycle productivity. Chapter three looks at employment and skills to assess whether Georgia's labor resources are adequately deployed. Chapter four is a diagnostic of exports and international trade and the policies that may be holding back growth and productivity of the export and tradable sectors in particular. Two appendices on the apparel and wine industries provide additional insight into policies to support export growth. -
Publication
Georgia : Agricultural and Rural Enterprise Development
(Washington, DC, 2009-12)The report is structured as follows. Section one examines the contribution of the rural economy to the national economy, the structure of the farm and non-farm sectors and their relative importance. Section two describes policies and constraints affecting the wider rural economy including, reforms in macro-economic management, recent external influences and financial services before discussing those which relate specifically to agriculture including, agricultural trade policy, land reform, agricultural machinery services , irrigation and drainage, seeds, sanitary and phytosanitary control and veterinary services, marketing and advisory services. Section three assesses the outcomes of these policies on the structure and performance of the rural economy. Section four describes the extent to which policy makers should prioritize the farm and non-farm sectors in rural areas and then presents recommendations for reform. While it is recognized that rural infrastructure (roads, potable water, and energy) and rural social services have a major impact on the rural economy, the report does not attempt to address these issues in detail. Rural Infrastructure issues are examined in 'rural infrastructure in Georgia, improving service delivery' (World Bank, 2006) and key findings of this report are summarized at the end of section two.