COUNTRY PROFILES
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GeorgiaCapital Currency Population EU status GDP Employment Government type Religions Languages Exports Imports |
COUNTRY PROFILE
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Georgia |
Print articleGeorgia lies to the north of Turkey, directly across the transport route between the oil and gas reserves of Central Asia and the energy markets of Western Europe and the USA. Key oil and gas routes — the Baku-Tibilis-Ceyhan oil pipeline and the Baku-Tibilisi-Erzerum gas pipeline — already run through the country.
Without exportable energy resources itself, and with an economy which still has a strong agricultural and industrial sector, it will be looking to this role as a trade and transport route to provide much of its growth over the next few years, with transit fees set to be a major source of revenue. There is a strong possibility that these will be paid in kind, creating the necessity for the government to invest in or rent storage technology.
According to president Mikheil Saakashvili “Georgia is open to foreign investors and partners. We are at the beginning of the process of establishing long-term international business partnerships, which will make Georgia a regional hub of international business activity.” With growth in 2005 estimated at 10%, and predictions for growth to 2009 running at 6%, this is a dynamic and developing economy.
 Tbilisi |
Economic development
After a period of economic difficulty following independence in the mid- 90s, Georgia implemented an IMF programme designed to hasten economic recovery in the financial sector, and a poverty reduction strategy. The fiscal system has been reformed, both to reduce the overall taxation burden and increase transparency, and to combat the chronic non-payment of taxes which has been a problem in the past. The number of tariffs has been reduced, as have tax rates for both corporations and individuals. A visit from the IMF mission in 2005 found that considerable improvements had been made in the financial system, and that both stability and transparency had been much improved.
Privatisation
Privatisation of state enterprises is still continuing, with the assets being auctioned off through the government privatisation agency. Difficulty in collecting taxes over the past years has resulted in a major public sector deficit that means large amounts of maintenance and renewal need to be undertaken postprivatisation. However, the Georgian government says it is aiming at achieving a realistic price which reflects the large amount of modernisation that will need to be carried out.
Energy policy
A key part of Georgia’s development will be revitalising the energy infrastructure, which is currently outdated and inefficient. In particular, Georgia is looking to reduce its dependence on Russian oil and gas for its energy needs. The country has no fossil fuel resources of its own so will be looking to develop alternatives, in particular hydroelectric power.
FDI
Georgia attracted some $497 million of foreign investments in 2005, of which the largest investors were from the UK, followed by the US. Renewal of the infrastructure offers opportunities for companies to invest in all sectors, with a great deal of development potential for telecoms, where levels of penetration are as yet at 1:4 in towns and cities and 1:8 in rural areas.
Facts in brief
 Exterior of public bath in Tbilisi |
Georgia’s location is South-Western Asia, bordering the Black Sea, between Turkey and Russia. Strategically located east of the Black Sea; Georgia controls much of the Caucasus Mountains and the routes through them
Its climate is warm and pleasant; Mediterranean-like on Black Sea coast
Natural resources include forests, hydropower, manganese deposits, iron ore, copper, minor coal and oil deposits; coastal climate and soils allow for important tea and citrus growth
Agricultural products are citrus, grapes, tea, hazelnuts, vegetables; livestock
Industries include steel, aircraft, machine tools, electrical appliances, mining (manganese and copper), chemicals, wood products, wine.
Georgia is based on a civil law system; accepts compulsory ICJ jurisdiction
Diplomatic representation in the US — Chief of mission: Ambassador Vasil Sikharulidze
Diplomatic representation from the US — Chief of mission: Ambassador John F Tefft
Contact Information
American Chamber of
Commerce in Georgia
1 Nustubidze Street
Tbilisi 0177
Georgia
Tel: +995 32 251437
E-mail:
amcham@amcham.ge
Website: www.amcham.ge
Useful websites
| georgia.usembassy.gov | US Embassy in Georgia |
| www.investingeorgia.org/en | Government Investment Promotion Agency |
| www.privatization.ge | Ministry of Economic Development |
| www.georgica.caucasus.net | Tourist information |