The economy of Georgia after the collapse of the USSR and its development (briefly). The place of Georgia in the world economy

The economy of Georgia was still industrialized at a rapid pace even when the state entered the USSR . Since the mid-1910s for 60 years, the national treasury has grown almost 100 times. It was in Georgia that there were the biggest salaries and social payments. Huge sums of money were spent by the government on the transition from the agrarian sector to the industrial one. By the beginning of the 1980s, the production of oil products, metal products and equipment was developed in the country. Also worth noting the high foreign trade performance.

The economy of Georgia after the collapse of the USSR

In the first years after the collapse of the Soviet Union, the country's budget has undergone tremendous changes. The main reason for the negative trends in the domestic economy was the Georgian president's prohibition to conduct any trade relations with Russia. A consequence of this was a sharp drop in the industrial indicators of the state to 60% by the end of 1992.

After a couple of years, the crisis affected not only large-scale production, but also all other industries. The forestry of Georgia, glorified in Soviet times, completely ceased to exist. Transport and production infrastructure were destroyed. The monetary unit depreciated by 9000%. The result of the rollback of production was mass unemployment, a decline in wages. Formation and development of the Georgian economy began only towards the end of 1995. The reason was the impressive loans from the World Bank. Fortunately, inflation was stopped, effective reforms were made in the spheres of industry and services. Since 1996, the country, at last, began to observe a financial recovery.

In the mid-2000s, 60% of tax payments were cut, large foreign investors were attracted, and liaison with world creditors was established. In recent years, the Georgian economy has been supported by foreign business partners and constant credit injections.

The agrarian sector

Today, the Georgian economy can be briefly described as stably post-industrial. However, agriculture plays a very important role in it. From 1993 to 2008, the agrarian sector declined to 25%. This proportion is evenly distributed between cultivated lands and livestock.

After the economic crisis of the mid-2000s, the Georgian authorities stopped allocating large sums for the maintenance of agriculture. At the moment, only 16% of the land available for sowing remains in the country. Most of the land is transferred to private businessmen and farmers. The share of the agricultural sector occupies only 12% of the country's GDP. In recent years, plant crops yield extremely low yields. The whole reason is the chronic shortage of fertilizers and modern technology. It is noteworthy that now for the first time in its history Georgia urgently needs additional grain imports. Vineyards were reduced by 75%, tea - by 94%, cultural - by almost 50%.

As for cattle breeding, negative dynamics is also observed here. Revenues from this industry fell by almost 80%.

Indices of industry

Negative trend in the past 20 years is observed in the manufacturing sector. The indices of the country's industry fell to 12%. Every year the economy of Georgia is replenished at the expense of this industry by 2-2.5 billion dollars.

The most profitable and developed are the light and food industries, as well as non-ferrous metallurgy. Recently, there has been an increase in production in the mining and mining industries, in water supply, gas, wood and mineral processing. The food industry is a pillar of the Georgian economy. Drinks and products of this country are known far beyond its borders. Especially it concerns tea, cognacs, wines, cigarettes, oilseeds, mineral waters, some fruits and vegetables.

It is impossible not to mention the chemical industry. Its share in the industrial sector of the country is about 6%. The most popular products of the industry are nitrogen fertilizers, paint and varnish products and chemical fibers.

Energy and Fuel Complex

The economy of Georgia experiences significant losses every year because of 100% of imports of oil products. Most of the fuel is purchased from Azerbaijan. A similar situation is with natural gas, but Russia is already the main supplier here. The country's energy complex is held by several large thermal and hydraulic stations. Interestingly, a significant portion of the generating capacity is controlled by Russian investors. Another distinguishing feature of the Georgian energy complex is the parallel operation of all internal systems together with Azerbaijan.

There are only two thermal stations, but they are able to cover 2/3 of the country's territory. As for the hydropower complex, then its heart is the Inguri hydroelectric power station, capable of developing power up to 1300 MW. Of the smaller stations, we can distinguish the Perepadnaya and Vartsikhskaya.

Other branches of the economy

Significant contribution to the state budget is made annually by telecommunications. Their profit is estimated at 4% of GDP. A jump in the development of this field of activity was observed at the end of 2008. It is noteworthy that Georgia is on the third place in the world in terms of the high cost of cellular communication.

Foreign trade in recent years is characterized by a significant decline. The negative balance is determined by the increase in demand and demand for imports, rather than in exports. The most popular Georgian goods are ferroalloys and raw gold. The volume of extraction of such resources as coal, manganese and copper ores also falls . But the influx of tourists is noted because of the abolition of the visa regime.

Financial structure

A significant decline in all branches of production and services determines today's place of Georgia in the world economy. In terms of GDP, the country is on the 113th line in the rating. The treasury of Georgia is estimated at $ 16.5 billion. At the same time, the average monthly earnings per capita varies between $ 300.

The main drawback of the country's financial structure is its vulnerability to external factors. The economy of Tbilisi is built on loans and investments. However, only in this way the authorities can close the budget deficit.

Over the past 10 years, foreign aid to Georgia amounted to 3 billion euros. To date, the total public debt exceeds 11 billion dollars.