poverty in the North Caucasus
The North Caucasus comprises a rugged region along Russia’s southwestern frontier. The area is ethnically diverse and has a complicated history. Additionally, its poverty rate is high compared to most other regions of Russia.

Background of the Region

The makeup and history of the North Caucasus are essential to understanding the nature of poverty there. The region lies along Russia’s border with Georgia and Azerbaijan. It consists of the five republics of Chechnya, Dagestan, Ingushetia, North Ossetia and Kabardino-Balkaria. The North Caucasus has a population of around 10 million, and of Russia’s eight federal districts, it is the only one in which ethnic Russians comprise a minority. Dozens of different ethnic groups call the North Caucasus home.

Conflict worsens poverty in the North Caucasus. After the fall of the Soviet Union, violence began in Chechnya and spread to the neighboring republics of the region, such as Dagestan, which has seen spillover violence. A low-level insurgency now spans much of the North Caucasus following earlier Chechen-Russian conflicts. Just as the conflict worsens poverty, poverty also contributes to conflict in the region. Areas such as Dagestan have become breeding grounds for Islamic extremists in recent years, due mainly to high unemployment and poverty rates throughout the region.

Poverty in the North Caucasus

Not only does the North Caucasus have high rates of poverty compared to other regions of Russia but it has also suffered from uneven development in recent years. Chechnya, which suffers from high poverty and unemployment rates, has seen little effective reconstruction in the wake of conflict. Underdevelopment also complicates accurately measuring the scope of poverty in the region.

The North Caucasus felt the economic impact of the pandemic heavily as many lost their jobs overnight. Additionally, the Russian government has largely left the regional governments of the North Caucasus on their own during the pandemic, sending little aid. The human rights violations and corruption that hamstring efforts to alleviate poverty have further complicated the situation. However, in recent years, the number of casualties from armed conflict in the region has diminished.

NGOs’ Work in the North Caucasus

With poverty so prevalent in the region, NGOs have been stepping up to provide needed services. For example, My Angel offers assistance to children in Karachayevo-Cherkessia who suffer from genetic diseases. Meanwhile, the All-Caucasus Youth Training Center works to encourage children’s participation in sports and provides support to women and children who have suffered violence. In addition, the Mother and Children NGO assists young women throughout the North Caucasus by informing them about their rights and healthcare options.

The North Caucasus is an incredibly diverse region within the Russian Federation. It has a complicated history, especially regarding the conflict that has impacted the region since the fall of the Soviet Union. In addition, poverty remains prevalent in the North Caucasus and contributes to conflict in the region. However, despite these challenges, NGOs are working to provide the people of the North Caucasus with as much assistance as possible.

Coulter Layden
Photo: Wikimedia Commons

Austrian Development Agency Assists South Caucasus
Poverty is an unfortunate way of life for many people living in the South Caucasus, a region that includes the countries of Armenia and Georgia. As of 2018, about 23.5% of Armenia’s population was living below the poverty line. For Georgia, the most recent statistics from 2019 show that 13.3% of its population lived below the poverty line. However, despite the hardships that poverty brings for the people living in the South Caucasus countries, there is a glimmer of hope. Beginning in 1988, the Austrian Development Agency assists countries in the South Caucasus. With this assistance, Armenians and Georgians will have the tools they need for a better life.

Objectives of the Austrian Development Agency

The Austrian Development Agency follows three core objectives: fighting against poverty, working to guarantee peace and protecting the environment. The agency funds and oversees numerous programs intended to address these three objectives. The agency has used a total of 550 million euros to help fund current projects. However, the Austrian Development Agency does not carry out its objectives alone. Often, it partners with other institutions, such as the Federal Ministry for European and International Affairs.

The Austrian Development Agency’s Work in Armenia

About 68% of the Austrian Development Agency’s funding for Armenia goes to the agricultural sector alone. The reason the agency provides so much funding to Armenia’s agriculture is that over a third of Armenia’s population has employment in that sector. After the fall of the Soviet Union, the agricultural sector of Armenia began to suffer. The agency is assisting Armenia by providing funding, knowledge and machinery to promote agricultural productivity.

The Austrian Development Agency’s Work in Georgia

The Austrian Development Agency assists the South Caucasus country of Georgia as well. The agricultural sector employed more than half of all workers in Georgia. The agency helps Georgia’s agricultural sector by providing modern agro-technologies and teaching agro-management techniques. In addition, the agency is trying to promote democratization in the country, using the standards of European institutions to promote democratic values.

The Austrian Development Agency is also working to preserve the forests that cover 38% of Georgia. Forests prevent erosion, maintain the climate and store necessary amounts of water. The agency is promoting sustainable forest and watershed management through education.

Progress in South Caucasus Countries

The Austrian Development Agency assists the South Caucasus countries of Armenia and Georgia in several different ways. It aims to boost residents’ productivity in the agricultural sector, in turn boosting the countries’ economies. Furthermore, in Georgia, it aims to protect forests and to circulate democratic values throughout the country.

– Jacob E. Lee
Photo: Flickr

Georgia's economic policiesGeorgia’s poverty and unemployment rates hit 13.3% and 18.5% respectively in 2020. A vast number of factors have contributed to these statistics. The Borgen Project spoke with Toby Davis, the former division chief for the Caucasus and Central Asia Office for the Analysis for Russia and Eurasia, to explore the economic landscape of Georgia and the factors impacting Georgia’s economic policies.

Unemployment and Poverty in Georgia

Davis explains that 70% of polled citizens will declare unemployment. However, when taking away pensioners, students and people who are not currently looking for work, only about a third of the 70% are actually unemployed. For example, many subsistence farmers register as unemployed because they are not currently working for a recognized business and thus do not consider their trade as a job.

Davis explains that “Unfortunately, this tilts the balance of the statistics, resulting in government decisions that may not always be the best for those who are genuinely unemployed and struggling to find work.” Despite a sometimes inaccurate reflection of statistics, Georgia is nevertheless working to improve the level of poverty and unemployment within the country with solutions that can bring Georgia’s citizens out of their current state of poverty.

Causes of Georgia’s Economic State

Two main factors impact Georgia’s economic state. First, Davis states that Georgia’s economic problems stem from the establishment of the Georgian Dream-Democratic Georgia party in 2012. Billionaire politician, Bidzina Ivanishvili, established Georgia’s previous state of government, changing the motives of politicians within the country.

Teona Zurabashvili, policy analyst at the Georgian Institute of Politics (GIP), explains that when the Georgian Dream came into power, it “squandered the political capital” it accumulated and supporters “never received the social justice they were promised.” She explains that the political climate reflected “an unfocused economic program, clannish rule in the judiciary system, rampant nepotism in the civil service, decreased direct foreign investments, a devaluation of the national currency and clear signs of state capture.”

Due to poor governance, poverty in Georgia has largely gone unaddressed. Davis reaffirms that because of political interests and weak governance, many of Georgia’s economic policies do not help the economy reach its fullest potential.

The second major contributor to Georgia’s economic state is the imbalance between exports and imports. Currently, Georgia spends more than it sells and produces, with export levels barely making one-third of the number of imports. The statistics show that the total exports are around 3.3 million, whereas its imports are at approximately 9.1 million. In 2016, Georgia imported most of its oil and natural gas to satisfy the energy demand in Georgia. With a transition to renewable energy, Georgia may be able to reduce these imports.

Past Plans and Current Projects

The Economic Development and Poverty Reduction Programme was a past proposal to fix Georgia’s poverty. It was approved in 2003 but was never implemented. Although the plan had funding from the World Bank and the IMF, Georgia’s government lacked interest and never followed through with it. Davis seconds this point, stating that, “there are individual party projects trying to fix [poverty rates], but nothing ever reaches the grand government scale. The projects improve it in increments, but there are a lot of questions as to why it isn’t improving faster.”

The Namakhvani HPP project aims to help Georgia gain “energy independence” through hydropower. The project’s goal is to satisfy 20% of the energy demand in Georgia, increasing domestic annual generation by 15%. A large portion of Georgia’s spending goes toward importing oil and fuel for energy demands. Therefore, Namakhvani HPP would reduce these expenditures. Wealth from this project would allow Georgia to gain energy independence and focus on implementing poverty reduction programs.

Reviving the Deep Sea Port Project

Another option regarding Georgia’s economic policies is the revival of the canceled deep sea port construction that would have taken place on the coast of the Black Sea. The project has the potential to generate cargo trade with China and Central Asia, with the potential to bring in significant revenue. The project was canceled due to a lack of funding. Thus, if the project were able to garner the international support and funding it needs, the project could positively impact the import and export sector.

The government of Georgia needs to prioritize developing the economy and reducing poverty, which should be reflected in Georgia’s economic policies. With politics aside, Georgia has the potential to thrive.

Seren Dere
Photo: Flickr

Bug Infestation in Georgia
The year 2021 marks the culmination of a five-year-long partnership between USAID and Ferrero to end a harmful bug infestation in Georgia that damaged over $60 million worth of hazelnuts and other crops. The culprit is the brown stink bug, which gets its name from the repugnant odors it emits. Additionally, Ferrero invested in helping improve the health of hazelnut farms. Local Georgian farmers, the government of Georgia, the U.S. State Department, the U.S. Department of Agriculture, USAID and Ferrero started the Georgia Hazelnut Improvement Project (G-HIP) to address crop devastation and create future sustainable prevention measures.

The Infestation’s Effects on Farmers

Many of the affected hazelnut farms are in Abkhazia, a contested border region between Georgia and Russia. The remote western region has a long history of hardship, and the bug infestation further decimated an already vulnerable economy. Stink bugs destroyed more than 80% of the region’s crops in 2018. One farmer National Geographic interviewed said “this is the third year I’ve had no crops. I have no money left to pay my workers.” Thus, many farmers tried homemade methods of pest control, such as concocting their own pesticides, building traps and even collecting the individual bugs by hand and burning them. People are worried that they will have to leave their homes if they cannot get the infestation under control.

The Georgia Hazelnut Improvement Project (G-HIP)

The hazelnut industry is the sole livelihood of close to 50,000 people throughout Georgia. G-HIP’s mission was to give growers and processors the resources necessary to end the bug infestation in Georgia. The project addressed weaknesses in quality control, outdated infrastructure, technology and marketing. Also, it led to better soil testing, incentives to increase the quality of hazelnuts and technology to improve the post-harvest drying and storage capacity. Cultivating New Frontiers in Agriculture (CNFA), the Georgian Hazelnut Growers Association (GHGA) and the Hazelnut Exporters and Processors Association (HEPA) all worked together to see the project through.

Success Stories From G-HIP

A new drying, husking and storage facility opened in 2019 and was a big success for the project. The facility is located in Koki, a village in the Samegrelo region of western Georgia. It is 800 square meters large, dries around 1,000 tons of hazelnuts a year and employs 17 people. The high yield this facility will produce has the potential to bring in as much as $1.8 million in revenue. Furthermore, it will support all of the 300 farmers and their families in the village.

G-HIP also acquired a lure and kill trap that is less toxic than other pesticides. The U.S.-based company Trécé produced the trap as an environmentally friendly option. Around 500 villages were able to use the trap to cover 60,000 hectares. Fortunately, USAID and everyone involved in the project celebrated their success with the first annual Hazelnut Festival in the fall of 2020. These successes in combating the bug infestation in Georgia have resulted in high hopes for the coming years. The organization expects to have a yield of 50,000 tons. This is 30% more than the previous season for the 2020-2021 growing season.

Next Steps

Additionally, the United States Department of Agriculture (USDA) has worked with the Georgian National Food Agency and the Ministry of Environmental Protection and Agriculture to implement international standards for pest management. This helps track important data on pests and also makes adhering to international trade standards possible. The Georgian government set up a task force called the National Phytosanitary Steering Committee to see to the success of implementing international pest management standards and develop better policies regarding plant health.

This is the final year of G-HIP, but it is not the end of USAID’s work in Georgia’s agricultural sector. In early February 2021, Georgia’s National Food Agency started a brand new initiative called the Plant Safety System Initiative. This initiative will further improve prior pest management work through country-wide measures and give Georgian farmers the opportunity to earn internationally recognized certificates. These certificates can make farmers more marketable internationally, which leads to more exports. Another bug infestation in Georgia will have to contend with the many new initiatives and policies that have come about from the collaboration between all these organizations.

– Caitlin Harjes
Photo: Flickr

Healthcare Reform in GeorgiaHealthcare reform in Georgia has contributed greatly to its population’s quality of life. Located east of the Black Sea in Europe, the country of Georgia finally gained independence in 1991 from the Soviet Union. In recent centuries, Turkey, Persia and Russia fought over control of its land, and the region still experiences tensions with Russia. The United States’ political and economic involvement with Georgia was a cause of concern to Russia, especially given Georgia’s interest in joining NATO and the EU. The Georgian- and Russian-speaking country has a population of 4.3 million, with a life expectancy of 71 for males and 77 for females.

Privately Funded Healthcare

After making the transition from a communist regime to a market economy, healthcare in Georgia was primarily privately financed. By the year 2002, healthcare spending per capita was $64. Over the period from 2002 to 2013, that figure saw an increase to $350. The country has been alleviating regulations ever since 2003, easing private companies’ entry into the market.

Recently there have been further reforms, such as the government supporting private insurers to invest and operate in 2010. This led to the private ownership of 84.3% of hospital beds by the end of 2014. Additionally, private insurers generated 43.2% of written premiums that same year.

Rising Standards of Health

Ever since its independence, Georgia has been one of the poorer countries of the region, its population subject to mainly noncommunicable diseases. However, the country’s standards have been slowly catching up to the rest of Europe. For example, the poverty rate went from 33.2% in 2005 to 21.3% in 2016.

One issue with healthcare in Georgia, and with the general health of the population, has been the flawed death reporting system. This system has led to an exaggerated rate of illness-induced deaths. It reached 55% in 2010, even though research suggests that a rate higher than 20% should be considered unreliable. While the rate remains high and unreliable, the country made tremendous progress after improving software systems, resulting in a rate of 27.3% in 2015.

A New Universal Healthcare System

Healthcare in Georgia took a big leap in 2013, when the government introduced a universal healthcare system for which the entire population qualified. Healthcare reform in Georgia downsized the role of private insurers and changed the system’s entire financing and funding structure. Instead of supporting private companies, government funds were allocated directly to the healthcare providers. The vast majority – 96.4% – of patients reported satisfaction with the system.

One of the main diseases affecting the country during this century is Hepatitis C. According to the CDC and the NCDC, “in 2015, estimated national seroprevalence of hepatitis C is 7.7% and the prevalence of active disease is 5.4%.” Healthcare reform in Georgia sought to combat the disease through a national program initiated in 2015. This program electronically improved screening and data collection from national and local agencies. From 2015 until 2017, the cure rate reached 98.2% and 38,506 patients were treated.

Healthcare in Georgia has undergone many reforms since 2003. It began with the support of privatization, but eventually the government transitioned to a single-payer universal healthcare system that serves approximately 90% of citizens. The current system also took measures to address the effects of the Hepatitis C disease. Even though the country still lags behind other European countries in poverty and health standards, recent years have seen significant progress.

Fahad Saad
Photo: Pixabay

hunger in GeorgiaNestled in the Caucasus Mountains of Eastern Europe, the people of Georgia receive a sufficient quantity of food. However, the population suffers from stunted growth and undernourishment because of the quality of their diet. This leads to a condition called hidden hunger, in Georgia.

Background

Hidden hunger in Georgia results from a lack of essential vitamins and minerals in its accessible food. The people there often do not consume enough protein, iron and vitamin A. This can cause tangible issues. For example, half a million Georgians are malnourished and infant mortality is twice the EU average. Additionally, a significant number of children under five years old are anemic.

Most of the foods that Georgians eat are quite high in starch and have little nutritional value. The two most popular dishes in rural Georgia are fried potatoes and lobio, which is made of boiled beans. Overreliance on these types of foods have made cardiovascular disease the most common chronic disease in the country. Currently, it accounts for 69% of Georgia’s mortality.

The main cause of the dietary insufficiencies in Georgia is a lack of access to meat and meat-based products. Unfortunately, these products are rather expensive at local markets. With the average household income being just $6 per day (⅓ of the population earns only $2.5 per day), the consumption of meat is rather impractical for most people.

Furthermore, the gross domestic product of Georgia was just $16.21 billion in 2018, with a per capita GDP of $4,723. For comparison, the 2018 GDP per capita for the European Union was $35,616.

Although the country’s GDP is growing overall, economic downturns, such as the 2008 Russo-Georgian War, the 2015 stagnation and the 2020 pandemic, reduce the value of the Georgian Lari. These kinds of shifts can create vulnerable conditions for Georgia’s population and reduce food security.

Solutions

Fortunately, governmental and nonprofit organizations across the world are taking steps to improve the dietary standards and hunger in Georgia. Action Against Hunger has had a Food Security Program in the country since 1994, established shortly after the dissolution of the USSR and the collapse of collective farming in the region. It was able to help 5,937 people in 2018.

BRIDGE is a Georgia-based NGO that publishes comprehensive studies detailing the dietary habits of Georgians. It also publishes policy recommendations, which range from developing monitoring systems for the Georgian diet to embedding nutrition into the Ministry of Education’s agenda.

The Georgian Agricultural and Rural Development Alliance (GAARD), of which BRIDGE is a member, was able to register a “Food Security Bill” in Parliament in 2017. This bill aims to reduce Georgia’s reliance on imported food and improve the country’s nutrition self-sustainably.

The Impact of COVID-19

Although the country has only 879 confirmed cases of COVID-19 and 14 deaths as of June 16 2020, the global pandemic may put national food security at risk if another wave of the virus hits the region.

There are some subsistence farmers in the country, but many people buy their food from street markets or bazaars. Places like these are potential hotspots where the virus can spread. However, it is essential that these markets remain open because if they were shut down by a government mandate, many people would struggle to achieve their daily food quantity as well as combat hidden hunger in Georgia.


Hidden hunger presents itself in Georgia due to a lack of essential minerals and vitamins in its available food. Cardiovascular disease accounts for 69% of Georgia’s mortality. COVID-19 has the potential to increase the impact of hidden hunger if markets are shut down. While Georgia is facing a struggle with hidden hunger, organizations like Action Against Hunger, BRIDGE and GAARD are working to improve the quality of food in the country in order to make a positive impact.

– Christopher Bresnahan 

Photo: Flickr

Poverty in Georgia
Sitting between Turkey and Russia, the nation of Georgia tells a unique story about successfully fighting poverty. Although the country’s poverty rate sits at around 20.1%, the current figure represents a steep decline from the 2010 rate of 37.4%. A more complete understanding of the decline of poverty in Georgia requires an understanding of the nation’s history.

Recent Georgian History

Throughout the 19th century, the Russian empire slowly annexed Georgia. In 1918, after the collapse of the Russian Empire, the Democratic Republic of Georgia declared its independence. In 1921, the Soviet Union forcibly incorporated Georgia. Under Soviet rule, the economy of Georgia modernized and diversified from being largely agrarian to featuring a prominent industrial sector.

In 1936, Georgia became a constituent republic and remained so until the collapse of the Soviet Union. After the collapse in 1991, Georgia regained its independence, but instability, civil unrest and a falling GDP plagued the nation. After the Rose Revolution of 2003, the government of Georgia attempted to liberalize the nation’s economy and pursue cooperation with the West. Russia invaded the South Ossetia and Abkhazia regions in 2008 due to a territorial dispute, which is still ongoing.

When viewing the recent history, it is clear that the decline of poverty in Georgia deeply intertwines with its reforms after emerging from the Soviet Union. With a government focussed on stability and economic development, Georgia has been able to make strides to downsize poverty.

Success in Fighting Poverty

When the Georgian government made an attempt to liberalize the nation’s economy and pursue international cooperation after the collapse of the Soviet Union, the nation sought trade agreements with China and the European Union (E.U.) and made reforms to eliminate corruption and simplify taxes. As a result, Georgia’s GDP per capita has expanded at an average rate of 4.8% per year.

In 2007, The World Bank ranked Georgia as the world’s number one economic reformer due to its successful policies focussing on promoting competition and diversifying the financial sector. In 2014, it found that poverty in Georgia had decreased for the fourth consecutive year. Since 2014, Georgia has joined the E.U.’s Free Trade Area, and the E.U. has become the country’s largest trading partner.

Georgia has also been working with the United Nations Development Programme to pursue democratic reforms, inclusive growth, conflict transformation, green solutions and the achievement of the Sustainable Development Goals. In 2012, Georgia demonstrated positive growth, conducting a democratic election with a peaceful transition of power.

Fighting Poverty in the Future

Though the nation holds many statistical successes, poverty in Georgia is still a pressing matter. According to the Asian Development Bank, 20.1% of the population still lived below the national poverty line in 2018.

Unemployment remains a contributing factor to poverty in Georgia. The national rate sits at about 13.9%, though in some regions it is as high as 40%. Young people especially struggle economically in Georgia, and the country is currently working with the United Nations to improve vocational education and training. In 2017, the Georgian government put forth a rural development strategy, emphasizing its focus on the growth and diversification of the rural economy.

Despite the nation’s economic improvements, Georgia’s standard of living has decreased dramatically due to the loss of the cheap sources of energy previously received in the Soviet era. The country recognizes this problem and has made efforts to rebuild the energy sector in a sustainable way. In 2015, Georgia joined the EU4Energy Programme, which is dedicated to making effective, research-based policy decisions in the energy sector.

Healthcare also remains a contributing factor to poverty in Georgia, especially among children. The nation struggles with both a high infant mortality rate and a high rate of infections and parasitic diseases. In 2013, the country adopted a universal healthcare plan, which represents a significant step in making health care more accessible. The nation is currently working to expand the service to all areas of the population.

The previous victories in the decline of poverty in Georgia are laudable. Though Georgia still requires more work, the nation continues to make reform efforts and strives to ensure that the next chapter of economic history is one of continued success.

Michael Messina
Photo: Flickr

Life Expectancy in Georgia 

Georgia, located between Western Asia and Eastern Europe, has made significant progress over the past several decades when it comes to the life expectancy of its nearly 4 million citizens. Since around the 1990s, the country has experienced many health reforms that helped to improve the general health of its population as well as lower maternal and infant mortality rates. However, despite these improvements, Georgia still faces multiple health-related challenges that pose a threat to the life expectancy of its citizens. Listed below are five facts about life expectancy in Georgia.

5 Facts About Life Expectancy in Georgia

  1. According to a survey carried out by the United Nations in 2012, the average lifespan for Georgian women stood at 79 years, while the average life span for men was lower, at around 70 years. The average lifespan in Georgia is expected to increase to 80.6 years for women and 74.1 years for men by 2035. 
  2. As of 2019, the life expectancy in Georgia at birth is approximately 73.66 years. This marks a percentage increase of approximately 20 percent over 69 years. Back in 1950, the U.N. estimated that the life expectancy in Georgia at birth was less than 60 years in total. 
  3. According to the World Health Organization (WHO), the probability of death for people between ages 15 and 60 stands at 238 for males and 83 for females. The probability of children dying before the age of 5 per 1,000 births was around 11 in 2017.
  4. Georgia developed the Maternal and Newborn Health Strategy, as well as a short term action plan in 2017 to provide direction and guidance in improving maternal and newborn health. According to UNICEF, the three-year initiative “envisages that by 2030, there will be no preventable deaths of mothers and newborns or stillbirths, every child will be a wanted child, and every unwanted pregnancy will be prevented through appropriate education and full access for all to high quality integrated services.”
  5. In 2010, the leading causes of premature death in Georgia were cardiovascular and circulatory diseases, including ischemic heart disease and cerebrovascular disease. It was reported that in 2010, the three most prominent risk factors for the disease burdened people in Georgia were related to diet, high blood pressure and tobacco smoking. It was also reported that the leading risk factors for children who were younger than 5 and people between ages 15 to 49 were suboptimal breastfeeding and the aforementioned dietary risks.

As a whole, life expectancy in Georgia has improved significantly compared to the mid 20th century. With that being said, there is no denying that there is still work that needs to be done in a number of areas including maternal health. Hopefully, with strong investments from the government, life expectancy in Georgia will continue its upward trajectory. 

Adam Abuelheiga
Photo: Flickr

Georgia's integration into the E.U.Since the end of the Russo-Georgian War in 2008, poverty reduction and higher employment have accompanied an expanding Georgian economy. However, fears of renewed conflict with Russia, Georgia’s northern-neighbor, jeopardize the progress the nation has made in curtailing poverty and handling the refugee crisis. Georgia’s integration into the E.U. will not only reap economic benefits and accelerate a decline in poverty levels, but also provide Georgia security from Russian aggression.

Georgia’s Relationship to the EU

Despite being a member of the Organization for Security and Cooperation in Europe and the Council of Europe, Georgia is not a member-state of the European Union. Since Georgia’s Rose Revolution in 2003, politicians of diverse ideologies have prioritized E.U. membership as an ultimate goal. In fact, a 2009 survey of over 2,400 Georgians found that 50 percent of the population believed that Georgia would join the E.U. within 10 years. While Georgia has yet to join the E.U. in 2019, the Georgian government continues to introduce various reforms to align the country with the tenets of E.U. institutional structures. E.U. membership would help Georgia tackle poverty and inequality.

Free Trade with Europe Increasing National Welfare

Poverty in Georgia remains at 16.3 percent and unemployment at 12.7 percent. Currently, Georgia is allowed to trade in certain industries with the E.U. as a part of the Deep and Comprehensive Free Trade Area (DCFTA). Once the E.U. admits Georgia and Georgia is able to trade freely with E.U. member-states in all industries, poverty and unemployment will likely decline.

Free trade makes a country more productive by selecting a country’s most productive industries for exporting. Import competition will replace less productive industries, but Georgians will specialize in their more productive exporting sectors and reap the benefits of specialization. Enhanced specialization from trade will raise Georgia’s gross domestic product and increase consumer welfare because Georgians will be able to purchase foreign-produced goods at cheaper prices while specializing in exporting sectors, such as copper ores and wine. Coupled with appropriate distributional policies, free trade will have a positive impact on reducing poverty and unemployment.

EU Membership Shielding Georgia from Russian Aggression

During the 2008 war, 130,000 Georgians became displaced; Action Against Hunger reports that the number of refugees has increased over time. If Russia were to invade again, there would be serious economic consequences. Furthermore, the refugee crisis would deteriorate substantially. Georgia’s integration into the E.U. provides a security agreement under the auspices of the European Defence Union; if Russia interferes with one E.U. member-country, it faces the backlash of Europe. George could reverse its progress in reducing poverty over the past decade. E.U. membership will serve as a security buffer from Russian aggression and a defender of the nation’s recent economic progress.

Because of the protection and economic boost E.U. membership would bring, many political scientists and economists agree with the 67 percent of Georgians who advocate for Georgia’s integration into the E.U.

– Grayson Cox
Photo: Flickr

Infrastructure projects in the Republic of Georgia

The Republic of Georgia has been doing fairly well despite a shaky recovery after gaining independence from the former Soviet Union in 1991. The Republic of Georgia and the Russian Federation are still important trade partners despite past conflicts. Trade between Russia and Georgia accounted for 14.5 percent of Georgia’s exports in 2017.  The government has recognized this and, in 2017, it laid out a 3-year plan outlining infrastructure projects in the Republic of Georgia. Its goal is not only to increase the ease of trade but also increase the standard of living for Georgians.

Infrastructure Projects in the Republic of Georgia

Railroads, roadways, seaports, airports, pipelines and electrical transmission lines are all in need of either an upgrade or an overhaul. Infrastructure projects in the Republic of Georgia are being handled organized by the Georgian government, but they are being financed by companies and countries all around the world. For example, Japan signed $38 million agreement to fund investments for improvements on one of Georgia’s main highways.

Much of this investment is organized and promoted by the Georgian International Investment Agency. The agency was developed and established in 2002 outside of direct government control due to the laws at the time. In 2015, the agency was moved under the direct control of the office of Prime Minister as a result of its growing importance and investments. The job of the agency is to ensure that investors and the nation are treated fairly.

Western Trade Partners

As the government of Georgia is seeking closer ties to the west by looking to join both the European Union and NATO, it has formed an important trading partnership with the United States. USAID has been working with Tetra Tech, an international engineering firm, on infrastructure projects in the Republic of Georgia, specifically in the energy sector.

USAID along with Tetra Tech have been working together with the government of Georgia, and other nations in the Caucasus region, on the Georgia Power and Gas Infrastructure Oversight Project (PGIOP). The project includes the construction of 119 kilometers of gas pipelines and the replacement of substations and power lines that were damaged or dismantled during the 1992 Georgian Civil War.

Improved Infrastructure Benefits Trade

Georgia’s other neighbors, Azerbaijan, Turkey, Armenia, Bulgaria and Ukraine, are all important trade partners that share either a land or sea border with the Republic of Georgia. Improving infrastructure in Georgia will facilitate important trade between the county and its neighbors, helping the economies of all countries involved. The World Bank is working with the government of Georgia to help improve the infrastructure needed for this trade.

The World Banks has been investing millions into the Republic of Georgia not only to help stimulate trade within Georgia’s sphere of influence but also though the Caucasus Transit Corridor. The area is an important corridor between Asia and Europe. Modern infrastructure will help facilitate trade across the Black Sea and through all of the nations that border it. Both natural gas and trade goods will need to move faster as consumption increases.

Georgia is a nation tucked in a region with ever-growing tensions. The wars in Iraq and Syria are not far away. Its neighbors Armenia and Azerbaijan are in a constant state of alert. Russia, Turkey and Iran are all beginning to flex their muscles on the world stage more freely. Through improving infrastructure projects in the Republic of Georgia, the country can hope to become too important for any side to lose, allowing it to continue to grow freely and democratically.

Nicholas Anthony DeMarco
Photo: Unsplash