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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

Transport Infrastructure in Myanmar
One way Myanmar is accelerating economic development, and therefore reducing poverty, is through investing in transport infrastructure. A major side effect of economic development is poverty reduction. Development often results in job growth, higher productivity and improved education. Myanmar, as well as other developing countries, noticed massive poverty reduction that followed economic growth. However, economic growth is not the only solution to reducing poverty. Despite the southeast Asian country reducing poverty from 48.2 percent in 2005 to 24.8 percent in 2017, poverty still affects one in four people. Myanmar is currently updating and adding roads in rural areas. Additionally, Myanmar is constructing bridges, highways and railways to increase transport between Thailand, an important trade partner.

Benefits of Investing in Transport Infrastructure

Based on the Asian Development Bank’s (ADB) 2016 Myanmar Transport Policy Note, the country needs about $60 billion in transport investments between 2016 and 2030 for transport infrastructure in Myanmar to be completely developed. Myanmar has approximately 20 million people who lack basic road access. Further, 60 percent of highways are in poor condition. The ADB also stated that Myanmar’s GDP could potentially increase to 13 percent or about $40 billion if transport infrastructure investments increased to 3 to 4 percent of the GDP. For reference, Myanmar spent about 1 to 1.5 percent of its GDP on transport infrastructure between 2005 and 2015.

Policy for Transport Infrastructure

As part of Myanmar’s Sustainable Development Policy 2018-30, transport infrastructure development is a prioritized area. The third goal in the report relates to creating jobs and boosting the economy with the help of the private sector. The National Strategy for Rural Roads and Access 2016, Myanmar National Transport Master Plan 2016 and National Export Strategy 2015-2019 are three plans focused on upgrading or constructing transport infrastructure in rural and urban areas. Investing in transport infrastructure in Myanmar could improve trade between Thailand and other countries, as upgraded ports, railways, roads and bridges will open up the country for trade.

Bridges and Roads

The second Thai-Myanmar Friendship Bridge is a bridge over the Moei River in east Myanmar that opened in 2019. The $126 million bridge connects the city of Myawaddy in Myanmar with Mae Sot in Thailand. Myanmar expects the bridge will significantly improve business between the two trade partners.

Two bridge projects in the capital Yangon are also underway. The Yangon-Thanlyin Bridge will connect the capital with Thanlyin, a major port city that handles most of the export and import shipments into and out of Myanmar. Estimates determine that construction on the $278 million bridge should end by 2021. Another bridge connecting Yangon with Dala in the southwest costs $188 million. Construction for this bridge should end by 2022. Dala is an underdeveloped and rural area that lacks bridges across the Yangon River; therefore, this forces inhabitants to take a ferry to cross the river. The bridge will not only help locals reduce travel time but also increase trade throughout Yangon.

Railways

Investments also include the construction of railways, after Myanmar noticed that the number of vehicles on roadways doubled from 2012 to 2016. Traffic within Yangon has become two to three times slower within the same time period. Yangon has a population of more than seven million, so reducing traffic congestion is an important issue. This also explains the push for bridge construction within the capital. The result of this observation led to the creation of the National Transport Master Plan in 2014. One part of the plan involves upgrading the $3 billion Yangon-Mandalay rail line. Work began in 2018, and it should be completed by 2023. Travel times between Yangon and Mandalay will likely reduce from 12 hours to eight hours.

Progress

Evidence of further progress in transport infrastructure in Myanmar is clear through the paved highway network, which increased by 35 percent. The country is developing at around 6 to 7 percent; however, according to the ADB, further investment in transport infrastructure is necessary to completely develop the transport sector. Job growth and improved trade are two major results of transport infrastructure investment. As the bridges and railways come to completion in the coming years, transportation within and outside Myanmar could greatly improve.

Lucas Schmidt
Photo: Wikipedia Commons