Georgia

Three years after independence from the Russian Empire, Georgia fell under the control of the Soviet Union until the USSR declined in 1991. When protests arose after the government attempts to influence legislative elections in 2003, Eduard SHEVARDNADZE resigned as president; the elections in 2004 brought Mikheil SAAKASHVIL, and his National Movement party, to power. Advances on democratization have been difficult due to the conflicts in Abkhazia and South Ossetia, both of which are controlled by Russian-supported, unrecognized governments. Lately, a World Bank report noted that Georgia had made the most attempts to become a “’business-friendly’” nation, thus getting in 37th place on the World Bank’s league table evaluating ease of doing business.

Main Airports

Tbilisi (TBS)

U.S. Embassy

11 George Balanchine Street, Tbilisi, Georgia, 0131
telephone (995 32) 27-70-00

Statistics

GDP: purchasing power parity:

$15.56 billion (2005 est.)

GDP - real growth rate:

7% (2005 est.)

GDP - per capita: purchasing power parity:

3,300 (2005 est.)

Inflation rate (consumer prices):

8.2% (2005 est.)

Labor force:

2.04 million (2004 est.)

Exports:

$1.4 billion (2005 est.)

Exports - partners:

US 16.1%, Turkey 15.5%, Russia 12.3%, Turkmenistan 11.3% (2005)

Imports:

$2.5 billion (2005 est.)

Imports - partners:

Russia 16%, Turkey 10.3%, US 9.6%, Ukraine 9%, Azerbaijan 7.4%, Germany 6.5%, Italy 4.3% (2005)

Population:

4,661,473 (July 2006 est.)

Population growth rate:

-0.34% (2006 est.)

Population Below Poverty Line:

54% (2001 est.)

Major Industries:

steel, aircraft, machine tools, electrical appliances, mining (manganese and copper), chemicals, wood products, wine

Employing Workers: 6*

Registering Property: 16*

Enforcing Contracts: 32*

Closing a Business: 86*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Georgia	Region
Procedures (number)	7	9.4
Time (days)	16	32

Georgia Risk Assessment

Country Rating

Rating: C

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behaviour. Corporate default probability is high.

Risk Assessment

The influx of foreign capital and a good harvest allowed Georgia to achieve near 10 per cent growth despite Russian sanctions, with it successfully redirecting its exports towards Turkey and the European Union. The dynamism of manufacturing, construction, and telecommunications sectors combined with good performance in agriculture.

Growth should remain strong in 2008. This will cause substantial deterioration of external accounts, however. The resulting trend is unsustainable in the long term, especially due to Georgia's many persistent weaknesses, which include an industrial apparatus lacking competitiveness, a very insufficient savings rate and a bloated informal sector.

Economic conditions have nonetheless improved markedly since the rose revolution in 2003 thanks to significant progress on governance, privatisations, and establishment of a more stable macroeconomic framework. Financially, there has also been notable improvement as much in public sector accounts as in foreign indebtedness.

This improvement has nonetheless mainly benefited a minority of the population, essentially the young and educated. The continued ascendancy of the opposition, which forced President Saakachvili to bring the presidential elections forward to January 2008, should nonetheless not jeopardise the economic liberalisation policy. Relations with Russia constitute the main risk and they should remain very tense, much like the situation with the two separatist regions, Abkhazia and South Ossetia.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation