Country Information

Georgia occupies an area of 69 700 sq.km (the population is 5.2 million), with 50 percent of its landmass mountainous and at over 1500 metres, the country ranges from fertile valleys to semi-arid desert and the subtropical coast of the Black Sea.

The Human Development Report of 2004 ranks Georgia 97th out of 177 countries included in the Human Development Index (HDI), while the GDP per capita has fallen consistently during 2002-2004 from US$2 664 to US$2 260. In 2003, according to the Georgian State Department of Statistics (SDS), the proportion of people living below the poverty line was 55 percent. The proportion of the population in extreme poverty was 17 percent. Georgia is classified as a low income/ food deficit country.

The resolute actions of the new Government initiated in November 2004 have rekindled hope for a better future: despite a steep economic decline before the Revolution, some improvements are noticeable.
The Economic Development and Poverty Reduction Programme (EDPRP) has been developed in close consultation with civil society, international organizations and donor countries. The EDPRP was discussed and approved in June 2003, and the government of Georgia subscribed to its implementation. The EDPRP is a comprehensive and long-term strategy paper, which requires discussion on a regular basis in order to adapt it to current developments in the country.

The Government is keen to boost international trade, particularly through the promotion of industries that have a realistic export potential. Georgia’s accession to the World Trade Organization is a demonstration of the Government’s commitment to pursuing policies geared to economic expansion and improved integration into global systems. In this respect, special emphasis is being given to the harmonization of legislative frameworks and standards with EU requirements.

The new Government acknowledges that meeting the new emerging challenges for Georgia will require a concerted and sustained effort. The key priorities are continued macroeconomic stability, governance and civil service reform, infrastructure rehabilitation and investment in social sectors, creating a policy and regulatory environment conductive to private sector development in order to accelerate economic growth. The Government also declares its commitment to poverty reduction and achievement of the Millennium Development Goals, with a specific target of reaching the more than 15 percent of the population living in extreme poverty.

Development of agriculture is expected to play one of the key roles as a strong poverty-compensating factor for the food-insecure and thus highly vulnerable share of population. Since significant number of them still has no sufficient access to food and depends on humanitarian assistance, the agricultural sector could serve as one of the main pillars for the sustainable economic growth. Increasing agricultural productivity would be an obvious solution to combat rural poverty and food insecurity. Sustainable rural development should be a focus center for all responsible agencies involved.

Access to land was a strong poverty-compensating factor in rural areas of Georgia, which caused temporary flows of migration to the countryside. Now most of the people employed in agriculture are subsistence farmers. Absolute poverty is unlikely in rural areas where smaller communities are more likely to provide a safety net of some kind. But there are special cases of rural poverty when the whole community is poor due to lack of resources, unequal access to complementary inputs to labor (fertilizer, tractors, and capital equipment), barriers to land transactions, scarcity of rural credit, very limited off-farm earning opportunities and inability to market. In addition, Georgia is highly vulnerable to natural disasters. Severe droughts in 2000 and 2001 as well as floods and landslides in 2004 and 2005 demonstrated the poor preparedness of the population and national institutions.