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Georgia Economy 1996

    • Overview:
      Georgia's economy has traditionally revolved around Black Sea tourism; cultivation of citrus fruits, tea, and grapes; mining of manganese and copper; and a small industrial sector producing wine, metals, machinery, chemicals, and textiles. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable domestic energy resource is hydropower. Since 1990, widespread conflicts, e.g., in Abkhazia, South Ossetia, and Mingreliya, have severely aggravated the economic crisis resulting from the disintegration of the Soviet command economy in December 1991. Throughout 1993 and 1994, much of industry was functioning at only 20% of capacity; heavy disruptions in agricultural cultivation were reported; and tourism was shut down. The country is precariously dependent on US and EU humanitarian grain shipments, as most other foods are priced beyond reach of the average citizen. Georgia is also suffering from an acute energy crisis, as it is having problems paying for even minimal imports. Georgia is pinning its hopes for recovery on reestablishing trade ties with Russia and on developing international transportation through the key Black Sea ports of P'ot'i and Bat'umi. The government began a tenuous program in 1994 aiming to stabilize prices and reduce large consumer subsidies.

    • National product:
      GDP - purchasing power parity - $6 billion (1994 estimate as extrapolated from World Bank estimate for 1992)

    • National product real growth rate:
      -30% (1994 est.)

    • National product per capita:
      $1,060 (1994 est.)

    • Inflation rate (consumer prices):
      40.5% per month (2nd half 1993 est.)

    • Unemployment rate:
      officially less than 5% but real unemployment may be more than 20%, with even larger numbers of underemployed workers

    • Budget:


        $NA, including capital expenditures of $NA

    • Exports:

        citrus fruits, tea, wine, other agricultural products; diverse types of machinery; ferrous and nonferrous metals; textiles; chemicals; fuel re-exports

        Russia, Turkey, Armenia, Azerbaijan (1992)

    • Imports:

        fuel, grain and other foods, machinery and parts, transport equipment

        Russia, Azerbaijan, Turkey (1993); note - EU and US sent humanitarian food shipments

    • External debt:
      NA (T'bilisi owes about $400 million to Turkmenistan for natural gas as of January 1995)

    • Industrial production:
      growth rate -27% (1993); accounts for 36% of GDP

    • Electricity:

        4,410,000 kW

        9.1 billion kWh

        consumption per capita:
        1,526 kWh (1993)

    • Industries:
      heavy industrial products include raw steel, rolled steel, airplanes; machine tools, foundry equipment, electric locomotives, tower cranes, electric welding equipment, machinery for food preparation and meat packing, electric motors, process control equipment, instruments; trucks, tractors, and other farm machinery; light industrial products, including cloth, hosiery, and shoes; chemicals; wood-working industries; the most important food industry is wine

    • Agriculture:
      accounted for 97% of former USSR citrus fruits and 93% of former USSR tea; important producer of grapes; also cultivates vegetables and potatoes; dependent on imports for grain, dairy products, sugar; small livestock sector

    • Illicit drugs:
      illicit cultivator of cannabis and opium poppy; mostly for domestic consumption; used as transshipment point for illicit drugs to Western Europe

    • Economic aid:

        heavily dependent on US and EU for humanitarian grain shipments; EC granted around $70 million in trade credits in 1992 and another $40 million in 1993; Turkey granted $50 million in 1993; smaller scale credits granted by Russia and China

    • Currency:
      coupons introduced in April 1993 to be followed by introduction of the lari at undetermined future date; in July 1993 use of the Russian ruble was banned

    • Exchange rates:
      coupons per $US1 - 1,280,000 (end December 1994)

    • Fiscal year:
      calendar year

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