Georgia 2

Georgia

Georgia 3
Georgian Wine

For much of the 20th century, Georgia’s economy was within the Soviet model of command economy. Since the fall of the USSR in 1991, Georgia embarked on a major structural reform designed to transition to a free market economy. As with all other post-Soviet states, Georgia faced a severe economic collapse. The civil war and military conflicts in South Ossetia and Abkhazia aggravated the crisis. The agriculture and industry output diminished. By 1994 the gross domestic product had shrunk to a quarter of that of 1989. The first financial help from the West came in 1995, when the World Bank and International Monetary Fund granted Georgia a credit of US$206 million and Germany granted DM 50 million.

Georgia 4
Gudauri Ski Resort

Since the early 21st century visible positive developments have been observed in the economy of Georgia. In 2007, Georgia’s real GDP growth rate reached 12 percent, making Georgia one of the fastest-growing economies in Eastern Europe. The World Bank dubbed Georgia “the number one economic reformer in the world” because it has in one year improved from rank 112th to 18th in terms of ease of doing business. Georgia improved its position to 6th in World Bank’s Doing Business report 2019. The country has a high unemployment rate of 12.6% and has fairly low median income compared to European countries.

Transportation:

Today transport in Georgia is provided by rail, road, ferry, and air. Total length of roads excluding occupied territories is 20,553 kilometers and railways – 1,576 km. Positioned in the Caucasus and on the coast of the Black Sea, Georgia is a key country through which energy imports to the European Union from neighbouring Azerbaijan pass. Traditionally, the country was located on an important north–south trade route between European Russia and the Near East and Turkey.

Georgia 5
Port of Batumi

In recent years Georgia has invested large amounts of money in the modernization of its transport networks. The construction of new highways has been prioritized and, as such, major cities like Tbilisi have seen the quality of their roads improve dramatically; despite this however, the quality of inter-city routes remains poor and to date only one motorway-standard road has been constructed – the ს 1.

The Georgian railways represent an important transport artery for the Caucasus, as they make up the largest proportion of a route linking the Black and Caspian Seas. In turn, this has allowed them to benefit in recent years from increased energy exports from neighboring Azerbaijan to the European Union, Ukraine, and Turkey. Passenger services are operated by the state-owned Georgian Railway whilst freight operations are carried out by a number of licensed operators. Since 2004 the Georgian Railways have been undergoing a rolling program of fleet-renewal and managerial restructuring which is aimed at making the service provided more efficient and comfortable for passengers. Infrastructural development has also been high on the agenda for the railways, with the key Tbilisi railway junction expected to undergo major reorganisation in the near future. Additional projects also include the construction of the economically important Kars–Tbilisi–Baku railway, which was opened on 30 October 2017 and connects much of the Caucasus with Turkey by standard gauge railway.

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