Georgia’s economic story over the past decade appears to be one of stark contradictions. The country has achieved strong economic growth and vastly improved ease of doing business, yet high levels of unemployment persist, per capita income has not recovered to 1990 levels, and socio-economic vulnerabilities remain.
Yet, thanks to a history of trade liberalization, openness to foreign investment, and commitment to structural reform, Georgia is well placed to capitalize now on new opportunities. One such opportunity is offered by the Association Agreement and Deep and Comprehensive Free Trade Area signed with the European Union, which provide market access and a strong incentive to keep up reform momentum. But leveraging this, and others, will call for renewed reform efforts. In particular, measures will need to focus on firm productivity, labor mobility, logistics and supply chain management, and export survival and diversification.
International evidence suggests that structural reforms need time to take hold before labor market outcomes can improve, and that a highly targeted focus is needed on supporting productivity growth, especially in younger and more innovative firms that tend to lead on net job creation.
The report attempts to inform the policy discussion in this context, mainly by focusing on export competitiveness and jobs.
The World Bank’s latest Country Economic Memorandum for Georgia explores the potential for improved export competitiveness, the link with employment growth and suggests policy options going forward.
Read the full report: Georgia: Seizing the Opportunity to Prosper