Poverty in Georgia

The price of freedom has been high for many poor people across the countries of the former Soviet Union, nowhere more so than in Georgia where a combination of civil wars and economic liberalisation caused a collapse in the economy through the 1990s. Due to these exceptional circumstances, the baseline for the Millennium Development Goals (MDGs) has been moved back from 1990 to 2000 at which point the measure of extreme poverty was 14.3% whilst the proportion below the poverty line was 51.8%. These figures became worse rather than better in the years immediately following the millennium but the basis for calculating the poverty line has changed and the latest figure is believed to be around 35%. Of particular concern in the context of the MDGs is that the extent of extreme poverty may still be increasing, especially in rural areas where 40%-50% of the population is dependent on subsistence agriculture. The elderly form another particularly vulnerable group.

7th grade students in Georgia © Liko Chikhladze / UNESCO / ASPnet

Even in education and health, where the Soviet legacy was highly regarded, there is decline. Although gender parity in educational enrolment has survived, the quality of education is the cause of increasing concern. And infant and child mortality rates are uncomfortably high. Georgia's ranking in the UNDP Human Development Index remains significantly below most of the transitional countries in the region and it is clear that the government has given greater priority to headline economic growth than poverty reduction strategies - indeed there is no formal long term plan for achieving the MDGs. In his re-election speeches in early 2008 the President has promised immediate pro-poverty actions associated with the slogan "Georgia Without Poverty". There is reference to an accountable new commission but none of these initiatives yet refers to quantifiable targets which might be recognised as consistent with the MDGs.

The Economy in Georgia

The country has strong economic potential because of its competitive labor force, good natural resources, and strategic location between Europe and the land-locked countries of Central Asia, and between Russia and the Middle East. The Saakashvili government attracts international acclaim for transforming the cumbersome Soviet system into a modern open market economy able to exploit this potential. A frantic programme of privatization, managed by the charismatic Minister of Economic Reform, Kakha Bendukidze, even extends to the proposal to sell all the country's hospitals for development, building new private facilities with the proceeds. However, the Minister has lost his job in the new government, his programme having run into the sand in terms of completed sales, held back by concerns about transparency and about loss of sovereignty to Russian business interests. Nevertheless, the 2007 World Bank annual survey proclaims Georgia to be the 18th most friendly country in the world for business, remarkably a higher position than France or Germany.

This zeal for liberal reform has not only brought much unemployment in its wake and also has excluded agriculture which continues to account for about a third of the economy, engaging half of the population. The sector is trapped in poverty by the small average size of farms and lack of investment. Russian economic sanctions have been a further blow.

These sanctions may however rebound on the Russians whose application to join the World Trade Organisation (WTO) is now blocked by none other than Georgia, the single country yet to endorse the application. Georgia joined the WTO as long ago as 2000 but conventional benefits of membership have not yet rewarded the majority of the population.



The OneWorld Georgia Guide was first published in this format in September 2005 with a text written by Volunteer Editor Misha Kechakmadze.

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