The economy of Georgia after the collapse of the USSR and its development (briefly). The place of Georgia in the world economy


The economy of Georgia at the time of the entry of the state into the USSR industrialized at a rapid pace. Since the mid-1910s, over 60 years, the national treasury has grown almost 100 times. It was in Georgia that there were the biggest salaries and social benefits. Huge sums by the government were spent on the transition from the agricultural sector to the industrial sector. By the early 1980s, the country had developed a production of petroleum products, metal products, equipment. Also worth noting is the high foreign trade performance.

Georgian economy after the collapse of the USSR

In the first years after the collapse of the Soviet Union, the country's budget has undergone tremendous changes. The main reason for the negative trends in the domestic economy was the ban of the Georgian president to conduct any trade relations with Russia. The consequence of this was a sharp decrease in the industrial indicators of the state to 60% by the end of 1992.

After a couple of years, the crisis embraced not only large-scale production, but all the other industries. The forestry of Georgia, famous in Soviet times, completely ceased to exist. Transport and production infrastructures were destroyed. The currency unit depreciated by 9000%. The result of the rollback of production was massive unemployment, lower wages.


The formation and development of the Georgian economy began only towards the end of 1995. The reason was the impressive loans from the World Bank. Fortunately, inflation has been stopped, effective reforms have taken place in the fields of industry and services. Since 1996, the country has finally begun to experience a financial recovery.

In the mid-2000s, 60% of tax payments were truncated, large foreign investors were attracted, and communication with global creditors was established. In recent years, Georgia’s economy has been based on foreign business partners and constant credit injections.

Agrarian industry

Today, Georgia’s economy can be briefly described as stably post-industrial. However, agriculture still plays a significant role in it. From 1993 to 2008, the indicators of the agricultural sector declined to 25%. This share is evenly distributed between cultivated land and livestock.

After the economic crisis of the mid-2000s, the Georgian authorities stopped allocating large sums to support agriculture. At the moment, only 16% of land suitable for sowing is left in the country. Most of the land transferred to private businessmen and farmers. The share of the agricultural sector is only 12% of the country's GDP.


Recently, plant crops give extremely low yields. The whole reason is the chronic shortage of fertilizers and modern technology. It is noteworthy that now Georgia, for the first time in its history, is in dire need of additional grain imports. Grape lands were reduced by 75%, tea ones by 94%, and cultural ones by almost 50%.

With regard to livestock, then there is a negative trend. Revenues from this industry fell by almost 80%.

Industry Indicators

The negative trend in the last 20 years has been observed in the manufacturing sector. Indicators of industry in the country fell to 12%. Every year, the Georgian economy is replenished by this industry at 2-2.5 billion dollars.

The most profitable and developed are the light and food industries, as well as non-ferrous metallurgy. Recently, there has been an increase in production volumes in the mining and mining industries, in water supply, gas industry, wood processing and minerals.


The food industry is a pillar of the Georgian economy. Drinks and products of this country are known far beyond its borders. This is especially true of tea, brandy, wines, cigarettes, oilseeds, mineral waters, some fruits and vegetables.

It should be noted chemical industry. Its share in the manufacturing sector of the country is about 6%. Nitrogen fertilizers, paints and varnishes and man-made fibers are considered the most demanded products of the industry.

Energy and fuel complex

The economy of Georgia is experiencing significant losses every year due to 100% of imports of petroleum products. Most of the fuel is purchased from Azerbaijan. The situation is similar with natural gas, but Russia is already the main supplier here.


The country's energy complex is maintained at several large thermal and hydraulic stations. Interestingly, much of the generating capacity is controlled by Russian investors. Another distinctive feature of the Georgian energy complex is the parallel operation of all internal systems together with Azerbaijan.

There are only two heat stations, but they can cover 2/3 of the country’s territory. As for the hydropower complex, its heart is the Inguri hydroelectric power station, capable of developing capacity of up to 1, 300 MW. From the smaller stations can be distinguished Perepadnaya and Vartsikhskaya.

The rest of the economy

Telecommunications make a significant contribution to the state budget every year. Their profit is estimated at 4% of GDP. A jump in the development of this field of activity was observed at the end of 2008. It is noteworthy that Georgia is on the third place in the world for the high cost of cellular communication.

Foreign trade in recent years is characterized by a significant decline. The negative balance is determined by the increase in demand and demand for imports, rather than in exports. The most popular Georgian goods are ferroalloys and unwrought gold.


The volume of extraction of such resources as coal, manganese and copper ores is falling. But there is a sailing of tourists due to the abolition of the visa regime.

Financial structure

The significant decline in all sectors of production and services determines today's place of Georgia in the world economy. In terms of GDP, the country is in the ranking of all on the 113th line. Georgia’s treasury is estimated at $ 16.5 billion. At the same time, the average monthly salary per capita varies between $ 300.

The main disadvantage of the country's financial structure is vulnerability to external factors. The economy of Tbilisi is based on loans and investments. However, only in this way can the authorities close the budget deficit.

Over the past 10 years, foreign aid to Georgia amounted to 3 billion euros. Currently, total public debt exceeds $ 11 billion.

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