Georgia is a small, picturesque country roughly the size of South Carolina in the South Caucasus, situated on the east coast of the Black Sea, bordering Turkey to the south and Russia to the north.Georgia declared independence in 1991 at the disintegration of the Soviet Union and is still struggling to rebuild from the collapse.
Georgia has a long, proud history and culture dating back almost 2,500 years, infusing Georgians with a deep sense of national prideand honor. The second-oldest Christian country, Georgia has its own ancient alphabet and language, and boasts a rich culture steeped in traditions of familial bonds, hospitality, food and drink, andthe arts; Georgians are renowned for their hospitality and originalnational folk dance.
In the fourteen years since independence, the country has enduredcivil strife and endemic corruption that has left the economy in ruins and the people in poverty: a full 61% live below the povertyline, and most tellingly, 23% have migrated abroad.
In the fall of 2003, Georgians began to recoup for lost time when the peaceful protests of the Rose Revolution ousted disgraced President Shevardnadze and ushered in the new reform-minded administration of President Mikheil Saakashvili. These events clearly have accelerated Georgia’s democratic transition, yet much remains to be donebefore democracy can be said to have taken a firm hold. Nevertheless, the new government’s commitment to reform and to tackle corruptionhas increased confidence in the economic management of the country, resulting in large loans by bilateral and multilateral donors. The administration’s highly publicized crackdown on high-level corruption has not only succeeded in attracting loans, but also has increased revenue collection by an astounding 42% in 2004 versus the same time frame in 2003. This has allowed the government to make some small social improvements such as increasing pensions and paying salaries in full and on time.
Despite many significant gains since the Rose Revolution, much remains to be accomplished in Georgia’s transition to a democracy and free market economy. Several factors stand in the way of economic growth including: weak capacity of major job sectors to competein the export market, badly managed state-owned enterprises including the railway and port, little to no access to finance for small and medium sized enterprises, and a lack of market oriented skills among entrepreneurs. Additionally, territorial conflicts, corruption,non-transparency in the administration of taxes and customs fees,dilapidated infrastructure, and non-reliable energy supply all act as barriers to attracting foreign direct investment. On the social front, the government’s expenditure of around just 1% of GDP on public health and education places any economic or political gains at risk.
USAID has provided more than $1billion in humanitarian and developmentaid to Georgia since assistance began in 1992. Our objectives in Georgia are focused on building democracy, promoting regional stability, and fostering economic growth and health services.
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