Life in Georgia. Industry of Georgia What does Georgia produce

In this article, we will talk about the economy of Georgia. In fact, this country is curious about many other things, but today we will consider this aspect. In fact, it is very curious what the financial well-being of the inhabitants of this country is based on.

Before 1992

The economy of Georgia as part of the USSR quickly switched to industrialization. Over an interval of about 50 years, the national income of Georgia has increased almost 90 times! This is an incredible figure that was achieved precisely during the Soviet era. During the 1970s, the same figure was three-quarters of the Union average. The country gradually developed from agrarian to industrial to post-industrial form. By 1990, about 40% of the total population was employed in the service sector, and about 26% in industrial production. At this time, coal, cast iron, fertilizers, steel pipes, oil products, locomotives and parts for aircraft assembly were actively and in huge quantities produced here. Before the USSR collapsed, Georgia's foreign trade turnover was greater than the economic product produced. Food and agricultural products were exported. The main imports were consumer goods and various energy resources.

Before 2004

The Georgian Ministry of Economy went through a huge crisis after the USSR collapsed. This whole situation was further aggravated by the fact that Zviad Gamsakhurdia, the country's president, promulgated a strict ban. He referred to the fact that trade cannot be carried out between Russia and Georgia. The economy suffered greatly from this, but, apparently, then this was not a primary task. In 1992 alone, industrial production in Georgia fell by 40%.

By 1994, the crisis was already in all sectors. Construction and forestry as important components of the country's economy ceased to function. At the same time, the volume of production in other industries declined significantly until the 1990s. The new monetary unit almost immediately depreciated against the background of the fact that production and transport infrastructures were destroyed by leaps and bounds. The situation was aggravated by a decrease in the number of tourists who did not want to visit the country after the conflict with Abkhazia. The wages of people fell by about 10 times, everyone left Georgia en masse. Most of the people went to Russia, some to the EU countries. Since 1994, the country began to receive loans from the IMF. Only after that, by 1996, the situation improved slightly. In 1995, the government set itself a clear goal of overcoming the crisis. Debts were repaid, inflation was brought down. New deals were made.

The economic recovery was largely dependent on external funding. Moreover, economic policy has improved significantly. Again, during the 1998 crisis in Russia, Georgia's economy suffered, but relatively insignificantly.

Period 2010-2014

In 2003, the Rose Revolution took place. As a result, Mikheil Saakashvili became the country's president, who signed many lucrative contracts. The economy of Georgia under Saakashvili began to develop rapidly. In 2004, Kakhi Bendukidze was appointed Minister of Economy. The talented economist gave a new impetus to development. Soon a tax reform was signed, according to which about 20 taxes were reduced to 7 main ones. A tax amnesty was established for the period up to this year. Many of the largest businesses have been sold out. The Georgian economy has become much stronger due to the fact that foreign investors have begun to invest here. However, it later played a cruel joke.

Experts said that such economic growth was possible not because of our own production, but solely because of outside help. The Minister of Economy of Georgia did not take this into account. A number of real problems have not been resolved (lack of jobs, productive business, restoration of the proper level of education and science, etc.).

The economic crisis of 2008 negatively affected the country. However, by 2010, the previous level was reached and the country returned to normal. In 2011, the government signed the Economic Freedom Act, which significantly reduced the state's ability to intervene in the management of the economy.

Modernity

As for the modern period, the Georgian economy continues to grow, but this growth is of low quality. This means that there is no investment in promising industries, no job growth or an increase in the field of work for small and medium businesses. Investments are directed to the export area. Although the proportion of people employed in agriculture has increased significantly, the country has not produced impressive exports. If the quality of growth does not change, experts say, it will soon stop.

Industry

The main industries are light and food industries, nonferrous and ferrous metallurgy. The main growth is provided by the food industry, mining of metal ores also plays a role. However, as before, most of the country's large enterprises are idle or have a partial load.

The food industry is based on the processing of agricultural raw materials. Georgia is also famous for its delicious alcoholic drinks and mineral waters. The mechanical engineering industry occupies less than 1% of the country's economy. Even the chemical industry (production of nitrogen fertilizers, paints and varnishes and chemical fibers) takes more than 5%.

Fuel and energy complex

What else is Georgia famous for? The economy and living standards are good here, but not due to the internal development of the country. Russia supplied gas to Georgia at fairly high prices, so in 2006 the president announced that a gas supply contract would be concluded with Azerbaijan.

The basis of the country's electric power industry is the operation of hydroelectric and thermal power plants. But with factories shutting down massively, the energy complex is in decline. The economic policy in this regard is ineffective, since the companies are owned by Georgian businessmen and international complexes. All this leads to problems in the management of huge resources.

Transport

More than 60% of all traffic in the country is accounted for by road transport. The maximum volume of cargo turnover is by rail. The country's participation in regional energy transit projects has a great positive impact. At the end of 2017, it is planned to open a new transport branch for the transportation of goods from China and Central Asia. Note that construction and attempts to open this path have been going on since 1993.

Active but gradual reconstruction is underway on the Azerbaijan-Turkey road.

The country's merchant fleet is 144 vessels. The ports are located in 5 large cities (Sukhum, Batumi, Supsa, etc.). There are 30 airports in Georgia.

International trade

The economy of Georgia in the field of foreign trade is not very successful. A negative trade balance should be noted. The government was unable to arrange external relations in such a way that Georgia was more export oriented. This is due to the fact that all forces went to establish work in the food industry. The largest volumes of Georgia are exported ferroalloys and unprocessed gold.

The main buyers are Azerbaijan, Canada, Turkey, Bulgaria and Ukraine. As for imports, the country buys fuel, equipment, vehicles, pharmaceuticals. The main suppliers are Ukraine, Turkey, Germany, Russia and China. The country receives the lion's share of electricity and wheat from Russia.

Summing up the article, let's say that the Georgian economy has a positive, but unreliable dynamics.

TBILISI, May 19 - News-Georgia. The National Statistics Service of Georgia has published foreign trade data for January-April 2017, , exports from Georgia amounted to $ 788 million, which is 30% more than in 2016.

According to Sakstat, the main Georgian export product is copper alloys and concentrates, accounting for 17.6% of exports.

The list of top ten export products from Georgia looks like this:

1. Copper alloys and concentrates - 138 million dollars, an increase compared to the same period in 2016 was 22%. The share in total exports is 17.6%. Two thirds of copper alloys exported from Georgia are re-export. During the same period, the import of copper alloys in the amount of $ 113 million was carried out.

2. Ferroalloys - $ 110 million, an increase of 150% compared to last year. Share in total exports - 14%

3. Automobiles (re-export) - $ 47 million, a 2% decrease was recorded compared to last year. Share in total export - 6%

4. Medicines -43.8 million dollars, an increase compared to last year was 59%. Share in total export - 5.6%

5. Export of wine - 41 million dollars, an increase over the same period last year was 44%. Share in total export - 5.2%

6 alcoholic drinks - $ 30.7 million The growth compared to last year was 28%. Share in total export - 3.9%

7. Mineral waters - 30 million dollars, an increase in comparison with last year was 13%. Share in total export - 3.8%

8. Nitrogen fertilizers - $ 24 million, compared to last year, the figure decreased by 27%. Share in total export - 3.1%

9. Gold - 23 million dollars, the figure has decreased compared to last year by 5%. Share in total exports - 3%

10. Hazelnuts and walnuts - $ 21 million. Compared to last year, the export figures for the product decreased by 52%. Share in total export - 2.8%

11. Exports of all other goods amounted to $ 275 million, an increase of 43%. Share in total exports - 35%

The Ministry of Economy of Georgia expects that in parallel with the increase in external demand, exports will also grow, which will be supported by free trade agreements signed by Georgia with the European Union, China and a number of other countries.

In the structure of the industry, there are branches that process raw materials. The food and light industry accounts for 2/3 of the total gross product of the republic (see Table 4).

Food industry represented by numerous enterprises of the tea, wine and fruit and vegetable canning industries (see Table 5). The tea industry is concentrated in Western Georgia in the tea-growing regions. Several dozen tea factories work here for the primary processing of tea leaves. The only caffeine plant in the USSR was established in Batumi. Kakheti and in the middle reaches of the Rioni - Imereti stand out among the wine-making regions. Along with the production of table grape wines, cognac and champagne are produced at large factories in Tbilisi. The fruit and vegetable canning industry is located everywhere. More than two dozen canning factories produce canned fruits and vegetables.

Other branches of the food industry that have developed in the republic include tobacco, butter and cheese, the production of tung and essential oils, and the bottling of mineral water.

V light industry Of greatest importance is the production of cotton, woolen, silk fabrics, knitwear (Gori, Tbilisi, Kutaisi), carpets (Mikha Tskhakaia) and footwear (Tbilisi, Batumi). For the production of silk fabrics and footwear, Georgia holds the first place in the Transcaucasus.

V mechanical engineering transport engineering, machine tool engineering, instrument making, agricultural and electrical engineering are distinguished. The production of electrical goods, metal-cutting machine tools and instruments in Tbilisi is of all-Union importance; trucks, small tractors, mining equipment in Kutaisi; electrical equipment (Tbilisi, Kutaisi, Zestafoni, Batumi); equipment for light and food industries (Tbilisi, Batumi).

Mechanical engineering is characterized by high labor intensity and relatively low metal consumption. Non-metal-intensive mechanical engineering industries will develop at an accelerated pace in the future.

When analyzing the average annual number of workers employed in the national economy of Georgia in the period from 1980 to 1989, it can be seen that the number fell from 14 million 171 thousand. in 1980 to 13 million 969 thousand. in 1989 (see Table 6). This is how negative phenomena began in the Georgian economy, which became even more aggravated after the collapse of the USSR.

The total volume of industrial production in 1989 as a percentage of 1985 was 105, and in 1989 as a percentage of 1988 - 98.4.

“There are quite a few examples of failures, especially often in states whose situation is aggravated by armed conflicts. These countries can be ranked in the following order according to the depth of the economic crisis: Bosnia and Herzegovina, Serbia, Tajikistan, Armenia, Georgia, Azerbaijan, Moldova and Croatia. A common feature of most of these countries is a deep economic recession, i.e. GDP contraction of 50% or more, hyperinflation (50% per month) or very high inflation, significant unemployment. " Economic Issues, No. 1, 1994, p. 97.

In connection with armed conflicts and the elimination of external military threats from the outside, the interstate financial and industrial group "Granit" (on the basis of the Russian state concern "Granit") was formed to create and improve the air defense system of the Commonwealth countries. The group on a contract basis will include specialized radio engineering enterprises of Georgia and other interested economic entities of the CIS countries. "Granit" will serve the air defense system of these countries, provide it with military equipment and spare parts. Air defense systems produced by Granit today will reliably serve until 2020. Russian Economic Journal, No. 4, 1998, p. 97.

In addition to cooperation in the military field, the heads of state of the Commonwealth on September 24, 1993 initialed the Treaty on the Economic Union. “It provided for the formation of a single economic space, free movement of goods and the unification of customs regimes, i.e. formation of a common market. This document formulated the goals of the new economic association: creating conditions for the stability of development of the participating countries, the gradual formation of a common economic space on the basis of market relations, ensuring equal opportunities and guarantees for all forms of business. " Economic Issues, No. 3, 1994, pp. 85-86.

It should be noted here that Georgia, together with Ukraine and Belarus, preferred its associated form along with full membership in the Economic Union. “It should be borne in mind that the simultaneous action of many and bilateral regulators can lead to the emergence of contradictory and even conflict situations. Therefore, the participants in the association should pay special attention to the coordination and interaction of these two levels of integration mechanisms. " Economic Issues, No. 3, 1994, p. 86.

Then I would like to return to the question of development ferrous metallurgy full cycle in the republic. The Transcaucasian Metallurgical Plant in Rustavi receives iron ore from Dagestan (Azerbaijan) and Krivoy Rog, coal - local and imported from Donbass. The republic has reserves of manganese ores in Chiatura, ranking second after Ukraine in terms of both reserves and production. In Zestafon, there is a large electro-ferroalloy plant producing ferromanganese and other ferroalloys. Manganese concentrate is exported to metallurgical centers of the country and in large quantities (via the Poti port).

The republic is developing non-ferrous metallurgy... The Marneuli Combine for the extraction and processing of copper and polymetallic ores was created.

Development is associated with the metallurgical plant in Rustavi chemical industry, which initially used coke oven gas as a feedstock, and then was converted to natural gas. The Rustavi Chemical Plant produces nitrogen fertilizers, synthetic resins, fibers, caprolactam. The chemical and pharmaceutical industry has also been created.

A pulp and paper mill (Zugdidi), a paper mill (Tbilisi), plywood mills and furniture factories have been built on the basis of forests developed mainly in Western Georgia, in the mountains of the Greater Caucasus.

Building materials industry unites cement factories (Kaspi, Rustavi), large enterprises of concrete and reinforced concrete structures, brick factories, enterprises for the extraction of marble, quartz sands, refractory clays.

The basis electric power industry make up hydroelectric power plants. In terms of the absolute size of hydropower resources, Georgia occupies one of the first places in the CIS, second only to the Russian Federation, Tajikistan and Kazakhstan. The largest hydroelectric power plants have been built on the rivers Rioni, Kura, Inguri, Aragvi, Alazani, Bzybi. Thermal power plants have been built that run on coal (Tkvarchelskaya GRES) and natural gas (Tbilisi and Rustavskaya GRES). The construction of the Zhinvali hydroelectric complex at Aragvi and the Vartsikh hydroelectric power plants at Rioni were completed. Extraction of fuel - coal and oil - is small.

“In the republics of Transcaucasia, especially in Georgia, electrical engineering, machine-tool building and instrument-making have received great development, although their production in the overwhelming part goes outside the region. The point here is, first of all, that only such most labor-intensive branches of mechanical engineering could sufficiently occupy the hands of workers in these very densely populated republics. " Soviet Union. Geographical description in 22 volumes. / / Volume General Review, p. 552.

There are three industrial regions on the territory of Georgia. In the eastern part, there is the most developed Central Tbilisi region, which specializes in manufacturing industries. Mostly highly qualified mechanical engineering, as well as enterprises of the light and food industries are concentrated in Tbilisi. In the post-war period, new industrial centers were formed: Rustavi - ferrous metallurgy, chemical and cement industries, Gori - cotton and canning. The climatic resort of Borjomi with medicinal mineral waters is of particular importance.

The Central Kutaisi region (Imereti) is the most developed in Western Georgia. The second largest industrial center in the republic, Kutaisi, is located here, around which a group of industrial cities has grown - Chiatura, Zestafoni, Tkibuli. The region has a developed manganese electric power industry, coal industry, ferroalloy production, automobile construction, coal industry, ferroalloy production, automobile construction, electrical engineering, mining equipment production, as well as light and food industries.

In the Black Sea region, industry is associated with the processing of agricultural raw materials - tea, wine-making, tobacco, tung oil production. The most important industrial centers are Batumi (port, oil refining, mechanical engineering, food industry), Sukhumi (resort), Poti (port), Tkvarcheli (coal mining, electric power industry). A large region of climatic resorts has developed on the Black Sea coast - Gagra, Athos, Pitsunda, Sukhumi.

Industrialized at a rapid pace. Since the mid-1910s, in 60 years, the national treasury has grown by almost 100 times. It was in Georgia that there were the largest salaries and social benefits. The government spent huge sums on the transition from the agricultural sector to the industrial one. By the early 1980s, the country developed the production of petroleum products, metal products, and equipment. It is also worth noting the high foreign trade indicators.

Georgia's economy after the collapse of the USSR

In the first years after the collapse, the country's budget underwent tremendous changes. The main reason for the negative trends in the domestic economy was the prohibition of the President of Georgia to conduct any trade relations with Russia. The consequence of this was a sharp drop in the industrial indicators of the state to 60% by the end of 1992.

A couple of years later, the crisis affected not only large-scale production, but all other industries. The forestry of Georgia, glorified in Soviet times, has completely ceased to exist. Transport and industrial infrastructure were destroyed. The monetary unit has depreciated by 9000%. The rollback of production resulted in massive unemployment and a decline in wages.

The formation of Georgia also began only towards the end of 1995. The reason was the impressive loans from the World Bank. Fortunately, inflation was stopped, and effective reforms were carried out in the spheres of industry and services. Since 1996, the country has finally started to see a financial upswing.

In the mid-2000s, 60% of tax payments were cut, large foreign investors were attracted, and relations with world creditors were established. In recent years, the Georgian economy has been supported by foreign business partners and constant credit infusions.

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 fell to 25%. This share is evenly distributed between cultivated land and livestock production.

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

Recently, plant crops have given extremely low yields. The whole reason is the chronic lack 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. Vineyards have shrunk by 75%, tea lands - by 94%, cultural - by almost 50%.

With regard to animal husbandry, there is also a negative trend. Revenues from this industry fell by almost 80%.

Industry indicators

In the past 20 years, a negative trend has also been observed in the manufacturing sector. The country's industrial indicators fell to 12%. Every year, the economy of Georgia is replenished by this industry for 2-2.5 billion dollars.

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

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

The chemical industry should be noted. Its share in the manufacturing sector of the country is about 6%. The most popular products in the industry are nitrogen fertilizers, paints and varnishes and chemical fibers.

Energy and fuel complex

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

The country's energy complex is supported by several large thermal and hydraulic stations. Interestingly, a significant part 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 heating stations, but they are capable of covering 2/3 of the country's territory. As for the hydropower complex, its heart is capable of developing a capacity of up to 1300 MW. Of the smaller stations, Perepadnaya and Vartsikhskaya can be distinguished.

Other sectors of the economy

Telecommunications make a significant contribution to the state budget every year. Their profits are estimated at 4% of GDP. A leap in the development of this field of activity was observed at the end of 2008. It is noteworthy that Georgia ranks third in the world in terms of the high cost of cellular communications.

The last years have been characterized by significant decline. The negative balance is determined by an increase in demand and demand for imports rather than exports. Ferroalloys and unprocessed gold are considered the most demanded Georgian goods.

The volume of extraction of such resources as coal, manganese and other resources is also falling. But there is an influx of tourists due to the abolition of the visa regime.

Financial structure

A significant decline in all branches of production and services determines the current place of Georgia in the world economy. In terms of GDP, the country is only on the 113th line in the ranking. The Georgian treasury is estimated at $ 16.5 billion. At the same time, the average monthly earnings per capita varies within the range of $ 300.

The main disadvantage of the country's financial structure is its vulnerability to external factors. Tbilisi's economy is built 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. At the moment, the total public debt exceeds $ 11 billion.