The economy of Georgia even at the time of the state's entry into the USSR was industrialized at a rapid pace. Since the mid-1910s, for 60 years, the national treasury has grown by almost 100 times. It was in Georgia that there were the largest salaries and social benefits. Huge amounts of money were spent by the government on the transition from the agricultural sector to the industrial one. By the early 1980s, the country had developed the production of petroleum products, metal products, equipment. It is also worth noting 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 underwent enormous changes. The main reason for the negative trends in the domestic economy was the ban by the President of Georgia to conduct any trade relations with Russia. The consequence of this was a sharp decline in industrial indicators of the state to 60% by the end of 1992.
After a couple of years, the crisis engulfed not only large-scale production, but also all other industries. The glorified forestry of Georgia in Soviet times completely ceased to exist. Transport and industrial infrastructure were destroyed. The monetary unit depreciated by 9000%. The result of the rollback of production was massive unemployment, a decrease in wages.
The formation and development of the Georgian economy did not begin until the end of 1995. The reason was impressive loans from the World Bank. Fortunately, inflation was stopped, and effective reforms were carried out in the areas of industry and services. Since 1996, the country has finally begun to see a financial recovery.
In the mid-2000s, 60% of tax payments were truncated, 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 injections.
Agricultural industry
Today, the Georgian economy can be briefly described as stably post-industrial. However, agriculture still plays a significant role in it. From 1993 to 2008, indicators of the agricultural sector decreased to the level of 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 amounts to support agriculture. At the moment, only 16% of the 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 occupies only 12% of the country's GDP.
Recently, crops have been producing extremely low yields. The whole reason is a chronic lack of fertilizers and modern technology. It is noteworthy that now for the first time in its history Georgia is in dire need of additional grain imports. Grapes were reduced by 75%, tea - by 94%, cultivated - by almost 50%.
As for animal husbandry, negative dynamics are also observed here. Revenues from this industry fell by almost 80%.
Industry indicators
A negative trend in the last 20 years has been observed in the manufacturing sector. The country's industry indicators fell to 12%. Every year, the Georgian economy is replenished at the expense of this industry by 2-2.5 billion dollars.
The most profitable and developed are light and food industries, as well as non-ferrous metallurgy. Recently, there has been an increase in production in the mining and mining sectors, in water supply, gas, wood and mineral processing.
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 for tea, cognac, wine, cigarettes, oilseeds, mineral waters, some fruits and vegetables.
It should be noted the chemical industry. Its share in the country's manufacturing sector is about 6%. The most popular products of the industry are nitrogen fertilizers, paints and varnishes and chemical fibers.
Energy and fuel complex
The economy of Georgia experiences 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, however, Russia remains the main supplier here.
The country's energy complex is held at 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 thermal stations, but they are able to cover 2/3 of the country's territory. As for the hydropower complex, its heart is the Inguri hydroelectric station, capable of developing capacity of up to 1300 MW. Of the smaller stations, one can distinguish Perepadnaya and Vartsikhskaya.
The rest of the economy
A significant contribution to the state budget is annually made by telecommunications. 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 ranks third in the world in terms of the high cost of cellular communications.
Foreign trade in recent years is characterized by a significant decline. A negative balance is determined by an increase in demand and demand for imports, rather than in exports. The most popular Georgian goods are ferroalloys and raw gold.
The volume of extraction of such resources as coal, manganese and copper ores is also falling. But there is an influx of tourists due to the abolition of the visa regime.
