NEWSLINK: Georgia eyes double-digit growth, renewed Russia ties
(Georgia eyes double-digit growth, renewed Russia ties – Reuters – Margarita Antidze – Nov. 26, 2012 – http://www.reuters.com/article/2012/11/26/us-georgia-economy-idUSBRE8AP0NE20121126)
Reuters covers Georgia’s expressed need for increased economic growth in the face of unemployment and low per capita GDP, with one hope being that trade with Russia will play a part:
Georgia’s new economy minister says his country, beset by high unemployment and low per capita output, wants double-digit growth rates in two or three years through the injection of pro-business policies.
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If Georgia were to mend economic ties with Russia, it might be able to rebuild bilateral trade, which has slumped to just 5 percent of total trade from a peak of 20 percent in 2006, before a Kremlin crackdown on Georgian wine and mineral water imports.
Growth would come by boosting mid-size businesses, dismantling state monopolies, developing the stock exchange and attracting foreign investors, Kvirikashvili said.
But not yet. He forecast growth of 7 percent both this year and in 2013.
Georgia experienced some higher growth prior to the Russo-Georgian War, after which the economy slumped, aggravated by monopolies:
… Georgia faces economic challenges, including a high 15 percent jobless rate and economic output per capita that, at $3,230 last year, was lower than many former Soviet countries.
Saakashvili also faced criticism from businesses for nurturing monopolies, for excessive state meddling in the economy and for failing to provide clarity on tax law.
Experts say that breaking up monopolies can stimulate faster growth in Georgia, courted by the West as a key transit route for Caspian oil to Europe but jealously eyed by Russia, which recognized two breakaway regions as independent states in 2008.
The economy has been growing again since 2010, but with the new administration seeking to stimulate growth further, inflation could rise from recent levels of around 1-2 percent.
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