Economy of Georgia

Archaeological research demonstrates that Georgia has been involved in commerce with many lands and empires since the ancient times, largely due its location on the Black Sea and later on the historical Silk Road. Gold, silver, copper and iron have been mined in the Caucasus Mountains. Wine making is a very old tradition. The country has sizable hydropower resources. Throughout Georgia's modern history agriculture and tourism have been principal economic sectors, because of the country's climate and topography.

For much of the 20th century, Georgia's economy was within the Soviet model of command economy. Since the fall of the USSR in 1991, Georgia embarked on a major structural reform designed to transition to a free market economy. As with all other post-Soviet states, Georgia faced a severe economic collapse. The civil war and military conflicts in South Ossetia and Abkhazia aggravated the crisis. The agriculture and industry output diminished. By 1994 the gross domestic product had shrunk to a quarter of that of 1989. The first financial help from the West came in 1995, when the World Bank and International Monetary Fund granted Georgia a credit of USD 206 million and Germany granted DM 50 million.

Since early 21st century visible positive developments have been observed in the economy of Georgia. In 2007 Georgia's real GDP growth rate reached 12%, making Georgia one of the fastest growing economies in Eastern Europe.The World Bank dubbed Georgia "the number one economic reformer in the world" because it has in one year improved from rank 112th to 18th in terms of ease of doing business., The country has a high unemployment rate of 12.6% and has fairly low median income compared to European countries.

The 2006 ban on imports of Georgian wine to Russia, one of Georgia's biggest trading partners, and break of financial links was described by the IMF Mission as an "external shock.   In addition, Russia increased the price of gas for Georgia. This was followed by the spike in the Georgian lari's rate of inflation.  The National Bank of Georgia stated that the inflation was mainly triggered by external reasons, including Russia’s economic embargo. The Georgian authorities expected that the current account deficit due to the embargo in 2007 would be financed by "higher foreign exchange proceeds generated by the large inflow of foreign direct investment" and an increase in tourist revenues.The country has also maintained a solid credit in international market securities. Georgia is becoming more integrated into the global trading network: its 2006 imports and exports account for 10% and 18% of GDP respectively. Georgia's main imports are natural gas, oil products, machinery and parts, and transport equipment.

Since coming to power Saakashvili administration accomplished a series of reforms aimed at improving tax collection. Among other things a flat income tax was introduced in 2004 As a result budget revenues have increased fourfold and a once large budget deficit has turned into surplus.

Georgia is developing into an international transport corridor through Batumi and Poti ports, an oil pipeline from Baku through Tbilisi to Ceyhan, the Baku-Tbilisi-Ceyhan pipeline (BTC) and a parallel gas pipeline, the South Caucasus Pipeline.

Tourism is an increasingly significant part of the Georgian economy. About a million tourists brought US$313 million to the country in 2006. According to the government, there are 103 resorts in different climatic zones in Georgia. Tourist attractions include more than 2000 mineral springs, over 12,000 historical and cultural monuments, four of which are recognised as UNESCO World Heritage Sites (Bagrati Cathedral in Kutaisi and Gelati Monastery, historical monuments of Mtskheta, and Upper Svaneti).

As of 2001 54% of the population lived below the national poverty line but by 2006 poverty decreased to 34%. In 2005 average monthly income of a household was GEL 347 (about 200 USD). IMF 2007 estimates place Georgia's nominal GDP at US$10.3 billion. Georgia's economy is becoming more devoted to services (now representing 65% of GDP), moving away from agricultural sector ( 10.9%).

Architecture and arts of Georgia

Senaki State Theater in Senaki, is an example of neoclassical style with elements of baroque in Georgia. Architect Vakhtang Gogoladze.
Georgian architecture has been influenced by many civilizations. There are several different architectural styles for castles, towers, fortifications and churches. The Upper Svaneti fortifications, and the castle town of Shatili in Khevsureti, are some of the finest examples of medieval Georgian castle architecture. Other architectural aspects of Georgia include Rustaveli avenue in Tbilisi in the Hausmann style, and the Old Town District.
Georgian ecclesiastic art is one of the most fascinating aspects of Georgian Christian architecture, which combines classical dome style with original basilica style forming what is known as the Georgian cross-dome style. Cross-dome architecture developed in Georgia during the 9th century; before that, most Georgian churches were basilicas. Other examples of Georgian ecclesiastic architecture can be found outside Georgia: Bachkovo Monastery in Bulgaria (built in 1083 by the Georgian military commander Grigorii Bakuriani), Iviron monastery in Greece (built by Georgians in the 10th century), and the Monastery of the Cross in Jerusalem (built by Georgians in the 9th century).
The art of Georgia spans the prehistoric, the ancient Greek, Roman, medieval, ecclesiastic, iconic and modern visual arts. One of the most famous late 19th/early 20th century Georgian artists is the primitivist painter Niko Pirosmani.

Culture of Georgia

Georgian culture evolved over thousands of years with its foundations in Iberian and Colchian civilizations, continuing into the rise of the unified Georgian Kingdom under the single monarchy of the Bagrationi. Georgian culture enjoyed a golden age and renaissance of classical literature, arts, philosophy, architecture and science in the 11th century.

The Georgian language, and the Classical Georgian literature of the poet Shota Rustaveli, were revived in the 19th century after a long period of turmoil, laying the foundations of the romantics and novelists of the modern era such as Grigol Orbeliani, Nikoloz Baratashvili, Ilia Chavchavadze, Akaki Tsereteli, Vazha Pshavela, and many others. Georgian culture was influenced by Classical Greece, the Roman Empire, the Byzantine Empire, and later by the Russian Empire.

Georgia is well known for its rich folklore, unique traditional music, theatre, cinema, and art. Georgians are renowned for their love of music, dance, theatre and cinema. In the 20th century there have been notable Georgian painters such as Niko Pirosmani, Lado Gudiashvili, Elene Akhvlediani; ballet choreographers such as George Balanchine, Vakhtang Chabukiani, and Nino Ananiashvili; poets such as Galaktion Tabidze, Lado Asatiani, and Mukhran Machavariani; and theatre and film directors such as Robert Sturua, Tengiz Abuladze, Giorgi Danelia and Otar Ioseliani.

Moscow Encourages Turmoil in Georgia

EU / BRUSSELS - Georgia's ambassador to the EU has said the European Commission made misleading statements about street clashes in Tbilisi that left almost 40 people in hospital and two dead.

Speaking to EUobserver on Thursday (26 May) in Brussels, Salome Samadashvili said EU institutions and member states have not delivered any form of official complaint to Georgia about the events despite commission claims.

No one has communicaed these kinds of comments to us about what happened - not any representative of the commission nor any EU member state either here or in Tbilisi. So we were very surprised to hear this line," she explained. "Up till now I have not heard anything, anything. The commission spokesperson's statement is not in line with the truth."

Earlier the same day commission spokeswoman Natasha Butler told press that Brussels is "concerned" about the "regrettable" events and warned Georgia "not to use violence as a means for political ends."

"We urge the need to maintain law and order but as we have already told the Georgian government this needs to be done in an appropriate way and the EU therefore urges the Georgian government to investigate all allegations of excessive use of violence."

Riot police on Thursday attacked anti-government protesters on Rustali Avenue in Tbilisi with water cannon, tear gas and rubber batons fifteen minutes after their permit to hold the demonstration expired at midnight. The protesters fought back with sticks and flag poles. Two people died after being hit by a car.

Georgian President Mikhail Saakashvili described the events as a Russian plot to weaken his rule on the day of the 20th anniversary of Georgia's declaration of independence.

Moscow equates a violence-prone militant fringe with “the people,” but the people have actually disappointed their radical leaders. By May 22, the size of the protest rally in Tbilisi had shrunk to 2,000 by day and several hundred at night (AFP, Reuters, May 22, 23), when Georgian Party standard-bearer, Levan Gachechiladze, addressed potential Tbilisi supporters in the following terms: “We are preparing for the decisive selfless acts. My friends, residents of the Vakhe, Saburtalo, Vera, Gldani [Tbilisi neighborhoods], I am urging all of you to gather and resort to decisive selfless acts” (Kavkas-Press, May 22).

Apart from the heroic pose, the statement references quite concretely a possible social base for anti-government protests. Those neighborhoods are home to specific social groups whose livelihoods had variously depended on the Soviet system, the 1990s’ shadow economy system and the Eduard Shevardnadze presidency’s patronage system. These three overlapping systems and their remnants were all removed after 2003 by fast-paced reforms. This resulted in a social base for anti-government—in fact, anti-reform—protests, concentrated in Tbilisi (much less elsewhere). The extra-parliamentary opposition activated that base from 2007 onward, with a constantly diminishing rate of success. Those neighborhoods used to be Gachechiladze’s and his allies’ strongholds, but the appeal to them has now fallen flat.

Thus, popular support was nowhere in sight on the eve of the “Day of Rage” and the “final reckoning,” announced by Gachechiladze’s Georgian Party and Nino Burjanadze’s People’s Assembly for May 25 and 26 (National Independence Day), respectively.

People’s Assembly and Georgian Party leaders have not announced any programs or alternative ideas for governing, and have no expert teams to back them. Their only demand is the immediate resignation of President Saakashvili and the government, to be followed by new parliamentary and presidential elections in a “revolutionary” mode. Meanwhile, these groups and their leaders have practically dropped out of regular electoral processes due to their low ratings. They declined to take up their few parliamentary seats in 2008, and declined to run in the 2010 local elections, given their ratings in the low single digits. Although enjoying unimpeded access to state television, their popularity has not risen from that level.

By contrast, the constitutional opposition parties—Christian-Democrats and Our Georgia-Free Democrats—plan to compete in the 2012 and 2013 parliamentary and presidential elections. Led by Giorgi Targamadze and Irakli Alasania, respectively, these parties have distanced themselves from “revolutionary” street politics. They seek legislative changes through the parliamentary process (no longer through pressures outside the parliament); they prepare for elections in accordance with the constitutional timetable (not pre-term); and they cooperate to lay a basis for legal alternation of political parties in power in Georgia in the future (instead of street-driven change). Moreover, the constitutional opposition fully supports Georgia’s Western orientation.

Thus, Moscow lacks credible or effective candidates for a pro-Russia political movement in Georgia. The Kremlin can only hope to utilize small, outer-fringe groups for instigating street trouble, or—in a worst-case scenario—trigger a political explosion by furnishing some casualties amid turmoil and blaming everything on the government.

Protesters Call for the Resignation of Georgia’s President

Around 5,000 Georgian opposition supporters marched through the capital on Wednesday, the fifth day of non-stop protests aimed at ousting pro-Western President Mikheil Saakashvili.

They blocked Tbilisi's main street outside parliament, where the authorities had planned to hold a military parade to mark the Georgian Independence Day on Thursday.

Chanting protesters held placards reading "Misha (Saakashvili) must go", many of them also carrying sticks and hiding their faces with scarves.

"We are preparing for a decisive struggle," opposition party leader Nino Burjanadze told the crowd, although turnout has been small since the demonstrations began on Saturday.

Amid bitter divisions within the opposition, several other parties have not sent their supporters onto the streets and one of them cancelled plans to hold what it called an Arab-style "Day of Rage" on Wednesday.

Though the demonstration was largely peaceful, about a dozen protesters attacked a police cruiser with sticks early Sunday morning, prompting the police to retaliate, said Shota Utiashvili, a spokesman for the Interior Ministry.

“Police had to use a small amount of tear gas and rubber bullets against a small number of demonstrators,” Mr. Utiashvili said. He said two people were arrested, and five people, including the three police officers in the car, suffered minor injuries.

In another episode, demonstrators armed with sticks battled in the streets against unidentified men thought to be plainclothes police officers, according to local news reports.

Sunday’s violence, though relatively minor, revived memories of a brutal police crackdown on protesters in 2007. About 500 people were wounded then, when police officers used rubber bullets, water cannons and tear gas to disperse thousands of antigovernment protesters.

The violence prompted strong international condemnation and undermined Mr. Saakashvili’s popularity at home, and the government has since sought to avoid such clashes.

So far police officers have largely stayed out of sight, clearly keen to avoid clashes.

In 2007, about 500 people were injured when police reacted heavy-handedly during a protest. The incident undermined the government's credibility and the authorities are keen to avoid the same thing happening again.

Rates of poverty may be high. But many Georgians do not trust the opposition, seen as divided and lacking credibility, and the president remains relatively popular.

Most people do not want a return to the crime and corruption which plagued the country before Mr Saakashvili came to power in 2003. So previous anti-government demonstrations have fizzled out.

Opposition leaders, though, say this time is different. They have called for a "day of rage" on Wednesday.

And further protests are expected on Thursday, when the government will stage the anniversary celebrations of Georgian independence.

Bodies Found Near Site of Protests in Georgia

MOSCOW — Georgia’s Interior Ministry reported the discovery of two bodies on a roof near the site of the past week’s antigovernment demonstrations, and said that the police were studying whether the deaths could have been related to the protests.

Georgian riot police grappled with demonstrators on Thursday in Tbilisi, the capital.

The ministry said the bodies were found on Friday atop a store near a subway station. The preliminary cause of death was said to be electrocution, possibly from touching an electric cable, officials said.

The deaths of two people had already been attributed to the protests — a policeman and a demonstrator who were hit by vehicles leaving the scene as demonstrators scattered under pressure from the police.

A group of several thousand demonstrators gathered Saturday to protest the use of force against protesters. The State Department and Britain’s minister for European affairs have both called on Georgia to investigate the violence.

“I was saddened to hear of violence on the streets of Tbilisi,” David Lidington , the British minister, said in a statement. “Whilst there is a place for legal protest and demonstrations in any democracy, there can be no place for violence.” President Mikheil Saakashvili has said that he believes that the protesters were backed by Russia and that they provoked the violence.

Amnesty said that during a May 26 demonstration Georgian police clubbed unarmed and peaceful demonstrators and fired rubber bullets and tear gas at bystanders and journalists. Some 90 people have been detained.

An OSCE statement says at least 10 reporters were verbally and physically abused by police officers. Some were detained for questioning; others had their press cards taken away, and their equipment damaged or confiscated.

In a letter to Georgian Foreign Minister Grigol Vashadze, the OSCE Representative on Freedom of the Media, Dunja Mijatovic, said: "The fact that the police would abuse, detain and question reporters engaged in their professional duties is worrisome."

Georgian President Mikheil Saakashvili said on May 26 that the demonstrators were possibly financed by Russia and had aimed to destabilize the country.

The British government also called on Georgian authorities to investigate the violence.

Abkhaz leader Bagapsh dies in Moscow hospital

Sergei Bagapsh, president of Georgia's breakaway region of Abkhazia, has died aged 62, Abkhaz officials say.

They say he passed away in a Moscow hospital from complications following recent lung surgery.

Mr Bagapsh won his second five-year term in 2009. Georgia denounced the elections as "illegitimate".

Since its brief war with Georgia in 2008 over another disputed territory, South Ossetia, Russia has provided security for Abkhazia.

Abkhazia declared independence from Georgia in 1992, but is only recognised by Moscow and a handful of other countries.

Abkhaz officials say Vice-President Alexander Ankvab will be acting leader.

Abkhazia had spun out of Georgia's control in fighting in the early 1990s. But during the 2008 war between Russia and Georgia, Abkhaz forces with help from the Russian military succeeded in pushing Georgian troops out of the last bit of territory they held in Abkhazia.

Moscow then recognized the independence of Abkhazia and South Ossetia, another separatist region and the focus of the brief war. Only Nicaragua, Venezuela and the small South Pacific island nation of Nauru have followed suit, while the rest of the world still considers both regions to be Georgian territory.

The following year, Bagapsh was re-elected to a second presidential term and vowed to maintain close ties with Russia.

Russia has thousands of troops based in Abkhazia and is deeply interested in the region's stability. It lies just to the south of Sochi, the Black Sea resort where Russia will host the 2014 Winter Olympics.

Russia's president and prime minister expressed their condolences to Abkhazians over the loss of Bagapsh, whom they praised for what they described as putting Abkhazia on the path to international recognition of its sovereignty and for strengthening ties with Russia.

A source in the Black Sea region's administration said Bagapsh underwent surgery in Moscow on May 21 and died of complications.

Alexander Ankvab, his deputy, has been appointed as acting president, with new elections required by the region's constitution within three months.

"We are deeply shocked by the death of Sergei Bagapsh," the acting head of Abkhazia told the Interfax news agency.

"This is a great loss for all the Abkhaz people," the acting leader said.

The region's security council was expected to meet later Sunday to discuss the situation.

There was no immediate official reaction to the news from Georgia, whose Western-backed President Mikheil Saakashvili is now facing almost daily street protests from pro-Russian opposition forces.

The acting leader Ankvab, 58, was born in Abkhazia and educated in Russia, according to his official biography.

He briefly served as interior minister after the Soviet Union's collapse before going into business and moving to Moscow for six years.

Ankvab served as prime minister between 2005 and 2010, and was appointed vice president in February 2010.