The Warning Bells are Ringing: A Difficult Summer Season for the Georgian Electricity Market
Once the wealthiest Soviet republic, Georgia has since fallen far behind other post-Soviet states (except for, perhaps, Tajikistan, Kyrgyzstan and Moldova) in almost any parameter of wellbeing. Adjusted for purchasing power parity, Georgia’s annual income per capita in 2012 was close to $5,900 (a little higher than in resources-poor Armenia). Moreover, the “median” Georgian, as opposed to the “average” Georgian, is much poorer than is suggested by the per capita income estimate. Like any average measure, the income per capita figure masks significant inequality in the distribution of income, and Georgia is much less equal as compared to all of its other post-Soviet peers (with the possible exception of Russia).
Following the collapse of the Soviet Union, the Georgian nation went through a process of rapid disinvestment and de-industrialization. It was forced to shut down industrial plants, sending scrap metal abroad and pushing workers into subsistence farming or early retirement. Thanks to the country’s moderate climate and good soil conditions, hunger never became an issue, yet inequality and associated political pressures rapidly reached catastrophic dimensions, unleashing cycles of violence, undermining the political order and inhibiting prospects of economic growth.