Georgia’s agri-food export is concentrated in few products and few undemanding markets, making it highly vulnerable to shocks on a small number of commodity and geographical markets. At the same time, the diversity of climatic conditions and ample water resources create significant growth and diversification potential for Georgian agriculture
This research paper intended to supplement and complement the following economic policy strategies and plans of the Georgian government in the areas of sustainable and balanced growth.
Economic reforms announced in the run-up to the parliamentary elections in October 2016 raised concerns about whether Georgia was departing from its path of prudent fiscal policy. A reform of the corporate profit tax and increased infrastructure investment were driving expectations of a 6% of GDP budget deficit in 2017, endangering Georgia’s macroeconomic stability and its reputation with investors.
The Forum took place on 29 November 2016 in the framework of the EU-funded European Neighbourhood Programme for Agriculture and Rural Development (ENPARD) in order to discuss some the key challenges Georgia’s agricultural cooperatives face with regard to access to finance. Please see the conference programme and presentations (listed below).
Both Georgia and Armenia have been subject to negative external economic shocks, particularly through remittances and exports, in 2014 and 2015, yet the macroeconomic adjustment of the countries appears to have been different. While the GDP growth of both countries remained relatively stable at around 3% in both years, the exchange rate of the Georgian Lari (GEL) depreciated by a 29% in 2014-2015 compared to 15% for the Armenian Dram (AMD). While the depreciation of the AMD was initially quicker than that of the GEL, the GEL depreciation lasted much longer into 2015. Comparing the external shocks faced by the economies of Armenia and Georgia, it appears that Armenia was hit earlier, with remittances and FDI clearly dropping off stronger in the end of 2014 than in Georgia. However, Georgia was subject to a much larger and prolonged fall in exports – a 6% of GDP decrease in Georgia compared to 1.7% of GDP in Armenia in 2015. Also, the reaction of imports to reduced income and lower exchange rates appears much quicker in Armenia, partially explaining why the exchange rate may have behaved more stable in 2015.
On June 3 2016, a Round Table Discussion of Tea Cooperatives was held in Kutaisi. This was the third event in a series of dialogues about agriculture and rural development in Georgia organized by ISET Policy Institute (ISET-PI) in partnership with CARE International, the Regional Development Association and the Georgian Farmers Association, with support from the European Neighbourhood Programme for Agriculture and Rural Development (ENPARD). This meeting, which was a continuation of the Tea Forum held in July 2015, aimed to facilitate discussion among a variety of stakeholders of the State Program of Tea Plantation Rehabilitation, called “Georgian Tea”.