Once again, Georgians across the country are preparing for the holiday season, making travel plans, crushing walnuts for gozinaki, and buying gifts for their friends and families. Gifts are an important part of celebrating the New Year and Christmas, signifying the importance of friendship and allowing us to treat our loved ones to something to start a brand new year in style.

Some weeks ago, I was invited by a development bank to the Hotel Eden in Kvareli, Kakheti, where we discussed Georgia’s possibilities to develop economically. When we talked about the potential of the manufacturing sector, one of the attending bank employees said: “The problem is that Georgia does not have Rudolf Diesel and Nikolaus Otto.”

Agriculture makes an important contribution to economic development in Georgia. Value added in agriculture accounted for 9.3% of Georgian GDP in 2013 and 53.4% of employment (World Bank, 2014a). Agriculture also provides an essential basis for the food, beverages and tobacco processing industries, which together accounted for just over one-third of value added in manufacturing in Georgia in 2010.

A recent paper by Dani Rodrik has an interesting observation about Georgia. The paper itself estimates the productivity growth rates of manufacturing firms, based on a UNIDO dataset covering 72 countries.