After the collapse of the Soviet Union in 1991, the newly independent state underwent serious turmoil, including civil war, deteriorated governance, depreciation of critical infrastructure, and endemic corruption. But after the Rose Revolution in 2003, the country began to implement major political and economic reforms. Foreign capital was injected into the county which helped deliver extremely high GDP growth rates (on average of 6% per year from 2003 to 2013).

Economic growth, however, was not socially inclusive. It mainly centered on Tbilisi (the capital city) while the rest of the country was left behind. High levels of poverty and unemployment persisted, and this led to a build-up of social tensions that ultimately resulted in a dramatic political regime shift in 2012.

The objective of this study was to assess the economy wide indirect benefits of investments in the East West Highway (EWH). This study has used a computable general equilibrium (CGE) model, which simulates indirect benefits associated with the completion of the upgraded road corridor. The transmission channel modeled is the reduction in transportation costs—reduction in vehicle operating costs and time savings—resulting from the investments in the EWH. This reduction in transportation costs is normally assessed when conducting cost-benefit analysis of road projects, but without assessing the indirect impacts their reduction has on the wider economy. Explicitly excluded from the analysis are the direct impacts associated with the civil works of the EWH investment program, which would have large impacts on real GDP and employment.

The Debt Management Specialist’s initial focus was an assessment of the public debt management legal environment, institutional coordination and arrangements, public debt management initiatives and capacity, public debt portfolio composition, and macroeconomic condition in Georgia. This report provides a general overview of these fore mentioned components.

A key component to this Technical Assistance program in Georgia is the Ministry of Finance’s Public Debt and External Finance Department’s efforts in developing a medium-term debt management strategy (MTDS). This document provides an overview of a medium-term debt management strategy’s concepts, potential benefits, core principles and enabling framework, and macroeconomic coordination. Also, included is a narrative on risk indicators and targets, trends in debt management, debt and capital market development as a MTDS objective, and data base system suggestions for debt management analytics.

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