A SUPPLEMENT TO EUROMONEY - April 1997Stabilization and reformPrior to the breakup of the Soviet Union, Georgia was among the most productive and, probably, the wealthiest of the Republics. So, at independence in April 1991, expectations for the country's well being were high. Unfortunately, severe political turmoil and economic mismanagement in Georgia coincided with the many disruptions in trade and economic ties within the former Soviet Union. The results, over the next five years, were very large decreases in production, trade and employment. These developments, combined with hyperinflation, resulted in a decline in the standard of living estimated at over 70% during the country's first five years on its own. Finally, in 1995, under president Eduard Schevardnadze, who first came to the leadership position in 1992, reasonable degrees of political stability and economic reform began to take hold. Although separatist movements are far from settled, especially in Abkhazia, a beautiful region in northwest Georgia, it seems unlikely that armed conflict will resume. There are some 200,000 refugees from this breakaway autonomous region, primarily in Tbilisi, and that adds to the severe unemployment situation. A shortage of employment opportunities is greatly complicated by the government's inability to afford a social safety net which even begins to reach minimum subsistence levels. |