a small red
bolnur-katskhuri cross; the five-cross flag appears to date back to
the 14th century

Economy
Georgia

Economy - overview:

Georgia's economy has sustained robust GDP growth of close to 10% in
2006 and 12% in 2007, based on strong inflows of foreign investment
and robust government spending. However, a widening trade deficit
and higher inflation are emerging risks to the economy. Areas of
recent improvement include increasing foreign direct investment as
well as growth in the construction, banking services and mining
sectors. Georgia's main economic activities include the cultivation
of agricultural products such as grapes, citrus fruits, and
hazelnuts; mining of manganese and copper; and output of a small
industrial sector producing alcoholic and nonalcoholic beverages,
metals, machinery, aircraft and chemicals. The country imports
nearly all its needed supplies of natural gas and oil products. It
has sizeable hydropower capacity, a growing component of its energy
supplies. Despite the severe damage the economy suffered due to
civil strife in the 1990s, Georgia, with the help of the IMF and
World Bank, has made substantial economic gains since 2000,
achieving positive GDP growth and curtailing inflation. Georgia's
GDP growth neared 10% in 2006 and 2007 despite restrictions on
commerce with Russia. Areas of recent improvement include increased
foreign direct investment as well as growth in the construction,
banking services, and mining sectors. In addition, the reinvigorated
privatization process has met with success. However, a widening
trade deficit and higher inflation are emerging risks to the
economy. Georgia has suffered from a chronic failure to collect tax
revenues; however, the new government is making progress and has
reformed the tax code, improved tax administration, increased tax
enforcement, and cracked down on corruption. Government revenues
have increased nearly four fold since 2003. Due to improvements in
customs and financial (tax) enforcement, smuggling is a declining
problem. Georgia has overcome the chronic energy shortages of the
past by renovating hydropower plants and by bringing newly available
natural gas supplies from Azerbaijan. It also has an increased
ability to pay for more expensive gas imports from Russia. The
country is pinning its hopes for long-term growth on a determined
effort to reduce regulation, taxes and corruption in order to
attract foreign investment