Georgia is in the Middle East

Development fundamentals

Due to the geographic location of Georgia, the state is an important transit country between the EU and Azerbaijan, Armenia and Asia. Oil and gas transports from the Caspian region via Georgia to Turkey and from there on to the EU or directly from Georgia by ship over the Black Sea to the EU are seen as important factors. To this end, large investment projects were initiated and the ports of Poti and Kutaisi expanded. Geostrategically there would also be potential for north-south transit traffic between Russia, Turkey, Iran and the Middle East. Georgia has great development potential. Since independence, the legal prerequisites for building a stable democracy have been created; However, authoritarian tendencies of the government and the growing gap between rich and poor have repeatedly led to popular protests in the past.

On the one hand, agricultural production is seen as the basis of the Georgian economy. On the other hand, Georgia also has reserves of raw materials such as manganese and gold. Ore processing as an industrial branch (copper, manganese) can therefore also be counted among the economic sectors. The abundance of water in the country as well as other renewable energy sources such as wind offer great potential to meet one's own energy requirements and also to export energy. The government therefore formulated the expansion of energy production and increasing energy efficiency by modernizing the infrastructure as priorities.
The landscape of the Caucasus also holds great potential for international tourism, and several prestigious hotel and tourism projects already exist.

Georgia is one of the countries with high human development, but 10.1% still live below the national poverty line (2015). Georgia's tremendous economic growth between 2004-2008 initially resulted in a significant improvement in the living conditions of the population, but it increased the differences between rural and urban areas. This process was exacerbated by the conflict with Russia in 2008 and the global recession. The economic upswing, which was strongly encouraged by the government, was not sufficiently embedded in job-creating measures.

High unemployment (officially the rate was 11.6% in 2016), but unofficially it is likely to be much higher) and poverty pose major challenges for Georgian social policy . The infrastructure, especially the energy and water supply, is unlikely to meet western standards yet. Many people continue to suffer from the consequences of the war, mismanagement, corruption and the limited performance of state institutions. Despite the economic development since 2003, large parts of the Georgian population are underemployed or unemployed and impoverished. The residents of rural areas in the mountain regions are particularly affected, but also urban unemployed people and internally displaced persons and single mothers who are mostly isolated. Rural poverty usually leads to rural exodus or emigration. The food situation in Georgia has improved in recent years. The from International Food Policy Research Institute (IFPRI) developed Global Hunger Index (GHI) reported an index number of 11.3 for 2001 (1996), followed by a value of 9.3 in 2011 and 8.2 in 2016. 24.7% of Georgia's population were malnourished between 2010-2012.
Remittances from seasonal and permanent foreign migrants have already represented a significant share of the national income in the past.



In the past, too, problem areas were found in air pollution (especially around Rustavi) and the associated ecological consequences. The Kura River is an important ecosystem in the South Caucasian zones. However, it was reported that it was heavily polluted. The Black Sea around the cities of Poti and Batumi is also not insignificantly polluted. In addition to soil poisoning, a lack of drinking water supply represents a medium to long-term ecological problem. Although approx. 44% of Georgia is covered with forests, illegal exports to Turkey also represent a more extensive possible systemic risk for fauna and flora There are several nature reserves on the territory. One of the largest (since 2001) is the Borjomi-Kharagauli National Park (Lesser Caucasus; approx. 76,000 ha).

Just a few years ago, there were widespread power cuts every day due to maintenance deficits, insufficient investments and inadequate operational management. The "homemade" problems such as ineffective management of energy companies, corruption and electricity theft have been alleviated or resolved in recent years. Market economy structures, in particular cost-covering electricity tariffs, were introduced. At the same time, system-related weaknesses have been reduced to such an extent that power cuts are rarely seen today.

The collaboration focuses on increasing energy efficiency and promoting renewable energies. The Black Sea Energy Network (SMEV) was founded in April 2010 as part of Georgian-German government negotiations. It was co-financed by Germany and supports Georgia and its neighbors in networking their national electricity supply networks and connecting them to Europe. Georgia also has great potential in the areas of hydropower and geothermal energy. Georgia has a realistic perspective of becoming a net exporter of renewable energy (especially hydroelectricity). In order to make Georgia a net exporter of renewable energy (in particular electricity from hydropower), Germany made available a total of 107 million euros in funding for this "Black Sea Energy" project in 2008 and 2009, thereby helping to improve the climate. and resource conservation.

For a long time, cooperation in nature conservation and the promotion of biodiversity has also been of great importance. German experts work closely with the Georgian Ministry of the Environment and support the political and administrative implementation of international agreements such as the Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity (CBD). In recent years, for example, efforts have been made to preserve the Borjomi-Kharagauli National Park and make it usable for ecological tourism. With German help, a cross-border biosphere reserve was set up in Georgia and Armenia and a regional coordination office financed from which the residents and neighbors should also benefit. Part of the German commitment also included high-profile events, seminars and advanced training for experts in order to increase the previously rather low status of nature conservation in the public. Due to its extraordinary diversity of plants and animals, the Caucasus is one of 25 global "hot spots" for biodiversity. As part of a regional nature conservation program, Georgia was supported in preserving the Borjomi-Kharaghauli National Park and making it usable for ecological tourism. In addition, a cross-border biosphere reserve was set up together with Armenia. In order to ensure sustainable management of natural resources, a biodiversity monitoring system was introduced with German help. Awareness campaigns should make the Georgian public aware of the importance of regional biodiversity.

Further reading on development principles