Country Report Georgia March 2011

Economic policy: The president outlines economic priorities

On December 3rd, in an address at the opening ceremony of the Lilo Customs Clearance Zone on the outskirts of the capital, Tbilisi, Mr Saakashvili announced that a new economic course would be adopted. The plan is designed to improve the business environment and to provide a boost to small and medium-sized enterprises (SMEs). Mr Saakashvili acknowledged that the state still had a number of shortcomings in its relationship with business.

Mr Saakashvili clarified some of the authorities' future economic priorities in his annual state of the nation address on February 11th. He announced that the government would allocate an extra Lari150m to the agricultural sector over the coming years, with the aim of doubling agricultural production by 2015. Agriculture has experienced sluggish growth in recent years, and most agriculture has remained subsistence-based. The president also stressed the need to create new agricultural processing enterprises. In 2007 the government pledged to create 100 new agricultural processing plants (September 2007, Economic policy). However, these plans stalled after the war with Russia and the subsequent economic downturn.

Among other targets for 2015, Mr Saakashvili pledged to halve the current level of unemployment, increase average salaries by 50%, increase the annual number of foreign visitors to Georgia to 5m and build 17 new hydropower plants. In a related development, on January 12th, after a meeting between the parliamentary chair, Davit Bakradze, and representatives from the Business Association of Georgia, it was announced that a Business Council would be established to improve communication between parliament, the government and businesses.

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