An upcoming place to be for tourists

Dear followers, we are already in week number 4, we are now almost traveling for one month and we are still in our 4^th country namely Georgia.

Georgia has been good so far but now I would like to focus on their economy. Georgia has been involved in commerce with many countries and empires since the ancient times. This was due to their location at the black sea and later at the Silk Road. Their main goods that they traded were gold, silver, copper and iron. They are also famous for their wines. They have been making wine for ages. Their principal economic sectors are their agriculture and tourism due to its climate and topography.

Since the fall of the USSR in 1991 Georgia reformed to a free market but not everything went well with this change. They have known a severe economic collapse and with the civil war and military conflicts in South Ossetia and Abkhazia, this made everything worse. Their financial crisis had reached such a high point that they have asked for some help. Luckily they received it from the World Bank and International Monetary Fund in 1995. They received 206 million US dollars.

In the 21^st century Georgia had a real GDP growth rate of 12% and this made Georgia the fastest growing economies in Eastern Europe.  The world bank declared Georgia as “the number one economic reformer in the world” because they rose from place 112 to 18 in a list in terms of ease of doing business. On the other hand it had still a high unemployment rate and a low median income compared to other European countries.

In 2006 Russia banned the import of Georgian wine and this was a big problem for Georgia because Russia was there biggest trading partner. Russia also increased the price of gas for Georgia and therefore Georgia had an increase of inflation. Luckily in 2007 they could export to a lot of other countries in 2007 which was good for their economy. Their main imports are natural gas, oil products, machinery and parts and transport equipment.

In 2001 54% if the population lived below the national poverty line but by 2006 this was only 34%. This is a curve that is still lowering which is good for Georgia and the people living in Georgia.

We’ve seen a lot of poor people, you just can’t compare their way of live with ours. It is very different. I’m glad I’ve seen it here, but now it is time to move on. Next stop: Turkey!

Thank you for reading and feel free to comment.

Matthias Denys

Week 4 Georgia (economics)

http://en.wikipedia.org/wiki/Georgia_(country)#Economy