On December 6, the World Bank and the Georgian government convened an event to introduce the Country Economic Memorandum (CEM) for Georgia: "Charting Georgia's Future: Competitive, Connected, and Capable."
The research emphasized that, despite the COVID-19 epidemic, Georgia has managed good economic development in the previous ten years. "Georgia has one of the fastest-growing economies in the Europe and Central Asia (ECA) area," the survey noted. According to the research, Georgia has become an upper-middle income country (UMIC), and the poverty rate has decreased from 37.3% to 19.5% since the decade's beginning.
"The pandemic's impact on employment, income, and human capital is likely to linger for some time," the research noted. In this regard, the study stated that continued success in the coming decade is not guaranteed, despite the nation's solid foundations for growth. While stressing that other constraints will become increasingly more binding, the report noted that some constraints are already binding: investments may need to moderate to stabilize debt accumulation; showing firm growth, and the population is aging.
It emphasized that although the current structural shift of the Georgian economy from agriculture to services is delivering advantages, its potency will progressively wane. Additionally, according to the report, Georgian businesses have not increased their efficiency, which has kept many Georgians out of work despite the country's strong GDP growth. It also noted that many Georgians who left agriculture are either self-employed or working at low wages, meaning that even those Georgians who left agriculture are only slightly better off than their counterparts who have stayed in the industry.
The World Bank created the CEM, a growth diagnostic report, to examine growth factors and offer suggestions. The report highlights Georgia's "significant development gains over the last decade and seeks to inform government policies and help facilitate similar successes over the next ten years," according to a press release from the World Bank.
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World Bank’s Human Capital Review on Georgia
