Georgia - A Brief Survey of Macroeconomic Problems and Policies

Abstract

During the first three years of independence (1991-1994) Georgia suffered serious economic decline. The difficulties associated with the transition from soviet-type planning to free enterprise and with the collapse of the CMEA trade system were aggravated by civil strife and especially by the 1992-1993 war in Abkhazia which obstructed one of Georgia's main transport links to the outside world, and caused an influx of 270,000 refugees into Tbilisi and other cities. With the end of hostilities, the restoration of law and order in most of the country, and with the emergence of a government strongly committed to liberalization and to stabilization the situation turned sharply for the better. An analyses of the Georgian economic transition.

Keywords: Georgia, economic transition, macroeconomic policy