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The Georgian Miracle (Opinion)

After the collapse of the USSR, Georgia experienced an economic crisis. In the USSR, it was known as one of the most beautiful republics of the Soviet Union. The cobblestone-lined streets of Tbilisi and the scenic mountain views of Kazbegi, attracted millions. However, after the downfall, there were no tourists. This was just a piece of what Georgia lost, of course it lost Abkhazia and South Ossetia too. The country slipped into civil war, millions lost their jobs, factories closed, and inflation rose exponentially. 

GDP Deflator, Inflation, World Bank, CC BY-4.0

GDP Per Capita [PPP], current US$, World Bank, CC BY-4.0

This led to most of the economy shutting down, and millions going hungry. After 1993, Georgia went through en masse political unrest, and there were some reforms, but it was after the Rose Revolution that the economy witnessed severe changes. During Saakashvili’s reign, he made sure he grew the economy and this is seen by GDP per Capita rising. It was then that investment into Georgia rose, tourist arrivals, and the lost industry developed. Shown by the graphs below.

International Tourist Arrivals, Data from World Bank, CC BY-4.0

FDI Inflows into Georgia [in % of GDP], World Bank, CC BY-4.0

Saakashvili promised economic reforms and delivered, however, he did turn into a totalitarian, Draconian dictator. In 2008, Georgia fought over its territory. Nonetheless, one of his most important legacies were reducing corruption, increased trade, development — e.g., making it easy to do business — and cooperation with the west. Then came another party, which continued his legacy, and continued to develop Georgia with the same tactics he had used — for example the IT sector, and exports. [Happened because of the country’s low crime rate increasing investor psyche, therefore giving them the thumbs up to invest].

Georgia’s trade rating 2005-2013, [1 = low, 6 = high], World Bank, CC BY-4.0

Georgia’s Exports in Billions [current US$], World Bank, CC BY-4.0

Two years ago, Georgia crossed into the very high HDI category. This marks a new era as the country prepares to potentially enter the European Union in the future, and enhances its relations with Brussels. But it stands testament to the Georgian miracle. By far, Georgia is not like the Korean, Singaporean or Japanese miracles, but its fast rise from a war-torn nation in the 1990s to a modern, prosperous, free republic in the Caucasus is miraculous albeit a small victory, but compared to other former-soviet states, and one with no resources, Georgia is a celebratory success story.

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