ეკონომიკური პროფილი (Jul 2023)
FACILITATING AND HINDERING FACTORS OF THE ACCELERATED GROWTH OF THE GEORGIAN ECONOMY AND OPINIONS OF THE SCIENTIFIC COMMUNITY (RESULTS OF A SELECTIVE STUDY)
Abstract
In order to firmly establish a place in the global economy, Georgia must ensure a high rate of economic development and turn from an import-dependent country into the most important player in the global supply chain. Our goal is to find an answer to the question that has been transformed from rhetorical to existential in the post-independence period: "Can we do anything?" Our country's roe highway runs through sustainable and dynamic development, reducing import dependence, achieving an active trade and payment balance - increasing the scale and efficiency of using local resources, attracting, training and using suitably trained personnel with entrepreneurial experience and skills. In an ever-changing global world, new opportunities suddenly appear, and we must be ready to respond faster than others to the new demands of the economy and establish a place in the global supply chain. In our opinion, in order to overcome poverty, attention should be shifted to two main factors: investing a growing part of public funds in education adapted to the requirements of the modern world, and secondly, focusing on the production of products with high added value. The more the raw material goes through the recycling cycle, the more value is added to it and the richer society becomes. Qualified, high-quality education, together with appropriate supporting programs, restores and creates new sectors of the economy, which will be a determining factor in the economic development of Georgia. In order to identify contradictions and opportunities, in the research process, we set the following tasks: • Identification and analysis of factors promoting and hindering the dynamic development of the Georgian economy; • Systematic presentation of conditions and factors ensuring rapid economic development of Georgia and development of appropriate recommendations. In order to achieve the set goal, which included identifying factors promoting and hindering the rapid economic development of Georgia and determining the corresponding effects, from January 9 to January 16, 2023, four higher educational institutions of Georgia (Kutaisi University, Akaki Tsereteli State University, Caucasus University and Ivane Javakhishvili Tbilisi State University) We conducted an online survey among academic staff of the economic profile via corporate e-mail. We believe that in the process of searching and researching the factors of the rapid development of the economy of Georgia, it is important to have the assessments, expert knowledge and opinions of those who are most aware of the situation in the country's national economy and who, through their publications and appeals, regularly provide relevant opinions and recommendations to the central or local authorities. 60 professors and teachers answered the questionnaire, where 11-11 factors promoting and hindering the accelerated growth of the Georgian economy and one question were given. When filling out the questionnaire, the respondents should mark only 3-3 factors that are most important to them, and give one answer to the question. Factors facilitating to the accelerated economic growth of Georgia: • A reform-oriented government providing sustainable and dynamic development of the economy – 41,7% • Geopolitical location of Georgia – 38,3% • The recognition of the European perspective of Georgia by the European Union and the real perspective of Georgia joining the European Union – 36,7% • Free trade agreements with the world's largest markets (EU, China, etc.) – 33,3% • Liberal market economy (low level of corruption, little bureaucracy and procedural simplicity, little tax burden) – 31,7% • Georgia's rich and diverse nature, history, culture and gastronomy – 26,7% • Skilled and relatively cheap labor force – 23,3% • State programs for the development of entrepreneurship: "Make in Georgia", GITA grants, "Introduce the future", etc. – 18,3% • Rich natural resources – 16,7% • A well-developed banking system – 11,7% • Increasing harmonization of Georgian legislation with international legislation – 8,3% Factors Hindering to the accelerated economic growth of Georgia: • Underdeveloped democracy, constant question marks to the judicial system, political instability, little experience of statehood, state institutions not free from unhealthy political influence – 55% • Regional economic inequality, disproportionate distribution of investments and public funds to Tbilisi and the rest of Georgia – 41,7% • Low level of higher and professional education, insufficient qualified workforce – 41,7% • Lack of capital needed to implement innovative entrepreneurial ideas, low level of development of the real (production) sector of the economy and high deficit in foreign trade – 41,7% • Russia's occupation of Georgian territories, the threat of potential war and the unstable South Caucasus region. – 38,3% • High level of emigration – 20% • Underdeveloped stock market and non-convertible national currency – 18,3% • Monocentric state, high dependence of territorial-administrative units on state budget transfers – 10% • Mass destruction and hyperinflation of the economic powers inherited from the Soviet Union in the first years of independence – 6,7% • Inadequately developed transport logistics infrastructure (delayed Anaklia port project, poorly developed road infrastructure, single-lane railway lines) – 6,7% • Scarcity of natural resources and high import dependence on energy resources – 5% In response to the third question, which was about the time Georgia will need to reach the average European level of economic development in 2022, taking into account the listed factors. According to the received answers, this figure was about 15 years. Among them, 25 percent of the respondents named less than 10 years, and 10 percent - more than 25 years. For the accelerated economic growth of Georgia, there are many contributing factors as well as hindering factors. Despite the fact that we cannot solve some of the factors hindering economic growth by our own efforts, on the contrary, with the effective and coordinated use of the contributing factors, it is possible to minimize the risks and the rapid economic growth of the country. For rapid economic growth, it is necessary to quickly overcome the negative factors, the solution of which is an internal national issue, and also to use all the potential and positive factors at the same time, thus promoting the development of the real economy and technological innovations.
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