For more than a decade, the country has been de-industrializing and learning to live with firewood or diesel generators brought in from Turkey. Reforms in Georgia, with its entrenched corruption, lack of competitive industries, poor work ethic, worn-out Soviet-era infrastructure, and widespread poverty, has been considered difficult, especially in the face of a deep economic crisis and security threats, including ones from Russia.
Agriculture is a leading occupation in Georgia, whose warmer districts produce large quantities of tea and citrus fruits; tobacco, wine grapes, rice, and mulberry trees (for silk) are also grown. Sheep, pigs, and poultry are raised. Georgia is rich in minerals also. Georgia had a large and varied industrial sector. Its chief manufactures included transport equipment, electric motors, machine tools, iron and steel, railroad and mining equipment, chemicals, textiles, wine, and building materials, but many industries collapsed after independence.
Challenges: For Georgian economy to progress there are myriad internal and external challenges. Russia has been accusing Georgia of sheltering terrorists from the rebellious region of Chechnya, a charge Georgia has denied. Georgia has complained of Russian support for separatist elements in the border area of Abkhazia, over which the central government in Tbilisi has little control. Georgians want Russia to withdraw two Soviet-era military bases it maintains on their territory and to end support for two separatist regions
Although Georgia has abundant hydroelectric energy, it must import the bulk of its fuel due to previous faulty privatization policies and other circumstances. "Moscow also controls the vital electric and natural gas grids, acquired by state-controlled Russian companies RAO UES and Gazprom in 2003. Similar to the relationship between the U.S. And Central American economies, close to 1 million Georgians are repatriating their earnings to their homeland to the tune of up to one-fourth of Georgian GDP. Russia also uses the visa-free travel scheme from Georgia to encourage Abkhaz and Adjaran separatism" ('Our Challenge in Georgia' A17).
The new regime is struggling to attract honest, competent and educated people to the government, deliver pensions, salaries and other social safety payments on time and restarting economic growth and foreign investment amid deep economic crisis. The government is also encouraging economic reform, institution building, and anti-corruption measures through ongoing privatization and deregulation
The State Department should foster anew economic relationship with the Georgian government. Washington should expand cooperation with Georgia on providing security for Baku-Tbilisi-Ceyhan oil and gas Main Export Pipeline.
Elections in transitional countries are often scheduled by the authoritarian ruler and rigged to ensure reelection of the ruling party. These types of elections raise a different set of challenges. Democrats facing the prospect of a stolen election turn to the United States and Europe for help in somehow making the election fair as is the case with Georgia & Azerbaijan. Washington particularly ensured stability in the Caucasus as essential to its longtime projects of pipelines stretching from the Caspian to the Mediterranean through Azerbaijan, Georgia and Turkey. The project was specially became important for the economic progress of the country."The gas coming ashore from the Shah Deniz field will be processed at the Sangachal terminal before being piped along the new Baku-Tbilisi-Erzerum 686km pipeline to Turkey with off-takes in both Azerbaijan and Georgia. Georgia and Turkey stand to earn substantial revenues through transit fees and royalties. Azerbaijan's President Ilham Aliyev says he expects the major oil and gas fields and pipelines to provide revenues of more than $150bn to Azerbaijan, Georgia and Turkey by 2024. The European Bank for Reconstruction and Development has forecast that Azerbaijan's oil revenues alone will swell government coffers by $50bn" (Williams 44).
Democracy in both countries has come to the two countries with the help of western powers but credit should also go to the people of the countries. Especially the way people have come forward in Georgia can be an inspiration for other countries to follow. The interesting point to note in cases of both the countries is that both Moscow and Washington seemed to be in unison with regard to political changes in the Caucasus. States like Georgia and Ukraine became examples for countries like Azerbaijan which later also moved on the path of democracy. People of both countries suffered after disintegration but did not completely bog down and eventually started raising their voices.
Azerbaijan is faring better than Georgia in economic terms. This may be because no former Soviet republic saw as great an economic calamity as Georgia. The economy now is still under the pressure pf past mistakes in the two countries but things have started looking up slowly but surely. Azerbaijan on the hand is relying heavily on its energy resources. However, long-term prospects for Azerbaijan will depend on world oil prices, the location of new pipelines in the region, and Azerbaijan's capability to manage its oil wealth. "Georgia is one of the rare states where social spending is dependent on international assistance. With the massive international financial aid, Georgia can only provide its 5-million populations an average monthly income of less than $25, compared to $73 in Azerbaijan. Pensions and salaries are paid sporadically, retirees and refugees are struggling to survive on their $9 monthly allowances, and the country is regularly plunged into cold and darkness by seasonal energy shortages" (Rasizade 139). Despite similarities and differences, the two countries are now moving in the positive direction.
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Gupta, Sanjeev, Leruth, Luc, De Mello, Luiz & Chakravarti, Shamit. Transition Economies: How Appropriate Is the Size and Scope of Government?. Comparative Economic Studies. 45. 4, 2003: 554+.
Rasizade, Alec. Meets the Test of Its Independence. Contemporary Review. 284.1658, March 2004: 139+
Progress in Azerbaijan; an Ally in the War on Terror'. The Washington Times. April 28, 2006: A19.
Mitchell, Lincoln a. Beyond Bombs and Ballots: Dispelling Myths about Democracy Assistance. The National Interest. 88, March-April 2007: 32+.
Kaplan, Robert D. Was Democracy Just a Moment?. The Atlantic Monthly. 280.6, December 1997: 55+.
Smith, Pamela Ann. Azerbaijan Sees a Window of Opportunity. The Middle East. June 2001: 25.
Kechichian, Joseph a. & Karasik, Theodore W. The Crisis in Azerbaijan: How Clans Influence the Politics of an Emerging Republic. Middle East Policy. 4. 1,1995: 57.
Our Challenge in Georgia. The Washington Times. January 15, 2004: A17.
Carothers, Thomas. The Democracy Crusade Myth. The National Interest. 90, July-August 2007: 8+.
Ackerman, Peter & Duvall, Jack. People Power Primed: Civilian Resistance and Democratization. Harvard International Review. 27. 2, 2005: 42+.
Williams, Stephen. The Paradox of Plenty: Even as Azerbaijan's Oil and Gas Begins…