Georgian economy will grow 5-6% in 2008

Despite the heavy blow Georgia has received from the Russian aggression its economy will still grow by 5-6 %, says Minister of Economy Ekaterine Sharashidze. To make such prognoses under the present circumstances carries great risk as so much depends on receiving external help. The Minister’s statement however implies that the assistance Georgia knows it will receive will be extremely well-founded and permanent.

The Georgian leadership often thinks in these “Marshall Plan” terms, but to achieve growth via aid rational management and properly motivated individuals are required. Economic reconstruction will take devoted work, not just financial assistance, thinks economic analyst Demur Giorkhelidze. Fellow analyst Gia Khukhashvili takes a similar position, insisting on urgent changes in economic policy, the rules of the game and approaches. Financial assistance is only the basis of development and it is the relation between the administration and the market which is essential. Systemic changes should be implemented everywhere, including within the Government, Khukhashvili says.

It is very doubtful however whether the ruling administration is prepared to make radical changes in the country’s economic management. So far most of its attention is concentrated on the stabilization of the political situation and on military issues. Let us hope that the donor countries and organizations themselves carry out efficient monitoring of the funds they bestow and offer appropriate advice on their use when making the donations.