NGOs Suggest Steps to Reduce Georgia’s Economic Dependence on Russia
By Khatia Bzhalava
Wednesday, April 13, 2022
Georgian NGOs have issued 10 Recommendations to the Government of Georgia on Economic Issues, which include ways to reduce economic dependence on Russia and increase the economic and political security of the country.
According to the statement, Russia's aggression in Ukraine and the international sanctions imposed on Russia in response to this will hurt the Georgian economy, however, the NGOs claim that at this stage, the current situation in Georgia will not lead to an economic crisis.
As the World Bank and the Asian Development Bank have forecasted, the Georgian economic growth rate will be lower than projected at the beginning of the year, due to the ongoing hostilities in Ukraine. As NGOs note in their recommendations, how hard the Georgian economy will suffer also depends on the steps taken by the Georgian government. According to them, the government should use the strategic opportunities that are being created, in particular — to reduce Georgia's economic dependence on Russia, use the country's transit function more efficiently, and accelerate Georgia's economic integration with Western countries.
As the statement reads, to reduce economic dependence on Russia, the Georgian government should begin “more active and expeditious” work on reaching free trade agreements with "all strategic partners".
“Increasing the geographical area of free trade will reduce Georgia's dependence on imports of Russian products and exports of Georgian products to the Russian market,” the statement reads.
The NGOs also note that the government and municipalities should not subsidize entrepreneurial activities that increase Georgia's economic dependence on Russia, noting that this approach should apply to both business grants and concessional loans, as well as price subsidies.
It is also noted in the statement that even though electricity and natural gas imported from Russia have not accounted for a large share of Georgia's domestic consumption in recent years, it is important to further reduce it.
“Recent events have reminded us once again that Russia is using its energy resources and electricity exports as leverage for political pressure, which is detrimental to the country's energy security and poses significant risks to sustainable economic development,” the NGOs note.
The statement also suggests that the Government of Georgia should take advantage of new opportunities, stressing that due to the created geopolitical reality, the role of Georgia as a transit country is growing.
“It is realistic that the demand for transit of Azerbaijani oil and gas to Europe via Georgia, as well as the cargo from Central Asian countries, will be increased,” reads the statement, adding that Georgia should enhance its transport potential by accelerating infrastructure development and modernization.
The NGOs Emphasize that the Government of Georgia should state clearly that Georgia will not be used to circumvent sanctions against Russia.
