Georgia

THE CURRENT SITUATION

Georgia is a country with a parliamentary-premier system. Democratic institutions, despite all their partial shortcomings, are now a functional part of the country's political environment. According to the Human Development Index 2021, Georgia ranks 61st out of 189 countries. The country is facing high unemployment, a reduction in remittances, foreign direct investment and devaluation of the national currency. The low quality and lack of access to health and social services most affect the elderly, children, the disabled, socially excluded groups, and people living in remote areas. Agriculture employs about half of the workforce, is characterised by low productivity and, despite Georgia's favourable natural conditions, imports 70% of its food. Valuable mountain ecosystems are facing the consequences of the impact of climate change, illegal logging is taking place and there is therefore a high risk of soil erosion, landslides and flooding. The transposition of EU legislation under the Association Agreement and DCFTA, as well as the transformation and capacity building of public administration, including local and regional government, is also a key challenge for the country.

Georgia is a net recipient of development assistance and an upper middle-income country. Georgia receives substantial development assistance from the World Bank, the European Investment Bank (EIB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the International Monetary Fund (IMF), the EU, the US and other bilateral donors.

Georgia is one of the six Eastern Partnership countries (together with Ukraine, Moldova, Belarus, Azerbaijan and Armenia) and one of the countries of the Association Trio (together with Ukraine and Moldova) seeking to integrate into the EU. Under pressure from developments following the launch of the Russian aggression in Ukraine, Georgia, together with Moldova, applied for EU membership in March 2022 and submitted a completed pre-accession questionnaire in May 2022. In June 2022, the European Commission granted Georgia a European perspective and conditioned the granting of candidate status on the fulfilment of 12 recommendations in the political field.

On 27 June 2014, Georgia signed an Association Agreement with the EU in Brussels, which includes a Deep and Comprehensive Free Trade Area (DCFTA), which entered into force on 1 July 2016. From this date, Georgian exports to EU markets are free of tariffs and Georgian products must meet European standards. The process of setting appropriate standards for local companies is still ongoing. Although the volume of bilateral trade has been increasing since 2016, the EU share of Georgian exports and imports has been steadily decreasing since 2016. Meeting the strict conditions for honey and fish exports to the EU can be considered a success. In an effort to accelerate the Euro-integration reform processes, the Georgian government presented a comprehensive "Roadmap2EU" document in February 2019. 

Georgia is one of the few countries that managed to capitalise on Russia's aggression against Ukraine and whose economy continued to grow at a double-digit rate in 2022. The main reason for this was the government's accommodative policies and the flexibility of the business sector. In 2022, GDP grew by 10.1%, foreign trade by 33.7%, foreign investment by 61% and tourism receipts by 182%. Remittances, which accounted for 14.2% of Georgia's GDP in 2021, grew by 86%. The average inflation rate in 2022 was 11.9%. The fastest growing sectors were transport and storage, information and communication, energy and construction. Economic growth was stimulated by domestic consumption, which grew due to the influx of Russian citizens and a gradual recovery in tourism. The inflow of Russian capital led to the strengthening of the local currency, the lari (GEL). The euro depreciated by 18% and the USD by 13%.

Since the last parliamentary elections, the government's tendency to limit the independence of state institutions and to strengthen its influence and power is visible. The authoritarian tendencies have further strengthened after the launch of the Russian aggression in Ukraine in February 2022. In anticipation of the next parliamentary elections in 2024, the ruling party tried to limit the space for NGOs and media by enforcing the Law on Transparency of Foreign Influence (March 2023), which was only abandoned under pressure from mass demonstrations. However, efforts to control NGOs and the media continue in other forms.

CZDA ACTIVITIES

The CZDA has been active in Georgia since 2008, when emergency funds were made available for reconstruction and development assistance to the country in the aftermath of the conflict with Russia. In 2010-2017, Georgia was one of the priority countries of the Czech Foreign Development Cooperation without a cooperation programme. Since 2018, Georgia has been a programme country. In accordance with the Development Cooperation Programme with Georgia for 2018-2023, the projects of the CRA are implemented in the following sectors.

Development Cooperation Programme with Georgia:
Programme for the years 2018–2023

Projects