Private sector and human-resource development in Georgia

Non-Income Indicators of Poverty.   Non-income indicators of poverty in Georgia, inherited from Soviet times, still compare favorably with those of countries with similar per capita income.  The UNDP 2003 Human Development Report ranks Georgia 88th among 175 nations.  However, Georgia faces a major challenge in sustaining these relatively favorable indicators.  Studies conducted by various international organizations (UNICEF, USAID, EC, etc.), indicate that there has been no improvement in the indicators during the 1990s.  In fact, maternal mortality rate, immunization rates, access to health and education, access to safe water and sanitation and other living conditions indicators have deteriorated and the quality of social services has worsened substantially in comparison to the pre-transition situation.

Internally Displaced People.  IDPs vulnerability to poverty is magnified by their lack of access to land.  Thus IDPs living in collective centers are 3½ times less likely to have access to land than the local population, and those living in private accommodations half as likely.  In addition, IDP’s rate of unemployment is very high -- 40% among IDPs living in collective centers.  Government benefits do seem, however, to be reaching the IDPs, with 80% to 90% receiving a government benefit.

Millennium Development Goals.  The estimates of Georgia’s prospects for achieving the Millennium Development Goals (MDGs) show a mixed picture based on Georgia’s current performance, as indicated in Table 2.1.2.

Table 2.1.2: Millennium Development Goals

Millennium Development Goal

Present Situation

Prospects for Achievement by 2015

Goal 1: Eradicate extreme poverty and hunger.

Target 1: Halve, between 1990 and 2015, the propor­tion of people whose income is less than $2.15 a day.

NOTE: While the MDG indicator and target include $1 a day, a higher poverty line such as $2.15 is considered more appropriate in ECA given the extra expenditure on heat, winter clothing and food. (“The Millennium Development Goals in ECA”, World Bank, forthcoming)

Target 2: Halve between 1990 and 2015, the proportion of people who suffer from hunger.

In 2002, the poverty incidence at the international poverty line of US$2.15  per capita/per month at PPP was 13.5 percent. 

While the exact  percentage of people suffering from hunger in Georgia is not known,  there is no evidence that would indicate that hunger is an issue in Georgia. 

Likely.  The Economic Development and Poverty Reduction Program of Georgia envisages economic performance that would allow Georgia to meet the MDG. 

Goal 2: Achieve universal primary education.

Target 3: Ensure that by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling.

Enrollment rates in basic education (grades 1-9) are close to 100 percent.


Goal 3: Promote gender equality and empower women.

Target 4: Eliminate gender disparity in primary and secondary education, preferably by 2005 and in all levels of education no later than 2015.

Surveys show no significant gender differences in access to primary and secondary education. 


Goal 4: Reduce child mortality.

Target 5: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate.

According to the Human Development Report 2003, the under-five morality rate in Georgia in 2001 was 29 per 1,000 live births.  This was better that the average for ECA (36/1,000); and much better than the average for medium human development group of countries – 61 per 1,000 live births.

Due to current efforts and actions planned under the EDPRP to keep immunization rates at high level, improve breast-feeding rates, provide appropriate case management and home and in community for acute respiratory infection, pneumonia and diarrhea and improve access to appropriate health care, reliable water and improved sanitation, it is  estimated that Georgia will make a significant progress in reducing the U5MR.  However, the MDG target (U5MR of 9.7 per 1,000 live births, which is close to the current U5MR level in developed countries)  is estimated as unlikely to be met, given Georgia’s very low public spending on health.

Goal 5: Improve maternal health.

Target 6: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio. 

Available data suggests the MMR doubled over the last 10 years to almost 59 per 100,000 live births in 2001.  Only 59 percent of women complete the mandatory 4 antenatal visits but 96% of births are attended by skilled health personnel

Planned actions aimed at improving antenatal care are expected to result in decreased maternal mortality.  However, given high maternal mortality rate and its recent increase, the MDG target (15 per 100,000 live births) is estimated as unlikely to be met.

Millennium Development Goal

Present Situation

Prospects for Achievement by 2015

Goal 6: Combat  HIV/AIDS, malaria and other diseases.

Target 7: Have halted by 2015 and begun to reverse the spread of HIV/AIDS.

Target 8: Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases.

HIV/AID is spreading fast.  The number of new HIV cases in 1997  increased nearly threefold compared with the previous year and accounted 21 cases; in 2001 93 cases were registered. From 1998 through 2001 more then a half of newly registered HIV cases have been attributed to IDUs. The percentage of new cases attributed to heterosexual contacts also increases, suggesting that the epidemic is leaking into the general population. HIV/AIDS is predominantly present in young people (21-35 years old). In 2001 over 87 percent of all new AIDS cases have been detected  in 26-35 age group.

The prevalence of TB has increased  from 28.2 in 1991 to 85.8 in 2001, reflecting the spread of disease, but also better recording of incidence.

While Georgia has improved HIV recording and reporting, there is an urgent need to introduce prevention & education on a broad basis, as well as surveillance among high risk groups. The MDG target for HIV/AIDS is unlikely to be met

Political commitment and additional resources are required to keep the spread of TB under control. An upcoming PHC Development program is expected to further improve the effectiveness of control measures.  If measures are appropriately implemented, it is possible to arrest and reverse the trend.

Goal 7: Ensure environmental sustainability.

Target 9: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources.

Target 10: Halve by 2015 the proportion of people without sustainable access to safe drinking water.

The National Environmental Action Plan and Biodiversity Strategy are a framework  for  environment and sustainable use of natural resources.  The EDPRP highlights  steps  to mainstream environment  into development, but implementation is limited.   An environmental permitting system and other  legislation are in place, but institutional weaknesses (unclear  responsibilities, weak monitoring and enforcement, sometimes excessive and non-transparent regulations)  limit enforcement.  With regard the specific indicators,  despite its unique ecosystems in Georgia 2.8% of the land area is protected to maintain biological diversity compared with the world average of 6.5%. Forest cover is 40% but the quality of management is inadequate. Energy intensity and carbon emissions indicators are not high, but there are severe problems with delivery of energy services to the population.

In 1999, about 86% of urban population and 43% of rural population had access to piped water supply.  Reliability and quality of services are serious problems. Water systems are largely in a state of severe disrepair. Low capacity of people to pay for the services together with limited government budgets represent real constraints to mobilize resources into the sector. Involvement of IFIs is critical to avoid total collapse of sector.

Political will and strong commitment as well as human and financial resources are needed to ensure environmental sustainability.  If the governance environment and institutional capacity improve, and  if resources for environment and natural resource management could be increased, it would be possible to meet target 9.

About US$ 8-10 million annually will be needed for the rehabilitation of old deteriorated existing systems and expansion of access to piped water supply to an additional 0.5 million people  if the target 10 were to be met. Given current low level of investments in the sector, it is unlikely that Georgia will meet this target.

3.   Economics


3.1  Main economic indicators



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