Private sector and human-resource development in Georgia

· Lack of published information on the various administrative procedures required for business establishment and operation. For example, the official gazette is significantly behind schedule and the business stamp approval procedure is still issued by the police at the cost of 10 GEL. The challenge of publishing and disseminating timely and current information among officials and the public is even greater because of the ongoing changes to existing laws. However, timely publication and dissemination is necessary in order to minimize information gaps and opportunities for corruption.

· Absence of effective mechanisms for holding public officials accountable. In principle, the Administrative Code and the Civil Code include provisions on the conduct and accountability of public officials. However, in practice these provisions are not enforced. Efforts to introduce and implement codes of conduct for taxation and customs officials have had limited effect to date.

· Absence of effective appeals mechanisms and the inadequate capacity of the courts. The Administrative Code provides for the public's right to be heard in protesting or seeking clarification on the actions of most government agencies. However, there is no provision for an independent or autonomous arbiter to provide recourse. This function is apparently to be carried out by the courts. However, the integrity of the courts is often suspected and the capacity of the courts to address these issues is limited.

1.8 Institutional Arrangements

1.3.1 Securities Industry

The institutional structure of the securities industry includes the following market participants: reporting companies (i.e. the private companies whose shares are traded at Georgian Stock Exchange), securities brokerage companies, share registrars, clearing banks, Georgian Central Securities Depository (GCSD) and Georgian Stock Exchange (GSE). The overall supervision is carried out by the National Securities Commission of Georgia (NSCG). The rights of the securities market participants are protected by the Georgian Securities Industry Association (GSIA). The structure of Georgian Stock Market is presented in Fig. 1.3.1.1:

Fig. 1.3.1.1. The Structure of Georgian Stock Market

2. Society

2.1 Poverty issues

Poverty Trends. The relatively slow rebound from the economic collapse after independence has led to a severe decline in welfare. Georgia's annual income per capita is about 56 percent below the pre-independence level, unemployment rates are high (16 percent in 2001) and many Georgians are underemployed. In the circumstances, poverty, vulnerability and inequality have all increased over the period. Georgia clearly needs to achieve and sustain higher economic growth rates to improve living conditions. Given the small size of the domestic market, this can be achieved only through a stronger expansion in export activities, especially of those in which Georgia has a comparative advantage and the potential to generate new job opportunities, such as agro-processing.

Poverty Profile. Strengthened economic performance resulted in an reduction of poverty in the mid 1990s. However, Georgia's growth rate slowed considerably between 1998 and 2000, and consequently inequality and poverty increased as measured by any of several methodologies increased (see Table 2.1.1). Growth was affected by a number of shocks, including the 1998 Russian crisis, severe droughts in 1998 and 2000, and the increase in the price of energy imports in 2000. These problems were compounded by internal and external political instability. Growth recovered in 2001-02, leading to a slight reduction in overall poverty.

Table 2.1.1. Change in poverty in Georgia between 1997 and 2002

	Poverty Headcount (% of population)
Poverty definitions (lines)	1997	1998	1999	2000	2001	2002a/
Official minimum	46.6	50.5	53.0	52.5	52.0	51.3b/
Urban	46.7	53.3	60.4	56.6	54.3	53.7
Rural	46.4	47.1	44.6	48.0	49.6	48.8
US$4.30 per capita/day at PPPc/	13.6	19.8	23.2	23.0	22.8	21.7
Recommended poverty line (baseline)	13.6	19.8	23.2	23.0	22.8	21.7
Urban	13.8	22.2	27.4	24.6	24.1	22.6
Rural	13.4	16.8	18.4	21.4	21.3	20.7
US$2.15 per capita/day at PPP c/	9.7	11.8	14.5	15.4	14.8	13.5
US$1.075 per capita/day at PPP c/	1.7	3.0	3.2	3.3	3.4	2.7
Source: SDS SGHH primary data and World Bank, see Georgia Poverty Update, Report No. 22350-GE. Note: The official poverty line uses a normative basket and CPI price data to cost it and is around 100 GEL (about US$50 at current exchange rate) per equivalent adult per month. The recommended poverty line was developed jointly by the World Bank and SDS in 1998; it uses actual consumption patterns of the population and survey prices (its non-food component is fixed in real terms to 1996 and deflated using the CPI for non-food items); it is about 55 GEL (US$25) per month per equivalent adult. The equivalence scale used in the official and recommended methodology is the scale developed by SDS and used in Georgia to determine the social assistance payments. International poverty lines expressed in dollar terms (US$ in PPP) are per capita and use the latest (1996) revision of the World Bank, updated with the Georgia CPI. All figures are averages of quarterly data. a/ Preliminary estimate; corrections for changes in the Survey not made. b/ Bank estimates using official methodology. c/ Using 0.33 as PPP conversion factor.

Differential Impact of Rising Poverty. IDA, in close collaboration with the State Department of Statistics, prepared a Poverty Update covering the 1998-2000 period. The study found that the increase in poverty affected various socioeconomic groups differently, with growing differentiation among the poor, and signs that the poorest became even poorer. Poverty depth and severity increased in the observed period by 84 and 94 percent respectively. Driven by the volatile economic environment and absence of an adequate safety net, vulnerability to poverty for the average household rose significantly, with female-headed households being the most vulnerable. Although the extent of absolute poverty at any point in time remained around 20-24 percent, 40 percent of the population experienced poverty at least once during the year 1999-2000, and 60 percent of the population faced a real risk of experiencing poverty in the medium term. The high degree of vulnerability of households led them to apply strategies which may tend to increase chronic (long-term) poverty (e.g., shifting to subsistence farming, or pulling children out of school).

Urban and Rural Poverty. The trend in overall poverty reflects somewhat different developments in urban and rural poverty. In 1997, rural and urban poverty incidence were almost the same. In 1999, the urban poverty headcount doubled in comparison to 1997, whilst the rural headcount increased by 37.3 percent. Then in 2000, responding to the non-agricultural sector recovery after the Russian crisis, urban poverty dropped by 10.2 percent, stabilized in 2001 and declined further by 6.2 percent in 2002. Because of the drought, rural poverty increased in 2000, remained unchanged in 2001 and only in 2002 decreased by 2.9 percent. As a result, the difference between the urban and rural headcount has narrowed -- while in 1999, the urban poverty headcount was almost 50 percent over that in the rural population, in 2002 it was 9 percent higher.

Determinants of Poverty. The Georgia Poverty Update identified that the strongest determinants of poverty risk in Georgia in the period between 1998 and 2000 were economic: employment status, sector of employment, ownership of productive assets and education. It found an elevated poverty risk among urban households, households with an unemployed head and female headed households, as well as children aged 7-15, the disabled, those with low levels of education, single pensioners and orphans were experiencing. The working poor are becoming the majority, often employed in the informal sector with insecure, temporary and low productivity jobs.

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 88^th 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 3Ѕ 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.

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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 propor-tion 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.	Likely.
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.	Likely.
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.

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3. Economics

3.1 Main economic indicators

Sectoral Growth. Agriculture, industry, trade and transport dominate the structure of the Georgian economy. Agricul-ture is the largest sector accounting for just under 20 percent of GDP and 50 per-cent of employ-ment, although its share in GDP has decreased steadily (from over 30 per-cent of GDP in 1996). Industry contributes about 14 percent of GDP and 6 percent of employment, with its share changing little. The share of trans-port and tele-communi-cations has nearly tripled from 4.6 percent in 1996 to 12.1 percent by 2002. Transport has been the fastest growing sector, growing at over 20 percent annually because of the rapid expansion of oil transit from the Caspian Sea. Although transport turnover has tripled, it is still at one third of the pre-independence level. Other fast growing sectors include construction and finan-cial services. Trade has grown slightly faster than overall GDP. Sectoral growth index is presented in Fig. 3.1.1.

According to information from 2001 88.6% of the economically active population was employed, thus the unemployment rate was 11.4%.

The distribution of the employed work force by economic sectors is as follows:

Sector	%
Agriculture & forestry, fishery	53,4
Mining Industry	0,3
Processing Industry	6,5
Energy, gas or water production and supply	1,2
Construction	1,6
Trade & household goods technical service	8,6
Hotels & Restaurants	0,9
Transport, Warehouse economy and communications	4,0
Financial mediation	0,7
Operations with real estate, lease (rent) and business activity, research and projecting works	2,1
State management and self-defense, compulsory social insurance	5,8
Education	7,4
Health care and social service	4,3
Other communal, social and personal service, culture, entertainment, rest	2,4
Hired (engaged) service in private domestic economy	0,4
Ex-territorial (International) organization	0,1
Unidentified	0,1
Total	100

According to 2001 data, the minimum subsistence level for a medium sized family (4 persons) at average prices was 205.2 GEL.

3.2 Agriculture

Introduction. Only 44 percent of Georgia's land is used for agriculture. Twenty-six percent is arable land, 9 percent is used for perennials, 65 percent is pastureland, and 0.4 percent is fellow land. Sixty percent of the arable land needs artificial irrigation. The soil is mainly moderately fertile and easy to cultivate. Table 1 below shows the distribution of the agricultural land by agricultural product.

 

Table 1 Distribution of Agricultural Land by Product

 

Product	Land occupied (thousand ha)
Cereals	379,0
Citrus	10,9
Fruit	60,0
Potato	34,0
Sunflower	40,0
Tea	40,0
Vegetables	40,0
Vineyards	61,3

 

In the 20th century, Georgia became a country of agro-industry, with well-developed agriculture and food industry and with a good level of production. More than half of its GDP came under the agro-industrial sector of the country; 47 - 48% of the main funds were accumulated within the sector and it employed 41 - 42% of the total population of Georgia.

 

Georgia used to be an important exporter of food and one of the main suppliers of vegetables, tea, citrus fruits, wine, mineral waters, brandy, canned and fresh vegetables and fruits to the markets of the former Soviet Union. In the second half of the 1980s, the Georgian share of the food market of the former Soviet Republics was 10 percent. The total amount of exported food products was 1.7 times more than imported ones. The country is now undertaking actions to re-establish this exporting.

 

Since independence in 1991 the country experienced many years of civil war and ethnic conflicts, with 260,000 people internally displaced.

 

However, Georgia's economy is still strongly linked to the Russian Federation and the Commonwealth of Independent States (CIS). Approximately 50 percent of its trade is with the CIS.

•  

Agriculture is a main source of income and employment for the majority of the population, accounting for more then 30 percent of GDP. Output in the sector is only about 40 percent of its 1990 level, but employment in the sector has doubled and it now accounts for over 50 percent of the total employment.

 

Land privatisation has focused on the small-scale (household/subsistence) sector with little real progress in restructuring the former large state farms. Land reform has resulted in the allotment of small parcels of land up to 1.25 hectares to each rural family and the lease, through district authorities, of state owned land to persons or legal entities, with the aim of creating a subsistence sector for small farmers and a market sector controlled by large leaseholders.

 

Private producers account for the significant share of fruit, vegetable and livestock production, when their share in wheat production is about two thirds of the total wheat production in the country. The bulk of the domestic wheat production is consumed on farms for food, seed or feed. Indications are that only 20 percent of domestic production of wheat is marketed.

 

Low yields, also as a result of poor infrastructure, inadequate access to credit for inputs and suitable machinery, and high costs associated with transport and marketing have had a negative impact on food production and the earning capacity of a significant proportion of the population and thus on household food security.

 

The state of irrigation and drainage systems is also a major constraint to increasing crop yields and the competitiveness of domestic produce with imports. More than 60 percent of grain, 60 percent of dairy products and 33 percent of meat consumed in the country are imported.

 

Agricultural production in Georgia dropped sharply in 2000 due to a serious drought. WFP/FAO Crop and Food Supply Assessment mission carried out in mid-August 2000 estimates that Georgia will face a severe food crisis due to the drought. This situation is being exacerbated by on-going serious economic problems.

 

After droughts, agricultural production showed a slight increase of 5.6 percent in 2001, however the share of agricultural output in GDP dropped from 21 percent in 2000 to 19.2 percent in 2001.

 

During the present year, USAID has launched a five year program, called Support Value Added Enterprise (SAVE) that will promote economic growth through expanded production and sales of added-value agricultural products on international markets. Through this program the US government will support agriculture development through market expansion, standards on organic food production, distribution, improved credit and whole-chain food distribution networks.

 

Key Agriculture Indicators.

 

Agricultural output per hectare of agricultural land and per capita (US $)

 

Year	Per 1 ha of agricultural land	Per capita
1990	1195	725
1995	481	272
1996	539	302
1997	583	328
1998	531	301
1999	435	285

Source: Georgian Agriculture 1999

 

Agriculture in GDP

 

1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001
29,7					41,7	31,0	28,2	24,8	25,0	21,5	19,2
31,9	28,8	55,5	70,4	34,2	39,5	32,6

Source: State Department for Statistics of Georgia (1^st Row), GEPLAC , 1997(2^nd Row).

 

Trends in Share of Total Agricultural Production, (%)

 

	1985	1990	1995	1996	1997	1998	1999	2000
Crop production	68.1	68.7	58.4	49.8	59.3	56.4	56.8	45,8
Livestock Production	31.9	31.3	41.6	50.2	40.7	43.6	43.2	54,2

Source: SDS, Georgian Agriculture 2000, p.9.

 

Agricultural output (Current prices, mln. lari)

 

Agricultural Production	1980	1985	1990	1995	1996	1997	1998	1999	2000	2001
Total production	3219	4167	5199	1851	2062	2299	2266	2650	2024	1860
Of which: Plant-growing	2240	2838	3571	1081	1027	1363	1278	1506	927
Livestock	979	1329	1627	770	835	936	988	1144	1097
Of which by households	1584	2087	2495	1407	1650	1863	2116	2490	1903
Of which: Plant-growing	1102	1421	1714	816	805	1150	1163	1386	870
Livestock	481	666	781	591	845	713	953	1105	1033

Source: Georgian Agriculture 2000, p. 6

 

 

Distribution of Georgian Agricultural Territory by Inclination

0 - 2 gr.	2 - 10 gr.	10 - 20 gr.	20 gr. over	Total
Sq. km	%	Sq. km	%	Sq. km	%	Sq. km	%	Sq. km	%
13545,9	42,3	9237,1	28,8	5146,7	16,0	4166,7	12,9	32096,4	100

 

Distribution of Agricultural Land

 

	1986	1991	1996	1997	1998	1999	2000	2001
Agricultural lands, total	3267,1	3275,4	3048,0	3034,5	3037,0	3063,5*	3018,4*	3019,7*
Of which: Arable	783,2	790,4	759,3	781,1	785,0	791,9	790,4	792,9
Of which sown areas	730,1**	701,9**	452,8	597,5	616,1	594,7	610,8
Perennial plants	357,0	336,9	307,0	284,6	277,5	269,8	270,1	269,3
Meadows	176,3	158,4	147,9	148,6	141,2	142,7	142,5	142,3
Pastures	1947,7	1983,7	1822,1	1820,2	1833,3	1839,7	1796,0	1795,8
Fallow	2,9	6,0	11,7	-	-	-	-	-

*Unlike to other years, this data includes the areas of dwelling and economic buildings and yards - 19,4 ths hectares** - accordingly 1985-1990

Source: Georgian Agriculture-2000, Tbilisi 2001, p.18

 

Areas kept by some plant-growing cultures (1000 hectares)

 

Culture	1988	1993	1997	1998	1999	2000	2001
Cereals and beans	272,0	256,0	437,2	415,8	378,8	386,4
Industrial crops	40,6	21,1	36,5	59,0	75,8	69,8
Potatoes, vegetables and melons	77,0	48,8	62,4	84,7	85,7	93,1
Fodder crops	344,8	43,2	57,7	56,6	54,4	61,5
Fruit-berries	128,2	83,5	85,3	65,3
Vineyard	115,6	78,9	81,2	70,2		60,0?	61,0?
Citruses	26,7	16,7	11,4	15,9
Tea plantations	65,1	33,7	34,7	39,9

Source: State Department for Statistics; ? Rezonansi, Interview, 04,04.2002

 

Agricultural production

 

Name	Produced, thousand tons
	1998	1999	2000	2001
Wheat	144,7	226,1	89,4	306,5
Barley	20,2	50,8	30,0
Maize	420,2	490,5	295,9	300,0
Pulses	9,2	9,3	2,6	5,0
Sunflower	22,8	40,5	2,6	30,2
Tobacco	3,4	2,1	1,5	1,6
Potatoes	349,8	443,3	302,0	415,0
Vegetables	380,0	417,0	354,2	350,0
Melons	32,2	108,2	80,0	70,0
Annual and perennial grass	108,3	127,3	50,0
Fruits	279,0	296,0	250,0	200,0
Grapes	238,5	220,0	210,0	150,0
Citrus's	85,1	56,0	40,0	60,0
Tea leaves	47,2	60,0	24,0	23,0

Source: SDS;

 

Agricultural production

 

Name	Produced, thousand tons
	1980	1985	1988	1990
Wheat	208,6	174,2	638,1	257,7
Barley	87,5	96,7		117,8
Maize	306,2	321,5		270,2
Beans (Pulses)	na	16,1	na	7,3
Soy-Bean	3,9	6,0	na	3,4
Sunflower	9,5	9,3	16,9	7,7
Sugar Beet	119,9	61,2	51,2	30,6
Tobacco	16,8	20,4	11,9	8,1
Potatoes	392,8	393,8	337,9	293,8
Vegetables	583,1	604,3	662,3	443,2
Melons		42,5		38,8
Annual and perennial grass	na	796,9	na	624,3
Fruits	539,3	724,2	653,0	591,2
Grapes	995,6	914,9	619,7	691,0
Citrus's	147,7	134,6	436,9	283,1
Tea leaves	501,8	581,2	458,7	501,7

Source: SDS; Alexandre Didebulidze. Agriculture and Rural Development in Georgia. UNDP, Tbilisi, 1997, p.63.

 

Agricultural Production

 

Name	Produced, tons	1999-2001 as % of 1988-1990
	1988-1990	1999-2001
Grain (after cleaning)	621,9	640,2	102,9
Sunflower	10,8	24,4	225,9
Potatoes	321,4	386,8	120,3
Vegetables and Melons	528,3	459,8	87,0
Tobacco	9,9	1,9	19,2
Fruits and Berries (without Citruses)	616,3	248,7	40,4
Grapes	608,3	193,3	31,8
Citrus's	271,4	52,0	19,2
Tea leaves	486,0	35,7	7,3
Meat	173,7	103,6	59,6
Milk	700,4	663,1	94,7
Eggs (mln. pieces)	840,1	382,3	45,5
Wool	6,5	1,8	27,7

 

Number of livestock (for January 01), x1000

 

	1988	1993	1995	1996	1997	1998	1999	2000	2001	2002
Cattle	1584	1002	944	974	1008	1027	1051	1122	1177	1250
Of which: Milk-cows	626	502	514	531	544	551	575	640	646	685
Horses	24	18	20	24	26	28	30	34	35
Pigs	1118	476	367	353	333	330	366	411	443	481
Sheep and goats	1921	1192	793	725	652	584	587	633	628	701
Poultry	23900	11200	12300	13847	14645	15541	8240	8473	7826
Bees (Families)	112	65	35	55	66	77	78	94	98

Source: SDS

 

Data series for livestock

 

Year	Cattle	Pigs	Sheep and goat	Poultry
	Total	Public	Private	Total	Public	Private	Total	Public	Private	Total	Public	Private
1	2	3	4	5	6	7	8	9	10	11	12	13
1941	1607,0	581,5	1025,5	615,6	53,3	562,3	2193,6	1085,7	1107,9
1942	1518,8	607,5	911,3	475,0	59,8	415,2	2051,5	1144,0	907,5
1943	1434,3	631,7	802,6	365,9	77,2	288,7	1891,7	1156,0	735,7
1944	1480,8	658,2	822,6	424,1	74,3	349,8	1997,5	1254,8	742,7
1945	1501,3	668,2	833,1	484,5	71,6	412,9	2170,2	1448,5	721,7
1950	1492,7	764,7	728,0	472,7	109,6	363,1	2509,2	1988,6	520,6	6651		5900
1955	1319,2	677,5	641,7	557,2	124,4	432,8	1625,8	1178,8	447,0	8173		7642
1960	1502,6	671,5	831,1	581,6	253,1	328,5	2125,0	1375,2	749,8	7471		6016
1965	1457,6	651,6	806,0	452,5	208,1	244,4	2183,0	1409,9	773,1	8664		6610
1970	1445,9	616,8	829,1	588,8	237,6	351,2	1826,8	1177,0	649,8	12046		8917
1975	1513,0	677,4	860,1	743,6	310,9	432,7	1982,4	1256,7	725,7	14161		8172
1980	1556,3	675,0	881,3	950,7	434,3	576,4	2041,2	1302,9	738,2	18376		9080
1981	1564,0	671,2	892,8	943,1	428,4	514,7	2043,8	1284,5	759,3	18781	9551	9230
1982	1588,9	668,2	920,7	980,9	393,5	527,4	2109,2	1285,1	824,1	19394	10372	9022
1983	1621,8	664,3	957,5	1011,1	464,4	546,7	1947,3	1125,1	822,2	19693	10739	8954
1984	1633,8	662,6	971,2	1082,1	492,0	590,1	1984,8	1136,9	847,9	20108	11341	8767
1985	1652,6	668,1	984,5	1133,4	509,3	624,1	1955,7	1103,5	852,2	22452	13803	8649
1986	1645,5	676,2	969,3	1173,4	537,3	636,1	1976,6	1099,3	880,3	24296	14639	9657
1987	1634,7	674,1	960,6	1150,4	528,4	622,0	1938,5	1082,5	856,0	24342	14789	9553
1988	1584,8	650,5	934,3	1117,8	517,9	599,9	1920,5	1059,9	860,6	23917	14538	9378
1989	1547,8	609,8	938,0	1099,2	491,9	607,3	1894,0	1012,9	881,1	25172	15612	9560
1990	1426,6	545,7	880,9	1027,8	444,9	582,9	1833,5	970,2	863,3	24002	14322	6980
1991	1298,3	468,9	829,4	880,2	357,0	523,2	1618,1	912,7	705,4	21760	10890	10870
1992	1207,9	390,5	817,4	732,5	263,7	468,8	1469,6	781,2	688,4	20167	8629	11538
1993	1002,6	198,7	803,9	476,2	90,3	385,9	1191,6	550,3	641,3	11211	1379	9832
1994	928,6	119,0	809,6	365,1	46,7	318,4	958,1	354,1	604,0	11858	1352	10505
1995	944,1	78,9	865,2	366,9	29,9	337,0	793,3	222,5	570,8	12290	462	11828
1996	973,6	56,7	916,9	352,6	24,3	328,4	724,8	148,4	576,1	13847	180	13667
1997	1008,0	41,9	966,1	332,5	9,1	323,4	652,0	98,1	553,9	14645	8	14637
1998	1027,2	24,8	1002,4	330,3	4,4	325,9	583,5	63,5	520,0	15542	115	15427
1999	1050,9	15,3	1035,6	365,9	3,0	362,9	586,7	44,5	542,2	8240	100	8140
2000	1122,1	11,0	1111,2	411,1	1,5	409,6	633,4	38,4	595,0	8473	84	8390
2001	1177,4	6,8	1170,6	443,4	0,8	442,6	627,6	27,4	599,8	7826	82	7744
2002	1250,1			480,5			701,2

 

 

Livestock output (Ths. tons)

 

	Production
	1988	1995	1999	2000	2001
Meat (in slaughter weight)	172,1	115,4	100,5	107,9	102,4
Milk	730,5	475,4	660,3	618,9	710,0
Eggs, mln. units	890,2	269,4	390,1	361,4	395,4
Wool, in net weight	6,3	3,1	1,7	1,9	1,9
Silk cocoon	1,9	0,05	0	0
Honey		0,7	1,5	1,4

Source: Georgian Social-economic indexes, 2000y. Interfax, 04.02.2002

 

Data series for livestock output

 

Year	Meat	Eggs	Milk
	Public	Private	Public	Private	Public	Private
1913	49,4	49,4	119	119	222	222
1928	62,0	62,0	-	-	-	-
1940	75,0	66,6	251,1	250,1	357,8	317,8
1945	37,4	24,5	104,2	98,4	266,4	221,4
1950	51,1	33,0	156,3	148,2	292,5	210,0
1955	83,7	54,8	236,9	221,8	414,2	256,6
1960	90,4	53,5	221,3	180,8	487,1	271,0
1965	92,8	65,6	305,2	225,1	470,7	286,1
1970	104,2	75,2	397,3	250,6	518,1	310,3
1975	206,8	86,4	536,8	228,8	574,9	306,7
1980	143,1	82,3	654,9	330,0	642,2	340,9
1985	166,4	84,3	822,7	224,3	684,4	380,2
1986	172,2	89,7	879,8	237,9	721,7	395,1
1987	174,6	89,5	887,2	238,7	724,2	395,2
1988	172,1	88,0	890,2	243,7	730,5	407,8
1989	178,8	68,0	860,8	260,7	711,4	411,4
1990	170,3	81,9	769,2	263,4	659,4	402,5
1991	137,2	92,0	638,1	292,6	562,3	379,2
1992	113,4	88,6	297,3	184,2	469,5	380,2
1993	100,4	90,0	242,8	205,3	433,1	387,5
1994	108,3	102,8	250,6	239,5	429,3	403,6
1995	115,4	112,0	269,4	261,4	475,4	455,8
1996	117,8	116,0	350,2	348,5	530,3	514,3
1997	120,7	119,1	370,4	370,4	600,2	589,1
1998	104,1	103,5	380,4	377,0	634,7	627,7
1999	101,0	100,1	390,1	386,4	660,3	655,5
2000	107,9	107,3	361,4	357,2	618,9	615,7
2001	102,4		395,4		710,0

 

Productivity of Agricultural Cultures

 

	1990	1995	1996	1997	1998	1999	2000	2001
Winter wheat	28,2	12,2	13,3	17,7	11,0	20,4	10,4	26,7
Maize	25,2	27,1	33,0	27,3	20,5	22,3	16,2	14,8
Tobacco	11,2	8,3	9,2	11,3	11,7	11,9	10,3
Sunflower	5,8	2,0	1,2	8,9	4,9	6,2	2,3	6,9
Potato	105,6	152,0	121,0	130,0	106,4	130,0	88,9	112,2
Vegetables	110,6	140,0	136,0	151,0	92,2	96,0	93,4	88,0
Melon	105,3	60,5	110,0	94,0	38,3	131,7	97,6
Perennial grass	27,6	16,4	14,7	27,6	26,3	23,9	11,4
Maize in silage	95,1	23,0	27,4	75,0	60,4	54,2	-
Fruit	58,0	41,8	40,3	40,4	49,2	52,0
Citruses	169,8	90,3	69,4	50,5	57,7	37,0
Grape	67,6	47,5	36,4	40,5	36,3	35,0
Tea leaves	90,0	12,6	10,4	10,5	19,5	25,0

 

Machine Park (condition by the end of year) x1000

 

Technical means	1988	1994	1998	2000	Demand
Tractor	27,2	18,2	10,7		18,0
Combine	1,8	1,2	0,9		1,2
Loading machine	26,3	12,6	8,8
Pumping mounting	1,4	0,4	0,3		0,5
Sprayer	0,9	0,4	0,2		0,1

Source: SSD

 

Technical Dynamic in Agrarian Sector of Georgia

 

Year	Tractor	Grain combine	Plough	Cultivator	Seeding machine	Tractor-drawn implement	Mineral fertilization thrower	Sprinkler	Loading machine
1988	26.806	1.576	10.343	5.370	4.237	10.490	2.534	4.851	20.182
1990	26.000	1.343	8.339	4.370	3.852	8.589	2.373	4.027	17.800
1992	23.009	1.236	6.720	3.184	2.987	6.846	1.832	2.928	15.255
1993	20.800	1.140	5.491	2.626	2.737	5.251	1.635	2.262	13.823
1994	18.200	1.080	5.365	2.567	2.692	5.298	1.319	2.206	13.240
1995	15.160	949	5.216	2.307	2.018	5.265	1.084	1.905	12.860
1996	15.240	996	5.232	2.335	2.064	5.483	1.192	1.628	12.371
1997	17.583	1.018	5.367	2.340	1.910	5.617	1.230	1.498	12.110
1998	17.240	969	4.190	1.750	1.870	5.083	949	1.450	10.353
1999	18.147	1.064	4.434	2.346	1.912	5.610	1.030	1.428	10.240
2000	17.199	1.002	4.528	2.216	1.575	5.600	709	1.102	9.398
2001

Source: The Ministry of Agriculture and Food

 

Food consumption in Georgia (1999)

 

	Kg per capita	Scientific standard, Kg	Consumption as % Of standard
Bread, flour, grouts, legumes	141,1	125	113
Meat & meat products	19,8	78	25
Milk and milk products	209	405	52
Eggs, pieces	124,6	232	54
Fish and canned fish	1,3	10,2	13
Sugar	24,8	40	62
Margarine & other fats	9,0	9	100
Potatoes	47,6	110	43
Vegetables, melons	66,8	130	51
Fruit and grape	43,5	90	48

Source: State Department for Statistics of Georgia

 

Consumption of energy, fat and albumen by population in Georgia

 

Index	Measurement	Dwelling minimum	In rational nourishment conditions	Actual 2000 year
Energy	KW in day and night	2.250	3.200	2630
Albumen	Gr. in day and night	74	100
Fat	Gr. in day and night	57	130

Source: Gordeev A, MSXJ, 2-2000, food consumption condition-t.2

 

Privatisation in Agriculture of Georgia (1998)

 

	Total Area thsd. ha	Including
		Private	Rent	State property, %
		thsd. ha	%	thsd. ha	%
Arable land	785,0	431,9	55,0	255,9	32,6	12,4
Perennial plants	277,5	185,7	66,9	31,0	11,2	21,9
Meadows	140,6	47,6	33,9	28,6	20,3	45,8
Pastures	1788,0	124,5	7,0	441,4	24,7	68,4
T o t a l	2991,1	789,7	26,4	756,9	25,3	48,3

 

Privatization in Agriculture of Georgia (2001)

 

	Total Area thsd. ha	Including
		Private	Rent	State property, %
		thsd. ha	%	thsd. ha	%
Arable land	792,9	434,8	54,8	257,5	32,5	12,7
Perennial plants	269,3	181,8	67,5	31,6	11,7	20,8
Meadows	142,3	41,3	29,0	57,1	40,1	30,9
Pastures	1795,8	84,3	4,7	593,4	33,0	62,2
T o t a l	3019,7	762,1	25,2	939,6	31,1	43,6

Source: Source: State Department of Land Management, Land Bal; ance for 04.2001 [GFA/KfW, 38]

 

Farm Structures

 

Farm type	Number of entities	Total area in ha	Average farm size in ha
Families with private land	1 055 200	762 100	0,72
Families and groups with rented land	31 900	352 000	11,03
Legal entities with rented land	6 300	587 600	93,27

Source: State Department of Land Management, Land Balance for 04.2001

 

Share of private farms in agricultural output (per cent)

 

	1990	1995	1996	1998	2000
Cereals and bean crops	26	79	78	88	94
Of which:
Winter wheat	0,1	26	20	73	89
Maize	62	95	94	94	96
Bean crops - total	62	95	98	98	99
Sunflower seeds	1	25	52	69	81
Soy beans	3	50	6	82	96
Potatoes	49	97	96	90	99
Vegetables	59	97	95	87	99
Melons	52	86	77	62	99
Fruit	80	99	99	99	99
Citruses	83	97	95	98	99
Grapes	45	94	97	97	99
Tea leaves	7	47	36	45	34
Total output	48				94

Source: Georgian Agriculture 2000, p.36

 

Share of private farms in agricultural output (per cent)

 

	1988	2000
Grain	25	94
Sunflower seeds	1	81
Soya -beans	2	96
Tobacco	17	99
Potatoes	43	99
Vegetables	47	99
Melons	65	99
Fruits	78	99
Citruses	77	99
Grapes	50	99
Tea	7	34
Total output	50,1 (1985), 48,0(1990)	94,0

Source: Georgian Agriculture 2000

 

Privatisation in Georgian Agriculture

 

The least	In private position, %
	1986	2001
Agricultural lands	5,6	25,2
Of which: Arable	12,3	54,7
Perennial plants	23,7	63,8
Meadows	1,4	29,0
Pastures	0	4,7
Cattle	58,9	99,4
Of which milk cows and she-buffalo	71,0	99,6
Pig	54,2	99,8
Sheep and goat	44,5	95,6
Horse	74,0	98,9
Bird and wing	39,7	99,0
Poultry	15,6	100
Bee family	45,5	100

Source: Georgian Agrostatistic 2000, Tbilisi, 2001. - p

 

 

Agriculture in Georgian Export (2001)

 

Export Position	Million US$	Percentage and Place
General Export	320028,8	100,0
Incl.: Wine	32195,3	10,1 (3)
Mineral Water	11663,4	3,6 (7)
Nuts	9843,5	3,1 (9)

Source: SDS

 

Import of Main Food Products (2001)

 

Import Position	Million US $	Percentage and Place
General Import	684097,5	100,0
Incl.: Sugar	24105,1	3,5 (4)
Tobacco Wares	24065,2	3,5 (5)
Meal	14792,9	2,2 (8)
Wheat	11186,1	1,6 (10)

Source: SDS; * - estimate

 

Agricultural Export and Import

 

Year	Export	Import	Turnover
1995	9536,4	11652,1	21188,5
1996	14977,3	72917,9	87895,2
1997	12388,0	68032,4	80420,4
1998	40918,2	268955,5	309873,7
1999	102171,0	436740,9	538911,9
2000	139554,5	529371,8	668926,3

 

Dynamic of Agrarian Export, 1997-2001 (mln US$)

 

	1997	1998	1999	2000	2001
Tea	18,5	8,9	11,4	6,1	5,8
Citruses	9,1	9,5	1,9	2,5	1,6
Alcoholic drinks (instead wine)	5,2	5,5	5,5	4,0	5,9
Nuts	5,3	9,4	15,4	19,3	9,8
Wine	12,5	15,4	14,6	29,1	32,2
Mineral waters	18,5	7,2	2,6	9,5	15,2
Total export	239,8	192,3	238,2	329,9	320,0

Source: IMF (account No.211, 11.2001, pg.123;) in red State Statistic Department

 

Dynamic of Agrarian Import, 1997-2001 (mln US$)

	1997	1998	1999	2000	2001
Sugar	39,1	16,2	16,2	24,6	24,1
Tobacco wares	107,8	120,0	35,2	29,4	28,8
Wheat and flour	37,1	26,5	14,8	20,3	28,2
Beer	3,1	0,8	0,1	0,1	0,1
Bread products	57,2	31,8	15,5	21,9	17,3
Vegetable oil	2,2	4,7	1,1	1,0	3,4
Poultry meat, eggs	10,2	12,3	14,5	11,0	10,3
Coffee	9,0	5,4	5,0	4,3	2,0
Total import	941,7	884,3	601,9	650,7	684,1

Source: State Department of Statistic s; IMF(account No. 211, 11.2001, pg.124);

 

Investments in Fixed Capital

 

Year	Investments in Fixed Capital, total,Mln GEL	Of which Foreign Investments	Share of Agriculture, %
		Mln GEL	% of Total
1995	127	42	33,9	0
1996	170	86	50,6	0
1997	266	180	67,7	0
1998	512	401	78,3	0,04
1999	364	169	46,4	1,7
2000	349	119	34,1	0,4

Source: SDS, 25.01.2001

 

Foreign investments in fixed capital by fields and years

(in actual prices, mln Lari)

 

	1995	1996	1997	1998	1999	2000	2001
Foreign investments	42,9	86,4	179,9	401,0	168,6	119,0	128,2
The same in US$	33,2	68,5	138,6	271,2	83,1	60,2	62,2
Of which: Agriculture	-	-	-	0,2	6,0	1,3
Food industry	2,6	3,2	4,4	19,9	14,8	17,6
The same Gagua (EK 3/4/00		3,455	4,902	21,714
Sum	2,6	3,2	4,4	20,1	20,8	18,9
% of Foreign Investments	6,1	3,7	2,4	5,3	12,3	15,9

Source: Investment activities in Georgia, State Statistic Department, 1999

 

Most Exportable Agricultural Products.

 

Georgian Wines. Georgia is known as the birthplace of viticulture and winemaking and has 5000 years of wine culture. The rich land, hot sun and hard work have developed about 500 varieties of wine in Georgia.

 

According to the State Department of Statistics exports of different types of Georgian wine during first nine month of the 2001 made up 18186,5 thousand USD which is 7,8 percent of the total Georgian exports.

 

At the end of the 20^th century, the collapse of the Soviet Union has caused an economic decline in Georgia, which negatively affected the Georgian wine sector. To be more precise - the overall territory of vineyards has decreased by 50%, (1990 - 112,6 thousand hectares, 2000y - 60,5 thousand hectares). This tendency was mainly caused by the following reasons: lack of enough funds among farmers to purchase chemicals, technical devices and machines for vine cultivation, also huge numbers of farmers had to convert their vineyards into land to grow edible products such as corn, vegetables, and grain.

 

In addition, from the mid 1990s the tendency of vineyard rehabilitation has been quite dynamic, still the total area of vineyards is far less than it was even 20 years ago.

 

Table # 1 Tendency of wine sector development for the last ten years

 

Sector	Measure	1981-85 average per year	1986-90 average per year	1990	1995	1996	1997	1998	1999	2000	2001
Total area of vineyards	(1000) Hectares	137,4	116,1	112,6	94,2	94,0	72,0	70,0	60,1	60,5	61,5
Production of grape	(1000) Tones	768,0	712,0	691,0	160,0	342,0	370,0	370,0	219,0	210,0	170,0
Grape Processing	(1000) Tones	564,3	422,5	433,5	38,0	60,0	46,0	23,5	29,5	34,4	19,1
Production of wine materials	(1000) decaliters	21969,0	14997,0	16283	3670	2223	3121,6	2303,8	1859,2	1816	1900
Production of champagne and sparkling wines	(1000) decalitres	1375,7	1526	1451	49,2	94,6	75,6	40,3	64,7	87,9	88,35
Production of Brandy	(10000 decaliters	1563	1865	2165	158	135	82.,3	37,8	30,4	70,6	71,0
Production of the liqueur	(10000decaliters)	937.0	523,0	822	103	132	251	112,7	473,0	430,0	569,0

 

Source: Samtrest, Ministry of Agriculture.2002

 

Even though the Georgian wine sector is famous for its 500 traditional grape varieties, the vast majority is currently grown and available only in limited areas and numbers. Traditionally in accordance with climate and soil characteristics - Georgia is divided into 5 main wine producing regions. Kakheti, Kartli, Imereti, Racha-lechkhumi and the Black Sea Subtropical zone.

 

In accordance with the development and strength of the wine sector Kakheti could be easily considered as the leader. The region is characterized by huge variety of grapes and assortment of wine.

 

From the structural point of view, 80% of Georgian vineyards is allocated to white grapes: Rkaciteli amounts to almost 75% of all white wines and the remaining 25% is allocated to Cicka, Colikauri, Mcvane, and Tetra. The dominant type in red grapes is presented by Saperavi which holds 70%. The remaining 30% is allocated to the following red grapes: Aleksandriuli, Mijuretuli, Ojaleshi, and Vaios Saperavi.

 

Table # 2 below indicates the total area by regions (1000 hectares) as of year 2001.

 

Region	State Vineyards	Private Vineyards	Total
Kakheti	1,35	43,73	45,08 (~ 75%)
Kartli	0,18	5,83	6,01 (~10%)
West Georgia	0,27	8,74	9,01 (~15%)
Total	1,8	58,3	60,1 (100%)

Source: Ministry of Agriculture, 2002

 

Table #3 below indicates the information on main types of Georgian grape, as of 2001

 

Species of grapes	Colour	Regions of prevalent	Sugar content (%)	General acidity (%)	Yield of Grapewine (kg)
Aladasturi	Red	Chokhatauri, Vani, Bagdadi	19,5-20,0	8,8-9,2	2,0-2,5
Aleksandreuli	Red	Ambrolauri, Tsageri, Oni	22.0-23,0	7,0-7,5	1,5-2,0
Chkaveri	Red	Chokhatauri, Ozurgeti	19,5-21,0	8,1-9,6	1,8-2,0
Mtsvane	White	Telavi,Sagarejo, Akhmeta	21,5-22,0	9,5-10,0	1,5-2,0
Ojaleshi	Red	Martvili, Tsageri	21.0-22,0	9,0-9,5	1,4-1,6
Rkatsiteli	White	Kakheti	19,0-20,-	6,0-6,5	1,4-1,5
Saperavi	Red	Kakheti	20,0-22,0	7,0-8,5	1,5-1,7
Tetra	White	Ambrolauri	20,0-22,0	7,5-8,5	1,5-1,7
Tsitska	White	Imereti, Lanchkhuti	18,5-20,5	8,5-10,0	1,5-2,0
Tsolikauri	White	Imereti	19,0-21,5	9,0-10,5	1,5-2,0
Usakhelauri	White	Tsageri	19,0-21,0	7,5-9,0	1,4-1,8
Vaios Saperavi	Red	Keda	20,0-20,5	8,5-9,0	2,4-2,8

 

Source: Samtrest, Ministry of Agriculture, 2002

 

Today the production of two main types of grapes per hectare of land is the Rkaciteli - 7.0-8.0 tons, and the Saperavi - 5.0-6.0. These numbers are can increase by 25-35 % under normal working conditions and with all necessary tools and machinery readily available.

 

By taking into consideration the fact that during the grape processing period the market price for one kilogram of white grape ranges from $0,10 to $0,20, which is slightly above of its base price, then accordingly it could be forecasted that in the case of an increase in the volume of grapes the price per kilo will drop and the farmer's revenue will increase, thus creating the ability for the farmer to procure some necessary tools, chemicals and machinery and increase the volume of his grapes for the next season. This could lead to the rehabilitation and positive redevelopment of the whole Georgian wine sector, though it should be mentioned that this positive tendency will not be implemented without sophisticated grape processing factories and new export markets.

 

In Table #1 it is clearly indicated that during the first part of last decade of the 20^th century there was a huge drop in the volume of processed grape. This was mainly caused by the following reasons: Weak economic condition of the country, loss of traditional Russian market and huge amount of fake vintage Georgian wines, both in the Georgian and Russian markets. It should be mentioned that during the same period both farmers and wine factories had huge amounts of grapes in their warehouses, which did not find its path towards wine, simply because of the aspects mentioned above. And this is happening in Georgia - a country, which during the Soviet period was producing 55% of the total vintage wines and more than 25% of brandy in the USSR.

 

Despite all the negative factors mentioned above, in the second part of last decade of the 20^th century developmental steps ahead were made in the Georgian wine sector, which on its behalf has led to the participation of foreign investors in the sector. The positive aspects were mainly caused by the fact that a new generation businessmen have acquired western knowledge of management and marketing, the consumer's nostalgia for Georgian wines, and the government's support. Lately, the participation of foreign companies is getting clearly noticeable - both in the fields of wine-making and in establishing new vineyards.

 

As a result, the number of local Georgian wine-making companies could be easily outlined in accordance with their financial strength, good marketing campaign, progressive management and export volume. These companies are: GWS (Georgian wines and spirits), “Telavi wine cellar”, “Akhasheni”, “Tbilwine” “Vaziani”, “Kinzmarauli”, “David Sarajishvili and Eniseli”, “Okami”, “Teliani Veli”, “Rachuli Gvino” and “Zmebi askaneli”.

 

Mineral and Spring Waters. According to the State Department of Statistics exports of different types of Georgian mineral waters during the first nine months of 2001 made up 6646,9 thousand USD which is 2.8 percent of the total Georgian exports.

 

One of the biggest assets - essential for the resort development in the country is represented by mineral waters. In Georgia almost all kinds of mineral water can be found, with more than 2,000 mineral springs, out of which 1700 are natural phenomena and 300 are boreholes. Their estimated total yield per day is 120 million liters. The most common kind is a carbonic acid mineral water, the daily yield of which amounts to approximately 60 million liters.

 

^{[1]Structural geologic and hydrochemical properties of the so-called geotechtonic zones account for the distribution of various kinds of mineral waters in Georgia. For instance, within the limits of the Main Range and the Southern slope of the Greater Caucasus - cold, mostly carbonic and hydrocarbonated waters predominate. On Georgian Block the typical water includes cold as well as thermal sulphide-methane and nitric-methane, chloride and sulphate. Within the Adjara -Trialeti system and the adjoining Somkhiti Block the following kinds of water predominate: carbonic acid hydrocarbonated or chloride-hydrocarbonated as well as weak sulphide nitric, sulphate-chloride or carbonate-bicarbonate.}

 

Georgia has large reserves of thermal water of various chemical compositions. The territory occupied by Georgian Block and Adjara Trialeti System is especially rich in them. Thermal radioactive (Radonic) mineral waters are the main natural curative factors of the Tskaltubo and Tkvarcheli Resorts. So-called hyperthermal waters, forming a class by themselves are extracted from the earth's deep levels by boring. The main pools of these waters are: Tsaishi (Temp 81-82 C), Kvaloni (Temp 94 C), Kindghi (103 C), Khorga (Temp 110 C). Hyperthermal waters are mostly used for heating purposes.