Editing Economy of Georgia (country) (section)

== Structure of the economy ==

=== Energy ===
{{main|Energy in Georgia (country)}}
[[Image:Enguri Dam, Georgia.jpg|thumb|250px|[[Enguri Dam|Enguri hydropower plant]], completed in 1987]]
In recent years Georgia has fully deregulated its electricity sector, and now there is free and open access to the market.

Georgia has a sizable hydroelectric capacity, a factor that has become an increasingly important component of its energy supplies and policies. The country's topography and abundance of hydro resources give it serious potential to dominate hydroelectric markets in the Caucasus region. The [[Ministry of Energy (Georgia)|Georgian Ministry of Energy]] estimates that there are around 26,000 rivers within Georgian territory, with approximately 300 of those rivers being significant in terms of energy production. The Ministry also claims that current projects for hydroelectric power plants total around US$2.4 billion.<ref>Projected Hydropower Plants in Georgia  http://www.minenergy.gov.ge/index.php?m=305 {{dead link|date=September 2017 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> [[Alexander Khetaguri]], the former Georgian Minister of Energy, proposed new hydroelectric projects worth well over 22,000 megawatts of capacity, which would cost over US$40 billion and would be privately funded. These projects alone would transform Georgia into the world's second-largest hydropower producer.{{Citation needed|date=July 2012}}<ref>Georgia Looks to Tap Hydropower Potential {{cite web |url=http://main.omanobserver.om/node/25098 |title=Georgia looks to tap hydropower potential &#124; Oman Observer |access-date=2012-04-03 |url-status=dead |archive-url=https://archive.today/20120714143339/http://main.omanobserver.om/node/25098 |archive-date=2012-07-14 }}</ref>

In 2007, Georgia generated 8.34 billion kilowatt-hours of electricity while consuming 8.15 billion kWh.<ref>{{cite web|url=https://www.cia.gov/the-world-factbook/countries/georgia/|title=The World Factbook|work=cia.gov|date=22 September 2021}}</ref> Most of Georgia's electricity generation comes from [[Hydroelectricity|hydroelectric]] facilities. In 2005, the country generated 6.17 billion kWh of hydropower, or 86% of total electricity generation.<ref>{{cite web
 |publisher   = [[Energy Information Administration]]
 |title       = International Energy Annual 2005nbxn
 |url         = http://www.eia.doe.gov/iea/elec.html
 |date        = 2007-09-13
 |access-date  = 2008-09-22
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20080514152640/http://www.eia.doe.gov/iea/elec.html
 |archive-date = 2008-05-14
}}
</ref> In 2006, rapid growth in hydroelectricity output (by 27%) was matched by equally strong growth in thermal electricity (by 28%).<ref>{{cite web|url=http://www.infoplease.com/country/profiles/georgia.html |title=Georgia |publisher=Infoplease.com |access-date=2013-04-22}}</ref> Since then, the share of hydropower has grown even bigger, when [[Inguri]] power plant reached full capacity in November 2007.{{citation needed|date=March 2023}} In addition to state-owned Inguri, which has an installed capacity of 1,300 megawatts, Georgia's hydroelectric infrastructure consists of many small private plants.<ref>{{cite web |url=http://www.minenergy.gov.ge/index.php?m=349 |title=Ministry of Energy of Georgia |access-date=2008-09-22 |url-status=dead |archive-url=https://web.archive.org/web/20110721030940/http://www.minenergy.gov.ge/index.php?m=349 |archive-date=2011-07-21 }}, Ministry of Energy of Georgia</ref>

In recent years, Georgia became a major exporter of electricity in the region, exporting 1.3 billion [[KWh]] in 2010. [[Hydropower plant|Hydropower stations]] of Georgia produce 80-85% of the electricity utilized within the country, the remaining 15–20% is produced by [[thermal power station]]s. According to [[Ministry of Energy (Georgia)|Ministry of Energy and Natural Resources]], so far, Georgia has been exploiting only 18% of its hydro resource potential.<ref>{{cite news |url=http://world.eizvestia.com/full/turciya-i-gruziya-pokroyutsya-dambami-i-ges |title=Турция и Грузия покроются дамбами и ГЭС |trans-title=Turkey and Georgia will be covered with dams and hydroelectric plants |publisher=Economicheskiye Izvestiya |author=Dmitry Bondarenko |date=2011-02-08 |access-date=2011-03-30 |archive-url=https://web.archive.org/web/20110902152730/http://world.eizvestia.com/full/turciya-i-gruziya-pokroyutsya-dambami-i-ges |archive-date=2011-09-02 |url-status=dead }}</ref>

Georgia's reliance on hydropower leaves the country vulnerable to climatic fluctuations, which requires imports to meet seasonal shortages, but also opens the possibility of exports during wetter conditions. Georgia still has the potential to increase hydro-generated power, through refurbishing existing facilities, as well as constructing new hydropower plants.

One of the more difficult realities facing many of the former Soviet republics was the loss of Soviet-subsidized fuel and utility transfers. Prior to 2004, Georgia's transmission network was in critical condition, with electricity blackouts being common throughout the country. In response to mounting pressures, the Georgian government initiated a series of legislative reforms in 1998 and 1999 to begin to develop the power sector and electricity markets. While measures were taken to unbundle and liberalize the energy sector, a new law was drafted and Georgia's independent regulatory authority, the [[List of energy regulatory bodies|Georgian National Energy Regulatory Commission (GNERC)]], was formed. In addition to providing government subsidies, the GNERC was able to increase the prices of electricity and natural gas in Georgia to buffer the costs of recovery from the state's reform process.<ref>Revisiting Reform http://documents.worldbank.org/curated/en/2003/12/3219271/revisiting-reform-energy-sector-lessons-georgia</ref> Following these reforms, distribution has been increasingly more reliable, approaching consistent 24-hour-a-day services. Investments in infrastructure have been made as well.
Currently, a [[Private company|privately owned]] Energo-Pro Georgia, controls 62.5% of the electricity distribution market.<ref>[http://www.caucaz.com/home_eng/breve_contenu.php?id=318 New foreign investors are entering the Georgian market], caucaz.com</ref>

Georgia has transmission lines that connect its power grid to [[Russia]], [[Turkey]], [[Armenia]] and [[Azerbaijan]]. In July 2008, Georgia began exporting electricity to Russia through the Kavkasioni power line.{{citation needed|date=March 2023}} Later in 2009, Georgian Energy Minister [[Alexander Khetaguri]] incited scandal for a business deal struck with the Russian energy company, [[Inter RAO]], to jointly manage the Georgian [[Inguri Dam|Inguri]] hydropower plant for 10 years.<ref>Georgia’s Energy Minister Is Assailed for Deal With Russia https://www.nytimes.com/2009/01/14/world/europe/14georgia.html</ref> Khetaguri's proposal would entail a cash flow of around US$9 million into Georgia for use of the plant. Tensions ran high, however, as the Inguri hydropower plant provides nearly 40 to 50 percent of the country's electricity and is located at the administrative border of the secessionist [[Abkhazia]] region.<ref>Managing Enguri: A Russian Hydropower Play? http://www.eurasianet.org/departments/insightb/articles/eav011609e.shtml {{Webarchive|url=https://web.archive.org/web/20140427031643/http://www.eurasianet.org/departments/insightb/articles/eav011609e.shtml |date=2014-04-27 }}</ref>

Georgian [[Natural gas]] consumption stood at 1.8 billion cubic meters in 2007. Natural gas used to be supplied to Georgia by [[Russia]]. In recent years, however, Georgia has been able to eliminate its dependency on imports from Russia, thanks to increased hydroelectricity production, and the availability of natural gas sources from [[Azerbaijan]]. In addition, all Russian gas exports to Armenia pass through the Georgian pipeline system. Georgia takes 10% of that gas as a transit fee.<ref>en.rian.ru</ref>

Georgia is a partner country of the [[European Union|EU]] [[INOGATE]] energy programme, which has four key topics: enhancing [[energy security]],
convergence of member state [[energy market]]s on the basis of [[Internal energy market|EU internal energy market]] principles,
supporting [[sustainable energy]] development, and attracting [[Investment (macroeconomics)|investment]] for energy projects of common and regional interest.<ref>{{cite web|url=http://www.inogate.org/|title=INOGATE|work=inogate.org|access-date=2009-04-19|archive-date=2019-11-18|archive-url=https://web.archive.org/web/20191118080914/http://www.inogate.org/|url-status=dead}}</ref>

=== Agriculture ===
{{Main|Agriculture in Georgia (country)}}

Currently, about 55% of the total labor force is employed in agriculture, though much of this is [[Subsistence agriculture|subsistence farming]].<ref>[http://www.investingeorgia.org/sectors/agriculture/ Main Indicators of Agriculture Development] {{Webarchive|url=https://web.archive.org/web/20080929142430/http://www.investingeorgia.org/sectors/agriculture/ |date=2008-09-29}} investingeorgia.org</ref>

Georgian agricultural production is beginning to recover following the devastation caused by the civil unrest and the necessary restructuring following the breakup of the Soviet Union. Livestock production is beginning to rebound, although it continues to be confronted by minor and sporadic disease outbreaks. Domestic grain production is increasing, and the government invests in improvement of  infrastructure improvements to ensure appropriate distribution and revenues to farmers. Tea, hazelnut and citrus production have suffered greatly as a result of the conflict in Abkhazia, a crucial area for planting the latter crops.

Approximately 7% of the Georgian GDP (2011) is generated by the agrarian sector.

[[Viticulture]] and winemaking are the most important fields of Georgia's agriculture. Over 450 species of local vine are bred in Georgia, and the country is considered as one of the oldest places of producing top-quality wines in the world. Russia was traditionally the biggest export market for [[Georgian wine]]. This, however, changed in 2006, when Russia banned imports of wine and mineral water from Georgia, preceded by statements of Georgian governmental officials about low quality requirements of the Russian market.<ref>[http://www.aif.ru/online/aif/1331/02_05] {{webarchive|url=https://web.archive.org/web/20070312234413/http://www.aif.ru/online/aif/1331/02_05|date=March 12, 2007}}</ref> Since then Georgian wine producers have struggled to maintain output and break into new markets.

In 2011 Georgia sold wine in total amount of 54 mln USD in 48 countries and alcoholic beverages in total amount of 68 mln USD in 32 countries.  Vines and  alcoholic beverages are in the top 10 export commodity's list with 2,5% and 3.1% share respectively.<ref name="External Trade">{{cite web|url=http://geostat.ge/index.php?action=page&p_id=137&lang=eng%7ctitle=GeoStat.Ge%7cwork=geostat.ge|title=GeoStat.Ge|access-date=3 March 2015}}</ref>
According to National Wine Agency of Georgia, export of Georgian wine is increasing. 2011 wine export is 109% higher than 2007 exports. According to 2012 information, Georgia trades wine with 43 countries, selling over 23 million bottles. Biggest export partners for Georgia in wine industry are Ukraine (47.3% of wine export), Kazakhstan (18.9%) and Belarus (6.9%).<ref>{{cite web|url=http://www.nwa.gov.ge/page/153/geo/42-gradusi.htm|title=::N W A|url-status=dead|archive-url=https://web.archive.org/web/20160307022237/http://nwa.gov.ge/page/153/geo/42-gradusi.htm|archive-date=2016-03-07}}</ref>
In 2011 export of vines, mineral waters and alcoholic beverages exceeded export of all years after 2006. 
Georgia is rich with spring waters and production of mineral waters is one of the main spheres of industry. Export of mineral waters in 2011 amounted to 48 mln USD in 35 countries. Share of mineral water in total export is 2.1%.<ref name="External Trade"/>
Food processing industry is developing to align with the primary agricultural production and export of processed products is increasing year by year. Export of nuts constituted about 6% of Georgian export (2011) and is among 10 top export commodity list with total amount of 130 mln USD. Nuts was exported in 53 countries.<ref name="External Trade"/>

Rural population as a percentage of total population in Georgia was 48.2% in 2011 and decreased to 46.3%  in 2014.<ref>{{cite web|url=http://geostat.ge/index.php?action=page&p_id=428&lang=eng%7ctitle=GeoStat.Ge|title=GeoStat.Ge|access-date=3 March 2015}}</ref>

In 2018, in addition to smaller productions of other agricultural products,<ref>[https://www.fao.org/faostat/en/#data/QC Georgia production in 2018, by FAO]</ref> Georgia had produced:
* 259 thousand tons of [[grape]];
* 237 thousand tons of [[potato]];
* 194 thousand tons of [[maize]];
* 107 thousand tons of [[wheat]];
* 82 thousand tons of [[apple]];
* 62 thousand tons of [[tangerine]];
* 57 thousand tons of [[barley]];
* 57 thousand tons of [[watermelon]];
* 51 thousand tons of [[tomato]];
* 33 thousand tons of [[cucumber]];
* 27 thousand tons of [[peach]].

=== Tourism ===

[[Tourism in Georgia (country)|Tourism in Georgia]] is one of the fastest growing sectors of the local [[economy]], which has high potential for further development. During recent years the number of visitors to [[Georgia (country)|Georgia]] increased significantly contributing to the growth of other tourism related sectors. In 2011, more, about 3 million visitors visited Georgia 40 percent more, than in 2010.<ref>[http://www.gnta.ge/upload/file/2000-2011_Arrivals_foreign_travellers_at_national_borders_of_Georgia.pdf Arrivals of non-resident visitors at national borders of Georgia by country of citizenship] {{dead link|date=September 2017 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> To foster the development of the tourism sector the [[Cabinet of Georgia|Government of Georgia]] invests heavily in the development of the transportation and basic infrastructure, renovation and development of tourism destinations, which is a stimulus for the private investment generation. In 2011, total output of tourism related services production increased by 77% compared to 2006 and constituted 7.1% of total output of economy.<ref>{{Cite web |url=http://geostat.ge/cms/site_images/_files/english/nad/output%20of%20tourism.xls |title=Total Output of Production in Tourism |access-date=2012-05-14 |archive-url=https://web.archive.org/web/20130517085345/http://geostat.ge/cms/site_images/_files/english/nad/output%20of%20tourism.xls |archive-date=2013-05-17 |url-status=dead }}</ref> In 2018 tourism generated 3.4 billion dollars in tax revenue for Georgia.<ref>{{Cite web|url=https://calrev.org/2019/07/25/russian-impiety-georgian-riots/|title=Georgian Protests: Tbilis's Two-Sided Conflict|last=Genin|first=Aaron|date=2019-07-25|website=The California Review|language=en-US|access-date=2019-08-01}} {{Dead link|date=March 2021 |bot=InternetArchiveBot |fix-attempted=yes }}</ref><ref>{{Cite web|url=https://www.georgia.org/newsroom/press-releases/georgias-tourism-industry-breaks-economic-impact-record|title=Georgia's tourism industry breaks economic impact record {{!}} Georgia Department of Economic Development|website=www.georgia.org|access-date=2019-08-01}}</ref>

The following table shows the monthly average for incoming tourists in Georgia by citizenship and number of visits (in thousands).<ref>{{Cite web |url=https://www.geostat.ge/en/modules/categories/102/inbound-tourism |title=Inbound Tourism |author=National Statistics Office of Georgia |access-date=2019-11-16 }}</ref>

{| class="wikitable sortable"
|-
! Country !! 2015 !! 2016 !! 2017 !! 2018 !! Change 2015–2018
|-
| Azerbaijan || 96,3 || 89,7 || 108,5 ||  118,7 || 23,2%
|-
| Armenia || 99,3 || 96,0 ||  107,3 || 105,7 || 6,5%
|-
| Iran || 1,8 || 10,8 || 23,5 || 24,3 || 1221,9%
|-
| Israel || 4,6 || 7,1 || 9,6 || 13,1 || 183,1%
|-
| Russia || 63,6 || 70,8 || 94,6 || 117,1 || 84,1%
|-
| Turkey ||  89,5 || 82,4 || 83,9 || 91,5 || 2,3%
|-
| Ukraine || 10,6 || 12,6 || 14,2 || 14,8 || 39,0%
|-
| European Union || 17,8 || 19,1 || 23,6 || 32,1 || 80,4%
|-
| Other countries || 17,6 || 25,1 || 37,1 || 43,3 || 146,0%
|-
| Total || 438,0 || 449,4 || 540,2 || 600,3 || 37,1%
|-
|}

According to data from Georgia's National Tourism Administration, TASS reported that Armenia is third on the list of countries with the most visits from citizens in 2021. Turkey leads the pack in terms of trips made by visitors to Georgia last year, with 326 thousand, 2.7% fewer than in the previous year. With more than 212 thousand tourist visitors, 2.1% more than in 2020, Russia comes in second.<ref>{{cite web | url=https://arka.am/en/news/tourism/tourist_flow_from_armenia_to_georgia_in_2021_drops_by_more_than_a_third/ | title=Tourist flow from Armenia to Georgia in 2021 drops by more than a third | date=14 January 2022 }}</ref> Georgia received over 1.8 million international visits in total in 2021, an increase of 7.7% from the previous year.

=== Logistics ===

Georgia is one of the key members in international [[TRACECA]] programme due to its important geographical and political location. Since it is situated right in between of Europe and Asia, the country is supposed to become a busy transitional hub of a modern [[Silk Road]] in the near future. On  March 11 of 2015, Georgian media declared that the Chinese and Georgian companies have reached an agreement in Beijing concerning the developing of the deep-water port at [[Anaklia]], which existence is crucial for the TRACECA route.<ref>{{cite news| url = http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D=43699&tx_ttnews%5BbackPid%5D=228#.VdyeFyV6TMw| title = China Seeks Massive Investments in Georgia – Jamestown| newspaper = Jamestown}}</ref> The port will be constructed on a plot of over 1,000 hectares and have access to a deep sea canyon.<ref>{{cite web| url = http://cbw.ge/economy/seven-companies-are-selected-to-build-anaklia-port/| url-status = dead| archive-url = https://web.archive.org/web/20150929011112/http://cbw.ge/economy/seven-companies-are-selected-to-build-anaklia-port/| archive-date = 2015-09-29| title = Seven companies are selected to build Anaklia port - CBW.ge}}</ref> US-Based SSA Marine was later finally chosen to Invest in and Operate Container Terminal of Anaklia Deep Sea Port in Georgia by signing an agreement with Anaklia Development Consortium on 1 August 2017.<ref>{{Cite press release|url=https://www.businesswire.com/news/home/20170801006198/en/Anaklia-Development-Consortium-Signs-Agreement-US-Based-SSA|title = Anaklia Development Consortium Signs Agreement with US-Based SSA Marine to Invest in and Operate Container Terminal of Anaklia Deep Sea Port in Georgia|date = August 2017}}</ref>

First train containing 82 containers and 41 platforms came from [[China]] to [[Baku]], Azerbaijan on July 28. It is planned to launch a first carriage using this way through Georgia to [[Istanbul]] in September 2015.<ref>{{Cite web|url=http://bizzone.info/transportation/2015/1440444961.php|title=В Баку прибыл первый контейнерный поезд из Китая}}</ref> [[Baku–Tbilisi–Kars railway]] became operational on October 30, 2017.<ref>{{Cite web|url=https://dnd.com.pk/btk-railway-track-becomes-operational-to-carry-chinese-goods-to-europe/134952|title=Baku–Tbilisi–Kars (BTK) railway track becomes operational to carry Chinese goods to Europe|date=30 October 2017}}</ref>

[[Re-exportation]] of vehicles which is one of the income sources for Georgia has lowered much during 2014–2015 stagnation, most noticeably to [[Azerbaijan]]: it became 5.1 times less (on 10 337 cars) comparing to the previous year.<ref>{{Cite web |url=http://minval.az/news/123478492 |title=Азербайджан снизил импорт автомобилей из Грузии – Minval.az |access-date=2015-08-25 |archive-date=2020-08-04 |archive-url=https://web.archive.org/web/20200804115509/https://minval.az/news/123478492 |url-status=dead }}</ref>

=== Finance ===
[[File:格鲁吉亚银行总部2.jpg|thumb|[[Bank of Georgia headquarters]] in Tbilisi]]
Like most other post-soviet countries, Georgia's finance sector is dominated by banks. As of 2015, there were 21 commercial banks, of which 5 large banks controlled most of financial assets.<ref>Aaron Batten, Poullang Doung, Enerelt Enkhbold, Gemma Estrada, Jan Hansen, George Luarsabishvili, Md. Goland Mortaza, and Donghyun Park, 2015. [http://www.adb.org/sites/default/files/publication/173460/ewp-450.pdf The Financial Systems of Financially Less Developed Asian Economies: Key Features and Reform Priorities]. ADB Economics Working Paper Series No. 450</ref> There are some major challenges facing the banking sector. For instance, banks play a limited role in financing the real economy and in investing in activities that are required to stabilize the country's persistent trade.

=== Companies ===

In 2022, the sector with the highest number of companies registered in Georgia is Manufacturing with 3,905 companies, followed by Services and Wholesale Trade with 2,934 and 1,036 companies respectively.<ref>{{cite web | url=https://www.hithorizons.com/eu/analyses/country-statistics/georgia | title=Industry Breakdown of Companies in Georgia | website=HitHorizons | access-date=2023-09-09 | archive-date=2023-09-22 | archive-url=https://web.archive.org/web/20230922155939/https://www.hithorizons.com/eu/analyses/country-statistics/georgia | url-status=dead }}</ref>