Private sector and human-resource development in Georgia (стр. 17 из 26)

Table 6. Top 10 Export Destinations of Georgian Tea, 1994-2001

1994	1995	1996	1997	1998	1999	2000	2001
1	RUS	TKM	TKM	RUS	RUS	RUS	RUS	RUS
2	UKR	RUS	RUS	UZB	UZB	UKR	UKR	POL
3	BLR	UKR	UZB	TKM	DEU	DEU	DEU	USA
4	TKM	KGZ	TJK	TJK	TJK	TKM	USA	DEU
5	UZB	KAZ	UKR	MNG	SYR	USA	MNG	UKR
6	TJK	UZB	KAZ	UKR	NLD	UZB	UZB	MNG
7	KAZ	TJK	MNG	POL	MNG	MNG	POL	UZB
8	TUR	MNG	AZE	KAZ	BLR	TJK	UKR	TKM
9	MDA	BLR	BLR	BLR	UKR	BLR	KAZ	IDN
10	POL	MDA	KGZ	KEN	KAZ	POL	TKM	TJK

Source: State Department of Statistics, author’s estimates

Table7. Household Contribution to Total Production

All of Georgia excluding Abkhazia

1999	2000	2001
Production by Households, tons	25,942	8,160	21,390
Total Production, tons	60,330	23,999	23,000
Household Share in Total Production, percent	0.43%	0.34%	0.93%

Source: State Department of Statistics, author's estimates

3.3 Trade

Georgian Foreign Trade Statistics. In 2002 Georgian foreign trade turnover (registered) totalled US$1045,0 million, that is 104,6 % of previous year's data for the appropriate period. From this export is US$325,0 million (101,5% accordingly) and import -US $720,0 million (106,1%). Negative trade balance of Georgian trade for 2002 stood at US$395,0 million.
The following table shows the trends in Georgia's trade balance:

In 2002 Georgia had a negative trade balance with 89 partner countries, with whom the trade gap amounted 454,2 million US Dollars in comparison with the last year when the same figure was indicated by 378,8 million US $ with 88 partner countries. Georgia had a positive trade balance of US $ 59,2 million with 40 countries, and in 2001 with 30 countries (positive balance of US $ 59,2 million).

In 2002 the foreign trade with CIS countries have increased. The 30.6% of the trade gap covers these countries (29.7% for the same period of the last year). The foreign trade with CIS countries amounted US $ 4337.4 million in 2002 (the amount increased by 10.6% in comparison with the same period of the year 2001). CIS countries share 41,9% of Georgia's foreign trade turnover, among them exports share 48,7% and imports 38,8% (accordingly 39.6%; 45.1% and 37.0% - in the year 2001).

Trade turnover with Russia reflected US $ 162.8 million and has declined by 1.2% in comparison with the same period of the year 2001, and Georgian foreign trade turnover with Russia have decreased by 0.9 per cent points from 16.5% to 15.6%.

Georgian Foreign Trade: 2001-2002 (in US$ millions)

Georgia's Top Ten Export Destinations in 2002 (in US$ millions)

Major export products in 2002 (in US$ millions)

3.4 Construction

Overview of Georgian Construction Sector. Georgian construction sector mainly consists of civil, industrial, hydro-technical, transport, and communication construction projects.

The construction sector was established long before the formation of the country as a legal state and has passed from primitive buildings to complicated and sophisticated complexes. Throughout various stages of the country’s development, buildings and other construction projects reflect the period in which they were built. For nearly the last two centuries Georgia was part of the Russian empire and the Soviet Union, thus, the development of the construction sector was in accordance with the laws and conditions accepted by Russia and the FSU, i.e. massive construction of industrial facilities. During that period the construction sector employed almost 250,000 people and produced construction materials worth approximately US$1.5 million annually.

After the collapse of the Soviet Union, the Georgian construction sector ceased development, which was mainly caused by the political, social and economic conditions of the country (i.e. a coup, civil war, and armed conflicts in Abkhazia and South Osetia), and also by non-efficient, highly energy consuming technologies and outdated equipment and machinery. As a result, almost one hundred percent of the construction factories and facilities ceased functioning.

During the early ‘90s, when Georgia became independent and positioned itself towards democracy and integration into the world economy, the Georgian construction sector realized that it was totally unprepared to meet the demands and standards of country’s development phase. The main negative aspects characterizing such non-preparedness were:

1. Non-efficient and partially destroyed equipment and machinery.

2. Lack of investment in majority spheres of construction (except private construction).

3. Weak management of the sector from the government’s side.

4. Lack of professional managers and specialists with knowledge of international principles.

5. Great need of specialized trainings for the staff.

6. Harsh economic condition of scientific, projecting and architecture institutions.

7. Import of foreign construction materials and workforce.

Among other important factors, considering the importance and crucial character of the construction industry for the country’s economic development, the Georgian government made several positive steps towards rehabilitation of the construction industry to create a favourable investment environment including passing the law on promotion and guarantee of foreign investment activities, and instituting a process of restructuring and privatisation. A few years ago the government of Georgia launched a process of restructuring and privatisation of large Soviet era construction enterprises. As a result, various non-efficient, illiquid and monster enterprises have changed their organizational structure and been converted into small cost and energy efficient, liquid plants. Derived from the privatisation process the majority of state construction companies have become private joint stock and limited liability companies. In addition, a huge number of uncompleted construction sites have been privatised and completed.

Main Indicators of Development in the Construction Sector. The slight revival and positive trends in the construction sector have been noticed since 1995 – the period when the Georgian national currency the Lari (GEL) was introduced.

The table below indicates the main financial flow in the construction sector during 1995-2002 (first nine months).

Year	Monetary unit	Investment in main capital	Government investment	Construction and engineering work	Personal funds of population*	Foreign investment
1990	Million Rubles	2545	2233	1313	93	-
1991		2698	2435	1882	140	-
1992		12368	11521	8636	532	-
1993	Billion Coupon	311	142	270	168	-
1994		55821	30769	41758	25000	-
1995	Million Lari	127	65	90	19	43
1996		170	60	91	24	86
1997		266	67	114	19	180
1998		512	915	244	16	401
1999		364	119	248	76	169
2000		349	141	181	89	119
2001		362	201	101	33	128
2002		246	158	86	59	29