Georgia ‘Mostly Free’ in Index of Economic Freedom

Georgia has been listed as a ‘mostly free’ country in the Index of Economic Freedom 2016 by Heritage Foundation. Compared to the previous year, Georgia moved back by one place to take 23rd place. It also took 12th place in Europe with 72.6 points. Georgia has seen a 3.2 point increase since 2012.

“Despite global and regional challenges, Georgia’s economy has demonstrated considerable resilience. Efforts to eliminate corruption and restore fiscal soundness by revitalizing the commitment to limited government have borne fruit. Two years of fiscal consolidation has kept government spending under control and ensured macroeconomic stability,” stated the Heritage Foundation website.

Research shows that Georgia has remarkable success in management of public finance, open markets, and regulatory efficiency. However, the rule of law is still a concern.

“A leading economic reformer among the former Soviet republics, Georgia has reduced regulations, taxes, and corruption. Russia invaded Georgia in 2008 and continues to occupy its South Ossetia and Abkhazia regions. In 2012, billionaire Bidzina Ivanishvili and his Georgian Dream coalition defeated President Mikheil Saakashvili’s United National Movement. Victory by Giorgi Margvelashvili in the 2013 presidential elections reinforced Georgian Dream’s political dominance.

“Georgia has been affected by the economic downturn in Russia and low oil prices, and its currency has lost 30 percent of its value relative to the dollar since November 2014. Agriculture or related industries employ over half of the workforce. Georgia signed Association Agreements with the EU in June 2014 and hopes to join NATO,” says the study.

The study of the Heritage Foundation also says that Georgia still struggles with the effects of Soviet-era corruption as well as on-going Russian influence. Executive and legislative interference in the judiciary is also substantial. Yet protection of property rights has improved.

The competitive regulatory framework is conducive to entrepreneurial activity. It takes only two procedures to launch a business, and no minimum capital is required, according to the study.

Germany, Finland, Great Britain, Canada, and others are also listed as ‘mostly free’ among 178 countries. As for the regional countries, Turkey, Azerbaijan and Armenia are listed as ‘moderately free’ countries and Russia as ‘mostly unfree’.

Ana Akhalaia