World Bank Issues Systematic Country Diagnosis Update for Georgia

The World Bank has issued the Systematic Country Diagnostic (SCD) Update for Georgia. The report, titled “Georgia: Keeping the Reform Momentum,” provides a comprehensive analysis of development challenges related to poverty and sustainable prosperity, as well as recommendations.

The SCD Update states that Georgia has shown remarkable resilience to shocks and growth has rebounded strongly in 2021 and 2022, but risks and uncertainties remain exceptionally high. According to the report “economic growth has remained robust despite shocks, driven by capital accumulation.”

However, “consistent with the slowdown in the labor contribution to growth, poverty reduction has
slowed in recent years, as income from wages has decreased.” It’s noted that Georgia has struggled to create quality jobs, and labor force participation has declined.

Also, although Georgia has made significant strides in access to social services, “the human capital formation is undermined by quality constraints, particularly in education”. The report highlights that “Georgia has experienced natural capital degradation, partly driven by lack of sustainable agricultural practices and inefficient land use, and has so far been unable to decouple carbon emissions for economic growth. 

The report suggests clear policy objectives for Georgia: strengthening the quality of education, improving land use, adaptation to climate change, and building resilience to shocks. Other important areas include increasing labor force participation, boosting access to finance, digitalization, innovation, investing in energy efficiency, supporting renewable energy development, and improving the enforcement and predictability of laws and regulations. 

Report also identifies four High-Level Outcomes (HLOs):

• (i) enhanced creation of good quality jobs by boosting productivity;
• (ii) improved and more equitable human capital;
• (iii) enhanced readiness to climate change and the
  green transition;
• and (iv) improved resilience to shocks.

“Georgia has a solid foundation but needs to step up reforms in order to achieve inclusive and sustainable growth in the face of global trends such as the climate transition or digitalization and automation,” – said Rolande Pryce, World Bank Regional Director for the South Caucasus.  

The SCD Update has been prepared following consultations with the government officials, representatives of the private sector, development partners, civil society organizations, and academia. 

The previous SCD report, titled “Georgia: from Reformer to Performer” was published in 2018, and it laid the foundation for understanding Georgia’s economic growth and inclusion challenges. The 2023 SCD Update builds upon the foundation and addresses the rapidly changing mega trends that require increased focus on resilience. 

Also Read:

• 21/07/2023 – Deputy Minister of Economy Speaks Black Sea Electricity Cable at the World Bank
• 16/06/2023 – World Bank Highlights Georgia’s Economic Growth in Latest Report
• 14/06/2023 – US State Department: Full Enforcement of Sanctions Will Not Harm Georgia’s Economy
• 26/01/2023 – Opinion | Education Needs Changes, Changes Need Educated Society

This post is also available in: ქართული (Georgian) Русский (Russian)