31. Oktober 2022

Sustainable and inclusive growth as the key to social cohesion and territorial parity in Georgia

An analysis by Jonas Nitschke
with Tamta Chankseliani, Salome Artmeladze, Tamar Papava, Tamar Rekhviashvili, David Aludauri, Nika Kratsashvili, Grisha Labadze and Sandro Jibladze

Despite some progress, Georgia continues to face major political and economic challenges. . Unemployment is on the rise, and the economic and social consequences of the pandemic were severe. Nevertheless, two groups of young innovators in Kobuleti and Baghdadi showed their creativity to show their Municipalities’ economic potential.


According to the World Bank and the European Bank for Reconstruction and Development, Georgia is trying to boost competitiveness, connectivity and regional integration, innovation and digital transformation. But why is the government in Tbilisi putting so much effort into local economic development? And what does it mean in the Georgian context? 


The reasons behind Georgia’s economic backlash

The political and economic shock in the aftermath of the collapse of the Soviet Union, intra-ethnic conflicts and a rapidly deteriorating business climate led to a drastic economic decline in Georgia. The Rose Revolution, the devastating Russian-Georgian five-day war over the territories of South Ossetia and Abkhazia in 2008, and the global economic crisis set the Georgian economy back once again. Although international donors provided the country with financial reconstruction packages, there were significant insecurities preventing sustainable and inclusive economic growth. The lack of economic reforms, state and government intervention, as well as the confrontation with Russia, were the reasons for a renewed change of power in the fall of 2012. This political instability led to decreasing private investments with severe impact on ordinary people. This was reinforced in 2019 when the global pandemic hit the world’s economies.

Another major problem of the Georgian economy is its dependence on the agricultural sector. In 2017, it accounted for about 50 percent of all employed persons in the country. This disproportion indicates some of the key problems: critical structural challenges remain, particularly weak productivity and the necessity to create high-quality jobs in rural areas. As the World Bank summarizes: ‘Many Georgians in rural areas remain engaged in low productivity agriculture. Measures of human capital continue to be weak, with poor learning outcomes and a lack of linkages between education and private sector needs. In addition, Georgia’s trade openness and reliance on income from tourism make it vulnerable to external and global shocks.’ Clearly, Georgia needs creative solutions and engaged youth in a decentralized effort to overcome the socio-economic differences between urban and rural areas by local diversification strategies. How can the Georgian people achieve higher productivity and generate inclusive economic growth? The answer is: Together across sectors and with a grassroots approach.


Local grassroots movements and innovative ideas for economic growth

In the process of territorial development in Georgia and transforming urban and rural areas, the aim of the bottom-up approach is to reduce socio-economic disparities between regions and municipalities. Local democracy must be strengthened in this process of inclusive participation as it leads to a better life for everyone in the affected communities. This is what the two projects realized in the framework of #GEONext were all about. Apart from bringing together young people invested in societal change and the pro-European stance of youth in Georgia and Germany who can support and learn from each other, the exchange with mentors from the business world leads to an increase in acceptance and credibility of young voices in decision-making processes. In this exchange, they learned how their ideas can become sustainable solutions to change systemic inequalities and imbalances to value the aspect of living in an equitable and just society.   

The first group focused on the utilization potential of the Baghdadi Municipality. The main purpose of the project was to support honey producers and owners of wineries and wine producers. The project was carried out in two ways: by introducing ways of utilizing opportunities for better sales by delivering lectures about touristic social platforms such as Airbnb for winery owners and honey producers. In a second step, the group invited professionals from the field and arranged practical workshops for honey producers regarding building Api-touristic facilities (tourism connected to beekeeping as a traditional profession)  in their everyday workplace. 

A notable achievement by the group was the increased interconnection between local business owners. Winery owners and honey producers clearly felt the importance of establishing cooperatives or associations as an essential tool for fostering cooperation, attracting investments, and increasing the quality of their products. The group organized an exchange with bigger companies to show the participants how they are working together with municipalities and to use the international experience of how people in more recognized brands work together with them.

The second group organized a “Camp of the Youth Ideas.” They met with young people in a local context in the region of Adjara, bringing them together with experts in the field of regional economic development and including perspectives from European youth stakeholders. The main goal of this project was to give school children living in the Kobuleti municipality theoretical and practical knowledge in the preparation and implementation of start-up projects (micro and small projects related to entrepreneurship as well as innovative technologies). Their ideas included creating a social space with books, a reading room, a work space and a small cafe, creating an app that will include educational materials, and video lessons which will help school students prepare for university exams or tackling the issue of student housing.

These projects impressively demonstrate the importance of grassroots initiatives such as #GEONext and how it is significantly contributing to an inclusive Georgian economy. If we want to see a more just and inclusive society where everyone profits, not just in Georgia, successful business owners need to team up with civil society and especially youth initiatives to develop an inclusive economic system for individuals, municipalities and cities!


Learn more about our project #GEONext here!

#GEONext is funded by the Federal Foreign Office in the framework of the programme “Expanding Cooperation with Civil Society in the Eastern Partnership Countries and Russia” and kindly supported by the German Embassy Tbilisi.


The Polis Blog serves as a platform at the disposal of Polis180’s & OpenTTN’s members. Published comments express solely the authors’ opinions and shall not be confounded with the opinions of the editors or of Polis180.

Images by #GEONext


Jonas works as a Programme Manager for the Multinational Development Policy Dialogue of the Konrad-Adenauer-Foundation in Brussels. He studied in Kleve and Vienna with a focus on International Relations and Development Policy.  In the context of his work and studies, he is particularly interested in authoritarian developments in governmental systems in Asia and Africa, as well as in the international development policy of the EU. At Polis180, he is a member of the board and contributes to the programme connectingAsia.


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